Sam Tocco v. Richman Greer Professional Assoc.
Opinion
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION File Name: 13a1048n.06
No. 13-1055
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
SAM TOCCO, ) FILED ) DEC 26, 2013
Plaintiff - Appellant, ) DEBORAH S. HUNT, Clerk )
v. )
)
RICHMAN GREER PROFESSIONAL ) ON APPEAL FROM THE UNITED ASSOCIATION, ET AL., ) STATES DISTRICT COURT FOR ) THE EASTERN DISTRICT OF Defendants - Appellees. ) MICHIGAN
BEFORE: KEITH, GUY, and GIBBONS, Circuit Judges.
KEITH, Circuit Judge. Appellant Sam Anthony Tocco (“Tocco”) appeals the district court’s grant of summary judgment in favor of attorney John Whittles and the Richman Greer Professional Association (collectively, “Appellees”), which disposed of Tocco’s claims for fraudulent misrepresentation, negligent misrepresentation, innocent misrepresentation, and silent fraud. We now AFFIRM the ruling of the district court.
I. BACKGROUND
The facts are as follows: Tocco met Joseph Zada (“Zada”) in the 1990s, and from approximately 1998 until 2008, Tocco gave Zada several million dollars in loans and investments. Zada made periodic payments to Tocco during this time, but began to miss deadlines for payment
in 2007. During that same year, Zada informed Tocco that he would not be able to repay Tocco the $4, 797, 541 that he owed until he received an expected inheritance from a Saudi royal.
Tocco retained counsel thereafter but did not file suit against Zada. Meanwhile, Zada retained Appellees as counsel and informed them that he was to inherit between $1 billion and $1.5 billion from a member of the Saudi royal family. Zada provided Appellees with documentation supporting his claim. He then asked Appellees to contact his creditors and inform them that he would repay his debts upon receipt of the inheritance. In March 2008, Appellees commenced communications with Tocco regarding Zada's debt. According to Tocco, Appellees made a number of representations to him, over the course of 21 months, that payment of the debt was imminent. Appellees claim, however, that they never assured Tocco that Zada would repay his debt. In the end, Zada had spent his assets by April 2009 and never paid Tocco.
In 2011, Tocco filed suit against Appellees, seeking damages in excess of $28 million, in Wayne County Circuit Court. The case was subsequently removed to the Eastern District of Michigan. Appellees filed a motion for summary judgment on August 1, 2012, which the district court granted on December 17, 2012. See Tocco v. Richman Greer Prof’l Ass’n, 912 F. Supp. 2d 494 (E.D. Mich. 2012).
II. ANALYSIS
A. Standard of Review We review de novo a district court’s grant of summary judgment. ACLU of Ky. v. Grayson Cnty., 591 F.3d 837, 843 (6th Cir. 2010). Summary judgment is proper “where 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). “In considering a motion for summary judgment, we must draw all reasonable inferences in favor of the nonmoving party.” Spees v. James Marine, Inc., 617 F.3d 380, 388 (6th Cir. 2010) (citation omitted). The central issue is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). B. Tocco and Appellees are adverse parties.
Assuming that Appellees did make assurances to Tocco that Zada would repay his debt as well as other related assurances, a central question before this Court is whether or not Tocco could reasonably rely upon Appellees’ representations.
We hold that he could not. A plaintiff’s interests are adverse to those of a defendant and his counsel. See Friedman v. Dozorc, 312 N.W.2d 585, 591-92 (Mich. 1981). Reasonable reliance by a party upon an attorney’s representations cannot exist where the interests of that party are adverse to those of the attorney’s client. See Beaty v. Hertzberg & Golden, P.C., 571 N.W.2d 716, 722 (Mich. 1997) (“As is apparent, it is unreasonable for a nonclient to repose confidence and trust in an attorney when any of the interests of the client and the nonclient are adverse.”). Indeed, “placement of trust, confidence, and reliance . . . is unreasonable if the interests of the client and nonclient are . . . even potentially adverse.” Prentis Family Found. v. Barbara Ann Karmanos Cancer Inst., 698 N.W.2d 900, 906 (Mich. Ct. App. 2005)(emphasis added)(citation omitted). Although both Beaty and Prentis involve claims of breach of fiduciary duty, an allegation not made here, both cases are instructive and are consistent with Michigan authority indicating that reliance on one with interests adverse to one’s own is generally unreasonable. In the instant case, Tocco had
an interest in having his debt repaid as soon as possible, while Appellees had an interest in helping their client, Zada, delay his repayment of the money owed to Tocco for as long as possible. Tocco therefore could not have reasonably relied upon Appellees’ representations as a matter of law, and any of Tocco’s claims requiring reasonable reliance upon Appellees must fail.
The second major question before this Court is whether or not Appellees owed Tocco a duty of care. It is well-settled that an attorney does not owe a duty of care to his client’s adversary. See Friedman, 312 N.W.2d at 590-92. Any claims requiring that Tocco demonstrate a duty of care owed to him by Appellees must also fail. C. Tocco fails to satisfy the elements of a claim for fraudulent misrepresentation.
Tocco alleges that Appellees fraudulently misrepresented to him, among other things, that Zada would repay him. Fraud must be clearly proven by “‘clear, satisfactory and convincing’ evidence.” Cooper v. Auto Club Ins. Ass’n, 751 N.W.2d 443, 451 (Mich. 2008) (internal citations omitted). In order to establish a claim of fraudulent misrepresentation under Michigan law, a plaintiff must prove:
(1)[t]hat defendant made a material representation; (2) that it was false; (3) that when he made it he knew that it was false, or made it recklessly, without any knowledge of its truth and as a positive assertion; (4) that he made it with the intention that it should be acted upon by plaintiff; (5) that plaintiff acted in reliance upon it; and (6) that he thereby suffered injury. Each of these facts must be proved with a reasonable degree of certainty, and all of them must be found to exist; the absence of any one of them is fatal to a recovery.
Titan Ins. Co. v. Hyten, 817 N.W.2d 562, 567-68 (Mich. 2012) (internal citations omitted).
That reliance must occur to sustain a claim for fraud is well-settled in Michigan’s courts, as is the requirement that the reliance be reasonable. See Novak v. Nationwide Mut. Ins. Co., 599
N.W.2d 546, 554 (Mich. Ct. App. 1999). Tocco cannot demonstrate reasonable reliance upon Appellees’ representations, as discussed, supra, and he therefore cannot satisfy the elements of a claim for fraudulent misrepresentation. See Titan, 817 N.W.2d at 567-68. The fraudulent misrepresentation claim fails as a matter of law. D. Tocco fails to satisfy the elements of a claim for negligent misrepresentation.
Under Michigan law, “there is a valid tort cause of action in the nature of negligent misrepresentation arising from a contract for . . . services in favor of a non-contracting damaged third-party whose reliance on the [services] could be foreseen.” Williams v. Polgar, 215 N.W.2d 149, 158 (Mich. 1974). “The plaintiff . . . must show that privity of contract existed between the plaintiff and the defendant. ‘A claim for negligent representation requires plaintiff to prove that a party justifiably relied to his detriment on information prepared without reasonable care by one who owed the relying party a duty of care.’” Unibar Maint. Servs, Inc. v. Saigh, 769 N.W.2d 911, 919 (Mich. Ct. App. 2009) (quoting Fejedelem v. Kasco, 711 N.W.2d 436, 437 (Mich. Ct. App. 2006) (internal citation omitted)).
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