Stephen J. Greenberg, & Cross-Appellee v. Judith De Tessieres T/a Washington Financial, Washington Monetary Exchange, & Cross-Appellants

902 F.2d 1002, 284 U.S. App. D.C. 176, 1990 U.S. App. LEXIS 7050, 1990 WL 56491
CourtCourt of Appeals for the D.C. Circuit
DecidedMay 4, 1990
Docket89-7077, 89-7081
StatusPublished
Cited by5 cases

This text of 902 F.2d 1002 (Stephen J. Greenberg, & Cross-Appellee v. Judith De Tessieres T/a Washington Financial, Washington Monetary Exchange, & Cross-Appellants) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stephen J. Greenberg, & Cross-Appellee v. Judith De Tessieres T/a Washington Financial, Washington Monetary Exchange, & Cross-Appellants, 902 F.2d 1002, 284 U.S. App. D.C. 176, 1990 U.S. App. LEXIS 7050, 1990 WL 56491 (D.C. Cir. 1990).

Opinion

Opinion for the court filed by Circuit Judge MIKVA.

*1003 MIKVA, Circuit Judge:

In this appeal, we review the district court’s summary judgment against the appellant; we also address the impropriety of counsel raising frivolous claims for sanctions against opposing parties.

The appellant, Stephen Greenberg, asserts that the district court abused its discretion in granting summary judgment against him, particularly in light of the proposed amendments to his complaint. The appellee not only defends the summary judgment against Greenberg, but charges in a cross-appeal that the district court abused its discretion in not granting Rule 11 sanctions against Greenberg. We affirm the district court’s decision -to grant summary judgment against the appellant and deny de Tessieres’ cross-appeal. In light of the frivolous Rule 11 claim which she raises in her cross-appeal, we chastise de Tessieres and her counsel for filing the cross-appeal, and deny de Tessieres her costs.

I. Background

Appellee Judith de Tessieres was in the business of advising would-be investors when she met Stephen Greenberg in April of 1986. She counseled Greenberg on one particular opportunity which offered a possible return of the invested money plus fifty percent more over only four months; this deal involved Greenberg loaning $20,-000 to Vacation and Travel Planners, Inc. (“VATP”) to facilitate VATP’s providing cruise ship service to certain conventions sponsored by the Montford Point Association (“Montford”); hopefully, he would receive back $30,000. De Tessieres contends that she described the risks associated with this transaction to the appellant, including the fact that Montford had previously withdrawn from a similar deal with VATP and that Montford was to tender no performance bond assuring VATP some payment.

When payment was due on Greenberg’s loan to VATP, the borrower lacked sufficient funds to cover repayment, motivating Greenberg to seek compensation from VATP, its president, executive vice president, and the trustee of the trustee company that was to ensure repayment of the loan out of the proceeds of the charter arrangement. Failing to win back his investment through these suits, Greenberg instituted this case against de Tessieres for having negligently advised him to invest in VATP, and for having defrauded him as well. The basis of these charges is de Tessieres’ alleged failure to uncover and relay certain information about the financial background of VATP’s officers, as individuals (including the poor credit rating of VATP’s vice president, Venant Vincent). Greenberg claims he would never have invested in VATP had he been adequately informed. The appellant specifically claims that the precise reason for VATP’s dire financial condition is irrelevant to his claim. He asserts that no matter why the company could not repay his loan, it was de Tessieres’ incomplete advice on the officers’ personal financial backgrounds that resulted in his making this unfortunate investment.

The district court agreed with de Tessi-eres that there was no causal connection between her asserted failure and Green-berg’s loss, either on the malpractice claim or on the fraud charge. We agree. The trial judge added that nothing in Green-berg’s amended complaint would cure this defect. The court also, in a footnote, disposed of the appellee’s motion for sanctions against the appellant; the appellee ignored the court’s indication that the sanction claim did not warrant serious attention, and reiterated that claim in her cross-appeal to this court.

II. Analysis

A. Summary Judgment was Proper

“[I]f the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact,” summary judgment may be granted. Fed.R.Civ.P. 56. The district court found, as to both claims, that “even assuming arguendo that [the] defendant was negligent in failing to provide certain financial information, there is no evidence *1004 to support a causal connection between the defendant’s omission and plaintiff’s loss.” Greenberg v. de Tessieres, 1988 WL 134936 (D.D.C. Nov. 30, 1988). It also considered Greenberg’s amended complaint, and held that even as modified, the claim was insufficient.

Appellant Greenberg still contends that the “reason why the loan was not repaid ... is ultimately” irrelevant. He is wrong on this point. In the malpractice context, a plaintiff must show that it was the “natural and continual sequence” of events flowing from an act or omission of the defendant, “unbroken by any intervening cause,” that produced the plaintiff’s injury. Hitaffer v. Argonne Co., 183 F.2d 811, 815 (D.C.Cir.1950); see also White v. United States, 780 F.2d 97, 107 (D.C.Cir.1986) (“Given the close match between the reasons the Hospital was required to keep Dwayne White confined and the unfortunate consequences, we” find causation.). As the Restatement (Second) of Torts § 430 comment a (1965) explains, “The conditions which are necessary to make the act negligent in respect to the harm of which the other complains [include] .... subjecting the other to the hazard from which the harm results.” (emphasis added). It is plain to see that, contrary to Greenberg’s assertion, he cannot properly maintain his malpractice suit while agreeing that VATP’s inability to repay him was not tied to the risk created by de Tessieres’ failure to reveal information about VATP’s officers.

With regard to the appellant’s cause of action for fraud, we find entirely proper the district court’s ruling that Greenberg did not present a sufficient claim, recognizing that he never demonstrated causation. Even assuming that all other elements of a cause of action for fraud were present, a material omission is only actionable where the harm suffered by the plaintiff resulted naturally from the defendant’s omission. The Restatement (Second) of Torts § 548A comment b (1977) states, “Pecuniary losses that could not reasonably be expected to result from the misrepresentation are ... beyond the scope of the maker’s liability.” In an illustration, the Restatement says,

A, seeking to sell B the municipal bonds of C County, fraudulently tells B that the county received full payment for the bond issue. B purchases the bonds in reliance upon this statement. Subsequently ... the bonds are held void by the supreme court of the state on the ground that a court had no jurisdiction to issue certain orders with respect to them. As a result, B suffers pecuniary loss. A is not liable to B for the loss.

Restatement (Second) of Torts § 548A illustration 1 (1977).

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Bluebook (online)
902 F.2d 1002, 284 U.S. App. D.C. 176, 1990 U.S. App. LEXIS 7050, 1990 WL 56491, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stephen-j-greenberg-cross-appellee-v-judith-de-tessieres-ta-cadc-1990.