Sierra Fria Corp. v. Evans

CourtCourt of Appeals for the First Circuit
DecidedOctober 10, 1997
Docket97-1294
StatusPublished

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Bluebook
Sierra Fria Corp. v. Evans, (1st Cir. 1997).

Opinion

USCA1 Opinion



UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT FOR THE FIRST CIRCUIT

_________________________

No. 97-1294

SIERRA FRIA CORP. AND RODRIGO ROCHA,

Plaintiffs, Appellants,

v.

DONALD J. EVANS, P.C., ET AL. (GOODWIN, PROCTER & HOAR),

Defendants, Appellees.

_________________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Morris E. Lasker,* Senior U.S. District Judge] __________________________

_________________________

Before

Selya, Circuit Judge, _____________

Coffin and Campbell, Senior Circuit Judges. _____________________

_________________________

Stephen L. Braga, with whom Miller, Cassidy, Larroca & __________________ ____________________________
Lewin, L.L.P. was on brief, for appellants. _____________
David S. Blatt, with whom John K. Villa, Williams & ________________ _______________ ___________
Connolly, James J. Dillon, and Goodwin, Procter & Hoar were on ________ ________________ _______________________
brief, for appellees.

_________________________

October 9, 1997
________________________

________________
*Of the Southern District of New York, sitting by designation.

SELYA, Circuit Judge. St. Ambrose is said to have SELYA, Circuit Judge. _____________

advised St. Augustine that "[w]hen . . . at Rome, live in the

Roman style." John Bartlett, Familiar Quotations 113 (Justin ____________________

Kaplan ed., 16th ed. 1992). In this case, the defendants, a

Boston law firm and its constituent partners (hereinafter

collectively Goodwin, Procter), counselled their erstwhile

clients that when acquiring real estate in Aruba there were

material risks associated with doing so in the Aruban style. The

plaintiffs demurred and instead traveled a path consistent with

St. Ambrose's counsel. Costly problems surfaced after the deal

was done.

Unwilling to absorb the loss in silence, the clients

sued for malpractice. The district court found in the lawyers'

favor. See Sierra Fria Corp. v. Evans, ___ F. Supp. ___ (D. ___ _________________ _____

Mass. 1997) [No. 95-CIV-10106-MEL, slip op.]. The clients

appeal. We affirm.

I. TROUBLE IN PARADISE I. TROUBLE IN PARADISE

Inasmuch as the appellants profess not to contest the

facts as found by the lower court, we lean heavily upon the

opinion below in recounting the relevant events. See id. at ___ ___ ___

[slip op. at 2-18].

In 1991, plaintiffs-appellants Sierra Fria Corporation

and Rodrigo Rocha (hereinafter collectively Rocha) acquired an

option to purchase two Aruban resort hotels, the Divi Divi and

the Divi Tamarijn, from Grape Holding N.V. (Grape) for

approximately $35,000,000. Rocha engaged Goodwin, Procter as

2

lead counsel, with overall responsibility for coordinating legal

due diligence involved in the transaction. The law firm assigned

a partner, Michael Glazer, and an associate, Minta Kay, to work

on the acquisition. Both attorneys specialized in real estate

law, but neither previously had handled an Aruban transaction.

Kay received a draft title memorandum based on Aruban

land records from Ingrid Bleeker, an attorney affiliated with

Smeets, Thesseling & Von Borkhorst (a firm that one of Rocha's

joint venturers had hired for its familiarity with Aruban and

Dutch law). Kay, who had hoped to obtain either title insurance

or an as-built survey or both, expressed concern that the

memorandum lacked solid title assurances. Bleeker informed her

that title insurance was unavailable in Aruba and that Aruban

real estate transactions customarily proceeded without as-built

surveys. The prevailing practice, she said, was to requisition a

title opinion from a local notary. Bleeker also informed Kay

that, if an as-built survey could be obtained at all, it would

necessitate an extremely costly and time-consuming process.

Frank Zeven, a more senior member of the Smeets firm, spoke with

Glazer and confirmed Bleeker's depiction of Aruban real estate

practices.

Based on these conversations, Glazer and Kay understood

that if Rocha purchased the hotels according to Aruban custom, he

risked not knowing exactly what assets he was acquiring. Their

concern heightened when they realized that a time-share complex

(Dutch Village) adjoined the Divi Tamarijn Beach Resort and that

3

no clearly visible dividing line separated the properties. Thus,

Kay spoke to Christopher DeChiario, Rocha's long-time aide. She

explained the hazards of proceeding without a survey, and

DeChiario promised to discuss the matter with Rocha. Glazer

later spoke directly to Rocha about the risks attendant to the

absence of a survey. Rocha indicated that he was not

particularly concerned. Consequently, Goodwin, Procter did not

commission a survey and Kay continued to work with Bleeker to

determine precisely what assets were located on the hotels'

properties.

Bleeker eventually mailed several maps of the

properties to Goodwin, Procter. Kay informed DeChiario that the

maps did not answer the boundary questions and again explained

that, without a survey, Rocha lacked assurance that he was

purchasing all the improvements. DeChiario told Kay to press on

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