Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_13-cv-01963/USCOURTS-azd-2_13-cv-01963-0/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 28:1441 - Petition for Removal: Securities Fraud

---

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA

Christopher Davis, Lori Davis,

Plaintiffs, 

v. 

Wells Fargo Advisors LLC, Wells Fargo 

Bank, N.A., Unknown Parties, 

Defendants.

No. CV-13-01963-PHX-NVW

ORDER 

 Before the Court is Defendants Wells Fargo Advisors, LLC and Wells Fargo 

Bank, National Association’s Motion to Strike Class Allegations from Complaint and to 

Compel Arbitration (Doc. 8), the Response (Doc. 15), and the Reply (Doc. 18). For the 

following reasons, the Plaintiffs’ class allegations will be stricken and arbitration will be 

ordered. 

I. FACTS 

 Plaintiffs Christopher and Lori Davis are a married couple living in Arizona. Both 

are practicing attorneys. In 2007, the Davises earned around $2 Million in contingency 

fees from two lawsuits. The money was substantially more than the Davises usually 

earned in a year, and they deposited the money in an investment account with Wachovia 

Securities. 

 After consulting with an accountant, the Davises were advised that they would 

owe approximately $600,000 in taxes on their income from 2007. Rather than pay their 

tax obligation straight out, their broker at Wachovia Securities suggested they leave the 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 1 of 12
- 2 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

full amount of their earnings in the investment account and pay the tax obligation with an 

Asset-Backed Line of Credit (“ABLOC”) provided by Wachovia Bank. The ABLOC 

functioned as a loan collateralized by the investment account, and their broker suggested 

the payments on the ABLOC loan could be made from profits earned on the investment 

account. The Davises believed this arrangement would allow them a better overall return 

on investment. 

 To obtain the ABLOC loan, the Davises entered into a separate agreement with 

Wachovia Bank for a $700,000 credit line, which they drew on in 2008 to satisfy their 

2007 tax debt obligation. During that time, Wachovia was purchased by Wells Fargo & 

Company. Wachovia Bank then became Wells Fargo Bank and Wachovia Securities 

became Wells Fargo Financial Advisors, LLC. 

 A. The Davises’ Agreements with Wells Fargo Financial Advisors 

The Davises entered into an Asset Advisor Client Agreement with Wachovia 

Securities to engage Wachovia’s investment management services. (Doc. 8, Exh. C.) 

The agreement provided that Wachovia would work with the Davises to manage their 

investments and accomplish their financial goals. (Id. at ¶ 5.) Over the years, the 

Davises signed three versions of that agreement: an Asset Advisor Client Agreement 

with Wachovia Securities on January 4, 2005 (Doc. 8, Exh. C); an Account Agreement 

with Wachovia Securities on March 29, 2007 (Doc. 8, Exh. D); and another Asset 

Advisor Client Agreement on February 9, 2008 (Doc. 15, Exh. G).1

 The 2008 Agreement 

contained essentially the same investment management terms as the earlier agreements 

but notified the Davises that, in the event of a successful merger between Wachovia and 

Wells Fargo, their Agreements would be assigned to Wells Fargo & Company, the parent 

company of Wells Fargo Bank and Wells Fargo Financial Advisors. (Doc. 15, Exh. G 

¶ 22.) In the 2008 Asset Advisor Client Agreement, the investment account was entitled 

 

1

 Wells Fargo later sent the Davises something entitled “Account Profile/Investment Policy” in March 2010, which was accompanied by a letter saying it reflected changes the Davises had made to their account. (Doc. 15, Exh. H.) It was 

similar to the earlier Client Agreements, except that it went unsigned and contained no arbitration provision. Neither party argues the agreement is binding. 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 2 of 12
- 3 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

“WBNA Collateral Acct FBO Chris Lori Davis.” (Id.) The Davises assert this 

agreement was necessary to identify their investments as collateral for the ABLOC loan, 

but Wells Fargo claims the 2008 Agreement was executed only to position Wells Fargo 

as Wachovia’s successor. Except for the title, nothing in the 2008 Asset Advisor Client 

Agreement mentions the ABLOC loan. 

