Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_03-cv-04829/USCOURTS-cand-5_03-cv-04829-20/pdf.json

Nature of Suit Code: 423
Nature of Suit: Bankruptcy Withdrawal 28 USC 157
Cause of Action: 28:0157 Motion for Withdrawal of Reference

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 This disposition is not designated for publication and may not be cited.

Case No. C 03-03394 JF (PVT) and C 03-04829 JF (PVT)

ORDER RE MOTIONS HEARD ON JANUARY 6, 2006

(JFLC1)

**E-Filed 2/23/06**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

EDWARD L. SCARFF, et al.,

 Plaintiffs,

 v.

WELLS FARGO BANK, N.A., et al.,

 Defendants.

Case Number C 03-03394 JF (PVT)

 C 03-04829 JF (PVT)

ORDER1 RE MOTIONS HEARD ON

JANUARY 6, 2006 

On January 6, 2006, the Court heard oral argument on five motions in the instant action:

(1) Defendant Comerica Bank (“Comerica”) moves for partial summary adjudication on the issue

of damages; (2) Defendants Wells Fargo Bank, N.A. (“Wells Fargo”) and Carol Barber

(“Barber”) move for summary judgment on Plaintiffs’ third, fourth, sixth, ninth, eleventh,

twelfth, and fourteenth claims; (3) Defendant Kelly Hvegholm (“Hvegholm”) moves for

summary judgment on Plaintiffs’ third and fourth claims; (4) Defendants Intuit Inc. (“Intuit”),

Computing Resources Inc. (“CRI”), and Lisa Ciccotti (“Ciccotti”) move for summary judgment

on Plaintiffs’ third and fourth claims (Wells Fargo, Barber, and Hvegholm join in this motion);

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ORDER RE MOTIONS HEARD ON JANUARY 6, 2006

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(5) Wells Fargo, Intuit, CRI, Barber, and Ciccotti move to exclude the expert declarations of

John Britt (“Britt”), Vicki Lambert (“Lambert”), and David Moore (“Moore”) (Comerica joins in

this motion as to the declarations of Britt and Moore; Hvegholm joins as to the declaration of

Lambert).

On January 11, 2006, in light of the proximity of the then-scheduled trial date, the Court

issued a Memorandum of Intended Disposition. This order sets forth the reasoning underlying

the Memorandum.

I. BACKGROUND

The general background of the present action is described in the Court’s Amended Order

Re Motions to Withdraw Reference to the Bankruptcy Court and Motions to Dismiss, dated June

18, 2004 and its Order Granting in Part and Denying in Part Motions to Dismiss and to Strike

Portions of the Consolidated Amended Complaint, dated May 23, 2005 (“Order of May 23,

2005”). This action arises out of alleged “credit line” and “payroll” schemes, through which, for

approximately a decade, Carol Huang (“Huang”) embezzled millions of dollars from a number of

banks, financial institutions, companies, and/or individuals. Plaintiff Edward L. Scarff (“Scarff”)

had a career as a successful businessman for many years, which included serving as President and

Chief Operating Officer of Transamerica Corporation and as a partner in several investment

firms. Huang was employed as a bookkeeper for two of these investment firms, Plaintiffs Scarff,

Sears & Associates (“SSA”) and Pentoga Partners (“Pentoga”). 

In the fall of 2002, after Huang’s alleged embezzlement came to light, Comerica and

Wells Fargo filed suit against Scarff and the Scarff Trust (which guaranteed Scarff’s loans) in the

Santa Clara Superior Court, seeking to collect millions of dollars in loan advances made by the

banks, plus unpaid interest, attorneys’ fees, and costs. Plaintiffs denied liability and, on

December 24, 2002, brought several claims against Comerica and other Defendants in the state

court action. 

On July 21, 2003, Plaintiffs Scarff, Nancy Scarff, SSA, and Pentoga filed their first

original complaint in the instant federal action. The final Consolidated Amended Complaint

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2

 Additionally, Huang is named as a Defendant in the caption of the CAC, but none of the

claims is asserted expressly against her.

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ORDER RE MOTIONS HEARD ON JANUARY 6, 2006

(JFLC1)

(“CAC”), the allegations of which are at issue in the pending motions, was not filed until August

16, 2004. In that pleading, Plaintiffs allege fifteen claims for relief against various groups of

Defendants, including Wells Fargo, Comerica, Bank of America Corp. (“Bank of America”),

Fidelity National Title Co. (“Fidelity”), CRI, Intuit, Hvegholm, Barber, Joan Burtzel (“Burtzel”),

and Ciccotti.2 In its Order of May 23, 2005, the Court dismissed, restricted the scope of, or

limited to specific Plaintiffs certain claims against Wells Fargo, Comerica, Bank of America,

Fidelity, CRI, Intuit, Hvegholm, Barber, Burtzel, and Ciccotti. On June 14, 2005, the Court

dismissed Fidelity as a Defendant in this action. Bank of America has entered into settlement

with Plaintiffs, the details of which are unknown to the Court.

By order dated December 16, 2005, the Court denied Comerica’s motion for summary

judgment as to Scarff’s ninth and eleventh claims and Burtzel’s motion for summary judgment as

to Scarff’s ninth, eleventh, and twelfth claims. Neither Comerica nor Burtzel moved for

summary judgment as to the fifteenth claim, for declaratory relief. Accordingly, the claims

remaining against Comerica are the ninth, eleventh, and fifteenth, and the claims remaining

against Burtzel are the ninth, eleventh, twelfth, and fifteenth. The remaining Defendants now

move for summary judgment or partial summary judgment on all claims except the fifteenth. In

addition, Comerica moves for partial summary adjudication on the issue of damages, and several

Defendants move to exclude certain expert declarations.

II. LEGAL STANDARD

A motion for summary judgment should be granted if there is no genuine issue of

material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.

56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The moving party bears

the initial burden of informing the Court of the basis for the motion and identifying the portions

of the pleadings, depositions, answers to interrogatories, admissions, or affidavits that

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ORDER RE MOTIONS HEARD ON JANUARY 6, 2006

(JFLC1)

demonstrate the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S.

317, 323 (1986). 

If the moving party meets this initial burden, the burden shifts to the non-moving party to

present specific facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e);

Celotex, 477 U.S. at 324. A genuine issue for trial exists if the non-moving party presents

evidence from which a reasonable jury, viewing the evidence in the light most favorable to that

party, could resolve the material issue in his or her favor. Anderson, 477 U.S. 242, 248-49;

Barlow v. Ground, 943 F.2d 1132, 1134-36 (9th Cir. 1991). 

“When the nonmoving party has the burden of proof at trial, the moving party need only

point out ‘that there is an absence of evidence to support the nonmoving party’s case.’” 

Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (quoting Celotex Corp. v. Catrett, 477

U.S. 317, 325 (1986)). Once the moving party meets this burden, the nonmoving party may not

rest upon mere allegations or denials, but must present evidence sufficient to demonstrate that

there is a genuine issue for trial. Id. 

The standard applied to a motion seeking partial summary judgment is identical to the

standard applied to a motion seeking summary judgment of the entire case. Urantia Foundation

v. Maaherra, 895 F.Supp. 1335, 1335 (D. Ariz. 1995). 

III. DISCUSSION

1. Comerica

On December 5, 2005, Comerica moved for partial summary adjudication on the issue of

damages, arguing that a significant portion of Scarff’s damages claims are barred by the two- and

three-year statutes of limitation applicable to his negligence and fraud claims, respectively. On

the same date, Comerica filed a motion for administrative relief to amend the scheduling order

and to permit it to file the instant motion. Plaintiffs did not file opposition to the motion for

administrative relief. On December 19, 2005, the Court granted Comerica’s motion for

administrative relief and scheduled the hearing on the instant motion for January 6, 2006.

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Case No. C 03-03394 JF (PVT) and C 03-04829 JF (PVT)

ORDER RE MOTIONS HEARD ON JANUARY 6, 2006

(JFLC1)

a. The Court properly granted Comerica’s motion for administrative relief to amend

the scheduling order 

Scarff first argues that the Court erred in granting Comerica’s motion for administrative

relief to amend the scheduling order. In moving to amend the scheduling order, Comerica argued

that discovery responses produced by Scarff on October 25, 2005 “made apparent for the first

time that over half of the total amount of the damages Scarff alleges is barred by the two and

three year statutes of limitations.” Scarff argues that this basis for amending the scheduling order

is not supported by the record. He contends that his May 9, 2005 responses to Bank of

America’s first set of interrogatories—which provided a list of then-known unauthorized

transactions, including transactions between 1997 and 1999—provided Comerica with sufficient

notice of the transactions which Comerica now argues are barred by relevant statutes of

limitations. Declaration of Philip L. Gregory in Opposition to the Motion for Partial Summary

Adjudication of Defendant Comerica Bank (hereinafter “Gregory Decl. A”), Ex. 2.

For several reasons, the Court concludes that it properly granted Comerica's motion for

administrative relief to amend the scheduling order. First, as noted above, Plaintiffs did not file

opposition to the motion for administrative relief. Comerica filed its motion for administrative

relief on December 5, 2005. Pursuant to Civil Local Rule 6-3(c), opposition to a motion to

change time must be filed “no later than the third court day after receiving the motion.” This

filing deadline applies to opposition for miscellaneous administrative requests. Civ. L. R. 7-

10(2). The Court granted Comerica’s motion for administrative relief on December 19, 2005,

fourteen days after the motion was filed. Second, Scarff’s May 9, 2005 responses to

interrogatories did not identify specifically the transactions on which Scarff would base his

claims for damages— instead, they identified only the “transaction[s] conducted and/or arranged

by Carol Huang without [Scarff’s] authorization that resulted in the removal of money from any

of [his] bank account(s).” Gregory Decl. A, Ex. 2. Third, the issue of whether any portion of the

damages alleged by Scarff is barred by a statute of limitations is an issue that necessarily would

arise at trial. Thus, it is in the interest of judicial efficiency for the Court to hear Comerica’s

substantive motion concurrently with the motion of Intuit et al., which includes a similar

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 In its reply brief, Comerica represents to the Court that:

The “discovery rule” is codified in section 338(d) and provides that a cause of

action for fraud or mistake “is not to be deemed to have accrued until the

discovery, by the aggrieved party or his or her agent, of the facts constituting the

fraud or mistake.” C.C.P. 338(d) (emphasis added).

