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Snyder v. Wells Fargo Bank, N.A.

United States District Court, S.D. New York

April 18, 2013

RICHARD SNYDER, Plaintiff,
v.
WELLS FARGO BANK, N.A. as successor to WACHOVIA BANK, N.A., Defendant

Decided: April 17, 2013.

For Plaintiff: Brian Kennedy, Esq., New York, NY.

For Defendant: Michael P. Manning, Esq., Greenberg Traurig, LLP, New York, NY.

OPINION

Page 390

OPINION AND ORDER

Shira A. Scheindlin, U.S.D.J.

I. INTRODUCTION

Plaintiff Richard Snyder brought suit against Wells Fargo Bank, N.A., as successor in interest to Wachovia Bank, N.A. (" Wachovia" ) for, inter alia, breach of contract and breach of fiduciary duty. Snyder claimed to have suffered investment losses as a result of Wachovia's failure to exercise reasonable care, skill, and caution in making investment decisions regarding his Investment Management Agreement (" IMA" ) with Wachovia After a seven-day trial, the jury awarded Snyder $7,437.71 in damages for breach of contract[1] and $724,999.20 in damages for breach of fiduciary duty. The jury found that the date on which Wachovia breached its contract with Snyder was September 9, 2008. The jury further found that Wachovia breached its fiduciary duty to Snyder on September 27, 2008, and that Wachovia's fiduciary obligation to Snyder ended on October 6, 2008.

Wachovia now moves pursuant to Federal Rule of Civil Procedure 50(b) (" Rule 50(b)" ) for judgment as a matter of law setting aside the jury's verdict on Plaintiff's

Page 391

breach of fiduciary duty claim. Plaintiff cross-moves to alter or amend the judgment, pursuant to Federal Rule of Civil Procedure 59(e) (" Rule 59(e)" ), to add statutory interest. For the following reasons, both motions are granted.

II. BACKGROUND

A. Stipulated Facts and Trial Evidence[2]

On June 24, 2008, Snyder first met with Wachovia representatives, including investment advisor Anthony Rogers, at his home where they discussed Snyder's investment objectives and financial circumstances. Snyder met with Rogers and other Wachovia representatives a second time on July 31, 2008, at which time he signed documents to open the IMA. Snyder testified that he told Rogers that he wanted Wachovia to immediately hedge or " collar" his investments to protect them from a market downturn and eventually diversify his portfolio.[3] Snyder's assets were transferred from his Greenhaven Account and delivered into the IMA on August 8, 2008. Wachovia deemed the assets in " good order" for the transaction of business on August 26, 2008.

On September 15, 2008, Lehman Brothers' Holding Inc. filed for Chapter 11 bankruptcy, precipitating a severe market downturn. In response, Snyder sent an e-mail to Rogers, dated September 15, 2008, in which he stated: " i want to know now did you hedge the greenhaven money as you were told to do on many occasions." [4] At trial, Snyder maintained that he first learned that Wachovia did not hedge or collar his IMA investments on September 15, 2008.[5] After the market closed on September 17, 2008, Snyder sent an e-mail to Rogers and others directing Wachovia to sell all of his financial stocks in its possession.[6] Rogers confirmed Snyder's instructions and the placement of sell orders for those stocks.

On September 26, 2008, Snyder directed Wachovia to transfer all cash in the IMA to the Bank of New York (" BoNY" ).[7] Wachovia completed the transfer that same day.[8] The next day, a Saturday, Snyder sent the following e-mail to Tom Roberts of BoNY in which Rogers was copied:

TOM PLS PREPARE CUSTODOL [sic] ACS TO IMMEDIATELY RECEIVE ALL REMAINING ASSETS HELD BY WACHOVIA WHICH SCHOULD [sic] BE PRIMARILY SECURITIES. . . . ALSO WOULD NEUBERGER AND WACHOVIA ALSO CALL AND CONFIRM INSTRUCTIONS AND TIMING.[9]

Rogers responded with an e-mail to Snyder later that day stating: " We will deliver the assets to BoNY when they notify us they are ready to receive. The timing of this transfer will be determined solely by BoNY. Please let us know asap if you have

Page 392

any further instructions for us in the interim." [10] Snyder did not provide any further instructions to Wachovia in response to Rogers' e-mail. He testified at trial that he had no idea what Rogers meant ...


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