 All three agreements contained nearly identical pre-dispute arbitration clauses, 

requiring the parties to arbitrate any disputes arising between the parties that concerned 

“any transaction or the construction, performance or breach of this Agreement or any 

other agreement between us, whether entered into prior to, on, or subsequent to the date 

of the Agreement.” (Doc. 15, Exh. G ¶ 25; see also Doc. 8, Exh. C ¶ 22, Exh. D ¶ 19.) 

The agreements explicitly exclude class actions from the arbitration requirement. (Id.) 

 B. The Davises’ Agreements with Wells Fargo Bank 

 In March 2008, the Davises executed an Asset Advantage Agreement with 

Wachovia Bank. (Doc. 8, Exh. A.) The Asset Advantage Agreement outlined the terms 

of the ABLOC loan and assigned the securities in the Davises’ investment account as 

collateral for the loan. The agreement contained an arbitration provision which allowed 

either party to elect binding arbitration of claims: 

(1) under local, state or federal law whether based on a constitution, 

statute or regulation, in contract, tort or otherwise, and whether for money 

damages, penalties, or declaratory or equitable relief; (2) relating to the 

validity, enforceability, interpretation, or scope of this arbitration 

provision; (3) between the Parties, or between a Party and another Party’s 

employee, agent, parent, subsidiary, affiliate, licensee, successor, assign, 

or heir; (4) relating to any phase of this loan transaction including any 

subsequent modification, extension or renewal of this Agreement; or 

(5) relating to the interpretation, performance or breach of any provision 

of this Agreement or any other document prepared or submitted for this 

loan transaction, the sale and/or financing of any ancillary products or 

services, or to the conduct of any Party to this loan transaction. 

(Doc. 8, Exh. A ¶ 38) (emphasis added). In the same agreement, the parties also waived 

their right to bring any claims on behalf of, or as members of, a class: 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 3 of 12
- 4 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

All Claims will be arbitrated on an individual basis. No Party will 

participate as a representative or member of any class of claimants with 

respect to any Claim. 

(Doc. 8, Exh. A ¶ 38.) The Davises executed a second Asset Advantage Agreement in 

February 2011, this time with Wells Fargo Bank, which contained a materially identical 

arbitration provision. 

 C. The Davises’ Suit 

 The Asset Advantage Agreement contained a safeguard for the bank. If at any 

point the value of the collateral securities fell below a preset percentage of the 

outstanding loan obligation, the bank retained the right to accelerate the debt and 

liquidate the securities. The securities could be liquidated even when timely payments 

were maintained on the loan balance. Beginning in 2008, the stock market entered a 

downturn. Over the next few years, in order to maintain the value of their securities as a 

certain percentage of the outstanding loan balance, the Davises were forced to pay down 

the principal by liquidating a substantial portion of their investment and engaging in 

trading practices that caused them substantial losses. 

 The Davises now assert claims against Wells Fargo Bank and Wells Fargo 

Financial Advisors, jointly and individually, alleging both entities trapped the Davises 

and other similarly situated consumers into damaging ABLOC loans. They allege 

violation of the applicable rules of the Financial Industry Regulatory Authority 

(“FINRA”) (Count I), breach of contract (Count II), breach of the implied covenant of 

good faith and fair dealing (Count III), misrepresentation/fraud/securities claims 

(Count IV), consumer fraud (Count V), negligence (Count VI), and unjust enrichment 

(Count VIII). They also request declaratory relief (Count VII). All counts are asserted 

against both Wells Fargo Advisors and Wells Fargo Bank. Counts I, II, III, IV, and V are 

brought as class claims. 