This is a misrepresentation of the law: While clause “or his or her agent” is included in

sections (c), (e), and (f) of California Code of Civil Procedure § 338, it is notably absent from

section (d). While the fact that the additional clause not only is included but also has been

emphasized causes the Court some concern, the Court will give counsel the benefit of the doubt

and presume that the addition of this clause was inadvertent.

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Case No. C 03-03394 JF (PVT) and C 03-04829 JF (PVT)

ORDER RE MOTIONS HEARD ON JANUARY 6, 2006

(JFLC1)

argument about relevant statutes of limitations.

b. Discovery rule

On October 25, 2005, in response to Wells Fargo’s first set of interrogatories, Scarff

provided a detailed list of dates and interest payments he alleges in connection with his claim for

damages. See Declaration of Jonathon R. Bass in Support of Wells Fargo Bank N.a.’s, Carol

Barber’s, Intuit Inc.’S, Computing Resources, Inc.’S and Lisa Ciccotti’s Motions for Summary

Judgment (hereinafter “Bass Decl.”), Ex. 22, pp. 13-25. This list includes payments made

between June 25, 1997 and September 3, 2002. Id. Scarff first filed claims against Comerica

and the other Defendants in this action on December 24, 2002. Accordingly, Comerica contends

that the two-year statute of limitations for negligence bars damages claims for transactions that

occurred prior to December 24, 2000, see Cal. Code Civ. Proc. § 339, and the three-year statute

of limitations for fraud claims bars damages claims for transactions conducted prior to December

24, 1999, see Cal. Code Civ. Proc. § 338.3 In response, Scarff argues that the discovery rule,

which can delay the start of a limitations period, applies to Scarff’s claims for damages because

Scarff timely filed his claim after he discovered Huang’s scheme.

 The discovery rule “postpones accrual of a cause of action until the plaintiff discovers, or

has reason to discover, the cause of action.” Norgart v. Upjohn Co., 21 Cal.4th 383, 397 (1999).

Comerica argues that the relevant periods of limitation begin to run when the plaintiff “could

have discovered” the claim with reasonable diligence. The only case cited by Comerica that

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Case No. C 03-03394 JF (PVT) and C 03-04829 JF (PVT)

ORDER RE MOTIONS HEARD ON JANUARY 6, 2006

(JFLC1)

includes the rule that the limitations period begins when the claim “with reasonable diligence

could have been discovered” by the plaintiff is a case of professional negligence. Electronic

Equipment Express, Inc. v. Donald H. Seiler & Co., 122 Cal.App.3d 834, 855 (1981). Comerica

also cites Norgart v. Upjohn Co. for the proposition that the limitations period begins to run

when the plaintiff “could have discovered” the claim with reasonable diligence. However, the

Norgart court held that a plaintiff has “reason to discover the cause of action when he has reason

at least to suspect a factual basis for its elements,” which is defined as when a plaintiff has

“‘notice or information of circumstances to put a reasonable person on inquiry.’” Id. at 398

(quoting Jolly v. Eli Lilly & Co., 44 Cal.3d 1103, 1110 (1998)) (italics in original). In Kline v.

Turner, another case cited by Comerica, the court held that the plaintiff was “reasonably on

inquiry” because he had notice of “an inexplicable act” and “should reasonably have suspected a

possible explanation [that] was something other than negligence.” Kline, 87 Cal.App.4th 1369,

1375 (2001).

Considering the facts in the light most favorable to the Plaintiffs, a reasonable jury could

conclude that Scarff did not have notice of facts that would have put a reasonable person on

inquiry, and that he would not have discovered such facts through reasonable diligence. Scarff

had remarkably little contact with employees of Comerica. Burtzel, who originally solicited

business from Scarff, met with Scarff in person only twice, the first time at his office sometime

after Scarff’s initial meeting with a Comerica representative in June, 1997, and the second time

over lunch in 1997 or 1998. See Declaration of Martin H. Kresse in Support of Motion for

Summary Judgment, or in the Alternative, Partial Summary Judgment by Defendant Joan

Burtzel, Ex. C, pp. 145-55. Moreover, at Huang’s request, Scarff’s bank statements were kept at

the Comerica office. See, e.g., Gregory Decl. A, Ex. E, pp. 40-42 and Ex. G, pp. 12, 26-27. 

While the Court has considerable doubt that a jury in fact would conclude that Scarff was

reasonably diligent (given the fact that he apparently never looked at his own bank records), it is

not inconceivable that a reasonable jury could reach such a conclusion. Thus, summary

adjudication that the discovery rule does not apply is inappropriate.

At oral argument, counsel for Comerica argued, as Comerica did in its moving papers,

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 Defendants Wells Fargo and Barber join in the motion of Intuit et al. Because the Court

will grant Intuit et al.’s motion on the ground that Plaintiffs have not met their burden of

presenting specific evidence showing that there is a genuine issue for trial, it does not reach these

three issues with respect to Intuit et al. However, as discussed below, the Court does reach the

first and third issues with respect to Wells Fargo and Barber. Additionally, even though none of

the claims alleged by Pentoga will remain after this disposition, the Court nevertheless provides

reasoning supporting its conclusion, below, that Pentoga does not have standing to assert any

claims.

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Case No. C 03-03394 JF (PVT) and C 03-04829 JF (PVT)

ORDER RE MOTIONS HEARD ON JANUARY 6, 2006

(JFLC1)

that under Kiernan v. Union Bank “the employer, though not imputed with knowledge of the

fraud of his faithless agent, is, as principal, chargeable with such information as an honest

employee, unaware of the wrongdoing, would have acquired from the examination of the

cancelled checks and bank statements.” Kiernan, 55 Cal.App.3d 111, 117 (1976). However,

because Kiernan involved the specific statutory duty of a customer to discover and report his

unauthorized signature on forged instruments, it is distinguishable. Id. at 115 (“Section 4406 [of

the Uniform Commercial Code] places a burden upon a bank customer to examine his statements

regularly and discover any forgeries or alterations on any item included therein so long as the

bank has met its duty of making available the statement of account and items paid to the

customer.”).

Accordingly, Comerica’s motion for partial summary adjudication on the issue of

damages will be DENIED. 

2. Intuit, CRI, Ciccotti, and Hvegholm

Defendants Intuit, CRI, and Ciccotti move for summary judgment on Scarff’s, Pentoga’s,

and SSA’s third claim for secondary liability for fraud and deceit and fourth claim for secondary

liability for conversion. In addition or in the alternative, they request summary adjudication as to

three issues: (1) whether claims that are based on an aiding and abetting theory are time-barred to

the extent that the thefts occurred more than three years prior to Plaintiffs’ filing, (2) whether

Pentoga has capacity to bring claims in this action, and (3) whether Plaintiffs may pursue a claim

for punitive damages against Intuit or CRI.4 Defendant Hvegholm also moves for summary

judgment on Plaintiffs’ third and fourth claims and joins in the motion of Intuit et al. Plaintiffs

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5

 On November 23, 2005, Plaintiffs filed opposition to Hvegholm’s motion for summary

judgment. On December 7, 2005, Plaintiffs submitted an almost identical opposition to Intuit et

al.’s motion for summary judgment, despite the significant substantive differences between these

motions for summary judgment, and failed to address many of the arguments made by Intuit et al. 

Highlighting Plaintiffs’ failure to distinguish substantively their two oppositions is the fact that

they conclude their opposition to Intuit et al.’s motion with the sentence: “For the foregoing

reasons, Hvegholm’s Motion for Summary Judgment should be denied.”

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Case No. C 03-03394 JF (PVT) and C 03-04829 JF (PVT)

ORDER RE MOTIONS HEARD ON JANUARY 6, 2006

(JFLC1)

filed opposition to both motions for summary judgment.5

a. Factual background regarding Intuit, CRI, Ciccotti, and Hvegholm

On October 6, 1983, Wells Fargo and Pentoga entered into a Business Services

Processing Agreement (the “Pentoga Payroll Agreement”), under which Wells Fargo contracted

to provide payroll processing services to Pentoga. CAC, Ex. A. On August 7, 1984, the Pentoga

Payroll Agreement was amended to designate Huang as the authorized contact person for

Pentoga. Id. On November 3, 1983, Wells Fargo and SSA entered into an identical agreement

(the “SSA Payroll Agreement”). CAC, Ex. B. On July 30, 1985, the SSA Payroll Agreement was

amended to designate Huang as a “contact and authorized signature.” Id.; Bass Decl., Ex. 5, pp.

55-59. Both contracts include a “notification of errors” clause:

Upon Bank’s delivery of output data to Customer, Customer shall have twentyfour (24) hours in which to examine all documents to verify accuracy. 

Notification of missing or incorrect items may be made orally by Customer to

Bank but shall on the same day be confirmed in writing to the address set forth in

Section I. If no notification is given within this time period, subsequent requests

for corrections will be considered Special Handling and will be subject to the

additional fees for such services. Proof of processing and final audit

responsibility remains with the Customer.

CAC, Exs. A and B.

