Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-08-35966/USCOURTS-ca9-08-35966-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

COTO SETTLEMENT, 

Plaintiff-Appellant, No. 08-35966

v. D.C. No.  08-cv-00125-RSM

IAN EISENBERG and OLYMPIC OPINION TELECOMMUNICATIONS, INC.,

Defendants-Appellees.. 

Appeal from the United States District Court

for the Western District of Washington

Ricardo S. Martinez, District Judge, Presiding

Argued and Submitted

October 14, 2009—Seattle, Washington

Filed January 29, 2010

Before: Richard D. Cudahy,* Senior Circuit Judge,

Johnnie B. Rawlinson and Consuelo M. Callahan,

Circuit Judges.

Opinion by Judge Cudahy

*The Honorable Richard D. Cudahy, Senior United States Circuit Judge

for the Seventh Circuit, sitting by designation. 

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COUNSEL

Ernst Leonard, Friedman & Feiger, L.L.P., Dallas, Texas, and

Jeremy Robert Larson, Foster Pepper & Shefelman, Seattle,

Washington, for the appellant.

Derek A. Newman and Derek Linke, Newman & Newman,

Attorneys at Law, Seattle, Washington, for the appellees.

OPINION

CUDAHY, Circuit Judge: 

The question presented here is whether the district court

erred in dismissing the claims of Coto Settlement (Coto) as

barred by the statute of limitations. Coto claims that it is entitled to part of $1.4 million refunded by the Federal Trade

Commission (FTC) following a judgment against Coto, Ian

Eisenberg and other entities. Eisenberg and Olympic Telecommunications, Inc. (Olympic), owned by Eisenberg, contend that, if Coto had a claim for conversion of those funds,

it accrued in 2000, and is therefore time-barred. Coto maintains instead that its claims did not accrue until 2007, when

the FTC announced that it would refund the sum to Eisenberg

and Olympic. Coto characterizes the dispute in 2000 as one

regarding the proper management of the funds rather than

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their ownership but, for the following reasons, we disagree.

We note at the outset that the basis for this conclusion

requires reliance on documents and arguments not adequately

discussed by the parties in briefing or at oral argument. In the

interests of justice, however, we will raise and discuss these

arguments on our own. However, it is not the task of courts

to make cases for the parties, and we find the presentation of

this case unsatisfactory in the extreme.

I

A

Our appellate jurisdiction rests on 28 U.S.C. § 1291 and the

action below arose in diversity, 28 U.S.C. § 1332. The case

was filed in King County Superior Court, where the court

granted a temporary restraining order in favor of Coto, requiring the defendants to deposit certain contested funds into the

registry of the Superior Court. Before the hearing on a preliminary injunction, the matter was removed, improperly under

the forum defendant rule. Coto, however, failed to timely

object to removal, and we retain jurisdiction. See Lively v.

Wild Oats Markets, Inc., 456 F.3d 933, 942 (9th Cir. 2006)

(holding that improper removal is a waivable defect). Later,

upon motion, the district court dismissed Coto’s claims.

B

We review de novo a district court’s disposition of a motion

to dismiss pursuant to Rule 12(b)(6). A complaint may survive a motion to dismiss if, taking all well-pleaded factual

allegations as true, it contains “enough facts to state a claim

to relief that is plausible on its face.” Ashcroft v. Iqbal, 129

S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007)). “[W]e do not necessarily assume

the truth of legal conclusions merely because they are cast in

the form of factual allegations.” Paulsen v. CNF, Inc., 559

F.3d 1061, 1071 (9th Cir. 2009) (citing Cedars-Sinai Med.

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Ctr. v. Nat’l League of Postmasters of the U.S., 497 F.3d 972,

975 (9th Cir. 2007)).

C

Christopher L. Hebard, Coto’s beneficiary, and Eisenberg,

who has some interest in French Dreams Investments, N.V.

(French Dreams), created Electronic Publishing Ventures,

LLC (EPV) in 1998. EPV, a Delaware holding company,

owned several entities that offered internet services, and

Hebard and Eisenberg shared general supervisory and oversight responsibilities for the EPV entities. The EPV entities

charged their clients through telephone billings and used

Olympic to process the billing data and to collect payments

from the telephone companies. In the summer of 2000,

Hebard and Eisenberg shut down the programs because of a

dispute. Also that summer, Eisenberg announced that Olympic, which is owned or controlled by him, would increase its

reserve level to 100% of the funds billed by the EPV entities.

