United States Court of Appeals For the First Circuit
No. 19-1245
JAY FURTADO,
Plaintiff, Appellant,
v.
AMY PAGE OBERG; DARROWEVERETT LLP,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND
[Hon. John J. McConnell, Jr., U.S. District Judge]
Before
Howard, Chief Judge, Lynch and Kayatta, Circuit Judges.
Thomas R. Noel, with whom Lyndsey A. Fiore and Noel Law were on brief, for appellant. Jennifer L. Markowski, with whom Catherine M. Scott and Freeman Mathis & Gary, LLP were on brief, for appellees.
February 5, 2020 LYNCH, Circuit Judge. In August 2008, three would-be
members of a not-yet-created limited liability company (LLC),
including the plaintiff, Jay Furtado, met with Rhode Island
attorney Amy Page Oberg of the firm DarrowEverett LLP, seeking her
help to establish an LLC for a gym. Out of that 2008 engagement,
this July 2015 lawsuit against Oberg and her firm has emerged.
In March 2013, Oberg was rendered quadriplegic and
unable to speak. She is represented in this matter, and her
husband has medical and legal power of attorney, but she has been
unavailable to testify or otherwise participate meaningfully in
discovery.
The district court entered summary judgment against
Furtado. We do not adopt its reasoning. We are free to affirm on
any grounds made manifest by the record, see Bower v. Egyptair
Airlines Co., 731 F.3d 85, 92 (1st Cir. 2013), and we do so here.
I.
The participants in the 2008 meetings with Oberg were
Furtado, Karin Dreier, and Oswaldo Powell, who together sought to
start a gym called 360 Total Fitness. Dreier was a longtime client
and friend of Oberg's, and Dreier introduced Oberg to Furtado and
Powell. Oberg recommended to the three that they form an LLC.
The file contains no engagement letter from Oberg to
Dreier or Furtado. Nor is there evidence that Oberg communicated
to Furtado that she was not representing him or obtained a waiver
- 2 - from him. Oberg stored the documents related to the LLC matter as
a new matter file within Dreier's existing client file in
DarrowEverett's filing system. Dreier told Furtado that Oberg
would represent the three potential members of the LLC in its
formation.
Oberg prepared an initial Operating Agreement (OA) for
the LLC, which the three members each signed on or about August
21, 2008. LLC Articles of Organization for "360° Total Fitness
Training, LLC" were filed with the Rhode Island Secretary of
State's Corporations Division on August 19, 2008. The Articles
bore the name and address of Karen Dreier as the LLC's manager and
the person authorized to file the Articles. The OA provided a
deadline of August 26, 2008, by which the three members had to
execute and deliver to Oberg an Amended Operating Agreement (AOA).
The OA spelled out that a member's failure to execute and deliver
the AOA meant he or she would cease to be a member. Oberg also
discussed these consequences with Furtado, as he admits.
On August 23, 2008, Oberg sent Dreier a one-sentence
email extending the August 26, 2008, deadline to September 3, 2008,
with a subject line that instructed Dreier to sign the email and
to have Furtado and Powell sign as acknowledgment. Dreier did so,
and each of the three signed a printed copy of the email, each
dating it August 23, 2008.
- 3 - Despite being informed of the consequences of failing to
execute the AOA, Furtado never signed an AOA at any point, much
less by the extended deadline. Furtado did not ask Oberg or Dreier
about an AOA at any point between August 24, 2008, and September
3, 2008. Dreier did sign the AOA, writing "as of August 26, 2008"
below her signature.1 The copy of the AOA in evidence as signed
by Dreier lists only Dreier's name.
Later in September 2008, Furtado spoke with Oberg to
seek legal advice about a separate matter involving his ownership
of a truck. The complaint against Furtado in that matter was faxed
to Oberg on September 16, 2008, and Oberg settled the matter on
October 30, 2008. Furtado did not sign an engagement agreement
related to the truck matter, did not receive a bill from Oberg,
and did not pay Oberg, though he did give her a bottle of wine.
At some point in late 2011 or early 2012, wanting to
assess the company's condition, Furtado asked Dreier if he could
look at the LLC's financials. Dreier responded that she did not
have to show him the financials because he was "not an owner."
Furtado then tried to contact Oberg, but learned that she was no
longer practicing at DarrowEverett.
Furtado obtained his own counsel and sued Dreier in state
court in February 2013, asserting that he was an owner of the LLC.
1 Furtado disputes that Dreier in fact signed on August 26, 2008, but that dispute is not material to the outcome.
- 4 - He did not sue Oberg. In January 2014, some six years after its
opening, the gym closed and the LLC stopped operations. Furtado's
state court case against Dreier settled in early 2015, and Furtado
estimates his net proceeds from that settlement as "under
[$]30,000."
On July 27, 2015, apparently dissatisfied with that
settlement, Furtado sued Oberg and the law firm. He brought three
claims: legal malpractice, breach of fiduciary duty, and
misrepresentation. After discovery, the district court entered
summary judgment for defendants. Furtado appealed.
II.