In 1990, Wells Fargo outsourced its payroll processing agreements to CRI. Declaration

of David Merenbach in support of Wells Fargo Bank N.A.’s, Carol Barber’s, Intuit Inc.’s,

Computing Resources, Inc.’s and Lisa Ciccotti’s Motions for Summary Judgment (hereinafter

“Merenbach Decl.”), ¶¶ 3-4 and Ex. A, § 2. In May 1999, Intuit acquired CRI as a wholly owned

subsidiary, thereby acquiring the Pentoga and SSA payroll processing contracts. Merenbach

Decl., ¶ 5. Hvegholm was employed by CRI from 1984 to 1996 in various payroll and customer

service-related positions. Bass Decl., Ex. 17; Declaration of Susan Story in Support of Wells

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(JFLC1)

Fargo Bank N.a.’s, Carol Barber’s, Intuit Inc.’S, Computing Resources, Inc.’S and Lisa Ciccotti’s

Motions for Summary Judgment (hereinafter “Story Decl.”), ¶ 20. In 1986, Ciccotti began her

employment with CRI, where she held a series of payroll and tax-related positions. Ciccotti

Decl., ¶ 2. 

The payroll processing services provided by CRI, and later Intuit, included “calling in

payroll.” Declaration of Philip Gregory in Opposition to Hvegholm’s Motion for Summary

Judgment (hereinafter “Gregory Decl. B”), Ex. A, p. 44. An authorized person would call in the

amount of payroll to a designated CRI/Intuit representative. Story Decl., ¶ 4. CRI/Intuit would

process the information overnight, and the checks would be sent out the following day. Gregory

Decl. B, Ex. A, p. 44. In 1985, Hvegholm, then a payroll representative for CRI, began

providing payroll services for Pentoga and SSA. Id., pp. 31-32. It was at this point that

Hvegholm first had contact with Huang, who would call in the payroll for these companies. Id. 

CRI had on file a “semimonthly salary rate” for Pentoga and SSA. Id., p. 41. The person calling

in payroll, however, might request payroll amounts that deviated from the stated salary rates. Id.,

pp. 41-42. Hvegholm has testified that she understood Huang’s title to be “Head Accountant,”

and that she knew that Huang was not an owner of Pentoga or SSA. Id., pp. 43-44. Hvegholm

recalled that there was only one employee, Huang, on the payroll of Pentoga and there were five

or six employees on the payroll of SSA (but by the 1990s, Huang was also the only employee on

the payroll of SSA). Id., pp. 51-52.

In 1985 or 1986, Huang contacted Hvegholm and said that Huang needed to adjust her

salary. Hvegholm has testified that Huang made the following explanation: “[the owners of her

company] wanted to ensure that she got what was due to her each pay period, and that she would

pay herself though Pentoga Partners and Scarff, Sears & Associates, and whenever they deemed

she was receiving her pay or the money was coming in on these other companies, she would call

in an adjustment on the two companies, on Scarff, Sears and Pentoga Partners, and pay the net—

pay back to those two accounts that those—that the payroll was debited from.” Id., p. 53. 

Hvegholm never contacted Scarff about this arrangement. Id. However, Hvegholm did check

with her supervisor, Susan Story (“Story”), who told Hvegholm that she could process payroll in

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 In her deposition testimony, Hvegholm did not identify the origin of her flight to the Bay

Area. At the time, she was working for CRI in Reno, Nevada. Gregory Decl. B, Ex. A, p. 11. 

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ORDER RE MOTIONS HEARD ON JANUARY 6, 2006

(JFLC1)

this manner. Id., p. 54. Hvegholm has testified that she does not recall any other customer

having such an arrangement during her time at CRI. Id., p. 65.

Huang would say to Hvegholm, “‘I need my year-to-date wages now to read this,’” and

Hvegholm would “give her a call back and let her know what the net pay was due back to the

company, and then she would deposit that amount back into the appropriate company’s account.” 

Id., p. 55. The computer records would show that a check was voided in order to show the

adjustment, even though the check was not in fact voided. Id., pp. 55-56. “For the most part,”

these adjustments were made every two weeks, though sometimes Huang would not make an

adjustment. Id., p. 58. Later, Huang sent deposit receipts to Hvegholm documenting the amount

that had been put back into the Pentoga and SSA accounts. Id., p. 56.

Hvegholm and Huang met in person for the first time in 1986 or 1987, when Hvegholm

visited Huang in Berkeley, at Huang’s invitation. Id., p. 69. Hvegholm paid for her own flight,6

and Huang paid for Hvegholm’s hotel room and a dinner cruise. Id., pp. 71 and 73. Huang also

gave Hvegholm gifts of items and cash. In 1985, Huang sent Hvegholm a check for $300, which

Hvegholm reported to Story and Harry Hart (“Hart”), one of the owners of the company. Id., p.

72. They both told Hvegholm to return the check. Id. This was the only gift that Hvegholm

returned, and she never again reported to Story the gifts she received from Huang. Id., pp. 104

and 106. Huang gave Hvegholm several purses as gifts. Id., p. 95. Hvegholm has testified that

she received cash—which was “never compensation;” it was “always gifts because we were

friends, and they were given at Christmas, Thanksgiving, sometimes Easter”—every year starting

in the late 1980s. Id. She also testified that she might have received cash in other months. Id.,

p. 96. Hvegholm has testified that the checks ranged in amount from $300 to $1,700, explaining

that the larger check came at Christmas or the birth of a child. Id., p. 97. Huang also asked

Hvegholm to give specified amounts of money to Ciccotti because Huang “didn’t have time, you

know, to write out multiple checks.” Id., p. 97. Hvegholm has testified that she did not recall the

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7

 When a claim for fraud and deceit is based specifically on concealment, the elements of

the claim are as follows: “(1) the defendant must have concealed or suppressed a material fact,

(2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the

defendant must have intentionally concealed or suppressed the fact with the intent to defraud the

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specific amounts she gave to Ciccotti. Id., p. 99. In response to the suggestion that it ranged

from “a few hundred to several thousand at most,” she responded, “At most, yes. At way most.” 

Id. On at least one occasion, as one of the first gifts, Huang sent a cashier’s check in the amount

of three or four hundred dollars. Id., pp. 99-100. Hvegholm explained that it was sent in

response to Hvegholm having returned a previous check—Huang sent the cashier’s check and

said that Hvegholm had to cash it or Huang would be out the money. Id.

After Hvegholm left CRI in 1996, she continued calling in payroll for Carol Huang. Id.,

pp. 123-24. She informed several people at CRI/Intuit, including Hart, Linda Stoddard, Ciccotti,

Iris Matthews, and Carol King, about this continued service. Id., p. 124. Huang wrote a letter

authorizing Hvegholm to call in payroll for her. Id., p. 127. At this point, the checks that Huang

sent increased in value, ranging from about a thousand dollars to three or four thousand dollars. 

Id., pp. 100-101. During this time, Ciccotti did most of the calculations for Huang’s payroll

adjustment. Id., p. 138. In August 2002, when Huang left the country, she had the Intuit reports

send to Hvegholm’s home. Gregory Decl. B, Ex. C, pp. 157-58.

b. Damages arising from the payroll scheme

Defendants Intuit, CRI, and Ciccotti argue that Plaintiffs cannot prove that they suffered

damages as a result of the alleged payroll scheme; Hvegholm joins in this argument. Both of the

remaining claims against these Defendants—the third claim, for secondary liability for fraud and

deceit in connection with the alleged “payroll scheme” and the fourth claim for secondary

liability for conversion in connection with the alleged “payroll scheme”—require that Plaintiffs

show evidence of damages. The elements of a claim for fraud and deceit are: (1) a

misrepresentation (i.e., false representation, concealment, or nondisclosure), (2) knowledge of

the falsity, (3) intent to defraud (i.e., to induce reliance), (4) justifiable reliance, and (5) resulting

damage.7 Lazar v. Superior Court, 12 Cal.4th 631, 638 (1996). The elements of a claim for

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plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did

if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or

suppression of the fact, the plaintiff must have sustained damage.” Marketing West, Inc. v.

Sanyo Fisher (USA) Corp., 6 Cal.App.4th 603, 612-13 (1992).

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conversion are: “(1) plaintiffs’ ownership or right to possession of the property at the time of the

conversion; (2) defendants’ conversion by a wrongful act or disposition of plaintiffs’ property

rights; and (3) damages.” Baldwin v. Marina City Properties, Inc., 79 Cal.App.3d 393, 410

(1978). “It is well settled [] that money on deposit with a bank may not be the subject of

conversion.” Lawrence v. Bank of America, 163 Cal.App.3d 431, 437 (1985). “[M]oney cannot

be the subject of a conversion action unless a specific sum capable of identification is involved.” 

Software Design & Application, Ltd. v. Hoefer & Arnett, Inc., 49 Cal.App.4th 472, 485 (1996). 

In Software Design, the money at issue could not be subject to a claim of conversion because “it

came into the partnership accounts over time, in various sums, without any indication that it was

held in trust for [the plaintiff].” Id. 

Intuit et al. argue that the accounts of SSA, Pentoga, and Scarff were merely “used” in the

payroll scheme, and that Plaintiffs suffered no identifiable damages. Plaintiffs allege in their

CAC that “Huang wrote checks on the Northcliff account at WFB and/or transferred from the

Northcliff account, the amount equal to the difference between her actual salary and the

fraudulent “overpayment,” and that the money in the Northcliff account was transferred from the

Scarff personal checking account. CAC, ¶¶ 57, 58. While Intuit et al. argue that the money in

Scarff’s personal account was obtained fraudulently from financial institutions, Plaintiffs allege

that the credit line funds “together with Mr. Scarff’s personal [Wells Fargo] deposits, and [Wells

Fargto] deposits associated with the income and/or earnings of SSA, Pentoga, and Northcliff (a

separate account), were used to ‘fund’ the SSA and Pentoga business accounts that were used for

payroll.” Id., ¶ 8. However, as Intuit et al. argue, Plaintiffs have failed to identify any specific

evidence that their own funds were used in the payroll scheme; if such evidence exists, it

apparently is located at some unspecified location in the volumes of documents that have been

submitted to the Court. Plaintiffs’ opposition papers also fail to explain how, given the

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complicated nature of the scheme, any such evidence fits together.

