Black v. Dain

• Court: Court of Appeals for the Second Circuit
• Decided: March 24, 2025
• Docket: 23-728
• Status: Unpublished

Opinion

23-728(L) Black et al. v. Dain et al.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER"). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 24th day of March, two thousand twenty-five.

PRESENT: DENNY CHIN, MICHAEL H. PARK, SARAH A. L. MERRIAM, Circuit Judges. _________________________________________________

SARAH H. BLACK, JACOB L. BLACK,

Plaintiffs-Appellants-Cross-Appellees,

SAMUEL H. BLACK, DANIEL L. BLACK, KATHERINE BLACK, ON BEHALF OF HER MINOR CHILDREN D.B. AND J.B.,

Plaintiffs,

v. Nos. 23-728(L), 23-1235

ANTHONY DAIN, CHERIE WRIGLEY, ESAUN G. PINTO, SR., CPI INVESTIGATIONS,

Defendants-Appellees-Cross-Appellants, IRA SALZMAN, LISA DIPONIO, GAYLE YOUNG, PAMELA KERR, MELISSA COHENSON, BRIAN A. RAPHAN, P.C.,

Defendants. ∗ _________________________________________________

FOR PLAINTIFFS-APPELLANTS- MICHAEL H. SCHAALMAN, Schaalman CROSS-APPELLEES: Law Group, Milwaukee, WI.

FOR DEFENDANTS-APPELLEES- ROBERT M. FANTONE (Andrew L. CROSS-APPELLANTS: Mancilla, on the brief), Mancilla & Fantone, LLP, New York, NY, and Anthony Dain, Esq., pro se defendant- appellee, San Diego, CA.

FOR AMICI: Richard Black, for Center for Estate Administration Reform and Kasem Cares Foundation, Cornelius, NC.

Luanne Fleming, for Families Against Court Embezzlement Unethical Standards, Aurora, CO.

Cross-appeals from the United States District Court for the Eastern District

of New York (Amon, J.).

UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the district court's judgment filed March 31,

2023 and its memorandum and order entered July 31, 2023 are AFFIRMED.

∗ The Clerk is respectfully instructed to amend the caption as set forth above.

2 Plaintiffs-Appellants-Cross-Appellees Sarah H. Black and Jacob L. Black

(together, "Plaintiffs") appeal a judgment entered March 31, 2023, dismissing

their complaint against Defendants-Appellees-Cross-Appellants Anthony Dain,

Cherie Wrigley, Esaun G. Pinto, Sr., and CPI Investigations (collectively,

"Defendants") for breach of fiduciary duty. Judgment was entered after the

district court granted Defendants' motion for summary judgment by

memorandum and order entered March 31, 2023. Defendants cross-appeal from

the district court's decision denying Defendants' motion to clarify, modify, or

amend the judgment.

Plaintiffs are the grandchildren of Renata Black, who passed away nearly

thirteen years ago and left a $4.7 million estate. In 1997, Renata signed a will

naming her son Bernard as the executor of her estate and creating two trusts (the

"Issue Trust" for the benefit of Renata's grandchildren and the "SNT Trust" for

the benefit of Joanne Black ("Joanne")). Dain was a co-trustee of both trusts.

Since then, the competing claims to Renata's inheritance by both Plaintiffs and

Defendants have generated at least eighteen lawsuits around the nation,

including litigation in the Denver Probate Court. Many of these lawsuits are still

pending.

3 Here, Plaintiffs argue that Dain (aided and abetted by Wrigley, Pinto, and

CPI Investigations) breached his fiduciary duty as the co-trustee of the two

trusts. "To establish a prima facie case for breach of fiduciary duty, a plaintiff

must allege (1) the existence of a fiduciary relationship, (2) misconduct by the

defendant, and (3) damages directly caused by the defendant's misconduct."

Lambro Indus., Inc. v. Gilbert, 221 N.Y.S.3d 240, 241 (2d Dep't 2024). 1

In its summary judgment decision, the district court first concluded that

Dain had a fiduciary duty to both trusts. Second, the district court concluded

that to the extent Dain was a trustee of the two trusts, he engaged in

"misconduct" because he took actions adverse to the interests of the trust

beneficiaries. Third, however, the district court held that "Plaintiffs have failed to

show . . . that they suffered damages directly caused by [Dain's] misconduct."

