Levinson v. Westport National Bank (900 F. Supp. 2d 143, 2012)

MEMORANDUM OF DECISION GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. #354] AND GRANTING IN PART AND DENYING IN PART DEFENDANT’S AMENDED MOTION FOR SUMMARY JUDGMENT [DKT. # 372]

VANESSA L. BRYANT, District Judge.

This action arises out of the Ponzi scheme perpetrated by Bernard L. Ma-doff. Two individuals and a pension and profit-sharing plan, along with the class they represent (collectively the “Plaintiffs”), have brought this action against: (1) Westport National Bank (‘WNB”), the custodian of their retirement investments; and (2) Robert L. Silverman, the president of PSCC Services, Inc. (“PSCCSI”), the Plaintiffs’ pension consulting and actuarial firm (collectively the “Defendants”). The Plaintiffs and the class they seek to represent maintained custodial accounts with WNB for their investments. WNB invested the Plaintiffs’ assets with Bernard L. Madoff Investment Securities, LLC (“BLMIS”). After Madoff admitted his fraud, the Plaintiffs realized that their investments were lost and commenced this class action.

The Plaintiffs originally brought this putative class action in February 2009. After this Court dismissed their complaint with leave to amend, the Plaintiffs filed the first amended class action complaint on January 19, 2010, asserting several causes of action. Upon the Defendants’ motions, this Court dismissed or entered judgment on the pleadings in favor of the Defendants with respect to several claims. The only claims still active, see discussion, supra at 151 n. 2, are the Plaintiffs’ claims against WNB for (1) breach of contract, (2) breach of fiduciary duty, (3) negligence, (4) violations of CUTPA, (5) unjust enrichment, and (6) money had and received.

The Plaintiffs have moved, pursuant to Federal Rule of Civil Procedure 56, for partial summary judgment on their breach of contract, CUTPA, and money had and received claims [Dkt. # 354]. WNB has, in an amended motion, similarly moved for summary judgment on all of the Plaintiffs’ claims [Dkt. #372], Because this Court concludes that triable issues exist with respect to some, but not all, of the Plaintiffs’ claims, the Plaintiffs’ motion [Dkt. # 354] is DENIED and WNB’s amended motion [Dkt. # 372] is GRANTED IN PART and DENIED IN PART. WNB’s earlier motion for summary judgment, superseded by the amended motion [Dkt. # 358] is DENIED AS MOOT.

I. Background

In December 2008, when Madoff admitted his Ponzi scheme and BLMIS collapsed, the Plaintiffs had been investors with BLMIS for up to two decades, and WNB had served as custodian of their investment accounts with BLMIS since 1999. The gravamen of the Plaintiffs’ claims is that, during its time as custodian, WNB breached its contractual and common law duties to the Plaintiffs by impermissibly commingling their assets, relying on information provided by BLMIS, and making no effort to monitor BLMIS or verify this information. The Plaintiffs argue that WNB’s conduct entitles them to recover improperly assessed fees paid to WNB, as well as their investment principal and lost investment income which they could reasonably have anticipated earning if they had known that BLMIS was a fraudulent enterprise instead of an investment firm.

The parties have filed voluminous evidentiary submissions in the summary judgment briefing process. This ruling will briefly summarize this evidence, reserving some facts for discussion of the merits of the parties’ respective motions.

A. The Plaintiffs’ custodial accounts with WNB.

The Plaintiffs were clients of PSCC, Inc. and PSCC Services, Inc. (collectively “PSCC”), pension and retirement plan consulting services companies operated by Robert L. Silverman. (WNB’s L.R. 56(a)(1) Stmt. ¶ 1.) PSCC provided pension and retirement plan consulting services for the Plaintiffs. (Id.) In 1986, Silverman entered into an arrangement with Madoff whereby PSCC clients would invest with BLMIS through an intermediary custodian of their assets; the intermediary custodian would hold an omnibus account at BLMIS composed of the combined investments of the PSCC clients. (See id. ¶¶ 1, 9.)

Initially, Westport Bank and Trust (“WBT”) served as the intermediary custodian. (Id ¶ 1.) In 1999, after WBT was acquired by Hudson United Bank (“HUB”), HUB terminated the custodial arrangement with PSCC and BLMIS. (Id. ¶ 9.) PSCC approached WNB about serving as custodian of the PSCC clients’ investments with BLMIS, and WNB agreed. (Id.) The Plaintiffs terminated their accounts at WBT and opened new accounts at WNB. Thereupon, BLMIS transferred the assets in the omnibus account in WBT’s name to a new omnibus account in WNB’s name. (Id. ¶¶ 9-10.) At the time of the transfer, neither PSCC, WBT nor WNB verified the account balances reported by BLMIS. None of the entities conducted an audit the omnibus account or took any other steps to verify either that there were any actual assets in the omnibus account or the amount of such assets. No funds were deposited in WNB. (Pl.’s L.R. 56(a)(1) Stmt. ¶¶29, 32.)

Each Plaintiff entered into a separate custodial agreement with WNB which governed the custodial relationship. All of the agreements were identical. The agreements provide that WNB would undertake to perform certain specified functions. WNB agreed to act as custodian with respect to all funds transmitted to WNB by Plaintiffs and invest Plaintiffs’ funds in an omnibus account maintained at Bernard L. Madoff Investment Services, Inc. (“BLMIS”). (Whatley Decl. Ex. 49, at 1.) The agreements state that “[WNB] shall accept such property from [the Plaintiffs,] and [WNB] shall invest all such cash and cash equivalents held hereunder, and any interest, dividend or other income earned from property held by [WNB] hereunder, in [WNB’s] deposit money market account until [WNB] transfers the funds to [BLMIS].” Id. In addition, as described below, WNB was responsible for paying fees to itself and PSCC.

Each agreement provides that WNB had only a limited role in the Plaintiffs’ investment strategy: “Principal has chosen BLMIS to receive and invest Principals funds and has not relied on the Bank in choosing to give BLMIS full discretionary authority.” (Id.) “[WNB] has no authority or ability to direct or oversee in any manner the discretionary investments made by BLMIS; ... [WNB] is acting solely in a ministerial capacity; ... [and WNB] assumes no responsibility for the investment performance of BLMIS.” (Id.) But the agreements also provide that WNB has certain other responsibilities: WNB “shall maintain adequate records indicating the ownership by [the Plaintiffs] of investments with BLMIS and held by [WNB] as custodian for [the Plaintiffs]” and “shall render at least annually statements reflecting the property held by it as custodian hereunder.” (Id. at 2.) “The Principal and the Bank also acknowledge that the Principal has entered into an agreement with PSCC ... for services to be performed by ... [PSCC] with respect to Principal’s investments made by BLMIS. The Bank is authorized and directed to coordinate its recordkeeping with that provided by PSCC.” (Id. at 4.)