Huang has testified that it was her “best recollection” that, in the words of Plaintiffs’

attorney, “no money belonging to Mr. Scarff from his income or earnings or businesses [] went to

fund [Huang’s] payroll adjustments other than the lines of credit.” Bass Decl., Ex. 10, p. 514. In

the Santa Clara Superior Court action regarding the same factual allegations that underlie the

instant action, Plaintiffs submitted an expert declaration by Brian M. Kreischer (“Kreischer”)

regarding damages. Id., Ex. 32. Kreischer’s analysis covers only the period from November

1996, the inception of the Wells Fargo credit line, through September 2002. Id., ¶ 7. He states:

“Due to the fungible nature of cash, I did not attempt to trace specific deposits from the

Comerica credit facilities to these fraudulent payments. However, it is clear these Comerica

credit facilities were a major funding source for Huang’s payroll fraud scheme.” Id., Ex. 32 ¶ 8. 

Intuit et al. argue that there is also no competent evidence of damages to Scarff, SSA, or

Pentoga prior to January 1997. Scarff was asked by interrogatory to “[i]dentify each transfer of

‘funds from Edward Scarff’s personal accounts at Wells Fargo through Northcliff Corporation’s

account at Wells Fargo’ that ‘reimburse[ed] the SSA and Pentoga payroll accounts,’” as alleged

in the CAC. Bass Decl., Ex. 23, p. 14. In response, Scarff identified only deposit amounts

beginning on January 7, 1997. Id., pp. 15-17. SSA was asked by interrogatory to identify its

own funds, if there were any, that were embezzled through the payroll scheme. Id., Ex. 27, p.

24. In response, SSA identified only deposit amounts on or after January 2, 1997. Id. pp. 25-34. 

Pentoga, in response to the same interrogatory, did identify Pentoga dividend and interest income

prior to 1997. Id., Ex. 25, p. 17. However, Intuit et al. make a reasonable argument that there is

no identifiable competent evidence that this income funded the payroll scheme. Pentoga does

identify the Wells Fargo bank account # 4001-166917 as the account from which funds were

embezzled. Id. However, Plaintiffs do not identify any specific competent evidence that

supports the conclusion that the income identified prior to 1997 was deposited into this account. 

The only documentary evidence that cited by Pentoga are Schedule K tax returns, which, as Intuit

et al. argue, are unlikely to show deposits made to any particular bank account. It is entirely

possible that these funds were not deposited into Wells Fargo bank account # 4001-166917, as

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8

 A court may, in its discretion, choose to delve deeply into the record for evidence

supporting a party’s position. However, when the evidence is so complicated and vastly

scattered throughout the record, and a party with sufficient legal resources has failed entirely to

address the argument of the opposing party or identify with specificity any evidence, it is

unreasonable for that party to expect, or even to hope, that a Court would scour the record in

search of evidence supporting its position.

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Pentoga appears to have had more than one bank account. See Bass Decl., Ex. 16, p. 135. 

Thus, it is not readily apparent that any competent evidence exists that demonstrates that

any of Plaintiffs’ own funds were embezzled through the alleged payroll scheme. Intuit et al.

have met their burden on summary judgment of showing “‘that there is an absence of evidence to

support the nonmoving party’s case.’” Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001)

(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)); see also, Fairbank v. Wunderman

Cato Johnson, 212 F.3d 528, 532 (9th Cir. 2000) (“Under the federal standard a moving

defendant may shift the burden of producing evidence to the nonmoving plaintiff merely by

‘showing’—that is, pointing out through argument—the absence of evidence to support plaintiff's

claim.”). Because Intuit et al. have met their initial burden, Plaintiffs may not rest upon mere

allegations or denials, but must present evidence sufficient to demonstrate that there is a genuine

issue for trial. Id. 

Plaintiffs have not met their burden of presenting specific evidence showing that there is

a genuine issue for trial. In fact, they offer no response in opposition to the argument that there

is no evidence of damages. At oral argument, the Court inquired as to whether there was specific

evidence showing that any of the Plaintiffs had been damaged. In response, Plaintiffs’ counsel

indicated that such evidence is in “the answers to interrogatories.” This response confirmed the

Court’s initial conclusion that Plaintiffs had not met their burden of “[setting] forth in the

opposing papers with adequate references [evidence establishing a genuine issue of fact] so that

it [can] conveniently be found.” Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1031 (9th

Cir. 2001). It is not the Court’s task to “‘scour the record in search of a genuine issue of triable

fact.’” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996).8 

Accordingly, the motions of Intuit, CRI, Ciccotti, and Hvegholm on Plaintiffs’ third and

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9

 The Court can conceive of an argument that Scarff was damaged by the payroll scheme

to the extent that he paid fees and interest on the loans obtained through the credit line scheme

and used to fund the payroll scheme. However, Plaintiffs did not plead this theory in the CAC or

raise this argument in their voluminous briefing, and the Court declines to consider this argument

sua sponte.

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fourth claims will be GRANTED. As a result of this ruling, no claims remain against these

Defendants.9

c. Respondeat superior liability

An independent, alternative ground on which the Court grants Intuit’s and CRI’s motion

for summary judgment is that the doctrine of respondeat superior does not make Intuit or CRI

vicariously liable for the alleged actions of Hvegholm or Ciccotti, because these individuals,

assuming that they engaged in the alleged illegal conduct, acted outside the scope of their

employment. Plaintiffs offered no response to this argument in their opposition to Intuit et al.’s

motion for summary judgment.

Under California law, the doctrine of respondeat superior makes an employer “vicariously

liable for the torts of its employees committed within the scope of the employment.” Lisa M. v.

Henry Mayo Newhall Mem’l Hosp., 12 Cal.4th 291, 296 (1995). An employee’s tort is within

the scope of her employment if “the risk of such an act is typical of or broadly incidental to the

employer’s enterprise.” Yamaguchi v. Harnsmut, 106 Cal.App.4th 472, 482 (2003). The

employee’s motive is relevant to the determination of whether respondeat superior liability

arises: “An act serving only the employee’s personal interest is less likely to arise from or be

engendered by the employment than an act that, even if misguided, was intended to serve the

employer in some way.” Lisa M., 12 Cal.4th at 298. It is not enough that “the employment

brought tortfeasor and victim together in time and place.” Id. Rather, “ the incident leading to

injury must be an ‘outgrowth’ of the employment,” or “the risk of tortious injury must be

‘inherent in the working environment’” or “typical of or broadly incidental to the enterprise [the

employer] has undertaken.” Id. Vicarious employer liability may arise if the employee’s tort was

foreseeable, meaning “that in the context of the particular enterprise an employee’s conduct is

not so unusual or startling that it would seem unfair to include the loss resulting from it among

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other costs of the employer's business.” Id. 

Following California law, the Ninth Circuit has held that an employer was not liable for

an employee’s theft, even though it was made possible by his ability to access a “‘secure’ holding

area by way of his employment,” because it “would be hard-pressed to find that the employee’s

thievery served [the employer’s] interests in any way. The theft exposed [the employer] to

liability under the Warsaw Convention, potential loss of business, damage to its reputation, legal

fees, and other harms that normally arise from employee theft.” Insurance Co. of North America

v. Federal Exp. Corp., 189 F.3d 914, 922 (9th Cir. 1999). Similarly, assuming arguendo that

Hvegholm and Ciccotti did conspire with or aid and abet Huang in the alleged payroll scheme,

the actions of these employees would not give rise to the vicarious liability of Intuit or CRI. 

Participation in a fraudulent scheme, such as the one alleged, though made possible by

Hvegholm’s and Ciccotti’s employment, would not serve the interests of Intuit or CRI in any

way. Moreover, such conduct would be “so unusual or startling” that it would be unfair to hold

these employer’s liable. Lisa M., 12 Cal.4th at 298. 

3. Wells Fargo and Barber

Wells Fargo and Barber move for summary judgment on Scarff’s, Pentoga’s, and SSA’s

third claim, for secondary liability for fraud and deceit in connection with the alleged “payroll

scheme” and fourth claim for secondary liability for conversion. Wells Fargo and Barber also

move for summary judgment on Scarff’s ninth claim for secondary liability for fraud and deceit

in connection with the alleged “credit line scheme.” Wells Fargo moves for summary judgment

on Scarff’s eleventh claim for negligence in connection with the alleged “credit line scheme.” 

Barber moves for summary judgment on Scarff’s, Pentoga’s, and SSA’s sixth claim for violation

of 12 U.S.C. § 503 and 18 U.S.C. § 215 in connection with the alleged “payroll scheme” and on

Scarff’s twelfth claim for violation of these same statutes in connection with the alleged “credit

line scheme.” Wells Fargo moves for summary judgment on Scarff’s and Nancy Scarff’s

fourteenth claim for slander of title. Finally, Wells Fargo and Barber join in the motion of Intuit

et al. 

