Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-00980/USCOURTS-casd-3_10-cv-00980-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 12:1819 Default of Promissory Note

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

FEDERAL DEPOSIT INSURANCE

CORPORATION, as Receiver for LA JOLLA

BANK, FSB,

Plaintiff,

CASE NO. 10cv980-WQH-BGS

ORDER

vs.

DANNY TARKANIAN, an individual; AMY

M. TARKANIAN, an individual; JERRY

TARKANIAN, an individual; LOIS

TARKANIAN, an individual; GEORGE

TARKANIAN, an individual; ZAFRIR

DIAMANT, an individual; JOSEPHINE

DIAMANT, an individual; DOUGLAS R.

JOHNSON, an individual; DEBRA

JOHNSON, an individual; and DOES 1

through 100, inclusive,

Defendants. _____________________________________

DANNY TARKANIAN; AMY M.

TARKANIAN; JERRY TARKANIAN; LOIS

TARKANIAN; GEORGE TARKANIAN;

ZAFRIR DIAMANT; JOSEPHINE

DIAMANT,

Third Party Plaintiffs,

vs.

BEN WIGGINS; DOES I-X, inclusive; and

ROE CORPORATIONS I-X, inclusive,

Third Party Defendants.

HAYES, Judge:

The matter before the Court is the Motion for Summary Judgment on the Third Party

Complaint filed by Third Party Defendant Ben Wiggins. (ECF No. 63).

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BACKGROUND

On May 6, 2010, Plaintiff Federal Deposit Insurance Corporation (“FDIC”), as receiver

for La Jolla Bank, initiated this action by removing the Complaint from San Diego Superior

Court pursuant to 28 U.S.C. § 1441(b) and 12 U.S.C. § 1819(b)(2)(B). (ECF No. 1). The

original complaint filed in San Diego Superior Court alleges two causes of action against

Defendants Danny Tarkanian, Amy Tarkanian, Jerry Tarkanian, Lois Tarkanian, George

Tarkanian, Zafir Diamant, Josephine Diamant, Douglas Johnson, and Debra Johnson

(“Defendants”) for breach of guaranty on loans for which the Defendants were individual

guarantors. Id. at 30-48. 

On June 11, 2010, Defendants filed Counterclaims against Plaintiff FDIC and a Third

Party Complaint against Ben Wiggins (“Wiggins”). (ECF No. 6). In the Third Party

Complaint, Defendants allege causes of action against Wiggins for (1) civil conspiracy and (2)

aiding and abetting deceit. Id. at 28-42. Defendants allege that Wiggins conspired with La

Jolla Bank and Robert Dyson “to wrongfully encumber [Defendants’] real properties and to

shore up La Jolla Bank’s somewhat shaky financial posture by using the Johnson Investments

and the Vegas Diamond loan proceeds to repay Mr. Dyson’s loans from La Jolla Bank,” and

that Wiggins “aided Mr. Dyson [and La Jolla Bank] in their actions to wrongfully obtain funds

from [Defendants].” Id. at 40-41.

On November 21, 2011, Wiggins filed a Motion for Summary Judgment seeking

judgment in his favor on the Third Party Complaint. (ECF No. 63). On December 13, 2011,

Defendants filed an opposition. (ECF No. 72). On December 20, 2011, Wiggins filed a reply. 

(ECF No. 80). 

On January 5, 2012, the Court dismissed Douglas Johnson and Debra Johnson as third

party plaintiffs for failure to substitute counsel. (ECF No. 83). On April 17, 2012, the Court

dismissed the counterclaims against Plaintiff FDIC after Plaintiff FDIC showed entitlement

to judgment as a matter of law pursuant to 15 U.S.C. § 1823(e). (ECF No. 100). 

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UNDISPUTED FACTS

Vegas Diamond Properties, LLC (“Vegas Diamond”) and Johnson Investments, LLC

(“Johnson Investments”) each owned property in Las Vegas, Nevada. Defendants Danny

Tarkanian, Amy Tarkanian, Jerry Tarkanian, Lois Tarkanian, George Tarkanian, Zafir

Diamant, and Josephine Diamant are the principals of Vegas Diamond. Defendants Douglas

and Debra Johnson are the principals of Johnson Investments. 