The contracts also govern the Plaintiffs’ payment of fees to WNB and PSCC; the fees due to both entities depended on the “average assets” held on behalf of the PSCC clients. For services prior to December 31, 2004, PSCC received “an amount equal to .010 of the average assets (determined on an annual basis) held by [WNB] under this Custodian Agreement, plus .002 of the amount of each transaction effected by BLMIS on behalf of [the Plaintiffs] with a maximum of .025 of average assets.” (Id.) For services after December 31, 2004, PSCC received “an amount equal to .006 of the assets at the time of billing held by [WNB] under this Custodian Agreement,” plus any separately itemized “administrative services.” (Id. at 3.) WNB received “fees ... of .006 of the average assets held hereunder (determined on an annual basis).” (Id. at 2.) Lastly, the agreements provide that WNB “is further authorized and directed to pay to [PSCC] from the custodial account of Principal established hereunder.” (Id.)

B. WNB’s administration of the Plaintiffs’ accounts.

WNB held the Plaintiffs’ total assets in two types of investments: (1) the omnibus account with BLMIS, which held the Plaintiffs’ investments in combination with the other PSCC clients, and (2) cash in multiple custodial services accounts at WNB which WNB used to receive deposits from investors, receive disbursements from BLMIS, and pay fees to itself and PSCC. (WNB’s L.R. 56(a)(1) Stmt. ¶¶ 28.)

The Plaintiffs therefore held proportionate investment interests in a common pool of assets composed of the omnibus account at BLMIS and the custodial services accounts at WNB. (Id.) WNB attempted to have a cash balance in the custodial services accounts at all times. (Clark-Weintraub Decl. Ex. 31, at 47:17-48:13.) WNB would make the determination about when to transfer money and would do so to adjust the balance based on anticipated future cash needs. (Id. at 47:17-48:13, 138:3-139:4; see also Whatley Decl. Ex. 3, at 169:15-25.) WNB administered the custodial services accounts in a manner which minimized the number of .transfers which took place between WNB and BLMIS; when a customer deposited cash, WNB adjusted that customer’s pro rata interest in the common pool of assets but typically did not send the money to BLMIS. (Clark-Weintraub Decl. Ex. 31, at 63:9-65:25.) Instead, the money stayed in the custodial services account in order to fund distributions and fee payments. (Id. at 63:9-65:25, 183:13-25.). Because distributions and fee payments outpaced contributions during WNB’s nine-year tenure as custodian, WNB typically requested funds from BLMIS between six and eight times per year but only transferred funds to BLMIS twice, once in 2001 and once in 2004. (Clark-Weintraub Decl. Ex. 31, at 91:21-25; Whatley Decl. Ex. 40, at 287:12-290:20.)

WNB calculated the value of this proportionate investment interest in the common pool of assets, the net asset value (“NAV”), periodically. (Clark-Weintraub Decl. Ex. 27, at 38:11-17, 39:24-40:8.) WNB’s fees, and part of PSCC’s fees, were calculated based on the NAV of the combined pool of assets. (WNB’s L.R. 56(a)(1) Stmt. ¶ 50.) WNB calculated the NAV based on the reported value of the combined pool of assets, including the value BLMIS reported in its monthly statements sent to WNB. (See id.) WNB made some attempts to verify some of the information in the monthly statements BLMIS sent to WNB, but WNB neither comprehensively verified the BLMIS monthly statements nor audited BLMIS. (Pl.’s L.R. 56(a)(1) Stmt. ¶¶ 29, 32; WNB’s L.R. 56(a)(2) Stmt. ¶¶ 29, 32.)

The Plaintiffs received annual statements from WNB. (Pl.’s L.R. 56(a)(1) Stmt. ¶ 30; WNB’s L.R. 56(a)(2) Stmt. ¶ 30.) These statements provided the total value of their investment, the value of each share of their respective BLMIS investment, and number of shares owned, as well as with the market value of their investment one year earlier. (See generally, e.g., Whatley Decl. Ex. 23.) The statements also detailed any additional investment by the Plaintiffs during the year (identified as a cash deposit followed by a purchase of shares in a BLMIS investment), as well as the fees deducted for payment to WNB and PSCC (identified as a sale of shares in a BLMIS investment followed by a deduction for administrative or record-keeping fees to PSCC or custodial fees to WNB). (Id.)

C. The aftermath of BLMIS’ collapse.

WNB asserts that Madoff was arrested, and his Ponzi scheme uncovered, on December 11, 2008. At that time, it became clear that Madoff misappropriated assets as soon as they were deposited with BLMIS (see Pl.’s L.R. 56(a)(1) Stmt. ¶ 14), and that the trade confirmations and monthly account statements BLMIS sent to WNB had been fabricated (id. ¶ 33). The omnibus account at BLMIS in WNB’s name actually held no assets and had never held any assets. (Id. ¶¶ 14, 33; WNB’s L.R. 56(a)(1) Stmt. ¶ 34.)

On December 12, 2008, WNB acknowledged, in a letter to all the PSCC clients including the Plaintiffs, the “recent allegations involving Bernard Madoff’ and reminded Plaintiffs that, pursuant to their custodial agreements, they could request return of their assets by delivering the request to WNB. (Clark-Weintraub Decl. Ex. 55.) In connection with the liquidation of BLMIS pursuant to the Securities Investor Protection Act (“SIPA”), the individual Plaintiffs filed claims with the SIPA trustee in the United States Bankruptcy-Court for the Southern District of New York. (Thielmann Deck Exs. A, B.) WNB filed a statement in support of the claims submitted by the Plaintiffs and other PSCC clients. (Id. Ex. A.) The SIPA trustee denied the Plaintiffs’ claims in April 2011 because the Plaintiffs did not have accounts with BLMIS and therefore did not qualify for SIPA protection. (Id. Ex. B, at 5.)

The Plaintiffs filed this lawsuit as a putative class action on February 13, 2009. The Plaintiffs seek to recover their investment principal, lost investment income, and fees paid to WNB and PSCC. As of December 11, 2008, the reported value of the total investments of all the class members with BLMIS was almost $60 million. (PL’s L.R. 56(a)(1) Stmt. If 6.) Plaintiffs claim that, during the time that WNB served as custodian, it deducted over $2.8 million in fees for itself and over $12.6 million in fees for PSCC. (Id. If 33.)