 Wells Fargo filed this Motion to Strike Class Allegations from Complaint and to 

Compel Arbitration (Doc. 8), arguing that the Davises are bound by the pre-dispute 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 4 of 12
- 5 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

arbitration provisions in their banking and investment contracts and by the class waiver in 

the banking contract, which prohibits the Davises from bringing class claims against any 

Wells Fargo entity. The Davises respond that the contracts with Wells Fargo Advisors 

and Wells Fargo Bank are void, making the arbitration clauses unenforceable. Even if 

the contracts are not void, the Davises assert the class waiver provision in their contract 

with Wells Fargo Bank does not restrict their right to bring a class action in this case. 

II. Motion to Compel Arbitration 

 Both agreements signed by the Davises contain arbitration clauses. The Davises 

argue, however, that Wells Fargo violated the federal law governing margin requirements 

for credit maintained by a security, 15 U.S.C. § 78g, rendering both the investment and 

banking contract voidable under 15 U.S.C. § 78cc(b). Wells Fargo asserts that it did not 

violate any federal law when entering into the contracts, but that, even if it had, whether 

the contracts as a whole are void is a question for an arbitrator. 

 A contractual provision to arbitrate disputes “shall be valid, irrevocable, and 

enforceable, save upon such grounds as exist at law or in equity for the revocation of any 

contract.” 9 U.S.C. § 2. Although arbitration is favored by federal law, it is a matter of 

contract and the parties must agree to it. AT&T Tech., Inc. v. Comm’n. Workers, 475 

U.S. 643, 648 (1986); see 9 U.S.C. § 3. “Determining whether the parties agreed to 

arbitrate the dispute in question involves two considerations: (1) whether a valid 

agreement to arbitrate between the parties exists; and (2) whether the dispute in question 

falls within the scope of the arbitration agreement.” Pennzoil Exploration & Prod. Co. v. 

Ramco Energy Ltd., 139 F.3d 1061, 1065 (5th Cir. 1998). 

 Challenges to the validity of an arbitration agreement fall into two categories: 

(1) challenges specific to the arbitration provision itself that, for example, assert the 

arbitration provision violates some aspect of state or federal law; or (2) challenges to the 

agreement as a whole, such as asserting there was fraud in the inducement or that the 

entire contract is void because of an illegal provision. Buckeye Check Cashing, Inc. v. 

Cardegna, 546 U.S. 440, 444 (2006). Under Section 4 of the Federal Arbitration Act, 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 5 of 12
- 6 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

federal courts may only adjudicate a challenge to the validity of the arbitration clause 

itself and cannot adjudicate claims which challenge the validity of the contract as a 

whole. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04 (1967) 

(citing 15 U.S.C. § 4). To be heard by a court, the challenge to the arbitration clause 

must not be the same general complaint lodged against the entire contract, and, instead, 

must allege why the arbitration clause itself, independent of the rest of the contract, is 

invalid. Id. at 1000-01. Plaintiffs wishing to challenge the validity of an arbitration 

clause may first raise the issue in their complaint or in response to a motion to compel 

arbitration. Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., 622 F.3d 996, 998 

(9th Cir. 2010). 

 The Davises’ agreement with Wells Fargo Financial Advisors permits either party 

to elect binding arbitration for any dispute “concerning any transaction or the 

construction, performance or breach of this Agreement or any other agreement between 

us, whether entered into prior to, on, or subsequent to the date of the Agreement.” 

(Doc. 15, Exh. G ¶ 25; see also Doc. 8, Exh. C ¶ 22, Exh. D ¶ 19.) The agreement with 

Wells Fargo Bank is even broader, allowing either party to elect arbitration of a dispute 

arising “(1) under local, state or federal law whether based on a constitution, statute or 

regulation, in contract, tort or otherwise, and whether for money damages, penalties, or 

declaratory or equitable relief . . . [or] (4) relating to any phase of this loan transaction 

including any subsequent modification, extension or renewal of this Agreement.” 