Vegas Diamond and Johnson Investments took out loans with La Jolla Bank totaling

over $25 million, secured by their respective properties, and loaned the proceeds to developer

Robert Dyson to be used for a real estate project in Anza, California. The Johnsons personally

guaranteed the loan to Johnson Investments. Defendants Tarkanians and Diamants personally

guaranteed the loan to Vegas Diamond. The ability of Vegas Diamond and Johnson

Investments to repay their loans from La Jolla Bank was dependent on the ability of Dyson to

repay his loans from Vegas Diamond and Johnson Investments. 

Dyson was unable to repay the loans from Vegas Diamond and Johnson Investments. 

Defendants’ respective properties were foreclosed upon in March 2011. 

In support of his motion for summary judgment, Wiggins submitted a signed declaration

stating that: 

2. I was an independent contractor who provided services to the companies

owned by Robert Dyson. I was not Mr. Dyson's accountant or bookkeeper. At

the request of both Mr. Dyson and Danny Tarkanian, I sometimes acted as a

go-between, including sometimes transmitting messages, delivering documents

and obtaining signatures. I also prepared worksheets and paperwork related to

the Anza Project which were requested by Mr. Dyson and Mr. Tarkanian.

However, at no time did I knowingly conceal any facts or make any false

statements.

3. I was not present nor involved in any discussions or negotiations between Mr.

Tarkanian, Mr. Dyson and La Jolla Bank. I did not negotiate with La Jolla Bank

or anyone else. I never did any work for La Jolla Bank. I did not conduct or

participate in any loan negotiations on behalf of anyone. I did not restructure any

loan for Mr. Johnson or anyone else. I did not participate in any decision making

relating to Mr. Dyson's business, La Jolla Bank's business, Third Party Plaintiffs'

business, or the Anza Project.

4. I did not act knowingly to conceal or misrepresent anything, did not conspire

with anyone, and did not commit any acts in furtherance of any common design.

5. In addition, based upon my conversations with Mr. Johnson, Mr. Tarkanian

and Mr. Dyson, it was apparent to me that the true facts relating to the loans on

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the project, the use of loan proceeds, the delays with the project, the political

climate in the Anza Valley, and all the other matters Third Party Plaintiffs allege

constituted wrongful concealment, were actually known by Mr. Tarkanian

and/or his legal counsel at the time.

(Wiggins Declaration; ECF No. 63-3). 

Robert Dyson gave the following deposition testimony in this case:

Q. ... What was your relationship – or what is your current relationship with Mr.

Wiggins?

A. He still does – well, he doesn’t now. We have someone else doing the

accounting. Our relationship pretty much are friends and I counsel with him on

occasion.

Q. ... between, let’s say, 2001 and October 30, 2008, what was your relationship

with Mr. Wiggins?

A. Very active. He was instrumental in preparing us in various activities in our

real estate operation.

Q. Can you be more specific?

A. He comes more from the accounting side. I come from the marketing side. So

he – he brought that – those talents to the table in various projects that we

worked on.

...

A. ... he managed our money and did a significant amount of reporting.

...

Q. Was Mr. Wiggins your personal tax accountant?

A. He’s not an accountant.

Q. ... What is his professional background?

A. Um, he has a degree, I believe, in accounting. And I think you will have to

ask him as far as that’s concerned. He just did a great job for us.

...

Q. So if you were going to give me some advice... where I would go to get those

disbursement instructions, where would you send me?

A. Again, Ben Wiggins handled our accounting, so I would that [sic] if he had

any records...

...

Q. Now, Mr. Wiggins, he owned a company called Master Management?

A. Master Management.

...

Q. This was his company?

A. Yes, sir.

Q. What type of company was it?

A. I don’t know. I mean, it was accounting.

...

Q. ... What type of business?

A. It was an accounting business. He did a lot of our accounting and fund

control.