II. Summary Judgment Standard

The standard for deciding the cross-motions for summary judgment is familiar. Summary judgment is appropriate only when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). No genuine disputes as to any material fact exist, and summary judgment is therefore appropriate, when “the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A material fact is one which “might affect the outcome of the suit under the governing law,” and an issue is genuine when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). But “[c]onclusory allegations will not suffice to create a genuine issue.” Delaware & Hudson Ry. Co. v. Consolidated Rail Corp., 902 F.2d 174, 178 (2d Cir.1990).

On cross-motions for summary judgment, the same standard applies. See Morales v. Quintet Entm’t, Inc., 249 F.3d 115, 121 (2d Cir.2001). “The court must consider each motion independently of the other and, when evaluating each, the court must consider the facts in the light most favorable to the non-moving party.” Natural Res. Def. Council v. Evans, 254 F.Supp.2d 434, 438 (S.D.N.Y.2003) (citing Morales, 249 F.3d at 121).

III. Discussion

A. Breach of Contract

Plaintiffs advance four theories with respect to their breach of contract claim. First, Plaintiffs argue WNB breached the custodial agreement in its administration of the custodial clearing accounts through the comingling of funds. Second, Plaintiffs argue that WNB breached Paragraph 7 of the custodial agreement by failing to return Plaintiffs’ contributions as soon as practicable. Third, Plaintiffs argue that WNB breached the custodial agreement in its calculation of fees based on “assets.” Lastly, Plaintiffs argue that WNB breached the custodial agreement by failing to maintain adequate records and statements. The Court will therefore examine these theories independently.

In Connecticut, a breach of contract action requires the plaintiff to show (1) a valid agreement, (2) performance by one party, (3) breach of the agreement by the opposing party and (4) damages directly and proximately caused by the breach. McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., 93 Conn.App. 486, 504, 890 A.2d 140 (2006).

In determining whether breach has occurred, the court must ascertain the contractual rights and obligations of the parties.

In ascertaining the contractual rights and obligations of the parties, we seek to effectuate their intent, which is derived from the language employed in the contract, taking into consideration the circumstances of the parties and the transaction____Where the language is unambiguous, we must give the contract effect according to its terms.... Where the language is ambiguous, however, we must construe those ambiguities against the drafter.... [A] contract is unambiguous when its language is clear and conveys a definite and precise intent.... The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity.... Moreover, the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous.... In contrast, a contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself.... [A]ny ambiguity in a contract must emanate from the language used by the parties.... The contract must be viewed in its entirety, with each provision read in light of the other provisions ... and every provision must be given effect if it is possible to do so.... If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous.

Harbour Pointe, LLC v. Harbour Landing Condominium Ass’n, Inc., 300 Conn. 254, 260-61, 14 A.3d 284 (2011) (quoting Cantonbury Heights Condominium Ass’n, Inc. v. Local Land Development, LLC, 273 Conn. 724, 734, 873 A.2d 898 (2005)). Where a contract term is ambiguous, the court may properly discern the intent of the parties as to the meaning of the contract by considering extrinsic evidence. United Illuminating Co. v. Wisvest-Connecticut, LLC, 259 Conn. 665, 675, 791 A.2d 546 (2002). “[T]he test of proximate cause is whether the defendant’s conduct is a substantial factor in bringing about the plaintiffs injuries.” Gurguis v. Frankel, 93 Conn.App. 162, 168, 888 A.2d 1083 (2006). “Proximate cause is ordinarily a question of fact.” Id.

1. Administration of custodial clearing accounts

First, Plaintiffs argue that they are entitled to summary judgment on their breach of contract claim because the custodial agreements required WNB to transmit their deposits to BLMIS within a reasonable time and did not permit the pro rata ownership of both the clearing accounts and the omnibus account at BLMIS which WNB used instead. Plaintiffs argue that no provision of the custodial agreement authorized WNB to utilize one account owner’s funds to pay other customers’ redemptions and fees. Plaintiffs essentially argue that WNB breached the agreement by comingling each Plaintiffs account contributions together. WNB argues that summary judgment in its favor is appropriate because the contract unambiguously permitted it to manage the custodial relationship as it did and that the custodial agreement did authorize grouping of customers’ funds and required transmission of funds to BLMIS when practical.

a. Breach

WNB argues that the plain language of Paragraph 2 of the custodial agreement required WNB to group the customer’s funds with those of other custodial customers and therefore there cannot be any breach. Paragraph 2 provides in relevant part that the “Principal hereby authorizes the Bank to transmit to BLMIS all funds received by the Bank from the Principal to the extent the first transmission of such funds is practical and acceptable to BLMIS ... It is understood and acknowledged that the funds of the Principal which are transmitted to BLMIS will be grouped with funds of other persons of entitles for investment with BLMIS.” (Whatley Deck Ex. 49.) Defendants further argue that it was practical to comingle and maintain the investor funds in this way and therefore its conduct was permissible under the contract. On the other hand, Plaintiff argues that this language in Paragraph 2 does not permit WNB to comingle investor’s funds in a checking account at WNB to pay the fees of other custodial accountholders.

Here, WNB’s argument presumes that the term “practical” modifies or relates to its own conduct. In other words, WNB presumes that pursuant to this language, it is empowered to determine whether the transmission of the funds is practical. However, this language is ambiguous as it could easily modify or relate to BLMIS and not WNB. Particularly in view of the fact, that the term “practical” is modified by the phrase “to BLMIS” in the same sentence. Therefore this language could just as easily be interpreted to empower only BLMIS to determine whether the transmission of the funds is practical and not WNB. If the Court credited WNB’s interpretation of this sentence that could have the effect of rendering the phrase “to BLMIS” meaningless in the sentence. A “contract must be construed to give meaning to each term in the context of the entire agreement.” Gerardo v. Laraia, No. CVN98091696BU, 2001 WL 283019, at *9 (Conn.Super.Ct. Feb. 6, 2001); Linemaster Switch Corp. v. Aetna Life and Cas. Corp., No. CV91-0396432S, 1995 WL 462270, at *14 (Conn.Super.Ct. July 25, 1995) (“Especially where there is a claim of ambiguity a court must attempt to give meaning to every word of a contract”) (citing Downs v. Nat’l Casualty Co., 146 Conn. 490, 495, 152 A.2d 316 (1959)).

Although, the terms of the contract do contemplate that the funds will be grouped together as WNB points out, it is ambiguous whether the funds could be comingled for an extended period of time or whether the funds could only be comingled immediately prior to and after transfer to BLMIS. The language in Paragraph 2 provides that the funds “will be grouped with funds of other persons or entities for investment with BLMIS.” The term “for investment” could be interpreted to mean that WNB could only transfer a Principal’s funds the bank’s money market fund to a single fund in order to transfer the funds to WNB’s custodial account at BLMIS. The grouping or comingling of the funds is only mentioned in the Custodial Agreement in connection with a transfer of funds to BLMIS, which WNB admits it only did twice in the nine years it served as custodian for Plaintiffs.