(Doc. 8, Exh. A ¶ 38.) This dispute arises out of the ABLOC loan, which was first 

promoted by Wells Fargo Advisors and implemented by Wells Fargo Bank. There can be 

no doubt that, together, the arbitration clauses in both agreements mandate arbitration of 

the Davises’ individual claims in this dispute. 

 The Davises do not dispute that they agreed to arbitrate their individual claims 

under their agreements with Wells Fargo Financial Advisors and Wells Fargo Bank. 

Instead they argue the agreements are invalid because they violate FINRA, rendering 

both contracts void. The Davises do not challenge the validity of the arbitration clause in 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 6 of 12
- 7 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

either contract. Nor do they make any allegations of unconscionability or fraud that 

could be fairly traced to the arbitration clause. Cf. Bridge Fund Capital Corp., 622 F.3d 

at 998 (holding that a court may only adjudicate the validity of an arbitration clause when 

a plaintiff challenges the arbitration clause on grounds separate from the general 

allegations made against the contract as a whole). 

 Instead, the Davises allege the contracts, as a whole, are invalid because they 

violate federal law. Long-standing Supreme Court precedent provides, “Unless the 

challenge is to the arbitration clause itself, the issue of the contract’s validity is 

considered by the arbitrator in the first instance.” Buckeye Check Cashing, Inc., 546 U.S. 

at 445-46. The Davises’ challenges to the contracts’ validity must be heard by an 

arbitrator, not a federal court. Well Fargo’s Motion to Compel Arbitration of the 

Davises’ individual claims will be granted, and the Davises will be ordered to submit 

their individual claims to an arbitrator in accordance with the terms of their agreement. 

III. Motion to Strike Class Claims 

The Davises’ Complaint (Doc. 1-1) also alleges class claims against both Wells 

Fargo Bank and Wells Fargo Financial Advisors. Wells Fargo moves to strike the 

Davises’ class allegations under Rule 12(f), Federal Rules of Civil Procedure, as barred 

by the agreement with Wells Fargo Bank. The Davises respond that class claims against 

both entities are permitted in federal court by their agreement with Wells Fargo Advisors. 

The agreement with Wells Fargo Bank provides, “Claims related to the validity or 

enforceability of the Class Wavier provision shall only be resolved in court.” (Doc. 8, 

Exh. B ¶ 38.) 

 Pursuant to Rule 12(f), a party may move to strike from the pleadings “an 

insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” 

Fed. R. Civ. P. 12(f). Class allegations are generally not tested at the pleading stage and 

are instead scrutinized after a party has filed for class certification. Brown v. Hain 

Celestial Group, Inc., 913 F. Supp. 2d 881, 888 (N.D. Cal. 2012). However, if a class 

action cannot be maintained on the facts alleged in the complaint, “a defendant may 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 7 of 12
- 8 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

move to strike class allegations prior to discovery.” Sanders v. Apple Inc., 

672 F. Supp. 2d 978, 989-90 (N.D. Cal. 2009). Wells Fargo’s Motion at this juncture is 

timely because whether the Davises’ contracts permit them to bring class claims can be 

resolved on the pleadings. 

 The agreement with Wells Fargo Financial Advisors permits the Davises to pursue 

class claims in court. (Doc. 15, Exh. G ¶ 25; see also Doc. 8, Exh. C ¶ 22, Exh. D ¶ 19.) 

In contrast, the agreement with Wells Fargo Bank explicitly bars class claims. (Doc. 8, 

Exh. B ¶ 38.) Wells Fargo admits that if the Davises had brought a typical investment 

suitability class action against Wells Fargo Financial Advisors alone, the Davises’ class 

claims would be governed exclusively by the contract with Wells Fargo Advisors and 

would not be barred. But the Davises allege class claims, jointly and individually, 

against Wells Fargo Advisors and Wells Fargo Bank over losses stemming from the 

ABLOC loan. 