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10 Many of the relevant documents have not been authenticated. For example, in their

opposition brief, Plaintiffs routinely cite to documents that are attached to the declaration of

David S. Moore (“Moore”). Because he is a forensic examiner whose testimony is submitted for

the purpose of identifying which of Scarff’s signatures are forgeries, Moore obviously is not in a

position to authenticate the Wells Fargo loan documents. Many of the same documents are also

attached to Plaintiffs’ CAC, but without authentication. However, neither Plaintiffs nor

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a. Factual background regarding Wells Fargo and Barber

Richard Starratt (“Starratt”), a vice president in Wells Fargo’s private banking

department, was Scarff’s private banker at Wells Fargo. Declaration of Philip L. Gregory in

Opposition to the Motion for Summary Judgment of Defendants Wells Fargo Bank N.a., Carol

Barber, Intuit Inc., Computing Resources, Inc. and Lisa Ciccotti (hereinafter “Gregory Decl. C”),

Ex. B, pp. 18, 31-32. Starratt provided the following description of Scarff’s relationship with

Wells Fargo in or about 1991, when Starratt was first introduced to Scarff:

[H]e had several checking accounts, I think he had a line of credit that had been

lapsed and I know that he had introduced to the bank an investment in one of his

quote deals unquote, on which Wells Fargo made an awful lot of money. I think

he was a personal friend of then CEO Carl Reichardt and I know he was highly

regarded by senior management of the bank.

Id., pp. 31-32. During the period from 1997 through April 2002, Ed McElroy (“McElroy”), vice

president and manager of private banking at Wells Fargo, was Starratt’s direct supervisor. 

Gregory Decl. C, Ex. A, pp. 46 and 56. Barber worked for Wells Fargo from 1996 until 2003,

working as a private banking account administrator from 1988 to October 1991, and

subsequently at a telephone service center that was established for the private banking customers. 

 Declaration of Carol Barber in support of Wells Fargo Bank N.A.’s, Carol Barber’s, Intuit Inc.’s,

Computing Resources, Inc.’s and Lisa Ciccotti’s Motions for Summary Judgment (hereinafter

“Barber Decl.”), ¶¶ 2-4.

Between 1991 and 2002, Wells Fargo extended a number of loans to Scarff, or, as Scarff

characterizes the situation, to Huang in Scarff’s name. Plaintiffs and Defendants have referred to

the numerous Wells Fargo loan transactions throughout their pleadings; witnesses have discussed

them in depositions; and both parties have submitted documents relating to and representing

these transactions.10 However, no party has presented a cohesive and coherent explanation, with

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28 Defendants have challenged the authenticity of the submitted Wells Fargo loan documents. 

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particular citations to admissible evidence, of the precise timeline of all Wells Fargo loans, loan

extensions, and other transactions related to Huang’s alleged scheme. For the purpose of the

instant motion for summary judgment, a discussion of several significant transactions must

suffice.

In approximately 1991, at Starratt’s suggestion, Scarff established a $1,000,000 line of

credit with Wells Fargo. Declaration of Edward L. Scarff in Opposition to the Motion for

Summary Judgment of Defendants Wells Fargo Bank N.A., Carol Barber, Intuit Inc., Computing

Resources, Inc. and Lisa Ciccotti (hereinafter “Scarff Decl.”), ¶ 11. In 1999, Wells Fargo

established a non-revolving line of credit for $2,500,000 in Scarff’s name. Starratt Decl., ¶ 7. 

Scarff claims that this credit line was established without his knowledge or his valid signature. 

Scarff Decl., ¶ 12. Starratt explains that he “was informed by Ms. Huang that Mr. Scarff wanted

this new line of credit in connection with a house he was building in the Lake Tahoe area.” 

Starratt Decl., ¶ 7. Starratt’s communication regarding Scarff’s account was conducted most

frequently with Huang. Gregory Decl. C., Ex. B, pp. 129-30. In August 2001, Starratt had a

meeting with Huang in which she informed him that, although there was $1,000,000 due at that

time on one or more of the Scarff loans, Scarff only would be able to pay $500,000. Id., pp. 167-

68. Starratt does not recall communicating directly with Scarff regarding this partial payment. 

Id., p. 168. Between 2000 and 2002, Starratt provided extensions of credit to Scarff. Id., pp.

190-91. Starratt’s bonus compensation was affected by the amount of business, including

establishing loans, that he brought to the bank. Gregory Decl. C., Ex. B, p. 30.

Starratt stated that he was informed by Huang in 2001 “that the Tahoe project was taking

longer than anticipated and that Mr. Scarff wanted to extend the term of the loan.” Starratt Decl.,

¶ 8. Starratt requested security for the loan, and he gave documentation to Huang for the

recording of a trust on Scarff’s residence in Los Altos. Id. Huang has testified that she—not

Scarff—signed the deed of trust, and that she arranged for a notary to notarize the deed. Id., pp.

439-40. During this period, McElroy had taken over the Scarff account, and it was he who

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received the completed loan documents and deed of trust from Huang. McElroy Decl., ¶¶ 3 and

4. Plaintiffs point to several irregularities in the deed of trust. For example, the deed initially

misstated the location of the residence as San Francisco rather than Santa Clara County. CAC, ¶

88; Declaration of Jo Ann Hernandez in Support of Wells Fargo Bank N.A.’s, Carol Barber’s,

Intuit Inc.’s, Computing Resources, Inc.’s and Lisa Ciccotti’s Motions for Summary Judgment, ¶

5. Jo Ann Hernandez, a loan processor for Wells Fargo, explained that this error was corrected

by a Wells Fargo employee and returned to Fidelity Trust for recordation. Id., ¶ 7. Scarff also

claims that the spelling of the notary’s signature is different from that on the notary’s official

stamp. CAC, ¶ 89. According to McElroy, “The signed loan documents and notarized deed of

trust appeared to [him] to be genuine and in order. [He] noticed nothing suspicious about Mr.

Scarff’s signature or the notary stamp.” McElroy Decl., ¶ 4.

In addition to having lines of credit with Wells Fargo, Scarff also had deposit accounts

with the bank. Declaration of Rose Pagano in Support of Wells Fargo Bank N.a.’s, Carol

Barber’s, Intuit Inc.’S, Computing Resources, Inc.’S and Lisa Ciccotti’s Motions for Summary

Judgment (hereinafter “Pagano Decl.”), ¶ 3, Ex. A (account in the name of Edward Scarff), Ex. B

(account in the name of Pentoga Partners), Ex. C (account in the name of Scarff, Sears &

Associates), and Ex. D (account in the name of Northcliff Corporation). Huang had authority to

write checks on Scarff’s Wells Fargo checking accounts because, at some point, Scarff enabled

her to do so with a signature card. Bass Decl., Ex. 1, p. 137. Scarff has testified that he

“expected [Huang] to review the bank statements.” Id., p. 185. Huang co-signed, with Scarff,

the Account Agreement and Authorization forms for the accounts of Pentoga and Northcliff. 

Pagano Decl., ¶ 3, Exs. B and D. She had authority to transfer funds among Scarff’s accounts,

including those of Pentoga and SSA. Id., ¶ 3 and Ex. G. Wells Fargo also had loan documents

on file that “authorized Carol Huang to make draw-downs on [Scarff’s] credit facilities.” 

Gregory Decl. C, Ex. A, p. 249. However, McElroy has testified that he knew of no written

authorization for Huang to request new loans on behalf of Scarff. Id., pp. 46 and 249. McElroy

also was unaware of any documents that allowed Huang to draw down on the $2.5 million or

$2.0 million lines of credit. Id., p. 254. Scarff himself never contacted Wells Fargo to inquire

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about his account or accessed online account reports, available beginning in 1995. Bass Decl.

Ex. 4, p. 484; Pagano Decl. ¶ 10. It is undisputed that the Wells Fargo bank account statements

of SSA showed evidence of the payroll scheme, which Scarff has acknowledged would have

indicated to him that something was amiss. Bass Decl., Ex. 5, pp. 90-91.

 Huang has testified that she funded the alleged payroll scheme, as described above, from

Scarff’s various Wells Fargo accounts. Bass Decl., Ex. 9, pp. 364-68. Barber, who worked on

Scarff’s account, received verbal requests from Huang to transfer funds from one account to

another, and processed these requests without getting authorization from Scarff. Id; Gregory

Decl. C, Ex. C, p. 130. When Huang requested advances on Scarff’s credit line, Barber “caused

the funds to be deposited into Mr. Scarff’s account.” Barber Decl., ¶ 5. Barber communicated

with Huang regularly and provided her with the account balances of each account on a daily or

every-other-day basis. Gregory Decl. C, Ex. C, p. 97. Although Barber worked on Scarff’s

account, she never communicated with Scarff regarding any business transaction. Gregory Decl.

C, Ex. C, p. 54. She met him only once, at the wedding of Huang’s daughter. Id., p. 55. 

Barber’s services for Huang and the Scarff account clearly were out of the ordinary. For

example, Barber prepared and faxed to Huang numerous letters regarding the status of Scarff’s

deposit accounts, dating from 1996 through 2001, addressed “To Whom It May Concern.” Id.,

pp. 107-108 and Exs. 7-15. The letters were very similar in content; one such letter reads “This

letter is to confirm that Edward L. Scarff has liquid funds at Wells Fargo Bank in excess of One

Million Dollars.” Id., Ex. 7 (letter dated May 10, 1996). At Huang’s request, Barber arranged

for Scarff’s statements to be kept at the bank. Id., pp. 184-85. Barber has testified that Huang

explained that this was necessary “because she was suspicious that some of her statements were

missing” and because their offices were moving. Id., pp. 185-86. A letter dated October 30,

1998, addressed to Barber and bearing what appeared to be Scarff’s signature, requests: “please

hold all my monthly statements, personal or/and business, at your office for pick up. Carol

Huang is authorized to discuss all details and procedures on my behalf and to pick up at your

office.” Id., Ex. 30.

Barber received numerous gifts of items and cash from Huang. Among these were black

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11 Barber has testified that she told Huang that she would not use this travel certificate and

that she did not, in fact, use it. Gregory Decl. C, Ex. C., p. 77.