The “practical” language in Paragraph 2 that WNB relies on patently refers to the manner in which the funds are transmitted as opposed to the manner in which the funds were held or stored. Courts must “accord the language employed in the contract a rational construction based on its common, natural and ordinary meaning and usage as applied to the subject matter of the contract.” Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 13, 938 A.2d 576 (2008). Transmit is defined as “to send or convey from one person or place to another.” Transmit Definition, Merriam-Webster.com, http://www.merriam-webster. com/dictionary/transmit (last visited August 1, 2012). Therefore the language in Paragraph 2 that WNB is authorized to transmit funds “to the extent that the transmission of such funds is practical and acceptable to BLMIS” could reasonably be interpreted to be limited to the two instances in which WNB actually transferred funds to BLMIS and would have no applicability to how WNB maintained each investor’s custodial accounts when not transmitting any funds to BLMIS. As Plaintiffs point out, the agreement in Paragraph 1 actually provides that when WNB is not transmitting funds to BLMIS that WNB “shall invest all such cash and cash equivalents held hereunder, and any interest dividend or other income earned from property held by the Bank, hereunder, in the Bank’s deposit money market account until the Bank transfers the funds to [BLMIS].” (Whatley Decl. Ex. 49.)

Moreover, the other provisions of the contract appear to contemplate that WNB would maintain individual investor accounts as opposed to a single comingled account. For example, Paragraph 4 provides that WNB was “authorized and directed to pay PSCCI from the custodial account of Principal established hereunder an annual fee” which suggests that each investor had an individual custodial account. (Whatley Deck Ex. 49, at 1.) Additionally, each Plaintiff executed a separate custodian agreement as opposed to being signatories to a master custodian agreement which again suggests that it was the parties’ intent to maintain individual custodial accounts for investment with BLMIS. Each custodial agreement stated that the Participant’s deposits, together with any income derived therefrom, would be held in the bank’s deposit money account. No mention is made of the deposits being held together with the deposits of other customers of the bank or the income on deposits of other customers of the WNB.

Consequently, the language in Paragraph 2 is somewhat ambiguous as to whether it permitted WNB to determine the manner it held funds that were not in transmission to BLMIS and whether it was permissible to comingle funds in a single account as was done. In addition, there are no terms in the agreement that expressly permits WNB to use the funds of other investors in the comingled account to fund redemption payments to other custodial account holders as it did. Considering that the Court must construe any ambiguities against the drafter and when viewed in the light most favorable to the Plaintiffs or WNB, genuine issues of material fact exists as to whether the contract permitted WNB to maintain the funds as it deemed practical in a comingled account. Therefore, while it could be argued that there is more evidence that commingling was impermissible than there is that it was permissible, such factual issues are not the province of the Court. Consequently, there are triable issues of fact as to whether there was a breach of agreement by WNB in its administration of the custodial clearing account.

b. Causation

WNB further argues that, even if it breached the custodial agreements by co-mingling funds, the Plaintiffs cannot succeed on their claim because they cannot show that this breach caused them any damages. WNB argues that it unclear how the Plaintiffs were harmed if it had not comingled the funds and instead immediately transferred every deposit to BLMIS as the only money not stolen by Madoff was the money WNB maintained in the eomingled clearing account.

Plaintiffs argue that WNB’s failure to transfer the funds immediately harmed them because the Madoff Trustee has taken the position that Plaintiffs and Class members have no recourse against the BLMIS estate because their funds never reached Madoff. (PI. Reply Mem. in support of Summary Judgment p. 8.) Therefore, Plaintiffs argue they were harmed because “WNB’s failure to send the money to BLMIS was the basis for the Trustee’s denial of Class members’ claims” under SIPA. (Id. at 10.) ' In support of their argument, Plaintiffs submit that “Plaintiffs’ counsel has been expressly informed by the Trustee’s counsel that, because WNB failed to transfer the vast majority of funds deposited by Class members into their custodial accounts at the Bank to Madoff, there had been no entrustment of cash or securities to BLMIS and, therefore, the Class members had no claims against the BLMIS estate for recovery of these amounts ... Thus, Class members have been injured by WNB’s failure to transfer the funds to BLMIS, because they now have no recourse against the BLMIS estate to recover those funds.” (Id. at 16).

Here, Plaintiffs’ SIPA argument is unavailing as the Madoff Trustee’s decision was not predicated on WNB’s failure to send money to BLMIS as Plaintiffs inexplicably contend but rather because the individual Plaintiffs did not have an account with BLMIS. See (Thielmann Decl. Exs. A, B.) The Madoff Trustee clearly and unambiguously concluded that only WNB would be entitled to SIPA protection because it held the account at BLMIS and therefore it was WNB and not the Plaintiffs who entrusted BLMIS with cash or securities for purpose of trading or investing in securities. Moreover, Plaintiffs attempt to lend credence to their unsupported theory by submitting that Plaintiffs’ counsel has been informed by Trustee’s Counsel that the failure to transfer the money was the Trustee’s real reason for denial of their claims is patently inadmissible hearsay.

Moreover, even if Plaintiffs’ SIPA theory was credible Plaintiffs would likely not be able to recover for such damages. “The Restatement (Second) of Contracts divides a defendant’s recovery into two components: (1) direct damages, composed of ‘the loss in value to him of the other party’s performance caused by its failure or deficiency’; plus, (2) ‘any other loss, including incidental or consequential loss, caused by the breach....’” City of Milford v. Coppola Const. Co., Inc., 93 Conn.App. 704, 715, 891 A.2d 31 (2006) (quoting 3 Restatement (Second), Contracts § 347(a) and (b) (1981)). “‘[Damages resulting from a breach of contract may be divided into those which flow naturally and usually from the breach itself, or general damages, and those which do not naturally and usually flow from such a breach, but did in this case, or special or consequential damages. As to the former, the parties need not actually have considered the possibility of their occurrence, as long as they may fairly be supposed to have considered them, while, as to the latter, to be recoverable, they must meet the requirements of causation, certainty, and foreseeability, that is, be such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract. Stated another way, when a defendant has reason to know, before entering into the contract in question, of facts indicating that particular, though unusual, damages will follow or may follow the defendant’s failure to perform its agreement, the defendant is liable for such damages.’” Id. (quoting 24 S. Williston, Contracts (4th Ed. Lord 2002) § 64:12. Pp. 130-32).