 In deciding whether a dispute must be arbitrated, it must be determined 

“(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the 

agreement encompasses the dispute at issue.” Samson v. NAMA Holdings, LLC, 637 F.3d 

915, 923 (9th Cir. 2010) (internal citations and quotations omitted). Here, there is no 

challenge to the validity of the arbitration agreements, except to the extent that the 

Davises seek to invalidate the arbitration clauses by challenging the contracts as a whole, 

see § II, supra. The question, instead, is which agreement’s arbitration clause 

encompasses the parties’ dispute over the ABLOC loan transaction, and, in turn, whether 

the Davises may pursue their class claims in federal court. 

 The arbitration clause in the agreement with Wells Fargo Bank permits either 

party to elect binding arbitration of claims. (Doc. 8, Exh. A ¶ 38.) It encompasses not 

only disputes the Davises have with Wells Fargo Bank, but also, to the extent they relate 

to the ABLOC loan transaction, disputes with Wells Fargo Bank’s affiliates. (Doc. 8, 

Exh. A ¶ 38, § (3).) It covers all claims “relating to the interpretation, performance or 

breach of any provision of this [ALBOC loan] Agreement or any other document 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 8 of 12
- 9 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

prepared or submitted for this loan transaction, the sale and/or financing of any ancillary 

products or services, or to the conduct of any Party to this loan transaction.” (Id. at 

§ (5).) It also reaches all phases of the loan transaction “including any subsequent 

modification, extension or renewal” and any claims brought “under local, state or federal 

law whether based on a constitution, statute or regulation, in contract, tort or otherwise, 

and whether for money damages, penalties, or declaratory or equitable relief.” (Id. at 

§§ (1), (4).) In signing the Asset Advantage Agreement with Wells Fargo Bank, the 

Davises agreed that, “All Claims will be arbitrated on an individual basis. No Party will 

participate as a representative or member of any class of claimants with respect to any 

Claim.” (Doc. 8, Exh. A ¶ 38.) 

 The arbitration clause in the agreement with Wells Fargo Financial Advisors 

covers “controversies or disputes which may arise between [the Davises] and [Wells 

Fargo Financial Advisors] concerning any transaction or the construction, performance or 

breach of this Agreement or any other agreement between us, whether enter into prior to, 

on, or subsequent to the date of this Agreement.” (Doc. 15, Exh. G ¶ 25.) It provides, 

“No person shall bring a putative or certified class action to arbitration, nor seek to 

enforce any pre-dispute arbitration agreement against any person who has initiated in 

court a putative class action . . . until: (i) the class certification is denied; or (ii) the class 

is decertified; or (iii) Client is excluded from the class by the court.” (Doc. 8, Exh. C 

¶ 22.) 

 Arbitration clauses encompassing disputes “arising out of or relating to” a contract 

are considered broad. See Prima Paint Corp., 388 U.S. at 397-98 (holding that a clause 

requiring arbitration of “[a]ny controversy or claim arising out of or relating to [an] 

Agreement” was broad). When an arbitration clause utilizes broad, inclusive phrasing 

such as “related to,” “every dispute between the parties having a significant relationship 

to the contract regardless of the label attached to the dispute” should be sent to 

arbitration. Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 720 (9th Cir. 1999). 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 9 of 12
- 10 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 The Davises’ agreement with Wells Fargo Bank is exclusively dedicated to the 

terms of the ABLOC loan. The arbitration clause in the agreement with Wells Fargo 

Bank covers all claims “relating to” the loan agreement, including those against affiliates 

such as Wells Fargo Advisors. (Doc. 8, Exh. A ¶ 38, § (3).) In contrast, the agreement 

with Wells Fargo Financial Advisors is dedicated to investment services. The only 

mention of the ABLOC loan in any agreement made with Wells Fargo Financial 

Advisors is the title given to the investment account in the 2008 Client Advisor 

Agreement executed around the time of the ABLOC loan, “WBNA Collateral Acct FBO 

Chris Lori Davis.” (Doc. 15, Exh. G ¶ 22.) Under the agreement with Wells Fargo 

Financial Advisors, the parties agreed to arbitrate all “controversies or disputes which 

may arise between” the parties “concerning any transaction or the construction, 

performance or breach of this [investment services] Agreement or any other agreement 

between us, whether entered into prior to, on, or subsequent to the date of the 

Agreement.” (Doc. 15, Exh. G ¶ 25; see also Doc. 8, Exh. C ¶ 22, Exh. D ¶ 19.) 