In moving for summary judgment at the conclusion of
discovery, the defendants argued that Furtado did not have evidence
of any loss proximately caused by any claimed breach of any alleged
duty owed to him. Under Rhode Island law, the proximate cause of
a loss is an element of each of Furtado's claims. Coccoli v. Town
of Scituate Town Council, 184 A.3d 1113, 1120 (R.I. 2018)
(fraudulent misrepresentation); Audette v. Poulin, 127 A.3d 908,
911 (R.I. 2015) (breach of fiduciary duty); Ahmed v. Panone, 779
A.2d 630, 632–33 (R.I. 2001) (legal malpractice). The district
court did not consider this alternative ground, as it found no
breach of any duty, in any event.
On appeal, the defendants prominently raised and fully
developed this argument as an alternative ground for affirmance,
- 5 - devoting a discrete section of their brief to it. Furtado's reply
brief developed no opposition to the argument, not even mentioning
it.
Our case law allows us to affirm on grounds not reached
by the district court in appropriate circumstances. Bower, 731
F.3d at 92 (noting that "[w]e may affirm on any independently
sufficient grounds made manifest by the record," and dismissing
the plaintiff's claim as preempted, when the district court based
its dismissal on other grounds); Rockwood v. SKF USA Inc., 687
F.3d 1, 9 (1st Cir. 2012) (same, in the summary judgment context).
The argument was plainly and prominently made on appeal as it also
was in the district court2 and, on appeal, Furtado was called upon
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United States Court of Appeals For the First Circuit
No. 19-1245
JAY FURTADO,
Plaintiff, Appellant,
v.
AMY PAGE OBERG; DARROWEVERETT LLP,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND
[Hon. John J. McConnell, Jr., U.S. District Judge]
Before
Howard, Chief Judge, Lynch and Kayatta, Circuit Judges.
Thomas R. Noel, with whom Lyndsey A. Fiore and Noel Law were on brief, for appellant. Jennifer L. Markowski, with whom Catherine M. Scott and Freeman Mathis & Gary, LLP were on brief, for appellees.
February 5, 2020 LYNCH, Circuit Judge. In August 2008, three would-be
members of a not-yet-created limited liability company (LLC),
including the plaintiff, Jay Furtado, met with Rhode Island
attorney Amy Page Oberg of the firm DarrowEverett LLP, seeking her
help to establish an LLC for a gym. Out of that 2008 engagement,
this July 2015 lawsuit against Oberg and her firm has emerged.
In March 2013, Oberg was rendered quadriplegic and
unable to speak. She is represented in this matter, and her
husband has medical and legal power of attorney, but she has been
unavailable to testify or otherwise participate meaningfully in
discovery.
The district court entered summary judgment against
Furtado. We do not adopt its reasoning. We are free to affirm on
any grounds made manifest by the record, see Bower v. Egyptair
Airlines Co., 731 F.3d 85, 92 (1st Cir. 2013), and we do so here.
I.
The participants in the 2008 meetings with Oberg were
Furtado, Karin Dreier, and Oswaldo Powell, who together sought to
start a gym called 360 Total Fitness. Dreier was a longtime client
and friend of Oberg's, and Dreier introduced Oberg to Furtado and
Powell. Oberg recommended to the three that they form an LLC.
The file contains no engagement letter from Oberg to
Dreier or Furtado. Nor is there evidence that Oberg communicated
to Furtado that she was not representing him or obtained a waiver
- 2 - from him. Oberg stored the documents related to the LLC matter as
a new matter file within Dreier's existing client file in
DarrowEverett's filing system. Dreier told Furtado that Oberg
would represent the three potential members of the LLC in its
formation.
Oberg prepared an initial Operating Agreement (OA) for
the LLC, which the three members each signed on or about August
21, 2008. LLC Articles of Organization for "360° Total Fitness
Training, LLC" were filed with the Rhode Island Secretary of
State's Corporations Division on August 19, 2008. The Articles
bore the name and address of Karen Dreier as the LLC's manager and
the person authorized to file the Articles. The OA provided a
deadline of August 26, 2008, by which the three members had to
execute and deliver to Oberg an Amended Operating Agreement (AOA).
The OA spelled out that a member's failure to execute and deliver
the AOA meant he or she would cease to be a member. Oberg also
discussed these consequences with Furtado, as he admits.
On August 23, 2008, Oberg sent Dreier a one-sentence
email extending the August 26, 2008, deadline to September 3, 2008,
with a subject line that instructed Dreier to sign the email and
to have Furtado and Powell sign as acknowledgment. Dreier did so,
and each of the three signed a printed copy of the email, each
dating it August 23, 2008.
- 3 - Despite being informed of the consequences of failing to
execute the AOA, Furtado never signed an AOA at any point, much
less by the extended deadline. Furtado did not ask Oberg or Dreier
about an AOA at any point between August 24, 2008, and September
3, 2008. Dreier did sign the AOA, writing "as of August 26, 2008"
below her signature.1 The copy of the AOA in evidence as signed
by Dreier lists only Dreier's name.
Later in September 2008, Furtado spoke with Oberg to
seek legal advice about a separate matter involving his ownership
of a truck. The complaint against Furtado in that matter was faxed
to Oberg on September 16, 2008, and Oberg settled the matter on
October 30, 2008. Furtado did not sign an engagement agreement
related to the truck matter, did not receive a bill from Oberg,
and did not pay Oberg, though he did give her a bottle of wine.