“General damages are considered to include those damages that flow naturally from a breach, that is, damages that would follow any breach of similar character in the usual course of events. Such damages are said to be the proximate result of a breach, and are sometimes called ‘loss of bargain’ damages, because they reflect a failure on the part of the defendant to live up to the bargain it made, or a failure of the promised performance itself. Consequential damages, on the other hand, include those damages that, although not an invariable result of every breach of this sort, were reasonably foreseeable or contemplated by the parties at the time the contract was entered into as a probable result of a breach. These, too, must be proximately caused by the breach, and the difference is that they do not always follow a breach of this particular character.” Id. (internal quotation marks and citation omitted).

Here Plaintiffs theory that they were harmed by the denial of SIPA protection as a result of WNB’s purported failure to properly administer the custodial accounts is clearly not a claim for general damages but rather a claim for consequential damages. This damage cannot be considered a general damage since the loss of SIPA protection does not flow naturally from WNB’s failure to transfer the funds and its decision to maintain a comingled account. Instead this purported harm is clearly a claim for consequential damages. However, the loss of SIPA protection resulting from Madoffs Ponzi scheme was clearly not a reasonably foreseeable or contemplated harm by the parties at the time the custodial agreements were executed. Consequently, Plaintiffs may not recover for a loss “that the party in breach did not have reason to foresee as a probable result of the breach when the contract was made.” Restatement (Second), Contracts § 351. Even assuming that Plaintiffs’ SIPA theory was persuasive, Plaintiffs would still not have established that they suffered damages proximately caused by WNB’s alleged failure to administer the custodial accounts pursuant to the terms of the agreement.

Moreover, this Court cannot discern any damages that would flow from WNB’s conduct of commingling the funds that would not be speculative. To the extent that it can be said that if WNB had maintained individual accounts and transferred all funds deposited to BLMIS immediately then BLMIS would have had to meet the redemption requests made by Plaintiffs in lieu of WNB’s use of other investor funds to meet those requests in the comingled clearing account. It is possible that if BLMIS had to service those additional requests that the Ponzi scheme would have come to light sooner. However any such theorizing in this vain would be conjectural and speculative. “It is hornbook law that to be entitled to damages in contract a plaintiff must establish a causal relation between the breach and the damages flowing from that breach. Such causal relation must be more than surmise or conjecture, inasmuch as a trier is concerned not with possibilities but with probabilities. Where ... the damages claimed are remote from the breach complained of and the causal connection is wholly conjectural, there can be no recovery.” Calig v. Schrank, 179 Conn. 283, 286, 426 A.2d 276 (1979); Bridgeport Harbour Place I, LLC v. Ganim, No. X06CV040184523S, 2008 WL 366550, at *3 (Conn.Super.Ct. Jan. 25, 2008) (“proximate cause cannot be premised on such indefinite assumptions or contingencies that the causal relationship at issue is rendered remote and speculative”).

Plaintiffs have failed to submit any evidence that the purported failure to administer the custodial account pursuant to the terms of the custodial agreement was the proximate cause of any damages. “Although the issue of causation generally is a question reserved for the trier of fact ... the issue becomes one of law when the mind of a fair and reasonable person could reach only one conclusion, and summary judgment may be granted based on a failure to establish causation.” Abrahams v. Young and Rubicam, Inc., 240 Conn. 300, 307, 692 A.2d 709 (1997) (internal quotation marks and citation omitted). Here no fair or reasonable person could conclude that Plaintiffs suffered any non-speculative damages proximately caused by WNB’s alleged failure to administer the custodial accounts pursuant to the terms of the agreement. Plaintiff has presented no evidence that there was any amount of money in the BLMIS account maintained by the Plaintiffs at any particular time. The very nature of a Ponzi scheme is to pay redemptions to one customer from the deposits made by another. Thus, Plaintiffs would have to have presented facts to establish that Madoff would not have used one Participant’s funds to meet another Participant’s redemption request had the funds been transmitted to BLMIS rather than retained by WNB. On this ground, the Court grants summary judgment in favor of WNB on Plaintiffs’ breach of contract claim on the basis of the failure to appropriately administer the custodial accounts.

2. Failure to return Plaintiffs’ contributions as required by Paragraph 7

Plaintiffs argue that WNB breached the agreement by refusing to comply with Paragraph 7 of the agreement which provides that the “Custodian Agreement may be terminated by either party upon ninety (90) days prior written notice. Upon termination, all cash, cash equivalents and other property held hereunder shall be delivered as soon as practicable to the Principal.” (Whatley Decl. Ex. 49.) Plaintiffs argue that pursuant to Paragraph 7 WNB is required to return their contributions which it has failed to do. Plaintiffs further contend that the custodial agreements have been terminated although WNB claims there is no evidence of the terminations. WNB explains that to the extent that Plaintiffs are referring to the small sum remaining in the clearing account, that it has put those funds in an interest bearing account pending resolution of litigation. To the extent Plaintiffs are referring to the funds held in the BLMIS omnibus account, WNB argues that it is not in breach because of Madoff s perpetration of the Ponzi scheme in which he stole those funds and because BLMIS is now in bankruptcy. WNB -argues that in light of BLMIS’s bankruptcy and the unprecedented theft perpetrated by Ma-doff it was clearly not practicable for WNB to return those funds under the terms of Paragraph 7. (Dkt. # 290 p. 22-23.) This Court agrees that a reasonable juror would conclude that it was not “practicable” to return the contributions held in the BLMIS account that were admittedly stolen by Madoff and that it was prudent for WNB to set aside the funds in the clearing account pending resolution of this action. Consequently, no reasonable juror would conclude that WNB breached its obligations in Paragraph 7.

Moreover, Paragraph 7 could be interpreted to mean that WNB had the obligation to request from BLMIS the assets in the omnibus account in order to deliver the “cash, cash equivalent and other property held” in line with Paragraph 2 which provides that the WNB “will also follow such reasonable written directions which the Principal may deliver to the Bank ... including to request that BLMIS return assets of the Principal to the Bank and for the Bank to remit cash or cash equivalents to the Principal.” (Whatley Decl. Ex. 49.) “[I]n construing contracts, we give effect to all the language included therein, as the law of contract interpretation ... militates against interpreting a contract in a way that renders a provision superfluous.” Connecticut National Bank v. Rehab Associates, 300 Conn. 314, 322, 12 A.3d 995 (2011) (internal quotation marks and citation omitted). Paragraph 7 when read in conjunction with Paragraph 2 suggests that upon termination WNB only had the obligation to request BLMIS to return the Plaintiffs’ assets and then deliver the assets BLMIS returned on to Plaintiffs. WNB has indicated that it has filed a claim in the BLMIS bankruptcy noting that the Class members’ proportionate share of the Madoff investment account is pending a final plan of distribution in the BLMIS bankruptcy. (WNB’s Opp. to PI. Summary Judgment, p. 22). Accordingly, WNB has fulfilled its obligation under Paragraph 7 to effectuate the return of assets as practicable under the terms of the agreement. Consequently, the Court grants summary judgment in favor of WNB on Plaintiffs’ breach of contract claim on the basis that WNB breached its obligations under Paragraph 7.