As of December 2000, according to allegations in the Complaint, Olympic held approximately $5 million in reserves,

purportedly for the EPV entities. In contrast, however, a Billing Services Agreement between Olympic and the EPV entities specifies that, before Olympic remits funds received from

the EPV entities’ customers to the EPV entities, Olympic subtracts funds for a “bad debt reserve” and for “chargeback

reserves”, used to cover certain charges for customers who do

not pay their bills and for customers whose charges Olympic

has chosen to forgive. Olympic remits the “net funds,” or the

payments received from the telephone companies less these

reserves and other fees and taxes. The Billing Agreement clarifies that, for the bad debt reserves, if the telephone company

discovers that it has any overage allocated to the bad debt

reserves, Olympic will remit that amount to the customer.

Olympic, however, is responsible for the chargeback reserves

and may adjust them in its sole discretion. The Billing Agreement notes that the chargeback reserves are merely an estimate that does not “in any way limit Olympic’s rights to

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recourse, reimbursement and set-off against [the EPV entities]

. . . for all sums due by [the EPV entities] to Olympic under

this Agreement, including without limitation the actual chargeback, unbillable and returns activity for [the EPV entities]

aggregate call records.” In 2000, Hebard strongly objected to

Olympic’s decision to increase the reserves to 100%, but

Olympic declined to refund any of this amount.

In October 2000, the FTC filed an action against the EPV

entities, Eisenberg, French Dreams, Hebard and Coto (the

FTC defendants), who were found to have mailed deceptive

offers to provide internet services.1 During the FTC action,

the EPV entities were all dissolved and their charters revoked

by November 2005.2 In March 2004, the FTC found the

defendants liable in the amount of $17 million subject to a

refund of any money not needed for consumer redress.

Hebard tendered $80,000, Olympic $2,152,694, and Eisenberg, $629,513.85, all deposited into the registry of the court

in the FTC action in June 2006. The FTC determined that the

actual liability was less than the sums tendered by the parties.

In 2007, therefore, responding to a motion by Eisenberg and

Olympic, the FTC announced that it would refund $1.4 million to them. Coto sent a demand letter in October 2007 to

Eisenberg and Olympic asking whether any of the funds tendered by Olympic were property of the former EPV entities

and requesting an accounting of the use and disposition of all

reserve funds. Eisenberg and Olympic did not respond. The

judge in the FTC action held that determining the ownership

of the refunded amounts was outside the scope of his jurisdiction and, therefore, as far as the FTC court was concerned, the

funds belonged to Eisenberg and Olympic, and, in any event,

the funds were no longer within that court’s possession or

control.

1FTC v. Cyberspace.com, L.L.C., C.A. No. C00-1806RSL, aff’d, 453

F.3d 1196 (9th Cir. 2006); 195 Fed. App’x. 544 (9th Cir. July 13, 2006)

(not designated for publication). 

2The first entity’s certificate of authorization was revoked in November

2000 and the last in November 2005. 

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Coto responded by filing this action. It asserted three

claims for relief: breach of fiduciary duty, money had and

received (an action incidental to unjust enrichment, Davenport v. Washington Educ. Ass’n, 197 P.3d 686, 698-99 (Wash.

Ct. App. 2008)) and conversion. In addition, Coto sought the

imposition of a constructive trust (a form of equitable relief,

Venwest Yachts, Inc. v. Schweickert, 176 P.3d 577, 582 n.5

(Wash. App. 2008)), an accounting (another equitable remedy, Saletic v. Stamnes, 51 Wn.2d 696, 698 (Wash. 1958)), as

well as declaratory and injunctive relief.

The district court dismissed Coto’s Amended Complaint

and denied its motion for a preliminary injunction on the

pleadings as time-barred because the court held that Coto’s

claims for relief arose in the summer of 2000 when Hebard

objected to Eisenberg and Olympic’s decision to raise the

reserve requirement to 100%. The district court rejected

Coto’s efforts to cast Olympic’s decision to require reserves

of 100% as a well-intentioned management decision to accumulate reserves to pay an eventual FTC judgment that would

be released back to the EPV entities if the reserve level was

set too high. The district court noted that the FTC did not file

its suit until the fall of 2000, months after the reserve requirement was increased. Because we find that Olympic’s actions

in raising the reserve requirement gave rise to Coto’s claims

in 2000, and therefore that the statute of limitations began to

run at that time, we affirm.