Special App'x at 36 (internal quotation marks omitted). Plaintiffs argue on

appeal that the district court's conclusion about damages is wrong.

1 Both the Issue Trust and SNT Trust state that "The Trustee shall have all powers granted fiduciaries under the New York Estates Powers and Trusts Law as amended to the date of this Trust." Appellees' App'x at 29. Plaintiffs cited New York law in the complaint and made no objection to the district court's application of New York law on the motion to dismiss. Both parties also cite New York law on appeal. "[W]hile courts are not bound by some types of legal conclusions agreed to by the parties, courts sitting in diversity may properly rely on the forum state's law where neither party asserts that another jurisdiction's law meaningfully differs." Johnson v. Priceline.com, Inc., 711 F.3d 271, 276 n.2 (2d Cir. 2013) (internal citations omitted).

4 Although they prevailed in moving for summary judgment, Defendants

moved to clarify, modify, or amend the district court's summary judgment

decision. Specifically, Defendants asked the district court to reconsider its

misconduct finding and hold instead that there was a material dispute with

respect to misconduct. The district court denied the motion, holding that it was

procedurally improper and also failed on the merits. Indeed, the district court

concluded that there was no genuine dispute that "Dain's actions met the

'misconduct' element of the breach-of-fiduciary-duty claim." Appellees' App'x at

1522. Defendants now cross-appeal.

We assume the parties' familiarity with the underlying facts, procedural

history, and arguments on appeal, to which we refer only as necessary to explain

our decision to affirm.

"We review de novo a district court's decision to grant summary judgment,

construing the evidence in the light most favorable to the party against whom

summary judgment was granted and drawing all reasonable inferences in that

party's favor." Horn v. Med. Marijuana, Inc., 80 F.4th 130, 135 (2d Cir. 2023)

(quoting Covington Specialty Ins. Co. v. Indian Lookout Country Club, Inc., 62 F.4th

748, 752 (2d Cir. 2023)).

5 Summary judgment is appropriate only "where there is no genuine dispute

as to any material fact and the movant is entitled to judgment as a matter of law."

Zann Kwan v. Andalex Grp. LLC, 737 F.3d 834, 843 (2d Cir. 2013) (internal

quotation marks omitted). We may affirm a summary judgment order "on any

ground supported by the record, even if it is not one on which the district court

relied." McElwee v. Cnty. of Orange, 700 F.3d 635, 640 (2d Cir. 2012).

"We generally review motions for reconsideration under an 'abuse of

discretion' standard." L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 435 (2d Cir.

2011) (internal citations omitted).

I. Plaintiffs' Appeal

Plaintiffs failed to present evidence from which a jury could reasonably

find a ripe claim to damages directly caused by Dain's misconduct. Both parties

agree that Dain, as a co-trustee of both trusts, owed Plaintiffs a fiduciary duty.

See Appellants' Br. at 8; Appellees' Br. at 27. But even though a reasonable jury

could find Dain's actions to constitute "misconduct," Plaintiffs failed to raise a

genuine issue of material fact as to a theory of damages that is ripe for

adjudication.

6 Damages are an "essential element" of a breach of fiduciary duty claim,

and the claim "is not enforceable until damages are sustained." IDT Corp. v.

Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132, 140 (2009) (quoting Kronos, Inc.

v. AVX Corp., 81 N.Y.2d 90, 94 (1993)). Indeed, even accepting the district court's

finding that Dain engaged in "misconduct," this Court has held that a breach of

fiduciary duty "requires proof of 'damage' (harm or injury)." Yukos Cap. S.A.R.L.

v. Feldman, 977 F.3d 216, 241 (2d Cir. 2020). "Nominal damages cannot satisfy the

'damage' element of a breach of fiduciary duty claim" and "harm consist[ing] of

lost future opportunities and potential future expenses . . . [is] too speculative to

amount to 'actual harm' under New York law." Id. at 241, 243.