3. Calculation of fees based on “assets”

Third, Plaintiffs argue that they are entitled to summary judgment on their breach of contract claim because WNB relied on fabricated account statements from BLMIS. As a result, they claim, WNB breached the custodial agreements by improperly charging fees based on the value of fictitious assets and providing inaccurate records and statements. WNB again argues that summary judgment in its favor is appropriate because the contract unambiguously permitted it to manage the custodial relationship as it did.

a. Breach

The custodial agreement provides that WNB and PSCC will receive fees based on the assets held under the custodial agreement. As to PSCC, the agreement provides for fees based on “average assets (determined on an annual basis) held by [WNB] under this Custodian Agreement” (Whatley Decl. Ex. 49, at 2), or to “assets at the time of billing held by [WNB] under this Custodian Agreement” (id. at 3). As to WNB, it provides for fees based on “average assets held hereunder (determined on an annual basis).” (Id. at 2.)

The Plaintiffs argue that, when the contract uses the term “assets,” it means actual assets held. (See PL’s Mot. for Partial Summ. J. at 24-25.) WNB argues that the term “assets” instead means the assets as reported by BLMIS. (See WNB’s Opp. to PL’s Mot. for Summ. J. at 35-36.) The remaining contract language does not assist in resolving this issue. (See generally Whatley Decl. Ex. 49.) This Court therefore concludes that the contract term “assets” is susceptible of both readings and is therefore ambiguous.

WNB, citing to Anwar v. Fairfield Greenwich Ltd., 831 F.Supp.2d 787 (S.D.N.Y.2011), argues that the contract term “assets” unambiguously means the value of assets reported by BLMIS. (See WNB’s Opp. to Pl.’s Mot. for Summ. J. at 35-36.) The Anwar court, on a motion to dismiss claims similar to those the Plaintiffs brought here, held that a contract which called for an intermediary to assess fees based on “month-end NAV of the Shares [of a hedge fund invested in BLMIS]” unambiguously permitted the intermediary to assess fees based on NAV as reported to it. 831 F.Supp.2d at 794-95. The reasoning in this decision does not resolve the matter of contract interpretation here.

In Anwar, the relationship between the intermediary bank defendant, BLMIS, and the plaintiff seeking to recover fees on a breach of contract theory was meaningfully different. The intermediary bank defendant had custody of the plaintiffs investment in a hedge fund which, in turn, invested with BLMIS. Id. at 795, The court interpreted NAV, net asset value, as a term of art which, when concerning the assets of a hedge fund, means a value calculated and promulgated by the hedge fund. Id. Using this interpretation, the court concluded that the plaintiffs' could not reasonably have expected that the intermediary bank would calculate its fees based on any figure other than the NAV reported by the hedge fund. Id. at 795-96.

Here, WNB’s position is not equivalent to that of the intermediary in Anwar. Unlike the intermediary in Anwar, WNB had the responsibility to calculate the NAV of a basket of investments which included BLMIS shares held by WNB in the BLMIS omnibus account as well as other assets, namely the cash accounts at WNB. 831 F.Supp.2d at 795; (PL’s L.R. 56(a)(1) Stmt. ¶ 31; WNB’s L.R. 56(a)(2) Stmt. ¶ 31.) And unlike the intermediary in An-war, WNB contracted to base its fees on “assets,” not the “NAV of the Shares [held by WNB as custodian].” Compare 831 F.Supp.2d at 794 with (Whatley Deck Ex. 49, at 2). Here the Participants contracted with PSCC to provide services with respect to their investments with BLMIS. (Custodian Agreement, Paragraph 4)

Moreover, WNB’s position is analogous to that of the hedge fund in Anwar. Like the hedge fund in Anwar, WNB held multiple investments in which the Plaintiffs had proportionate interests. 831 F.Supp.2d at 795; (PL’s L.R. 56(a)(1) Stmt. If 31; WNB’s L.R. 56(a)(2) Stmt. If 31.) Like the hedge fund in Anwar, WNB calculated the NAV of these investments regularly. See 831 F.Supp.2d at 795; (ClarkWeintraub Decl. Ex. 27, at 38:11-17, 39:24-40.8.) Accordingly, because Anwar resolved claims against an intermediary which did not calculate its own NAV and contractually based its fees on the value of shares in the hedge fund, and because Anwar did not address claims against the hedge fund itself, Anwar does not resolve the contract interpretation dispute here. The terms of the custodial agreements therefore do not conclusively resolve whether the term “assets” means actual assets or reported assets.

In the absence of a clear, unambiguous meaning for the term “assets,” this Court could nonetheless conclude that summary judgment is proper if sufficient extrinsic evidence exists to demonstrate the parties’ intent conclusively. See Compagnie Financiere de CIC et de L’Union Europeenne v. Merrill Lynch, Pierce, Fenner & Smith Inc. (Compagnie Financiere), 232 F.3d 153, 157-58 (2d Cir.2000); Murtha v. City of Hartford, 303 Conn. 1, 8, 35 A.3d 177 (2011) (“When the language of a contract is ambiguous, ... the determination of the parties’ intent is a question of fact.”). This Court concludes that the evidence is not so conclusive as to warrant summary judgment for either party. Evidence that WNB did take some steps to verify the BLMIS statements exists in the record. (Clark-Weintraub Decl. Ex. 28, at 256:9-259:6 (discussing verification of stock prices).) Additional evidence in the record indicates that WNB personnel both recognized that they some obligation to verify additional information provided in the BLMIS monthly statements and attempted to take additional steps to do so. (Id. at 260:13-265:6 (discussing attempt to verify option positions, including meeting where WNB personnel discussed that “we have to come up with someone who can provide the [option] verification”)). This evidence tends to suggest that WNB contemporaneously interpreted its contractual obligations to include paying fees based only on actual assets, not reported assets.

In addition, certain evidence in the record suggests that WNB reserved the right to audit the investments in BLMIS, but apparently never did so. (Whatley Decl. Ex. 14, at 15.) Because it did not do so, WNB’s federal bank regulator, the Office of the Comptroller of the Currency (“OCC”), concluded that WNB’s management lacked sufficient controls over its relationship with BLMIS. (App. to WNB’s L.R. 56(a)(1) Stmt. Ex. 60, at 30.) This evidence suggests that, in addition to WNB, the OCC interpreted WNB’s obligations under the contract as extending to auditing or verifying BLMIS’ reported asset values to some extent. Viewed in the light most favorable to the Plaintiffs, this evidence creates triable issues with respect to whether WNB had a duty to ascertain the actual existence and value of assets held by BLMIS and whether the contract term “assets” means actual assets such that summary judgment is not proper for WNB on this claim.