II

Coto argues that it has standing to assert its claims against

Appellees because it is a shareholder asserting the claims of

the now-dissolved EPV entities. Coto contends that it is a

basic tenet of corporate jurisprudence that the property rights

of a corporation pass to the shareholders after dissolution.

Although Appellees do not reject this standing argument and

the district court did not address it in its order, it is jurisdictional, Coto raised it in its opening brief and we consider it

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here. See, e.g., Jacobs v. Clark County Sch. Dist., 526 F.3d

419, 437-38 (9th Cir. 2008). The test for standing appears in

the familiar language of Lujan v. Defenders of Wildlife,

requiring a party to show three things:

First, [it] must have suffered an injury in fact-an

invasion of a legally protected interest which is (a)

concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there

must be a causal connection between the injury and

the conduct complained of . . . . Third, it must be

likely, as opposed to merely speculative, that the

injury will be redressed by a favorable decision.

504 U.S. 555, 560-61 (1992) (internal citations omitted); see

also D’Lil v. Best Western Encina Lodge & Suites, 538 F.3d

1031, 1036 (9th Cir. 2008).

[1] Coto argues that it has the right to claim property formerly belonging to the EPV entities because a shareholder of

a dissolved corporation has standing to assert claims for the

property of the corporation after the property passes to the

shareholders. While a corporation remains in existence, on the

other hand, as specified by corporation continuance statutes,

shareholders do not have standing to assert the claims of the

corporation, unless they do so through derivative actions. See,

e.g., RK Ventures, Inc. v. City of Seattle, 307 F.3d 1045, 1057

(9th Cir. 2002) (holding that injury to the corporation is not

injury to the shareholders for purposes of standing, although

a shareholder who is injured separately from the corporation’s

injury has standing apart from the corporation); United States

v. Stonehill, 83 F.3d 1156, 1160 (9th Cir. 1996) (explaining

that “[w]ell-established principles of corporate law prevent a

shareholder from bringing an individual direct cause of action

for an injury done to the corporation or its property by a third

party”). 

[2] After a specified period post-dissolution, however, the

corporation ceases to exist. In each of the states in which the

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EPV entities were incorporated, after dissolution, the LLC

continues to exist for a limited period as an entity that may

sue (through members and managers or others in derivative

actions) and be sued. See Nev. Rev. Stat. § 86.505 (LLC may

sue and be sued until 2 years after dissolution); Del. Code

Ann. tit. 6, § 18-803 (until the certificate of cancellation is

filed); Mont. Code Ann. § 35-8-909 (until five years after the

publication of a notice of the company’s dissolution).

[3] The disposition of assets after an LLC is wound up typically depends on the operating agreement entered into by the

owners. The EPV entities were registered in Nevada, Delaware and Montana. Those states provide by statute specific

procedures for distributing assets and assigning the liabilities

of the LLCs after dissolution that rely, in part, upon the procedures spelled out in the operating agreements of the LLCs.

See, e.g., Del. Code Ann. tit. 6, § 18-804(a); Mont. Code Ann.

§ 35-8-905; Nev. Rev. Stat. § 86.521.3 This court is not in

possession of the operating agreements of the EPV entities

effective at the time these entities were dissolved. But we may

reasonably conclude that, absent the FTC action, some of the

remaining assets of the EPV entities (if there were any assets)

would have flowed to their 50 percent owner, Coto, upon the

entities’ dissolution. Perhaps this absence of key information

explains Appellees’ failure to object to standing on appeal and

to advance their standing arguments in their response brief.4

For purposes of the present appeal, we make the reasonable

assumption that Coto has standing based on assets it allegedly

expected to receive after the release of the Olympic funds and

the dissolution of the EPV entities by the time Coto filed its

lawsuit.

3The EPV entities were dissolved at different times during the pendency

of the FTC action. The Delaware Secretary of State revoked the corporate

charter of EPV in June 2003 and that of Essex in June 2004, the Montana

Secretary of State revoked the certificate of authority for Cyberspace in

November 2000 and the Nevada Secretary of State revoked the corporate

charter of Surfnet in November 2005. 

4The standing issue was not discussed at oral argument. 

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III

Coto includes the Billing Services Agreement in the record

on appeal. This Agreement governs the billing and collection

services that Olympic provided the EPV entities. This contract was discussed in Coto’s response to defendants’ motion

to dismiss, but the Billing Agreement was first presented to

the district court attached to Coto’s Motion for New Trial that

the district court summarily denied because it found that it

lacked jurisdiction while the case was on appeal. Consequently, in the order now on appeal, the district court did not

rely on the Billing Agreement, and the parties on appeal have

for the most part ignored this document. 