Q. Was he a CPA?

A. No, sir.

Q. Did you have a CPA working for him?

A. No, I think he just – clients had their own CPAs and he furnished data.

Q. More of a bookkeeper type?

A. Yes.

(Dyson Deposition Transcript; ECF No. 72-1).

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Danny Tarkanian, main principal of Vegas Diamond, submitted a signed declaration in

opposition to Wiggin’s motion for summary judgment, stating that: 

5. Beginning in 2007, during the course of dealings leading up the loan

transaction [between La Jolla Bank (hereinafter “LJB”) and Vegas Diamond],

Defendant, Ben Wiggins (hereinafter “Mr. Wiggins”) was directly involved in

all aspects of the loan transaction on a day to day basis on behalf of Mr. Dyson.

6. Mr. Wiggins was the point of contact for Mr. Dyson.

7. Mr. Wiggins was involved in virtually every meeting which was held between

Vegas Diamond and Mr. Dyson.

8. Mr. Wiggins was acting as a chief financial officer and accountant for Mr.

Dyson throughout the course of dealing on the loan transaction.

9. Mr. Wiggins provided Mr. Dyson's financial documents to Vegas Diamond.

10. In providing Vegas Diamond the financial documents, Mr. Wiggins

reviewed the financial documents with Vegas Diamond and explained them to

Vegas Diamond.

11. In reviewing and explaining the financial documents of Mr. Dyson to Vegas

Diamond, Mr. Wiggins emphasized the financial strength of Mr. Dyson and

always made it look as though Mr. Dyson had a lot of money.

12. Mr. Wiggins often informed Vegas Diamond that LJB was requesting certain

documents or other paperwork from Vegas Diamond.

13. Mr. Wiggins often reworked the financial paperwork of Vegas Diamond

saying this is how it is to be done as required by LJB.

14. Mr. Wiggins would collect the documents and other paperwork which were

requested by LJB and delivered them to LJB.

15. Mr. Wiggins inferred that he had been involved in the project in Anza,

California for a long time with Mr. Dyson.

16. Mr. Wiggins told Vegas Diamond about the project in Anza, California, and

told Vegas Diamond how exciting the project was and the great potential and

prospects it had.

17. Mr. Wiggins made representations that the project in Anza, California was

a great investment.

18. Mr. Wiggins never informed Vegas Diamond of any real problems with the

project in Anza, California and minimized the impact and extent of any

problems he may have disclosed.

19. Mr. Wiggins never informed Vegas Diamond that there were problems with

the political climate in Anza which was against the project, and there was

opposition from the local Native Americans against the project.

20. Mr. Wiggins discussed that there was a water right issue, but minimized any

adverse impact of the issue by producing reports showing there was sufficient

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water.

2l. Mr. Wiggins never informed Vegas Diamond that the problems with the

project in Anza, California were present prior to 2005.

(Tarkanian Declaration; ECF No. 72-2). 

STANDARD OF REVIEW

“A party may move for summary judgment, identifying each claim or defense–or the

part of each claim or defense–on which summary judgment is sought. The court shall grant

summary judgment if the movant shows that there is no genuine dispute as to any material fact

and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A material

fact is one that is relevant to an element of a claim or defense and whose existence might affect

the outcome of the suit. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.

574, 586 (1986). The materiality of a fact is determined by the substantive law governing the

claim or defense. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986).

The moving party has the initial burden of demonstrating that summary judgment is

proper. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 152 (1970). The burden then shifts

to the opposing party to provide admissible evidence beyond the pleadings to show that

summary judgment is not appropriate. See Celotex, 477 U.S. at 322, 324. To avoid summary

judgment, the opposing party cannot rest solely on conclusory allegations of fact or law. See

Berg v. Kincheloe, 794 F.2d 457, 459 (9th Cir. 1986). Instead, the nonmovant must designate

which specific facts show that there is a genuine issue for trial. See Anderson, 477 U.S. at 256. 

