Eagle v. USI Ins. Serv. Nat'l, Inc.

• Court: Court of Appeals for the Second Circuit
• Decided: March 28, 2025
• Docket: 24-1001
• Status: Unpublished

Opinion

24-1001-cv Eagle v. USI Ins. Serv. Nat’l, Inc.

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 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 28th day of March, two thousand twenty-five.

Present: SUSAN L. CARNEY, MICHAEL H. PARK, MARIA ARAÚJO KAHN, Circuit Judges. __________________________________________

GREG W. EAGLE, PINE CREEK RANCH, LLC, UNIVERSITY 1248, LLC,

Plaintiffs-Appellants,

v. 24-1001-cv

USI INSURANCE SERVICE NATIONAL, INC.,

Defendant-Appellee,

TISDALE & NICHOLSON, LLP, JEFFREY A. TISDALE, GUY C. NICHOLSON,

Defendants. * __________________________________________

* The Clerk of Court is respectfully directed to amend the caption accordingly. FOR PLAINTIFFS-APPELLANTS: KEVIN SCHLOSSER, Daniel B. Rinaldi, Meyer, Suozzi, English & Klein, P.C., Garden City, NY. FOR DEFENDANT-APPELLEE: PETER J. BIGING, Goldberg Segalla LLP, New York, NY; Meghan Brown, Goldberg Segalla LLP, Buffalo, NY. Appeal from a judgment of the United States District Court for the Eastern District of New

York (Brown, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

Plaintiffs-Appellants Greg W. Eagle (“Eagle”), Pine Creek Ranch, LLC (“Pine Creek”),

and University 1248, LLC (“University 1248”) (collectively, “Plaintiffs”) paid EVMC Real Estate

Consultants, Inc. (“EVMC”) millions of dollars in advance fees for real-estate loans that never

materialized. In hopes of securing loans from EVMC or with its assistance for a new project,

Eagle signed a Release Agreement “on behalf of himself and any and all of his affiliates” that

“release[d] and forever discharge[d] EVMC, as well as its agents, officers, shareholders,

employees, consultants, and attorneys . . . from and against any and all claims . . . which to any

degree pertain to . . . any [of their] business dealings . . . .” App’x at 1205-06. Not long after,

Eagle signed a Credit Facility Agreement (the “CFA”) that “forever discharge[d] and release[d]”

EVMC and its “current and former officers, directors, consultants, agents, . . . attorneys, trustees,

and insurance carriers . . . with respect to each and every claim or potential claim or cause of

action . . . [for] any and all prior business dealings . . . .” Id. at 1240.

After the hoped-for loans did not materialize, Plaintiffs sued EVMC and its affiliates

seeking, inter alia, recovery for fraud and unjust enrichment. EVMC’s insurance-services agent,

USI Insurance Service National, Inc. (“USI”), moved for summary judgment, arguing that

Plaintiffs waived any and all claims against them under the Release Agreement and CFA. The

2 district court granted the motion, finding the releases valid and enforceable by USI as an agent and

consultant of EVMC. 1

Plaintiffs appeal that grant of summary judgment as to USI, arguing that “neither the

Release Agreement nor the CFA’s release provision is a bar to [Plaintiffs’] fraud and unjust

enrichment claims as a matter of law.” Appellants’ Br. at 15. “We review the district court’s

decision to grant summary judgment de novo, resolving all ambiguities and drawing all permissible

factual inferences in favor of the party against whom summary judgment is sought.” Booker v.

Graham, 974 F.3d 101, 106 (2d Cir. 2020) (quotation marks omitted). We assume the parties’

familiarity with the remaining underlying facts, procedural history of the case, and issues on

appeal.

First, Plaintiffs argue that “the CFA is unenforceable because it was procured by fraud.”

Appellants’ Br. at 58. The district court rejected this argument on the ground that “to successfully

establish a defense of fraud in the inducement” under Florida law, which governs the CFA, “the

reliance underlying a claim for fraudulent inducement must be reasonable.” Sands Harbor

Marina Corp. v. USI Ins. Serv. Nat’l, Inc., 586 F. Supp. 3d 163, 174 (E.D.N.Y. 2022). The

district court found that “any reliance on the part of [Plaintiffs] was indisputably unreasonable”

against the backdrop of EVMC’s years of broken promises, concerns by Eagle’s team, and

potential lawsuits against EVMC. Id.

1 The district court also granted summary judgment to Tisdale & Nicholson, LLP and Jeffrey A. Tisdale (collectively, “T&N Defendants”). Plaintiffs withdrew their appeal as against the T&N Defendants in light of a settlement. See Dkt. 88, 89. We proceed with the appeal only as against USI.

3 On appeal, Plaintiffs contend that “justifiable reliance is not a necessary element of”

fraudulent inducement under Florida law. Appellants’ Br. at 58. Plaintiffs’ argument fails.