On a motion to dismiss, we may consider materials incorporated into the complaint or matters of public record. See

Intri-Plex Technologies, Inc. v. Crest Group, Inc., 499 F.3d

1048, 1052 (9th Cir. 2007); cf. Fed. R. Civ. P. 12(d) (explaining that, should the district court decide to consider other

materials, the motion is converted into a motion for summary

judgment and the opposing party given reasonable time to

respond); Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th

Cir. 2001) (noting that a district court may not take judicial

notice of a disputed fact in a public record). We have

extended the doctrine of incorporation by reference to consider documents in situations where the complaint necessarily

relies upon a document or the contents of the document are

alleged in a complaint, the document’s authenticity is not in

question and there are no disputed issues as to the document’s

relevance. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th

Cir. 2005); Parrino v. FHP, Inc., 146 F.3d 699, 705, 706 n.4

(9th Cir. 1998), rev’d by statute on other grounds; Faulker v.

Beer, 463 F.3d 130, 134 (2d Cir. 2006); International Audiotext Network v. Am. Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir.

1995) (considering an agreement that was not specifically

incorporated into the complaint because the complaint “relies

heavily upon its terms and effect” such that the agreement is

“integral” to the complaint). But the mere mention of the exisCOTO SETTLEMENT v. EISENBERG 1773

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tence of a document is insufficient to incorporate the contents

of a document. See United States v. Ritchie, 342 F.3d 903,

908-09 (9th Cir. 2003).

Here, the Amended Complaint does not explicitly refer to

the Billing Agreement, but it contains allegations that the

EPV entities used Olympic to handle their billings and that

Olympic “held reserves from the EPV entities in an amount

necessary to cover contingent liabilities associated with the

marketing programs.” Appellees do not contend that the Billing Agreement provided in the record is not authentic.

Whether or not Olympic converted the reserves it received

from the EPV entities’ customers (for purposes of triggering

the statute of limitations) depends in large part on its authorization to do so and whether it asserted ownership over the

funds at that time—suggesting that the Billing Agreement is

integral to the Amended Complaint.5

IV

Because we must determine the limitations issue in accordance with Washington law, the applicable statute of limitations for all of Coto’s claims for relief is three years. RCW

4.16.0806; Louisiana-Pacific Corp. v. ASARCO, Inc., 24 F.3d

1565, 1580 (9th Cir. 1994); Hudson v. Condon, 6 P.3d 615,

619 (Wash. Ct. App. 2000).7 The statute of limitations begins

5The Agreement provides: 

Olympic will remit funds received from the LECs to [EPV] or its

designated payee as provided herein . . . Olympic shall perform

the settlement accounting in accordance with the above outlined

calculation, subject to any reserve adjustments pursuant to this

Section 2, which Olympic shall be entitled to adjust from time to

time, in its sole discretion, based on actual chargebacks, chargeback history, levels of client’s business and other relevant conditions. 

6The statute of limitations for an action arising out of a contract dispute

is six years. RCW 4.16.040. 

7We note that the Billing Services Agreement contains a mandatory

arbitration clause for “any controversy or claim arising out of or related

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to run when the plaintiff knew or should have known all of

the essential elements of its applicable cause of action.

Louisiana-Pacific Corp., 24 F.3d at 1580 (citing Rose v. A.C.

& S., Inc., 796 F.2d 294, 296 (9th Cir. 1986)).

A

[4] Conversion consists of an unjustified, willful interference without lawful justification, whereby a person entitled to

it is deprived of the possession of his or her property. See,

e.g., Potter v. Washington State Patrol, 196 P.3d 691, 696

(Wash. 2008); Western Farm Service, Inc. v. Olsen, 90 P.3d

1053, 1054 n.1 (Wash. 2004). The plaintiff must establish (or

here, plead) that it has “some property interest in the goods

allegedly converted.” Meyers Way Dev. Ltd. Partnership v.

Univ. Savings Bank, 910 P.2d 1308, 1320 (Wash. Ct. App.

1996) (quoting Michel v. Melgren, 853 P.2d 940, 943 (Wash.

Ct. App. 1993)). Money may be the subject of conversion if

the party charged with conversion wrongfully received the

money or had an obligation, which it failed to honor, to return

the specific money to the party claiming it. See, e.g., Public

Utility Dist. 1 of Lewis County v. Wash. Public Power Supply

System, 705 P.2d 1195, 1211 (Wash. 1995); Davenport v.