Plaintiffs did not present evidence that they have suffered a cognizable

injury. As the parties agree, neither trust has been defunded. Moreover,

Plaintiffs' claims for any future damages due to the potential defunding of the

trusts are unripe for judicial review. See id. at 243-44. "In assessing the possible

hardship to the parties resulting from withholding judicial resolution, we ask

whether the challenged action creates a direct and immediate dilemma for the

parties." Simmonds v. I.N.S., 326 F.3d 351, 360 (2d Cir. 2003) (quoting Marchi v.

Bd. of Coop. Educ. Servs. of Albany, 173 F.3d 469, 478 (2d Cir. 1999)). "The mere

7 possibility of future injury, unless it is the cause of some present detriment, does

not constitute hardship." Id. (citing Marchi, 173 F.3d at 478-79).

Because the trusts are not yet defunded, any claims for future damages

resulting from the defunding of the trusts do not create "a direct and immediate

dilemma for the parties" and this situation instead presents "the mere possibility

of future injury." Id. (citing Marchi, 173 F.3d at 478-79). The possibility of future

defunding is insufficient to raise a question of material fact as to Plaintiffs'

claims. See Simmonds, 326 F.3d at 360; Marchi, 173 F.3d at 478. As damages are

an "essential element" of a breach of fiduciary duty claim, we therefore decline to

enforce a fiduciary duty claim "until damages are sustained." IDT Corp., 12

N.Y.3d at 140 (emphasis added) (quoting Kronos, 81 N.Y.2d at 94).

Finally, to the extent Plaintiffs argue damages based on litigation expenses,

we similarly reject those claims as premature. Plaintiffs presented no specific

"proof" of expenses that have already been disbursed from the trusts. Yukos Cap.,

977 F.3d at 241. Moreover, given the nature and pendency of the various

litigations, any payments for attorneys' fees or litigation expenses out of the trust

or estate funds will be subject to approval of the courts in the actions in question.

The issue as to the propriety of those future disbursements is better resolved in

8 the first instance by the courts in which those applications will be made. If at a

later point in time, Plaintiffs can show proof of improper fee disbursements from

the trust, they may attempt to renew their claim.

We do not decide whether damages will become cognizable in the future.

In fact, the district court noted that various other pending litigations "may lead to

a defunding of one or both Trusts in the future." Special App'x at 37. Various

cases are pending on appeal regarding, among other things, the status of Joanne's

conservatorship, the validity of Bernard's disclaimer, and Dain's efforts to void

the disclaimer and defund the trusts.

Therefore, because the issue of Plaintiffs' entitlement to payment is

premature, we affirm the district court's dismissal of Plaintiffs' claims without

prejudice to renewal if circumstances change. As this Court has recognized, we

should "avoid entangling ourselves in abstract disagreements and engaging in

premature adjudication." United States v. Broadcast Music, Inc., 275 F.3d 168, 178

(2d Cir. 2001) (quoting Longway v. Jefferson Cnty. Bd. of Supervisors, 24 F.3d 397,

400 (2d Cir. 1994)); see also Simmonds, 326 F.3d at 357 ("[W]hen a court declares

that a case is not prudentially ripe, it means that the case will be better decided

9 later and that the parties will not have constitutional rights undermined by the

delay.").

II. Defendants' Cross-Appeal

Dain does not take issue with the district court's final judgment --

dismissal of the claims against him -- but instead challenges the district court's

reasoning. Specifically, Dain challenges the district court's conclusion with

respect to the second element of the breach-of-fiduciary-duty claim that he

engaged in "misconduct." Special App'x at 42. Hence, even though he prevailed

in defeating the claim against him, Dain seeks to appeal part of the trial court's

reasoning. Even assuming a prevailing party could appeal a court's reasoning,

we do not need to reach the issue of whether the district court erred in

concluding that Dain engaged in misconduct, and we decline to do so.

* * *

Because we agree with the district court's ruling with respect to damages,

we AFFIRM the district court's judgment dismissing Plaintiffs' claims, except to

the extent that the matter is REMANDED to the district court with instructions

to modify the judgment to reflect that the dismissal is without prejudice to

renewal if circumstances change. We also AFFIRM the district court's

10 memorandum and order denying Defendants' motion to clarify, modify, or

amend.

FOR THE COURT: Catherine O'Hagan Wolfe, Clerk of Court