Magistrate Judge Recommends Denying Summary Judgment in Bitcoin Purchase Dispute

On Thursday, April 4, 2024, Christina Bryan, a federal magistrate judge for the United States District Court for the Southern District of Texas, recommended that a motion for summary judgment be denied in a civil case involving the alleged purchase of cryptocurrency.

The case was brought by Efinanzas S.A.S., a Colombian company that trades cryptocurrency, against Roy & Associates P.L.L.C, a Houston law firm, as well as Brandon and Disha Roy, who were directors of the firm. Efinanzas claimed it deposited over $1 million into what it believed was the law firm’s escrow account to facilitate the purchase of Bitcoin. However, Efinanzas says it never received the cryptocurrency or a return of its funds.

Efinanzas filed a lawsuit seeking damages against the defendants and moved for summary judgment, arguing there were no genuine disputes regarding key facts. Specifically, Efinanzas pointed to evidence that Roy & Associates had forfeited its business privileges in Texas and that an insurance document submitted, purportedly showing the firm had $2 million in legal malpractice coverage, had been forged.

However, in her written recommendation, Judge Bryan found that Efinanzas had failed to provide sufficient evidence to support summary judgment on its claims of negligence per se, violations of the Texas Deceptive Trade Practices Act, and unjust enrichment. With regards to negligence per se, Bryan noted Efinanzas did not establish the defendants’ actions proximately caused its alleged damages or that it belonged to the class protected by the statutes cited.

As for the other claims, Bryan stated the forgery alone did not prove the elements needed. Bank records submitted late also showed funds deposited, but did not clarify their purpose or who directed later transfers. Bryan also rejected imposing personal liability on Brandon and Disha Roy at this stage. While one defendant raised unclean hands as a defense, Bryan said just enough was presented to avoid summary judgment.

Accordingly, Judge Bryan’s recommendation was for the court to deny Efinanzas’ motion and proceed with scheduling further case events, allowing the claims to move forward to be resolved at a full trial on the merits where more evidence could be considered.

Please contact BlockTribune for access to a copy of this filing.