The opposing party’s evidence is to be believed, and all justifiable inferences are to be drawn

in their favor. See id; see also Matsushita, 475 U.S. at 587 (holding that any inferences from

the underlying facts must be viewed in light most favorable to the non-moving party). 

DISCUSSION

Wiggins denies acting knowingly to conceal or misrepresent any facts, conspiring with

anyone, or committing any acts in furtherance of any common design. Wiggins asserts that

he was an independent contractor hired by Dyson to provide limited financial services and that

he did not participate in any loan discussions, negotiations, or decision-making.

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Defendants assert that Wiggins was intimately involved with loan negotiations and

Dyson’s finances. Defendants assert that “Wiggins was certainly positioned to substantially

assist and encourage his good friend despite knowing that Dyson was not being honest and

forthcoming with [Defendants].” (ECF No. 72 at 14). Defendants assert that “Wiggins

actively pushed for the Vegas Diamond loan without mentioning a word of these difficulties

[with the Anza project] to [Defendants].” Id. at 15.

Under California law, the elements of civil conspiracy are “(1) the formation of a group

of two or more persons who agreed to a common plan or design to commit a tortious act; (2)

a wrongful act committed pursuant to the agreement; and (3) resulting damages.” City of

Industry v. City of Fillmore, 198 Cal.App.4th 191, 212 (2011). Civil conspiracy is not an

independent tort. Id. at 211. “A civil conspiracy, however atrocious, does not per se give rise

to a cause of action unless a civil wrong has been committed resulting in damage.” Applied

Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503, 511 (1994) (citations omitted);

See also Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc., 131 Cal.App.4th 802, 823

(2005) (“[civil conspiracy] is not itself a substantive basis for liability.”). “By its nature, tort

liability arising from conspiracy presupposes that the coconspirator is legally capable of

committing the tort, i.e., that he or she owes a duty to plaintiff recognized by law and is

potentially subject to liability for breach of that duty.” Applied Equipment, 7 Cal.4th at 511. 

Similarly, liability for aiding and abetting the commission of an intentional tort may be

imposed upon a person who “(a) knows the other's conduct constitutes a breach of duty and

gives substantial assistance or encouragement to the other to so act or (b) gives substantial

assistance to the other in accomplishing a tortious result and the person’s own conduct,

separately considered, constitutes a breach of duty to the third person.” Neilson v. Union Bank

of California, N.A., 290 F.Supp.2d 1101, 1118 (2003) quoting Saunders v. Superior Court, 27

Cal.App.4th 832, 846 (1994). “[W]hile aiding and abetting may not require a defendant to

agree to join the wrongful conduct, it necessarily requires a defendant to reach a conscious

decision to participate in tortious activity for the purpose of assisting another in performing a

wrongful act.” Howard v. Superior Court, 2 Cal.App.4th 745, 749 (1992). “[L]iability [for

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aiding and abetting] attaches because the aider and abettor behaves in a manner that enables

the primary violator to commit the underlying tort.” Neilson, 290 F.Supp.2d at 1134.

Defendants have not alleged that any independent tort was committed by Wiggins. The

tort counterclaims against Plaintiff FDIC have been dismissed. No claims have ever been filed

against Robert Dyson. Defendants have failed to establish that any intentional tort or wrongful

act was committed by Wiggins, the FDIC as receiver for La Jolla Bank, or Dyson. Defendants

have not shown that any civil wrong has been committed by any party or that any duty was

owed to Defendants by Wiggins. See Applied Equipment, 7 Cal.4th at 511. Defendants have

failed to come forward with evidence to support their claims against Wiggins. Accordingly,

Wiggins is entitled to summary judgment. 

CONCLUSION

IT IS HEREBY ORDERED that the Motion for Summary Judgment on the Third Party

Complaint filed by Third Party Defendant Ben Wiggins (ECF No. 63) is GRANTED as to the

third party claims filed by Defendants Danny Tarkanian, Amy Tarkanian, Jerry Tarkanian,

Lois Tarkanian, George Tarkanian, Zafir Diamant, and Josephine Diamant. 

DATED: May 3, 2012

WILLIAM Q. HAYES

United States District Judge

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