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leather gloves, a red, white, and blue scarf, a white embroidered scarf, a burgundy and black

embroidered scarf, a black/floral scarf, cupid-shaped earrings, a red and black leather purse, a

black leather purse, a white leather purse, a tan Gucci purse, a gold lapel pin in the shape of a

wine bottle, a Tse sweater set, a shawl with gloves, a suitcase, an orchid plant, a camellia plant, a

pearl bracelet, a Kate Spade tote bag, a red Macintosh rain coat, an Easter gift box, a box of

Christmas ornaments, a security device, a ticket to a charity event for Open Hand in Napa Valley,

various floral bouquets, a souvenir charm with Defendant’s name on it, a small silver souvenir

dish from New Mexico, a wire crocheted purse, a souvenir necklace, a set of miniature perfumes,

a gift certificate for round-trip airfare to Morocco,11 and a heart-shaped ceramic dish. Id., Ex. 1

(Barber’s response to Plaintiffs’ first set of special interrogatories; Response to interrogatory no.

1). She also received cash gifts, $300 (sometime prior to 1991); $100 in 1998; $100-200 in

February 1999; a check payable to Barber’s niece in the approximate amount of $500 in July

1996; a cashier’s check in the approximate amount of $1,200-1,500 in December 1996; $300 in

March 1998; $300 in November 1999, $800 in December 1999; $1,000 in December 2000; and

$2,000 on or about August 3, 2002. Id. Barber has testified that she was aware that Wells Fargo

placed limitations on the value of gifts that she could receive from customers. Id., pp. 59-60,

128-30. She also testified, “If you received a gift from a customer based on a business

relationship, you would report it to your supervisor. My gifts were not from the customer. My

gifts were from a friend.” Id., p. 60. 

b. Claims three and four

For the reasons stated above with respect to the motions for summary judgment brought

by Intuit et al. and Hvegholm, Wells Fargo’s and Barber’s motion for summary judgment on

Plaintiffs’ third claim for secondary liability for fraud and deceit in connection with the “payroll

scheme” and fourth claim for secondary liability for conversion in connection with the “payroll

scheme,” will be GRANTED on the ground that Plaintiffs have not met their burden of

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identifying specific evidence showing that there is a genuine issue for trial regarding damages to

Plaintiffs arising from the alleged payroll scheme.12

c. Claim six

Barber’s motion for summary judgment on Plaintiffs’ sixth claim for violation of 12

U.S.C. § 503 and 18 U.S.C. § 215 in connection with the alleged “payroll scheme,” will be

GRANTED. As stated above, Plaintiffs have not met their burden of identifying specific

evidence showing that there is a genuine issue for trial regarding damages to Plaintiffs arising

from the alleged payroll scheme. 

d. Claim nine

Wells Fargo and Barber move for summary judgment as to Scarff’s ninth claim for relief,

in which Scarff alleges that they are secondarily liable for fraud and deceit in connection with the

alleged “credit line scheme.” Scarff alleges that Wells Fargo and Barber conspired with and/or

aided and abetted Huang in her scheme. The doctrines of conspiracy and aiding and abetting

both serve to impose secondary liability on a person who was not herself the tortfeasor. 

The elements of an “action” for civil conspiracy—which is not a claim in itself but rather

is “a legal doctrine that imposes liability on persons who, although not actually committing a tort

themselves, share with the immediate tortfeasors a common plan or design in its perpetration”—

are “the formation and operation of the conspiracy and damage resulting to plaintiff from an act

or acts done in furtherance of the common design.” Applied Equip. Corp. v. Litton Saudi Arabia

Ltd., 7 Cal.4th 503, 511 (1994) (internal quotation marks omitted). Tort liability for a civil

conspiracy is activated by the commission of an actual tort. Id. A plaintiff is entitled to damages

from “those defendants who concurred in the tortious scheme with knowledge of its unlawful

purpose,” and that concurrence and knowledge “may be inferred from the nature of the acts done,

the relation of the parties, the interests of the alleged conspirators, and other circumstances.” 

Wyatt v. Union Mortgage Co., 7 Cal.4th 503, 511 (1979). Since conspiracy is not an independent

tort, it “cannot create a duty or abrogate an immunity,” and it “allows tort recovery only against a

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party who already owes the duty and is not immune from liability based on applicable substantive

tort law principles.” Applied Equip., 7 Cal.4th at 513.

Liability for aiding and abetting the commission of an intentional tort is a basis for

liability separate from conspiracy liability. See e.g., Neilson v. Union Bank of California, N.A.,

290 F. Supp. 2d 1101, 1133-36 (C.D. Cal. 2003). It may be imposed if a person, knowing that

another person’s conduct constitutes a breach of duty, “gives substantial assistance or

encouragement to the other to so act.” Saunders v. Superior Court, 27 Cal.App.4th 832, 846

(1994). In order to be held liable for aiding and abetting, an aider and abettor must have “actual

knowledge of the primary violation.” Neilson, 290 F. Supp. 2d at 1119. 

Wells Fargo and Barber move for summary judgment with respect to both conspiracy and

aiding and abetting liability on the ground that there is no evidence that they had actual

knowledge of Huang’s scheme. The Court agrees that there is no direct evidence of actual

knowledge. However, although it is a close question, the Court concludes that Scarff has

presented enough circumstantial evidence to survive summary judgment. 

Wells Fargo and Barber rely on statements by Huang and Barber as evidence that Barber

did not have knowledge of Huang’s scheme. Bass Decl., Ex. 8, pp. 270-71; Barber Decl., ¶ 10

(“I never suspected that Ms. Huang was conducting herself other than in accordance with Mr.

Scarff’s wishes.”). However, a reasonable jury could conclude that Huang and Barber are not

being truthful in their statements, and, based on the available evidence, reasonably could infer

that Barber did in fact have such knowledge. The Court finds three categories of evidence

particularly troubling. First, as set forth above, Barber received relatively large sums of money

and an unusually high number of expensive gifts from Huang. Second, Barber arranged to have

Scarff’s bank statements kept at the bank. Gregory Decl. C, Ex. C., pp. 184-85. Barber has

testified that the request to keep the Scarff analysis statements at the bank, such that no statement

was sent to the customer directly, was the only such request she received while at Wells Fargo. 

Id., p. 205. Third, Barber prepared and faxed to Huang numerous letters regarding the status of

Scarff’s deposit accounts, dating from 1996 through 2001, addressed “To Whom It May

Concern.” Id., pp. 107-108 and Exs. 7-15. Considering these unusual circumstances together,

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and keeping in mind Defendants’ heavy burden on summary judgment, the Court concludes that

a reasonable jury could infer actual knowledge.

Wells Fargo and Barber also point out that Scarff’s response to Wells Fargo’s eleventh

interrogatory, which asks him to state the knowledge that he contends each previously named

individual had concerning the credit line scheme, includes the following statement: “Plaintiff

contends that Ms. Barber had constructive knowledge that Carol Huang was taking funds from

Plaintiff without authorization.” Bass Decl., Ex. 22, p. 29 (emphasis added). The Court agrees

with Wells Fargo and Barber that constructive knowledge is insufficient to establish the

intentional tort of fraud. However, Plaintiffs’ inartful use of the term “constructive knowledge”

does not change the probative value of the evidence in the record that supports an inference of

actual knowledge.

Wells Fargo and Barber also argue that there is no evidence of concealment, pointing out

that it was the bank’s practice to send monthly statements to customers and that at all relevant

times statements were available telephonically and electronically. Pagano Decl., ¶¶ 7-12. 

Although Barber, at Huang’s direction, arranged to keep Scarff’s statements at the bank, Gregory

Decl. C, Ex. C., pp. 184-85, Wells Fargo and Barber argue that this fact is immaterial because

Scarff delegated the task of looking at bank statements to Huang, and, thus, it was Scarff’s choice

not to look at the statements. However, while Scarff could have discovered the fraud by

obtaining the statements himself, either physically or electronically, that does not negate the

evidence suggesting that Barber may have assisted in concealing them knowing that Scarff had

entrusted management of his financial affairs to Huang. 

Accordingly, Barber’s and Wells Fargo’s motions for summary judgment on the ninth

claim will be DENIED. Although in the Court’s opinion the evidence for such an inference is

not strong, a reasonable jury could infer that Barber, Wells Fargo’s agent, had actual knowledge

of Huang’s scheme. 

d. Claim eleven 

Wells Fargo moves for summary judgment as to Scarff’s eleventh claim for relief, in

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13 While in a separate order the Court denies Plaintiffs’ motion for reconsideration, it is

worth noting here that Plaintiffs also fail to offer opposition to this claim in their motion for

reconsideration.

14 The Court notes that it is not entirely clear whether the provisions precluding

negligence liability were included in the terms of Scarff’s Wells Fargo account agreement prior

to 2000. The submitted Consumer Disclosure Statement “contains the terms of the Bank’s

agreement from August 2000 through April 2001.” Pagano Decl., ¶ 5. The relevant provisions

were not modified when certain other provisions were modified in 2001. Id. However, no

representation, by either Scarff or Wells Fargo, has been made regarding whether substantively

similar provisions were included in the account agreement prior to 2000. Because Scarff has not

offered any evidence or argument to the contrary, either in opposition or in Plaintiffs’ motion to

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which Scarff alleges that Wells Fargo is liable for negligence in connection with the alleged

“credit line scheme.” Wells Fargo argues that Scarff’s account agreements bar the negligence

claim. A provision of Scarff’s account agreement with Wells Fargo obligates the client, Scarff,

“To Review Statements And Items And To Report Irregularities.” Pagano Decl. Ex. F, p. 13. 