WNB counters with evidence that no relevant federal agency ever directed or mandated that WNB audit or verify BLMIS’ reported asset values and evidence that none of BLMIS’ other investors ever conducted such a verification or audit. (WNB’s L.R. 56(a)(1) Stmt. ¶¶ 44-45.) This argument is unavailing. The basis of the criticism was not a regulatory or statutory requirement which the OCC was bound to enforce, but rather a contractual provision. WNB cites no authority for the OCC’s authority to direct it to perform a contractual provision. Thus the legal significance of its failure to do so has not been established. On the contrary, the OCC interpretation is merely one possible interpretation of the contract. Viewing the evidence in the light most favorable to WNB, this evidence amplifies the existence of a triable issue with respect to whether the contract term “assets” means reported assets such that summary judgment is not proper for the Plaintiffs on this claim.

Whether viewed in the light most favorable to the Plaintiffs or WNB, a genuine issue of material fact exists based on the extrinsic evidence of the meaning of the ambiguous contract term “assets.” Sufficient triable issues therefore exist to preclude summary judgment for either party on this claim.

b. Causation

WNB further argues that, even if it breached the custodial agreements by paying BLMIS fees based on reported assets instead of actual assets, the Plaintiffs cannot succeed on their claim because they cannot show that this breach caused them any damages. (WNB’s Opp. to Pl.’s Mot. for Partial Summ. J. at 36-37.) WNB claims that the Plaintiffs cannot show that any breach proximately caused them damages because the Plaintiffs only “paid” fees in the sense that WNB sold the Plaintiffs’ worthless BLMIS shares in proportion to the fees owed. (Id. at 36.)

“[T]he test of proximate cause is whether the defendant’s conduct is a substantial factor in bringing about the plaintiffs injuries.” Gurguis, 93 Conn.App. at 168, 888 A.2d 1083. WNB concedes, as it must, that “[pjroximate cause is ordinarily a question of fact.” Id. This Court concludes that it is such a question here too and that summary judgment is not proper on this basis.

It is undisputed that WNB actually received substantial fee income in connection with performing custodial services for the Plaintiffs. (WNB’s L.R. 56(a)(1) Stmt. ¶ 50.) It is equally undisputed that the Plaintiffs contributed money to their investment accounts with the reasonable expectation that it would appreciate in value and not be stolen. (WNB’s L.R. 56(a)(1) Stmt. ¶¶ 1-5.) This Court has already concluded that the Plaintiffs have raised a triable issue as to whether WNB rightfully received as much in fees as it did. If WNB wrongfully received fees, then the money rightfully belongs to someone else, and WNB’s improper fees would constitute a substantial factor in their loss to that person. The Plaintiffs’ evidence creates a triable issue as to the source of the fees paid to WNB as well as whether at least some of the money WNB received as fees is attributable to the Plaintiffs’ contributions to their accounts. (See WNB’s L.R. 56(a)(1) Stmt. ¶¶ 1-5, 50.) Moreover, had WNB conducted some audit or verification of BLMIS’ reported asset values in order to verify its fees and discovered some discrepancy or indication of fraud, then WNB would not have collected the amount of fees that it did.' Consequently, Plaintiffs have presented a theory of damages in connection with this claim, when viewed in the light most favorable to them, evince proximate causation. Accordingly, the evidence shows a genuine factual dispute about whether and to what extent WNB’s improper fees rightfully belong to the Plaintiffs. Summary judgment is not warranted in WNB’s favor on the issue of proximate causation.

4. WNB’s failure to maintain adequate records and statements

Lastly, Plaintiffs argue they are entitled to summary judgment because WNB did not maintain adequate records of Plaintiffs’ investment and that under the custodial agreement it was required to do more than just send out annual statements which parroted BLMIS’s reported values. The custodial agreement provides that WNB “shall maintain adequate records indicating the ownership by [the Plaintiffs] of investments with BLMIS and held by [WNB] as custodian for [the Plaintiffs]” and “shall render at least annually statements reflecting the property held by it as custodian hereunder.” (Whatley Decl. Ex. 49, at 2.)

As with the propriety of WNB’s fees based on the contractual term “assets,” the parties disagree about the proper interpretation of the terms “adequate records” and “statements reflecting the property held ... as custodian.” The Plaintiffs argue that adequate records and statements reflecting the property in which they had an interest would have shown that the Plaintiffs owned nothing because BLMIS was a fraud. (See Pl.’s Mot. for Partial Summ. J. at 21-24) WNB argues that these terms instead mean records and statements based on the information reported by BLMIS. (See WNB’s Opp. to Pl.’s Mot. for Partial Summ. J. at 21-25.) Again, the remaining contract language does not assist in resolving this issue. (See generally Whatley Decl. Ex. 49.)

This Court therefore concludes that the contract terms “adequate records” and “statements reflecting the property held ... as custodian” are susceptible of both readings and are therefore ambiguous. Because insufficient extrinsic evidence exists to demonstrate conclusively the parties’ intent with respect to these ambiguous contract terms, summary judgment is not warranted for either party. See Compagnie Financiere, 232 F.3d at 157-58; Murtha, 303 Conn, at 8, 35 A.3d 177.

Again, evidence that WNB did take some steps to verify the BLMIS statements (Clark-Weintraub Decl. Ex. 28, at 256:9-259:6 (discussing verification of stock prices)), as well as evidence that WNB personnel both recognized that they some obligation to verify additional information provided in the BLMIS monthly statements and attempted to take additional steps to do so (id. at 260:13-265:6) (discussing attempt to verify option positions, including meeting where WNB personnel discussed that “we have to come up with someone who can provide the [option] verification”), exists in the record. Additional evidence also suggests that WNB could have audited the investments in BLMIS, did not do so, and lacked proper internal controls as a result. (App. to WNB’s L.R. 56(a)(1) Stmt. Ex. 60, at 5, 30.) Viewed in the light most favorable to the Plaintiffs, this evidence creates a triable issue with respect to whether the contract terms “adequate records” and “statements reflecting the property held ... as custodian” mean records and statements which reflected that the Plaintiffs’ BLMIS investments did not exist. Summary judgment is not proper for WNB on this claim.