 The Davises’ claims, described below, all relate to the ABLOC loan transaction: 

 Count 1, violations of FINRA: Davises allege both Defendants improperly 

classified the ABLOC loan in violation of “Regulation U of Section 7(d) of the 

Securities Exchange Act, 15 U.S.C. § 78g.” (Doc. 1-1, ¶ 165.) 

 Count 2, breach of contract: Davises allege they were assured “that the banks 

would not liquidate or force the Davises to liquidate the positions in their 

$1.5 Million Account in the event of a default and that so long as the Davises 

continued to timely provide payments on their interest payment obligations, they 

would not be considered in default.” (Doc. 1-1, ¶ 173.) 

 Count 3, breach of the implied covenant of good faith and fair dealing: both 

Defendants failed to properly label the ABLOC loan in accordance with federal 

law and to fairly represent the terms of the loan. (Doc. 1-1, ¶ 187.) 

 Count 4, misrepresentation/fraud/securities fraud: both Defendants failed to 

apprise the Davises of the risks of using securities as collateral. (Doc. 1-1, ¶ 191.) 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 10 of 12
- 11 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 Count 5, consumer fraud: both Defendants misrepresented the terms of ABLOC 

loan agreement. (Doc. 1-1, ¶ 206.) 

 The Davises argue they should be allowed to pursue their class claims because the 

agreement with Wells Fargo Financial Advisors permits them. But that agreement only 

governs how Wells Fargo will work with the Davises to manage their investments and 

accomplish their financial goals. (Doc. 8, Exh. C ¶ 5.) This action does not stem from a 

dispute over how the Davises’ money was invested, but instead arises out of the Davises’ 

agreement concerning the ABLOC loan. 

 Although some of the Davises’ class claims allege Wells Fargo Financial Advisors 

misled them when their advisor encouraged them to pursue the loan, the dispute relates 

primarily to the ABLOC loan agreement with Wells Fargo Bank. The Davises signed 

two separate agreements: one concerning their investment relationship with Wells Fargo 

Advisors and one concerning the loan agreement with Wells Fargo Bank. The gravamen 

of the action lies not with investment advice but with the implementation and terms of the 

ABLOC loan. In the agreement with Wells Fargo Bank, the Davises agreed to pursue all 

claims relating to the ABLOC loan, against both Wells Fargo Bank and any of its 

affiliates, on an individual basis. The contractual waiver of their right to arbitrate class 

claims is permitted by the Federal Arbitration Act. Am. Express Co. v. Italian Colors 

Restaurant, 570 U.S. __ (2013). The Davises’ class claims will be stricken. 

IT IS THEREFORE ORDERED that Defendants Wells Fargo Advisors, LLC and 

Wells Fargo Bank, National Association’s Motion to Strike Class Allegations from 

Complaint and to Compel Arbitration (Doc. 8) is granted. 

/ / / 

/ / / 

/ / / 

/ / / 

/ / / 

/ / / 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 11 of 12
- 12 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

IT IS FURTHER ORDERED that the Clerk shall enter judgment ordering 

Defendants Wells Fargo Advisors, LLC and Wells Fargo Bank, National Association and 

Plaintiffs Christopher and Lori Davis to arbitrate the disputes raised in this action in 

accordance with the terms of their agreement. 

 Dated this 8th day of April, 2014. 

Case 2:13-cv-01963-NVW Document 28 Filed 04/08/14 Page 12 of 12