This contractual provision reads as follows: 

Within 30 days after the Bank mails or otherwise makes the statement available to

you, you will report to the Bank any claim for credit or refund due for example

(and without limitation) to either an erroneous debit, a missing signature, an

unauthorized signature, or an alteration. . . . Without regard to care or lack of

care on the part of the Bank, if you don’t notify the Bank within the time frames

specified above, the stated balance will be conclusively presumed to be correct

regarding debits described on the statement. This means that the Bank is released

from all liability for the Items charged to your account, and for all other

transactions or matters covered by the statement. 

Id., p. 53 (emphasis added). A second provision obligates the client “To Report Unauthorized

And Erroneous Fund Transfers.” Id. Specifically, the client must “notify the Bank of the facts

within a reasonable time not exceeding thirty (30) days after” receiving notice of the transfer or

the account is debited. If the client does not object within the thirty day period, the client “will

be precluding from asserting that the Bank is not entitled to retain payment.” Id., p. 53.

While the terms of the contract cannot shield Wells Fargo from liability for fraud, they

appear on their face to preclude a claim based on negligence. More importantly, Scarff has

provided no legal or factual argument in opposition to this aspect of Wells Fargo’s motion.13

Accordingly, the Court will GRANT Wells Fargo’s motion for summary judgment on the

eleventh claim.14

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reconsider, the Court interprets the provisions in the submitted Consumer Disclosure Statement

to be representative of substantively similar provisions that were applicable to Scarff’s account

for the entirety of the relevant period.

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e. Claim twelve

Barber moves for summary judgment as to Scarff’s twelfth claim, in which Scarff alleges

liability pursuant to 12 U.S.C. § 503 and 18 U.S.C. § 215 in connection with the alleged “credit

line scheme.” Under § 215, it is a crime if “an officer, director, employee, agent, or attorney of a

financial institution, corruptly solicits or demands for the benefit of any person, or corruptly

accepts or agrees to accept, anything of value from any person, intending to be influenced or

rewarded in connection with any business or transaction of such institution.” 18 U.S.C. § 215(2). 

Section 503 creates individual liability for a director or officer who knowingly violates 18 U.S.C.

§ 215, or one of several other banking statutes. See 12 U.S.C. § 503. Barber’s motion for

summary judgment on Plaintiffs’ sixth claim, for violation of 12 U.S.C. § 503 and 18 U.S.C. §

215 will be denied. 

Barber argues that there is no evidence of a correlation between the gifts she received

from Huang and the actions she performed with respect to Scarff’s accounts. She stated that she

believed that Huang gave her gifts out of friendship, and that the gifts did not influence her

decisions as a banking assistant. Barber Decl., ¶¶ 13 and 14. Huang has testified that Barber

also gave her gifts. However, these gifts were of considerably less value: “Little stuffed animals,

candies, things like that.” Bass Decl., Ex. 9, p. 415. This evidence, of a purported belief that

friendship was the only thing motivating Huang’s gifts and of small gifts given in return, does

not prove that there was no corrupt correlation between Huang’s gifts to Barber and Barber’s

actions. Barber also argues that because Huang was an authorized signer on Scarff’s accounts,

Barber’s assistance was not necessary for Huang to withdraw or transfer funds. Pagano Decl., ¶

3, Exs. B and D. However, as stated above, Barber’s actions included more than assisting with

the withdrawal and transfer of funds: Barber also arranged to have Scarff’s statements kept at the

bank, wrote letters stating Scarff’s account balance, and did not alert Scarff of Huang’s frequent

banking transactions. Although in the Court’s judgment the evidence for such an inference is not

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strong, Plaintiff has identified sufficient evidence from which a reasonable jury a reasonable jury

could infer that the gifts were given and accepted with a corrupt intent. 

Barber also argues that there is no evidence that she had knowledge of Huang’s scheme. 

For the reasons stated above with regard to the Scarff’s ninth claim, the Court finds that a

reasonable jury could infer from the evidence in the record that Barber had actual knowledge of

and participation in the alleged “credit line scheme.” Accordingly, the Court will DENY

Barber’s motion for summary judgment on the twelfth claim. 

f. Claim fourteen 

Wells Fargo moves for summary judgment on Scarff and Nancy Scarff’s fourteenth claim

for slander of title. In Gudger v. Manton, the California Supreme Court adopted the definition

of the tort of slander of title from Section 624 of the Restatement of Torts: 

“One who, without a privilege to do so, publishes matter which is untrue and

disparaging to another’s property in land . . . under such circumstances as would

lead a reasonable man to foresee that the conduct of a third person as purchaser or

lessee thereof might be determined thereby is liable for pecuniary loss resulting to

the other from the impairment of vendibility thus caused.”

Gudger v. Manton, 21 Cal.2d 537, 541 (1943) (quoting section 624 of the Restatement of Torts),

overruled on other grounds by Albertson v. Raboff, 46 Cal.2d 375 (1956). Sections 623A, 624,

and 633 of the Second Restatement of Torts subsequently have been held to:

further refine the definition so it is clear . . . that there must be (a) a publication,

(b), which is without privilege or justification and thus with malice, express or

implied, and (c) is false, either knowingly so or made without regard to its

truthfulness, and (d) causes direct and immediate pecuniary loss. 

Howard v. Schaniel, 113 Cal.App.3d 256, 264 (1980) (internal citations omitted).

The Court concludes that Plaintiffs have not identified sufficient evidence from which a

reasonable jury could conclude that Wells Fargo recorded the deed of trust on the Scarff

residence with knowledge of falsity or disregard of the truth. Wells Fargo has identified

evidence that McElroy, who received the deed of trust, believed that there was nothing irregular

about the deed of trust. McElroy Decl., ¶ 4. In opposition, Plaintiffs have not pointed the

Court’s attention to any evidence establishing that Wells Fargo recorded the allegedly fraudulent

deed with the requisite scienter.

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15 Defendants object to the admission of this evidence, arguing that it is hearsay and that it

is not relevant. The Court does not rule on this objection, as it includes this evidence for the

exclusive purpose of giving an overview of the alleged facts. 

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Plaintiffs do argue, in opposition, that their claim for slander of title is based not only on

the recording of the allegedly false deed, but also on Wells Fargo’s commencement of

foreclosure proceedings on the deed of trust. Wells Fargo responds that the latter claim was not

asserted in the complaint. Yet the CAC does allege that: “[Wells Fargo] was also informed that

all of the documentation underlying the [Wells Fargo] 2001 Platinum Line, including the

promissory note, and the Deed of Trust were forged. Nonetheless, prior to Christmas in

December 2002, [Wells Fargo] initiated a non-judicial foreclosure of the Scarff Residence.” 

CAC ¶ 222. 

Plaintiffs’s opposition papers include a letter, dated December 4, 2002, regarding the

foreclosure proceedings initiated on the deed of trust, in which Attorney Heinz Binder states: 

I also appreciate the courtesy extended to me and my client wherein you advised

that you had begun the process of a non-judicial foreclosure on the Note and Deed

of Trust encumbering Mr. Scarff’s residence. Likewise, as a courtesy, I have

advised you that the Note and Deed of Trust are forged instruments. I have

previously so advised Mr. Clore. I have previously so advised Ms. Joyce Jaber. I

have previously so advised Mr. Frank Martinez.

Gregory Decl. C, Ex. A to Ex. G.15 On December 19, 2002, a Notice of Default was recorded

against Scarff’s residence. Id., Ex. D to Ex. H. On March 10, 2003, the Santa Clara Superior

Court issued a stipulation and order for preliminary injunction enjoining Wells Fargo from

publishing or recording a Notice of Sale against the Residence or taking any action to foreclose

on any deed of trust against the Residence. Id., Ex. I.

Although Plaintiffs are correct that the CAC asserts this aspect of their claim, they

identify no case in which a foreclosure proceeding in and of itself constitutes slander of title. 

Moreover, under California law, nonjudicial foreclosure sale proceedings constitute privileged

communications. “Civil Code sections 2924 through 2924k provide a comprehensive framework

for the regulation of a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed

of trust.” Moeller v. Lien, 25 Cal.App.4th 822, 830 (1994). California Civil Code section 2924

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establishes that “[t]he mailing, publication, and delivery of notices as required herein, and the

performance of the procedures set forth in this article, shall constitute privileged communications

within Section 47.” The litigation privilege, under California Civil Code section 47, is “absolute

in nature.” Silberg v. Anderson, 50 Cal.3d 205, 215 (1990).

Accordingly, Wells Fargo’s motion for summary judgment on Scarff and Nancy Scarff’s

fourteenth claim, for slander of title, will be GRANTED. 

g. Punitive damages

Wells Fargo moves for summary judgment on the issue of punitive damages. In order to

recover punitive damages against a corporation, “an officer, director, or managing agent of the

corporation” must have “advance knowledge and conscious disregard, authorization, ratification

or act of oppression, fraud, or malice” of “the wrongful conduct for which the damages are

awarded,” or “was personally guilty of oppression, fraud, or malice.” Cal. Civ. Code § 3294(b). 

Wells Fargo has met its burden of pointing out “‘that there is an absence of evidence to

support’” Plaintiffs’ claims for punitive damages. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th

Cir. 2001). While a reasonable jury could infer that Barber had knowledge of Huang’s scheme,

Wells Fargo has presented evidence that Barber did not hold a management position at the bank. 

