1 

18-1354 

Fezzani v. Dwecke 

UNITED STATES COURT OF APPEALS 

FOR THE SECOND CIRCUIT 

SUMMARY ORDER 

Rulings by summary order do not have precedential effect. Citation to a summary 

order filed on or after January 1, 2007, is permitted and is governed by Federal Rule of 

Appellate Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in 

a document filed with this Court, a party must cite either the Federal Appendix or an 

electronic database (with the notation “summary order”). A party citing a summary order 

must serve a copy of it on any party not represented by counsel. 

At a stated term of the United States Court of Appeals for the Second Circuit, held at 

the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, 

on the 13th day of August, two thousand nineteen. 

PRESENT: JOHN M. WALKER, JR., 

JOSÉ A. CABRANES, 

PETER W. HALL, 

Circuit Judges. 

 

MOHAMMED FEZZANI, CIRENACA FOUNDATION,

VICTORIA BLANK, LESTER BLANK, JAMES BAILEY,

JANE BAILEY, BAYDEL LIMITED, MARGRET BURGESS,

PATRICK BURGESSS, BOOTLESVILLE TRUST, ADAM 

CUNG, 

Plaintiffs-Appellants, 

v. 18-1354 

ISAAC R. DWECK, INDIVIDUALLY AND AS CUSTODIAN 

FOR NATHAN DWECK, BARBARA DWECK, MORRIS I.

DWECK,RALPH I.DWECK, MORRIS WOLFSON,AARON 

WOLFSON, ABRAHAM WOLFSON, JACK DWECK, 

Defendants-Appellees, 

ANDREW BRESSMAN, BEAR STEARNS & CO. INC.,

ARTHUR BRESSMAN, BEAR STEARNS SECURITIES 

CORPORATION, RICHARD ACOSTA, RICHARD 

HARRINGTON, GLENN O’HARE, JOSEPH SCANNI,

BRETT HIRSCH, GARVEY FOX, MATTHEW HIRSCH,
2 

RICHARD SIMONE, CHARLES PLAIA, ARIELLE 

WOLFSON JOHN MCANDRIS, JACK WOLYNEZ, TOVIE 

WOLFSON, ROBERT GILBERT, ANDERER AND 

ASSOCIATES, FIRST HANOVER SECURITIES INC.,

BOSTON PARTNERS, BANQUE AUDI SUISSE GENEVE,

WOLFSON EQUITIES, FOZIE FARKASH, TURNER 

SCHARER, RAWAI RAES, CHANA SASHA FOUNDATION,

BASIL SHIBLAQ, UNITED CONGRETION MESARAH,

IYAD SHIBLAQ, FAHNESTOCK & COMPANY, INC., KEN 

STOKES, BARRY GRESSER, MILLO DWECK, MICHAEL 

REITER, BEATRICE DWECK, APOLLO EQUITIES,

RICHRD DWECK, ISAAC B. DWECK, HANK DWECK,

DONALD & CO., 

Defendants. 

 

Appearing for Plaintiffs-Appellants: MAX FOLKENFLIK, Folkenflik & McGerity 

LLP, New York NY.

Appearing for Defendants-Appellees ROBERT A. HOROWITZ, Greenberg 

Traurig, LLP, New York, NY, for the Dweck 

Defendants. 

TERENCE W. MCCORMICK (Ira Lee Sorkin, 

on the brief), Mintz & Gold LLP, New York, 

NY, for the Wolfson Defendants. 

1 Appeal from a judgment of the United States District Court for the Southern District of New 

2 York (Crotty, J.). 

3 UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, 

4 ADJUDGED, AND DECREED that the January 10, 2018 judgment is VACATED and the case is 

5 REMANDED for further proceedings.

6 Plaintiffs-Appellants appeal the entry of summary judgment in favor of Defendants-Appellees. 

7 On remand from this Court, see Fezzani v. Bear, Stearns & Co., 716 F.3d 18 (2d Cir. 2013); Fezzani v. 

8 Bear, Stearns & Co., 527 F. App’x 89 (2d Cir. 2013) (summary order), the district court dismissed 

9 Plaintiffs’ state-law claims of conspiracy to defraud and aiding and abetting fraud for failure to 

10 demonstrate damages. This appeal follows. We assume the parties’ familiarity with the underlying 

11 facts, the procedural history of the case, and the issues on appeal. 

12 “This litigation arises out of a fraudulent scheme engaged in by a now-defunct broker-dealer, 

13 A.R. Baron (‘Baron’). Over the course of four years beginning in 1992, Baron defrauded customers 

14 of millions of dollars. As a result, Baron’s former officers, directors, and key employees have been 
3 

1 convicted of various crimes.” Fezzani, 716 F.3d at 20. In the current action, Plaintiffs seek recovery 

2 against Baron and its coconspirators. 