Wash. Educ. Ass’n, 197 P.3d 686, 695 (Wash. Ct. App. 2008).

[5] Coto contends that the reserves held by Olympic were

impressed with a resulting trust for the benefit of the nowdissolved EPV entities and that Olympic in 2000 asserted no

claim of ownership to the funds, and therefore did not convert

to this Agreement.” As no party has discussed the applicability of this

clause, however, we will not discuss its possible application. See Sovak v.

Chugai Pharmaceutical Co., 280 F.3d 1266, 1269-70 (9th Cir. 2002)

(holding that federal law governs waiver of an arbitration clause); see also

Britton v. Co-op Banking Group, 916 F.2d 1405, 1413 (9th Cir. 1990)

(explaining that the Federal Arbitration Act confers only the right to

obtain an order to compel arbitration, not an unqualified right to compel

arbitration of any dispute at any time). 

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them, until 2007. A resulting trust arises when the person with

legal title is not the person advancing consideration for the

property—the person with legal title is presumed to hold it

subject to the equitable ownership of the purchaser, absent

contrary intent. See In re Spadoni’s Estate, 430 P.2d 965, 967

(Wash. 1967). A resulting trust is formed only on the basis of

circumstances that create an inference that the parties

intended to create a trust. See Thor v. McDearmid, 817 P.2d

1380, 1388 (Wash. Ct. App. 1991). The trust must eventually

be proven by clear, cogent and convincing evidence. See In re

Spadoni’s Estate, 430 P.2d at 967. For example, the Supreme

Court of Washington affirmed a trial court’s finding of a

resulting trust in favor of a utility company’s shareholders

when the company declared dividends for its shareholders and

established a separate bank account for the funds. See Dep’t

of Revenue v. Puget Sound Power & Light Co., 694 P.2d 7,

12 (Wash. 1985). Given the facts alleged here, however, it is

not plausible that Olympic held a resulting trust for the benefit

of the EPV entities. Instead, it is clear from the Billing Agreement that Olympic intended to retain reserves to compensate

for amounts that are uncollectible from the EPV entities’

customers—not to hold them for the EPV entities’ later benefit.

[6] Even if Olympic did hold the reserves as a resulting

trust, it repudiated that trust in 2000. The statute of limitations

begins to run when the possessor of the property repudiates,

or the plaintiff should have discovered a repudiation of, the

claimant’s right to the property. See Goodman v. Goodman,

907 P.2d 290, 294 (Wash. 1995); Brougham v. Swarva, 661

P.2d 138, 142 (Wash. Ct. App. 1983). A repudiation occurs

when the trustee, by words or other conduct, denies there is

a trust and claims the trust property as its own. Goodman, 907

P.2d at 294 (internal citations omitted). “The repudiation must

be plain, strong, and unequivocal.” Id.; Puget Sound Power &

Light Co., 694 P.2d at 12-13 (holding that repudiation

occurred at the earliest at the date of the statutory presumption

of abandonment); Skok v. Snyder, 733 P.2d 547, 550 (Wash.

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Ct. App. 1987) (noting that a trustee’s continued acknowledgment of the trust is regarded as strongly indicating that he has

not repudiated it); O’Steen v. Wineberg’s Estate, 640 P.2d 28,

34 (Wash. Ct. App.1982) (trust not repudiated based on the

trustee’s inventory of the trust’s property, although that may

be a sign that the trustee considered the property his own, it

was not clear and unequivocal). 

[7] In the present case, in 2000, Coto objected to Olympic’s

decision to raise the reserves. While Coto does not plead that

Olympic clearly stated to Coto that the reserves were its property, it inferred as much when Olympic declined to return the

funds. Moreover, the Billing Agreement indicates that Olympic subtracts its reserves from the net funds to be disbursed

to the EPV entities and, therefore, when it declares a reserve

requirement, it is also declaring that it intends to withhold the

funds from the EPV entities indefinitely. The EPV entities’

marketing programs were shut down in 2000 and, consequently, Olympic’s decision to raise the reserve requirement

that summer was its final decision as to the reserves.