At some point in late 2011 or early 2012, wanting to
assess the company's condition, Furtado asked Dreier if he could
look at the LLC's financials. Dreier responded that she did not
have to show him the financials because he was "not an owner."
Furtado then tried to contact Oberg, but learned that she was no
longer practicing at DarrowEverett.
Furtado obtained his own counsel and sued Dreier in state
court in February 2013, asserting that he was an owner of the LLC.
1 Furtado disputes that Dreier in fact signed on August 26, 2008, but that dispute is not material to the outcome.
- 4 - He did not sue Oberg. In January 2014, some six years after its
opening, the gym closed and the LLC stopped operations. Furtado's
state court case against Dreier settled in early 2015, and Furtado
estimates his net proceeds from that settlement as "under
[$]30,000."
On July 27, 2015, apparently dissatisfied with that
settlement, Furtado sued Oberg and the law firm. He brought three
claims: legal malpractice, breach of fiduciary duty, and
misrepresentation. After discovery, the district court entered
summary judgment for defendants. Furtado appealed.
II.
In moving for summary judgment at the conclusion of
discovery, the defendants argued that Furtado did not have evidence
of any loss proximately caused by any claimed breach of any alleged
duty owed to him. Under Rhode Island law, the proximate cause of
a loss is an element of each of Furtado's claims. Coccoli v. Town
of Scituate Town Council, 184 A.3d 1113, 1120 (R.I. 2018)
(fraudulent misrepresentation); Audette v. Poulin, 127 A.3d 908,
911 (R.I. 2015) (breach of fiduciary duty); Ahmed v. Panone, 779
A.2d 630, 632–33 (R.I. 2001) (legal malpractice). The district
court did not consider this alternative ground, as it found no
breach of any duty, in any event.
On appeal, the defendants prominently raised and fully
developed this argument as an alternative ground for affirmance,
- 5 - devoting a discrete section of their brief to it. Furtado's reply
brief developed no opposition to the argument, not even mentioning
it.
Our case law allows us to affirm on grounds not reached
by the district court in appropriate circumstances. Bower, 731
F.3d at 92 (noting that "[w]e may affirm on any independently
sufficient grounds made manifest by the record," and dismissing
the plaintiff's claim as preempted, when the district court based
its dismissal on other grounds); Rockwood v. SKF USA Inc., 687
F.3d 1, 9 (1st Cir. 2012) (same, in the summary judgment context).
The argument was plainly and prominently made on appeal as it also
was in the district court2 and, on appeal, Furtado was called upon
to marshal any evidence and argument in opposition. Allowing the
defendants to press the damages issue on appeal presents no
unfairness to Furtado.
Our caselaw also makes clear that we may treat a party's
failure on appeal to respond to a properly raised argument for
summary judgment as waiver. See Latin Am. Music Co. v. Am. Soc.
of Composers Authors & Publishers, 593 F.3d 95, 101 (1st Cir.
2010); United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990);
2 In the district court, Furtado made only a brief response and cited no evidence, arguing that the LLC's lack of profits had not been established and that, as to damages, he gave his time and labor to a business he reasonably believed he owned. But it is undisputed that he received compensation for at least some of those efforts.
- 6 - see, e.g., Rando v. Leonard, 826 F.3d 553, 557 (1st Cir. 2016)
(holding that the plaintiff waived an argument in her appeal after
a grant of summary judgment because the defendant clearly raised
the issue and the plaintiff failed to adequately respond). Even
if there were any doubt Furtado has waived on appeal any argument
that a reasonable jury could find that any breach by the defendants
proximately caused him harm, we would reach the same result.
Our own unassisted review of the record discloses no
apparent flaw in the defendants' argument. Furtado offered no
evidence that the gym ever turned a profit, so any argument that
he would have benefitted from being a member of the LLC is
unsupported. In discussing other issues, Furtado called into
question reimbursement payments made to Dreier that he thinks may
have been inappropriate. But Furtado, who bears the burden of
proving proximate cause of loss and damages, has not mounted any
argument -- much less evidence to show -- that any of those
payments were improper. Nor has he offered any evidence as to the
amounts involved, or whether those amounts were enough to make up
for the documented losses. Additionally, the defendants point out
that Furtado declined to itemize damages in written discovery. No
reasonable jury could find on this record that the gym was or would
have been profitable.
As for any contention that Furtado would have found
different and more gainful employment had he known he was not a
- 7 - member of the LLC, which the defendants address clearly in their
response brief, Furtado has not set forward any evidence to back
it up. When we asked at oral argument, counsel claimed that such
a contention was made in his statement of facts submitted to the
district court. But we cannot find any such argument or evidence
in that document. And even if Furtado had testified that he would
have looked for another job, he has not offered evidence that other
employment would have resulted in him making more than what he
netted by training personal clients at the gym. This simply is
not enough to allow a jury to conclude that Furtado suffered any
lost wages.
We affirm the entry of summary judgment and award costs
to appellees.
- 8 -