3 The parties submitted on remand competing expert opinions regarding damages. Both 

4 Plaintiffs’ and Defendants’ experts estimated aggregate losses of approximately $6.5 million for what 

5 the district court termed “First Type Baron Securities,” i.e., shares that were held and traded only in 

6 Baron accounts. App. 418, 451. The experts diverged, however, on damages attributable to “Second 

7 Type Baron Securities,” i.e., shares that had at some point been transferred from or to the same then8 stock holders’ third-party accounts. Defendants’ expert initially estimated aggregate losses of 

9 approximately $3 million for Second Type Baron Securities using a “mark to market” approach 

10 wherein the market values at the times of transfer were used as proxies for the actual purchase or sale 

11 prices of the shares. Defendants’ expert subsequently disclaimed any such estimate, however, opining 

12 that “without trading records for the firms from which shares were received or to which shares were 

13 delivered, it is impossible to determine Plaintiffs’ net gains or losses with any degree of certainty.” 

14 App. 451–52. Plaintiffs’ expert did not independently calculate damages attributable to Second Type 

15 Baron Securities but nonetheless opined that the “mark to market” methodology was reasonable and 

16 in line with “common industry practice.” App. 418–21. 

17 The district court “accept[ed]” Defendants’ expert’s “opinion and analysis,” reasoning that 

18 any estimate of the losses based on the Second Type Baron Securities must rely on the assumption 

19 that “the third party brokerage firms must have operated as mere repositories of Second Type Baron 

20 Securities,” which “belies common experience” and, in any event, “cannot be verified without trading 

21 records or monthly statements.” Sp. App. 10. The district court thus concluded that Plaintiffs had 

failed to establish damages, an essential element of Plaintiffs’ claims.1 22 Sp. App. 10. On de novo 

23 review, see, e.g., Munoz-Gonzalez v. D.L.C. Limousine Serv., Inc., 904 F.3d 208, 212 (2d Cir. 2018), we 

24 disagree. 

25 Defendants’ theory is that Plaintiffs may have realized profits based on sales of Second Type 

26 Baron Securities, which had been transferred to third-party accounts, and that such profits would have 

27 been, according to Defendants, the result of a “single wrong,” which would decrease the net loss from 

28 the fraud and potentially result in net profits. See Abrahamson v. Fleschner, 568 F.2d 862, 878 (2d Cir. 

29 1977) (“This is not to say, however, that a plaintiff may recover for losses, but ignore his profits, where 

30 both result from a single wrong.”). Although Abrahamson was based on federal law, New York law 

31 appears to be similar. See, e.g., Chalom v. Liparelli, 236 A.D.2d 354, 356 (2d Dep’t 1997) (plaintiff could 

32 not recover for fraud when he lost money from one part of transaction but gained from other parts, 

33 resulting in a net profit from the entire fraudulent transaction); Majestic Export Co. v. Katz & Greenfield, 

34 Inc., 248 A.D. 205, 206 (1st Dep’t 1936) (plaintiff was not entitled to recover damages for fraud and 

 1

 The district court also denied Plaintiffs’ motion for reconsideration, Sp. App. 16, but they present 

on appeal no challenges to that denial. 
4 

1 deceit in inducing him to enter a contract because the transaction resulted in a net profit to plaintiff). 

2 The district court made no ruling concerning whether potentially realized profits based on sales of 

3 Second Type Baron Securities were in fact attributable to Baron’s fraudulent scheme, and we conclude 

4 that factual disputes with respect to this issue preclude summary judgment on the damages element 

5 of Plaintiffs’ fraud claims. See id. (remanding for further consideration of what profits were properly 

6 attributed to the underlying fraud); see also Minpeco, S.A. v. Conticommodity Servs., Inc., 676 F. Supp. 486, 

7 491 (S.D.N.Y. 1987) (concluding that unresolved factual questions on the same issue precluded 

8 summary judgment). 

9 More importantly, the district court’s and Defendants’ reliance on Celotex Corp. v. Catrett, 477 

10 U.S. 317 (1986), is misplaced. To be sure, Plaintiffs’ evidence (or lack thereof) demonstrates potential 

11 holes in their theory of damages, but Celotex requires Defendants to demonstrate “a complete failure 

12 of proof concerning an essential element of [Plaintiffs’] case” sufficient to “necessarily render[] all 

13 other facts immaterial.” See id. at 323. This they have not done. Celotex does not require Plaintiffs to 

14 prove damages to survive summary judgment. See, e.g., Integrated Waste Servs., Inc. v. Akzo Nobel Salt, Inc., 

15 113 F.3d 296, 302–03 (2d Cir. 1997) (concluding that defendant met “its burden of pointing to a gap 

16 in plaintiff’s proof on a material issue” under Celotex, but holding that plaintiffs’ “poorly developed” 

17 and “meager” record on damages was sufficient to preclude summary judgment and “permit them to 

18 introduce more specific evidence at trial”). 

19 Defendants alternatively argued for spoliation sanctions based on Plaintiffs’ alleged failure to 

20 preserve certain records, an issue not reached by the district court. While we take no position on this 

21 issue, we note that the district court enjoys broad discretion to impose appropriate discovery sanctions, 

22 including adverse-inference instructions, see generally Residential Funding Corp. v. DeGeorge Fin. Corp., 306 

23 F.3d 99, 106–10 (2d Cir. 2002), and the district court is free to consider such sanctions on remand. 

24 We have considered parties’ remaining arguments and find them to be without merit. The 

25 judgment of the district court is VACATED, and the case is REMANDED for further proceedings 

26 consistent with this order. 

27 

28 FOR THE COURT: 

29 Catherine O’Hagan Wolfe, Clerk of Court 

30