Camps v. Gore Capital, LLC

FERNANDO CAMPS, Plaintiff, v. GORE CAPITAL, LLC, KARL JAMES,and ANGELA EVANS, Defendants.

NO. 3:17-cv-01039

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

July 6, 2021

JUDGE RICHARDSON

MEMORANDUM OPINION

Pending before the Court is Defendant Angela Evans' Motion for Summary Judgment (Doc. No. 200, "Motion"), which is supported by a Memorandum of Law (Doc. No. 201). Plaintiff Fernando Camps has filed a response (Doc. No. 207), and Defendant has filed a reply (Doc. No. 215). Each party has filed responses (Doc. Nos. 208 and 216) to the other party's statement of undisputed facts.

BACKGROUND

In his Third Amended Complaint (Doc. No. 191), Plaintiff alleges that he was targeted by Defendants in a series of fraudulent investment schemes. As to Defendant Evans, Plaintiff asserts causes of action for fraud (Count II), fraud by wire transfer (Count III), intentional misrepresentation (Count IV), negligent misrepresentation (Count V), conversion (Count VI), breach of fiduciary duty (pled alternatively in Count VII), breach of oral contract (Count VIII), and unjust enrichment (pled alternatively in Count IX).¹

Most of the facts asserted in the parties' respective statements of (purportedly) undisputed facts are disputed. The Court discusses various disputes of fact below. However, in the text (as opposed to the footnotes) of this and the following two paragraphs, the Court will identify facts that appear to be undisputed and provide useful context for Plaintiff's claims. Evans and Plaintiff met in a restaurant bar in Argentina in November 2013 and thereafter began a long-distance, romantic relationship, which included visiting cities and family together about once a month. Evans had previously spoken about investments with an acquaintance, Defendant Karl James, because she "knew people he knew and deals he had done," she had a lot of respect for him, and he was a smart businessperson. She described James as "someone she trusted with her life." Evans invested some money² in James' company, Gore Capital.³

In March 2014 Evans introduced Plaintiff to James in St. Petersburg, Florida, at a professional racecar event, where James and Evans discussed with Plaintiff certain business investments, including a potential investment in racecar activities through a company called #AE20, LLC.⁴ Evans and Plaintiff discussed working together on an investment project. Eventually, Plaintiff wired $250,000 to Evans's bank account to be sent to Gore Capital. Plaintiff claims that Evans fraudulently transferred that money to Gore Capital for her own benefit, not Plaintiff's.

In the fall of 2014, Plaintiff sent additional funds to Gore Capital and/or its projects in the amounts of $200,000, $50,000, and $50,000. After receiving no further information or documentation about these funds, Plaintiff expressed his increasing concerns to Evans and both Plaintiff and Evans sought answers from James and Gore Capital about the status of the funds they had sent to Gore Capitol. Plaintiff then told Evans that the situation regarding his investments was intolerable and he intended to take legal action. This lawsuit followed.⁵

SUMMARY JUDGMENT

Summary judgment is appropriate where there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). "By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). In other words, even if genuine, a factual dispute that is irrelevant or unnecessary under applicable law is of no value in defeating a motion for summary judgment. See id. at 248. On the other hand, "summary judgment will not lie if the dispute about a material fact is 'genuine[.]'" Id.

A fact is "material" within the meaning of Rule 56(c) "if its proof or disproof might affect the outcome of the suit under the governing substantive law." Anderson, 477 U.S. at 248. A genuine dispute of material fact exists if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Harris v. Klare, 902 F.3d 630, 634-35 (6th Cir. 2018).

The party bringing the summary judgment motion has the initial burden of identifying portions of the record that demonstrate the absence of a genuine dispute over material facts.Pittman v. Experian Information Solutions, Inc., 901 F.3d 619, 627-28 (6th Cir. 2018). If the summary judgment movant meets that burden, then in response the non-moving party must set forth specific facts showing that there is a genuine issue for trial. Id. at 628.

A party asserting that a fact cannot be or genuinely is disputed—i.e., a party seeking summary judgment and a party opposing summary judgment, respectively—must support the assertion by citing to materials in the record, including, but not limited to, depositions, documents, affidavits or declarations. Fed. R. Civ. P. 56(c)(1)(A). In reviewing a motion for summary judgment, this court must view the evidence in the light most favorable to the non-moving party. Tlapanco v. Elges, 969 F.3d 638, 647 (6th Cir. 2020) (quoting Anderson, 477 U.S. at 248). Likewise, the court should view the facts and draw all reasonable inferences in favor of the non-moving party. Pittman, 901 F.3d at 628. Credibility judgments and weighing of evidence are improper. Hostettler v. College of Wooster, 895 F.3d 844, 852 (6th Cir. 2018). As noted above, where there is a genuine dispute as to any material fact, summary judgment is not appropriate. Id. The court determines whether sufficient evidence has been presented to make the issue of fact a proper jury question. Id. The mere existence of a scintilla of evidence in support of the non-moving party's position will be insufficient to survive summary judgment; rather, there must be evidence upon which the jury could reasonably find for the non-moving party. Rodgers v. Banks, 344 F.3d 587, 595 (6th Cir. 2003).