Barber Decl., ¶¶ 3, 4, 15. Wells Fargo argues, reasonably, that there is not enough evidence from

which a jury could infer that Starratt and McElroy, who were Vice Presidents at Wells Fargo, had 

knowledge of Huang’s scheme. Plaintiffs identify actions by Starratt and McElroy—for

example, that they communicated with Huang rather than with Scarff regarding loan transactions

and processed an allegedly fraudulent deed of trust—that may have deviated from standard or

preferred banking procedures. However, this is not evidence of, nor have Plaintiffs pointed the

Court’s attention to evidence of, Starratt’s or McElroy’s advance knowledge and conscious

disregard, authorization, ratification or act of oppression, fraud, or malice of Huang’s scheme or

was personally guilty of oppression, fraud, or malice. 

Accordingly, Wells Fargo’s motion for summary judgment on the issue of punitive

damages will be GRANTED.

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h. Damages limited by statutes of limitation

For the reasons stated above with respect to Comerica’s motion for partial summary

adjudication on the issue of damages, Wells Fargo’s and Barber’s motion for summary judgment

on the issue of whether damages should be limited by the applicable statutes of limitations will

be DENIED.

6. Pentoga

Intuit et al., joined by Hvegholm, Wells Fargo, and Barber, move for summary judgment

on all claims brought by Pentoga on the ground that Pentoga was dissolved before it was first

named as a party in the instant case and thus lacks legal capacity to sue. The instant order

disposes of all of the claims alleged by Pentoga. Accordingly, this aspect of the motions for

summary judgment is moot. However, to assist the parties in evaluating their positions, the

Court nonetheless will set forth its reasoning supporting its conclusion that Pentoga lacks the

capacity to sue.

Under California law, after dissolution of a limited partnership, “the general partners who

have not wrongfully dissolved a limited partnership or, if none, the limited partners, may wind up

the limited partnership’s affairs.” Cal. Corp. Code § 15683 (a). A general partner “can bind the

partnership . . . [b]y any act appropriate for winding up partnership affairs or completing

transactions unfinished at dissolution.” Cal. Corp. Code § 15685(a). Defendants have provided

evidence showing that Pentoga was no longer in the period of winding up on July 21, 2003, when

it was first identified as a plaintiff in the instant action. On December 31, 2000, Pentoga filed a

Certificate of Dissolution and a Certificate of Cancellation with the California Secretary of State. 

Bass Decl., Ex. 16 (exhibits filed under seal). According to the California Secretary of State’s

website, a “A Certificate of Cancellation (Form LP-4/7) is filed by a [sic] either a domestic or

foreign limited partnership once all assets have been distributed. This filing officially terminates

the limited partnership.” California Business Portal, Limited Partnerships: Frequently Asked

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16 Defendants submitted a printed copy of this website as Exhibit 3 to “Request to Take

Judicial Notice of Matters Supporting Defendants Wells Fargo Bank N.A.’s, Intuit Inc.’s,

Computing Resources, Inc.’s, Lisa Ciccotti’s, and Carol Barber’s Motions for Summary

Judgment.” Although the relevant page was missing from the exhibit, the Court located the

relevant language on the California Secretary of State’s website.

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Questions, http://www.ss.ca.gov/business/lp/lp_faq.htm;16 see also, 4-25 Ballantine and Sterling,

California Corporation Laws § 722.04 [2] (“When the winding up of the affairs of the limited

partnership has been completed, the general partners must cause a certificate of cancellation of

certificate of limited partnership to be filed with the Secretary of State.”). Plaintiffs have

submitted no evidence that might suggest that Pentoga was no longer in the period of winding up

when it first became a plaintiff in the instant action. Accordingly, Pentoga lacks capacity in the

instant action.

7. Expert declarations

Wells Fargo, Intuit, CRI, Barber, and Cicotti move to exclude the expert declarations of

John Britt (“Britt”), Vicki Lambert (“Lambert”), and David Moore (“Moore”), which were

submitted significantly after the expert disclosure deadline in the instant case had passed. 

Comerica joins in the motion as to the declarations of Britt and Moore. In addition, Hvegholm,

in her reply brief to her motion for summary judgment, requests that the Court exclude the expert

declaration of Lambert. 

The Court will DENY the motions to exclude the Lambert and Moore declarations. The

Lambert declaration applies only to the alleged “payroll scheme,” as to which the Court will

grant summary judgment in favor of all Defendants. Accordingly, the motion to exclude the

Lambert declaration is moot. The Moore declaration, originally filed as the “Declaration of

David S. Moore in Support of Motion for Preliminary Injunction” on February 13, 2003, is

identified as “preliminary.” Gregory Decl. C, Ex. D. While the Court does not condone the late

submission of this expert declaration, there is little evidence that Defendants were harmed by its

late submission. Moreover, at oral argument, Defendants represented to the Court that the Moore

declaration is not of concern to them. Accordingly, the Court will not exclude the Moore

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Case No. C 03-03394 JF (PVT) and C 03-04829 JF (PVT)

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declaration. Pursuant to Plaintiffs’ representations at oral argument, the Moore declaration will

be deemed a final, rather than a “preliminary,” declaration.

The Court will GRANT IN PART and DENY IN PART the motion to exclude the Britt

declaration. The Britt declaration was filed on December 7, 2005, in opposition to Wells Fargo’s

and Barber’s motion for summary judgment, more than four months after the July 15, 2005

deadline for Plaintiffs’ expert disclosures. During the September 2, 2005 Case Management

Conference, the Court instructed the parties that, in order to obtain an exception to the expert

disclosure deadline, a party would need to file a motion and show good cause. However, despite

this clear instruction from the Court, Plaintiffs did not seek permission of the Court to file the

Britt declaration after the deadline. Because this declaration included opinions concerning Wells

Fargo that were not included in the earlier-filed Britt declaration, the late filing was not harmless. 

Accordingly, the Court will exclude the Britt declaration, pursuant to Federal Rule of Civil

Procedure 37(c)(1), for the purpose of the instant motions. However, because the trial date has

been postponed until July 7, 2006, and this postponement will allow Defendants to conduct

further discovery in relation to the Britt declaration, the Court will not exclude the Britt

declaration at trial.

IV. ORDER

Good cause therefore appearing, IT IS HEREBY ORDERED that Defendants’ motions to

for summary judgment and to exclude expert declarations will be GRANTED IN PART and

DENIED IN PART, as discussed in detail above. For the parties’ convenience, the claims for

relief remaining, along with the Plaintiffs that may assert them and the Defendants against whom

they may be asserted, are summarized below.

• Ninth claim for relief: fraud and deceit—secondary liability only and limited to losses

from the alleged “credit line scheme”

Plaintiff: Edward Scarff

Defendants: Wells Fargo, Comerica, Barber, and Burtzel

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• Eleventh claim for relief: negligence in connection with the alleged “credit line scheme”

Plaintiff: Edward Scarff

Defendants: Comerica and Burtzel

• Twelfth claim for relief: liability pursuant to 12 U.S.C. § 503 and 18 U.S.C. § 215 in

connection with the alleged “credit line scheme”

Plaintiff: Edward Scarff

Defendants: Barber and Burtzel

• Fifteenth claim for relief: declaratory relief—not injunction, restitution, or attorney’s fees

Plaintiffs: Edward and Nancy Scarff

Defendants: Wells Fargo and Comerica

DATED: February 23, 2006

______________________

JEREMY FOGEL

United States District Judge

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This Order has been served upon the following persons:

Rebecca M. Archer EfilingRMA@cpdb.com, rmg@cpdb.com

Jonathan R. Bass EfilingJRB@cpdb.com, mjc@cpdb.com

William Bates , III bill.bates@bingham.com

Carolyn Chang cchang@fenwick.com, vschmitt@fenwick.com

A. Marisa Chun EfilingAMC@cpdb.com, pjd@cpdb.com

Joseph W. Cotchett plee@cpsmlaw.com,

Joseph N. Demko JND@JMBM.com, eap@jmbm.com

John W. Easterbrook jwe@hopkinscarley.com, dgraff@hopkinscarley.com

Gilbert Eisenberg g.eisenberg@sbcglobal.net,

William Henry Gavin gavin@gclitigation.com,

Philip L. Gregory pgregory@cpsmlaw.com, jacosta@cpsmlaw.com

Alan F. Hunter hunter@gclitigation.com,

Susan K. Jamison EfilingSKJ@cpdb.com, aaa@cpdb.com

William S. Klein bklein@hopkinscarley.com, ttellez@hopkinscarley.com

Martin H. Kresse mkresse1@earthlink.net,

C. Laine Lucas lainelucas@bindermalter.com,

Julian W. Mack pmack@ buchalter.com,

Frank M. Pitre fpitre@cpsmlaw.com, mnewman@cpsmlaw.com;

rmanuel@cpsmlaw.com

Elizabeth C Pritzker epritzker@cpsmlaw.com, zml@girardgibbs.com

Dori Lynn Yob dyob@hopkinscarley.com, ash@hopkinscarley.com

Peter G. Bertrand

Buchalter Nemer Fields & Younger

333 Market Street, 29th Floor

San Francisco, CA 94105-2130

Heinz Binder

Binder & Malter LLP

2775 Park Avenue

Santa Clara, CA 95050

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Jennifer Coleman

Jeffer Mangels Butler & Marmaro LLP

Two Embarcadero Center

Fifth Floor

San Francisco, CA 94111-3824

Tod C. Gurney

Hopkins & Carley

70 S. First Street

San Jose, CA 95113

tgurney@hopkinscarley.com, ttellez@hopkinscarley.com

Robert G. Harris

Binder & Malter, LLP

2775 Park Avenue

Santa Clara, CA 95050

Nanci E. Nishimura

Cotchett Pitre Simon & McCarthy

840 Malcolm Road

USBC Manager-San Jose

US Bankruptcy Court

280 South First Street

Room 3035

San Jose, CA 95113

Arthur S. Weissbrodt

U.S. Bankruptcy Court

280 South First Street

Room 3035

San Jose, CA 95113

Suite 200

Burlingame, CA 94010

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