They rely entirely on a standalone statement in Butler v. Yusem, a case that concerns fraudulent

misrepresentation. See Butler v. Yusem, 44 So. 3d 102, 105 (Fla. 2010) (“Justifiable reliance is

not a necessary element of fraudulent misrepresentation.”). Post-Butler, Florida courts continue

to hold that the doctrine of fraudulent inducement requires justifiable reliance. See, e.g.,

Maroone Chevrolet, LLC v. Alvarado, 344 So. 3d 459, 466 (Fla. 4th Dist. Ct. App. 2022) (listing

justifiable reliance as one of four elements of fraudulent inducement). Further, Butler did not

overrule “the well-established and common sense principle of law espoused in [Columbus Hotel

Corp. v. Hotel Management Co., 156 So. 893 (Fla. 1934)] and its progeny: generally, adverse

parties negotiating [to settle claims] in an attempt to avoid litigation cannot rely upon the

representations of one another.” Moriber v. Dreiling, 194 So. 3d 369, 374 (Fla. 3d Dist. Ct. App.

2016); see also Pieter Bakker Mgmt., Inc. v. First Fed. Sav. & Loan Ass’n, 541 So. 2d 1334, 1335-

36 (Fla. 3d Dist. Ct. App. 1989) (dismissing a fraudulent-inducement claim because, where “the

relationship between the parties has been plagued with distrust,” a party seeking to settle their

controversy “is not entitled to rely blindly on the opposing party’s representations”). Plaintiffs

do not dispute the district court’s finding that they had a “woeful history” of interactions with

EVMC. See Sands Harbor Marina Corp., 586 F. Supp. 3d at 174. Accordingly, Plaintiffs’

fraud-in-the-inducement argument fails. We therefore affirm the district court’s holding that the

CFA is enforceable.

Second, Plaintiffs argue that USI is not a third-party beneficiary of the Release Agreement

and CFA. Appellants’ Br. 29, 48. The district court rejected this argument. Although USI is

4 not explicitly mentioned in either agreement, the district court found that “the plain language of

the releases cover agents of EVMC, which includes USI.” Sands Harbor Marina Corp., 586 F.

Supp. 3d at 173. The district court ruled that under California law, which governs the Release

Agreement, and Florida law, which governs the CFA, insurance brokers are “agents” of the

insured. Id. It also found that USI and EVMC had entered a Client Services Agreement in

2006, under which USI had agreed to act as a consultant for EVMC’s Residual Value Insurance

needs. Id.

Plaintiffs’ claim of error in this ruling fails. Under both California and Florida law, a

nonparty to an agreement can enforce certain of its terms by showing that the nonparty is one of

the class of persons for whose benefit it was made. See Gen. Motors Corp. v. Superior Ct., 15

Cal. Rptr. 2d 622, 628 (2d Div. Ct. App. 1993); Hunt Ridge at Tall Pines, Inc. v. Hall, 766 So. 2d

399, 400 (Fla. 2d Dist. Ct. App. 2000). The Release Agreement and CFA reflect the parties’ clear

intent to release claims against EVMC’s “agents.” See App’x at 1205-06, 1240. As EVMC’s

insurance broker, USI was EVMC’s agent. See Marsh & McLennan of Cal., Inc. v. City of Los

Angeles, 132 Cal. Rptr. 796, 802 (5th Div. Ct. App. 1976) (“[A]n insurance broker is generally an

agent of the insured.”); Amstar Ins. Co. v. Cadet, 862 So. 2d 736, 740 (Fla. 5th Dist. Ct. App.

2003) (same). Moreover, the district court correctly discerned that USI’s Client Services

Agreement with EVMC rendered it a “consultant” also covered by the agreements. We thus

affirm the district court’s conclusion that USI is a third-party beneficiary that can enforce the

Release Agreement and the release provision of the CFA.

Third, Plaintiffs advance eight other legal arguments, none of which appeared in their

Memorandum of Law in Opposition, their pre-motion conference letter, or their pre-motion

5 conference reply letters in the district court. “It is a well-established general rule that an appellate

court will not consider an issue raised for the first time on appeal. While we have some discretion

to consider forfeited arguments, we will generally not . . . exercise our discretion where the

forfeited argument was available to the parties below and they proffer no reason for their failure

to raise the arguments below.” Siemens Energy, Inc. v. Petróleos de Venezuela, S.A., 82 F.4th

144, 160 (2d Cir. 2023) (alteration adopted and quotation marks omitted).

Plaintiffs’ new arguments are forfeited. USI argues in its brief that Plaintiffs forfeited

these new arguments, and Plaintiffs’ reply brief offers no reason for their failure to make the

arguments below. Nor do Plaintiffs argue that an exception to the forfeiture rule applies. They

instead argue that, because of the allocation of the burden of proof at summary judgment, a non-

moving party cannot forfeit arguments not made by them at that stage of the proceeding. But that

is wrong. See, e.g., Unkechaug Indian Nation v. Seggos, 126 F.4th 822, 832 (2d Cir. 2025);

Parada v. Banco Indus. De Venezuela, C.A., 753 F.3d 62, 70 (2d Cir. 2014); Oneida Indian Nation

of New York v. Madison Cnty., 665 F.3d 408, 441 (2d Cir. 2011). Accordingly, we decline to

review these arguments.

* * *

We have considered the remainder of Plaintiffs’ arguments and find them to be without

merit. For the foregoing reasons, we AFFIRM the judgment of the district court.

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