WNB argues, not without persuasive force, that the Plaintiffs’ proffered interpretation is unreasonable because WNB would incur liability for failing to uncover the Madoff Ponzi scheme before law enforcement and the rest of BLMIS’ investors. (See WNB’s L.R. 56(a)(1) Stmt. ¶¶ 44-45.) WNB also again relies on evidence that relevant authorities never directed or mandated that WNB audit or verify BLMIS’ periodic statements. (Id.) Viewed in the light most favorable to WNB, this evidence creates a triable issue with respect to whether the records and statements which WNB provided complied with the custodial agreement’s records and statements terms. Summary judgment is not proper for the Plaintiffs on this claim. As discussed above, Plaintiffs have presented facts which indicate that WNB’s failure to audit proximately caused WNB to collect fees that were inflated.

Whether viewed in the light most favorable to the Plaintiffs or WNB, a genuine issue of material fact exists based on the extrinsic evidence of the meaning of the ambiguous contract terms “adequate records” and “statements reflecting the property held ... as custodian.” Sufficient triable issues therefore exist to preclude summary judgment for either party on this claim.

B. Breach of fiduciary duty.

WNB argues that its undisputed status as custodian of the Plaintiffs’ investments, not as an investment advisor, necessarily means that the WNB had no fiduciary duty to the Plaintiffs at all. This Court disagrees and concludes that the record contains triable factual issues with respect to whether WNB bore any fiduciary duties to the Plaintiffs and whether WNB breached any such duties. Accordingly, summary judgment for WNB on this claim is not warranted.

“[A] fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other.” Sherwood v. Danbury Hosp., 278 Conn. 163, 195, 896 A.2d 777 (2006) (quoting Biller Assocs. v. Peterken, 269 Conn. 716, 723, 849 A.2d 847 (2004)). “Although [the Connecticut Supreme Court has] not expressly limited the application of these traditional principles of fiduciary duty to cases involving only fraud, self-dealing or conflict of interest, the cases in which we have invoked them have involved such deviations.” Id. (quoting Murphy v. Wakelee, 247 Conn. 396, 400, 721 A.2d 1181 (1998)) (emphasis in original). “In the seminal cases in which [the Connecticut Supreme Court] has recognized the existence of a fiduciary relationship, the fiduciary was either in a dominant position, thereby creating a relationship of dependency, or was under a specific duty to act for the benefit of another____In the eases in which this court has, as a matter of law, refused to recognize a fiduciary relationship, the parties were either dealing at arm’s length, thereby lacking a relationship of dominance and dependence, or the parties were not engaged in a relationship of special trust and confidence.” Biller Associates v. Peterken, 269 Conn. 716, 723-24, 849 A.2d 847 (2004) (internal quotations omitted). The legal question of whether a fiduciary duty exists therefore depends on the resolution of the factual question of whether a fiduciary or confidential relationship exists. See id.; see also Albuquerque v. Albuquerque, 42 Conn.App. 284, 287, 679 A.2d 962 (1996).

a. Calculation of fees

Genuine factual issues exist as to whether a fiduciary relationship existed between WNB and the Plaintiffs with respect to the calculation of fees. It is undisputed that WNB calculated the basis for its own fees, the NAV of the custodial accounts. (Clark-Weintraub Decl. Ex. 27, at 38:11— 17, 39:24-40:8.) It did so based on information which was unavailable to the Plaintiffs: the transaction reports which came directly from WNB and the cash balance in the custodial services accounts. (Id.; WNB’s Supp. L.R. 56(a)(1) Stmt. Ex. R, at 316:13-317:3; Clark-Weintraub Decl. Ex. 28, at 214:9-20.) Internal WNB documents raised the possibility that, based on this discrepancy, WNB might owe the Plaintiffs a fiduciary duty with respect to the calculation of WNB’s and PSCC’s fees. (Whatley Decl. Ex. 24, at 2.) Viewed in the light most favorable to the Plaintiffs, this evidence creates a triable issue with respect to whether this arrangement had the requisite trust, knowledge disparity, and duty to represent the Plaintiffs interests with respect to the calculation of the NAV of the Plaintiffs’ investment accounts to give rise to a fiduciary duty.

b. Investment discretion

Genuine factual issues also exist about whether WNB exercised sufficient discretion over the Plaintiffs’ proportionate investments in the BLMIS omnibus account and the custodial clearing accounts such that a fiduciary relationship existed. WNB, without consulting the Plaintiffs, made the determination to liquidate investments in the BLMIS account, thus altering the allocation of Plaintiffs’ proportionate investments between the clearing account and the omnibus account. (ClarkWeintraub Decl. Ex. 31, at 47:17-48:13.) In addition, WNB determined about when to transfer money to BLMIS, without instructions from the Plaintiffs or BLMIS, in order to satisfy anticipated future cash needs. (Id. at 47:17-48:13, 138:3-139:4; see also Whatley Decl. Ex. 3, at 169:15-25.) When the OCC discovered these practices, it concluded that “[WNB’s role] could be construed as evolving beyond being ministerial in nature.” (App. to WNB’s L.R. 56(a)(1) Stmt. Ex. 60, at 30.) Viewed in the light most favorable to the Plaintiffs, this evidence raises a genuine factual dispute as to whether WNB exercised sufficient discretion, independent of the Plaintiffs’ instructions, over the Plaintiffs’ proportionate investments in the BLMIS omnibus account and the clearing accounts so as to put the parties in a fiduciary relationship.

c. Breach

Finally, genuine factual issues exist as to whether WNB breached any such fiduciary duties. WNB’s federal regulator advised, if not mandated, that “[c]ustodians should establish strong risk-based internal controls to protect assets held off-premises” and that “[i]ndependent personnel should reconcile the depository’s position report to the custodian’s accounting system each month.” (Whatley Decl. Ex. 56, at 16.) Evidence in the record suggests that WNB interpreted its responsibilities similarly. (Clark-Weintraub Decl. Ex. 28, at 256:9-259:6) (discussing verification of stock prices); id. at 260:13-265:6 (discussing attempt to verify option positions, including meeting where WNB personnel discussed that “we have to come up with someone who can provide the [option] verification”). Other evidence in the record indicates that WNB’s failure to discharge these responsibilities meant that it “did not appropriately implement effective controls.” (App. to WNB’s L.R. 56(a)(1) Stmt. Ex. 60, at 30.) The evidence also shows that the Plaintiffs did not receive the detailed statements from BLMIS that WNB received, and one can reasonably infer from this evidence that the Plaintiffs, because they did not have accounts at BLMIS, also lacked the ability to audit or investigate BLMIS. (Clark-Weintraub Decl. Ex. 27, at 38:11— 17, 39:24-40:8; WNB’s Supp. L.R. 56(a)(1) Stmt. Ex. R, at 316:13-317:3; Clark-Weintraub Decl. Ex. 28, at 214:9-20.) Evidence i