It is not surprising, therefore, that Coto’s beneficiary

objected to Olympic’s actions by filing a conversion claim on

behalf of EPV in 2000. Included in the record on appeal are

several filings related to a bankruptcy in the Northern District

of Texas Bankruptcy Court, purportedly filed by EPV. In an

adversarial proceeding brought in the bankruptcy court in

November 2000, EPV filed a complaint alleging a conversion

claim against Olympic based on “[t]he method and manner in

which Olympic has retained the approximately $9 million in

funds in violation of the Billing Services Agreement.” See

Electronic Publishing Ventures, L.L.C. v. Olympic Telecommunications, Inc., Adversary Proc. No. 00-03574-hca, Doc.

No. 1 (Bankr. N. D. Tex. Nov. 21, 2000).8 EPV pleaded that

8The Court notes that the attorney currently representing Coto was representing EPV in that adversarial proceeding, which was dismissed for

want of prosecution. 

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it “has made demand upon Olympic for the return of such

funds, and such demand was refused. Accordingly, EPV

requests judgment against Olympic for the value of the money

and property which it has wrongfully assumed and exercised

control over.” Id. 

[8] Eisenberg and Olympic did not raise the abovedescribed complaint in the bankruptcy proceeding in the proceedings below, in briefing here, or at oral argument.9

 While

not relying on this bankruptcy complaint for the truth of the

allegations in it, we note that it provides additional support for

our conclusion that, in 2000, Coto (then on behalf of EPV)

knew or should have known of all the existence of the elements of a conversion claim, that is, at that time, Olympic

intended to retain the reserves and would not be disbursing

them to the EPV entities. Coto’s conversion claim thus arose

in 2000 and is, therefore, time barred.

B

[9] A claim of money had and received is another name for

a common law action for restitution. Davenport v. Washington Educ. Ass’n, 197 P.3d 686, 696 (Wash. Ct. App. 2008).

It may apply when conversion does not, in cases when “the

defendant has received money which in equity and good conscience should have been paid to the plaintiff, and under such

circumstances that he ought, by the ties of natural justice, to

pay it over.” Id. at 697 (internal quotations omitted). The law

of restitution requires only that the transferee have received

the property of another under circumstances that result in the

transferee’s unjust enrichment. Id. at 698-99. Then, restitution

9Coto attached an unfiled copy of the complaint in the adversary proceeding (which was later filed, according to records from the Texas bankruptcy court) to its Motion for New Trial. In its Motion, Coto explained

that, when it filed the complaint, it had not yet learned that, contrary to

defense counsel’s initial assertion that Olympic held no reserves, it actually had $3.6 million of reserves, purportedly for the EPV entity Cyberspace, alone. 

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applies to recover the gain acquired by the defendant through

the wrongful act as opposed to seeking damages to recover for

the harm done to the plaintiff. See GEORGE E. PALMER, LAW OF

RESTITUTION § 2.1, at 53 (1978 & Supp. 2010). Unjust enrichment is essentially another way of stating a tort claim and,

consequently, once the underlying tort claim is dismissed, so

is the unjust enrichment claim. See id. Here, Coto’s “money

had and received” claim appears to be an echo of its conversion claim, and for the reasons discussed above, is also barred

by the statute of limitations.

C

[10] Coto’s third claim for relief is one for breach of fiduciary duty based on Appellees’ role as “trustee” of the resulting trust discussed above. A fiduciary relationship does not

exist on the basis of an arm’s length business transaction,

unless provided for by contract. See, e.g., Maginnis v. Simmons, 286 P.2d 102, 104 (Wash. 1955). A claim for a breach

of fiduciary duty exists when there is a duty and the breach

was the proximate cause of losses sustained. See, e.g., Senn

v. Northwest Underwriters, Inc., 875 P.2d 637, 639 (Wash.

Ct. App.1994). As Coto averred, in 2000, it objected to the

reserve level as improper and all the elements of a breach of

fiduciary duty were present at that time—if at all. Unlike the

conversion claim, the breach of fiduciary duty claim does not

depend on whether Olympic asserted ownership over the

funds— only whether it acted as a fiduciary should have in

the best interest of those to whom it owed a duty. As Coto

notes, it could have also brought a claim based on mismanagement of the reserves in 2000. The district court’s order

will therefore be affirmed as to this claim for relief.

[11] Coto’s remaining “claims” are in fact equitable remedies that were properly disposed of by the district court given

that Coto’s claims for relief were dismissed. Accordingly, the

judgment of the district court is AFFIRMED.

COTO SETTLEMENT v. EISENBERG 1779

Case: 08-35966 01/29/2010 ID: 7212529 DktEntry: 24-1 Page: 15 of 15