Seligman v. Tenzer

173 F. App'x 280
Court of Appeals for the Fourth Circuit·Decided March 31, 2006·No. 05-1849·Unpublished·Cited by 5 cases

Opinion

PER CURIAM:

This appeal arises from a corporate governance dispute in which Mason Cass and Bryant Cass, principals of the corporation, Adventis, Inc. (“Adventis”), ousted the third principal, Jason Seligman. Disgruntled with his termination from Adventis, Seligman first filed suit in Virginia state court against the Casses and Adventis and settled the dispute. Seligman then filed this diversity malpractice action against David I. Tenzer and the law firm, Glenn, Feldmann, Darby & Goodlatte, P.C. (“GFDG”) (collectively, “defendants”), who had drafted the papers necessary to incorporate Adventis. The district court granted defendants’ motion for summary judgment and denied Seligman’s motion for voluntary dismissal or a continuance. We now affirm.

I.

In 1999, the Casses invited Seligman to join their pre-existing partnership, which advertised the sale of used cars over the Internet. Shortly thereafter, the three men dissolved the partnership and formed a new entity, Independent Systems, LLC (“LLC”). In early 2002, the LLC’s accountant advised the three principals to reincorporate the LLC as an S-type corporation, so that they could avoid self-employment taxes.

Consequently, Seligman contacted Tenzer to discuss the conversion. The parties agreed to reincorporate the LLC as an S-type corporation under a new name, Adventis, and to consider themselves employees, rather than members, of Adventis. Seligman alleges that, despite these changes, the three principals sought to preserve the unanimity rule, which had governed their relationship under the LLC.

At a meeting held on March 29, 2002, Tenzer told Seligman and the Casses that *282 the corporation could not function by the unanimity rule and urged them to adopt a majority rule of decisionmaking. Although Tenzer further encouraged the principals to adopt immediately the drafted shareholder and employment agreements, the principals directed him to complete the conversion by March 31, 2002 and to defer the remaining agreements. However, Seligman and the Casses orally agreed that two of the principals could terminate the third, but only for cause.

Immediately after the conversion, the principals suffered a falling out, and the Casses fired Seligman. Seligman filed suit in Virginia state court against the Casses and Adventis, asserting state law claims of oppression, breach of fiduciary duty, fraud, and mismanagement of corporate assets. On March 26, 2003, the parties executed a settlement agreement, under which Seligman received, among other things: (1) a yearly compensation package that included $120,000 in salary, full health benefits, and car allowance for five years; and (2) a onetime $100,000 dividend payment. Although Seligman retained a one-third ownership in Adventis’s stock, he did not regain a managerial role in Adventis.

In January of 2004, Seligman filed the instant legal malpractice action in Virginia state court against defendants, alleging that defendants’ failure to protect him during the conversion caused his diminished bargaining power within Adventis. Defendants removed the action to federal district court and moved for summary judgment after extensive discovery. In connection with his opposition to defendants’ motion, Seligman filed a motion to continue the trial date, which was denied. Seligman then moved to dismiss his complaint without prejudice, or alternatively, for reconsideration of his original motion for a continuance. The district court granted defendants’ motion for summary judgment and denied both of Seligman’s motions.

II.

A.

We first review de novo the district court’s decision to grant defendants’ motion for summary judgment. Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 519 (4th Cir.2003). According to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, ... show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). Although we view the facts and inferences drawn therefrom in the light most favorable to Seligman, the non-moving party, he nevertheless has the ultimate burden of demonstrating a genuine issue of material fact for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Thompson v. Potomac Elec. Power Co., 312 F.3d 645, 649 (4th Cir.2002).

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Seligman v. Tenzer, 173 F. App'x 280 (4th Cir. 2006).

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