ANALYSIS

A. Fraud by Wire Transfer

Evans first contends that there is no private right of action for fraud by wire transfer in violation of 18 U.S.C. § 1343, which is a criminal statute. The Court agrees. A private citizen has no authority to initiate a federal criminal prosecution; that power is vested exclusively in theexecutive branch. Saro v. Brown, 11 F. App'x 387, 387 (6th Cir. 2001). More to the point, violations of the wire fraud (or, for that matter, mail fraud) criminal statutes do not give rise to independent, private (civil) causes of action. Id., cited in Gratton v. Cochran, No. 3:19-cv-00267, 2019 WL 1787665, at *3 (M.D. Tenn. Apr. 24, 2019).

In response to the Motion, Plaintiff has not rebutted this argument. The Court will dismiss Plaintiff's fraud by wire transfer claim (Count III) because there is no private right of civil action based on a defendant's alleged wire fraud in violation of 18 U.S.C. § 1343.

B. Fraud/Intentional Misrepresentation

"The Tennessee courts consider 'fraud,' 'intentional misrepresentation,' and 'fraudulent misrepresentation' to be different names for the same cause of action."⁶ Best Choice Roofing & Home Improvement, Inc. v. Best Choice Roofing Savannah, LLC, 446 F. Supp. 3d 258, 275 (M.D. Tenn. 2020).⁷ A plaintiff alleging intentional misrepresentation must address the following elements with particularity: 1) the defendant made a representation of an existing or past fact; 2) the representation was false when made; 3) the representation was in regard to a material fact; 4) the false representation was made either knowingly or without belief in its truth or recklessly; 5) plaintiff reasonably relied on the misrepresented material fact; and 6) plaintiff suffered damage as a result of the misrepresentation. PSC Indus., Inc. v. Johnson, No. 3:19-cv-00362, 2021 WL1663574, at *15 (M.D. Tenn. Apr. 28, 2021); Constr. Mgmt., Inc. v. Expo Hosp., LLC, No. 3:19-cv-00298, 2020 WL 489461, at *4 (M.D. Tenn. Jan. 30, 2020).

"The law has never undertaken to precisely define fraud," recognizing that such an effort would be futile because fraud "assumes many shapes, disguises and subterfuges." Vazeen v. Sir, No. M2019-01395-COA-R3-CV, 2021 WL 832043, at *5 (Tenn. Ct. App. Mar. 4, 2021) (citing Hodge v. Craig, 382 S.W.3d 325, 342 (Tenn. 2012)). "The essence of fraud is deception. In its most general sense, fraud is a trick or artifice or other use of false information that induces a person to act in a way that he or she would not otherwise have acted." Lopez v. Taylor, 195 S.W.3d 627, 634 (Tenn. Ct. App. 2005), cited in Harris v. Wells Fargo Bank, N.A., No. 18-2400-JPM-dkv, 2019 WL 3080764, at *13 (W.D. Tenn. Mar. 18, 2019). "Fraud occurs when a person intentionally misrepresents a material fact or intentionally produces a false impression in order to mislead another or to obtain an unfair advantage." Id. In Tennessee, fraud includes those situations where a party, while not actually lying, intentionally produces a false impression in order to mislead another or to obtain an undue advantage over him. Gregg v. Y.A. Co. Co., No. 1:06-cv-203, 2007 WL 4570889, at *22 (E.D. Tenn. Dec. 28, 2007) (citing Tully v. USA Wireless, Inc., No. 01A01-9707-CH-00332, 1998 WL 195955, at *5 (Tenn. Ct. App. Apr. 24, 1998)). "Under Tennessee laws, the intention to defraud is generally a question of fact that usually requires a trial before it can be fully developed." Id. (citing Fowler v. Happy Goodman Family, 575 S.W.2d 496, 499 (Tenn.1978)).

Evans argues that she is entitled to summary judgment on Plaintiff's fraud/intentional misrepresentation claims, because the undisputed evidence demonstrates that (1) Evans did not make an untrue statement of existing or past fact and to the extent that she did she believed it tobe true; (2) Plaintiff did not reasonably rely on any (to...