N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT C ARM ELO GALEA,

Pla i ntiff-Appe lla

nt,
and ANTHONY W . IM B IM B O, Truste e of the C arm e lo Ga l e a

Fam i ly Insura nc e Trust, Pla i ntiff,
v. STEVEN B UR GESS, individually ; THE B UR GESS GR OUP,

De fe nda n ts-Appe lle e s,
and LINC OLN NATIONAL C ORPOR ATION; THE LINC OLN NATIONAL LIFE INSUR ANC E C OM PANY, INC .,

De fe nda n ts. No. 15-56468 D.C . No. 3:11-c v-01218-C AB
M EM O R ANDUM * 

# FIL ED

MAR 27 2017 M OLLY C. DW Y ER, CLERK U
. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.Appe a l from the Unite d

Stat e s Distric t C ourt for the Southe rn Distric t of C a lifornia C a thy Ann B e nc ive ngo, Distric t Judge , Pre siding Argue d a nd Subm itte d M a

rc h 9, 2017 Pa sa de n a , C a l ifornia B e fore : PAEZ, B ER

ZON, a n d C HR ISTEN, C irc uit Judge s. In this dive rsity -ba se d a c tion, C arm e lo Ga le a a ppe a ls the distric t

c o urt’ s gran t of sum

m ary judgm e n t to de fe nda nt Ste ve n B urge ss on his C a lifornia sta te la w c la im s a lle ging fra

ud a nd de c e it a

nd profe ssiona l ne glige nc e . W e a ffirm
. 1. The distric t c ourt did not err in gra n ting sum m a ry judgm e nt to B urge ss on Ga le a ’ s c la im for fra ud a nd de c e it. Unde r C a lifornia la w, the tort of de c e it or fra

u d re quire s “ (a ) m isre pre s e ntat ion (fa l se re pre s e ntation, c onc e a lm e nt, or nondisc losure ); (b) knowle dge of fa lsity (or ‘ sc i e nte r’ ); (c ) inte nt to de fraud, i.e ., to induc e re lia

nc e ; (d) justifia

ble re lia nc e ; a nd (e ) re sulting da

m a ge .” C harpe ntie r
v . Los Ange le

s Rams Football C

o., Inc
. , 75 C a l. App. 4th 301, 312 (1999) (c ita tion
om i tte d). Ga le a a l le ge s tha

t in 2008, he

obta ine d thre e life insura nc e polic ie s from Linc oln Na

tiona l Life Insura

nc e C om pa ny with a c om

bine d va lue of $25 m illion. Ga le a furthe r a lle g e s tha

t h e sought a

non-re c ourse loa

n to fina nc e the pa

ym e nts,
and tha t Linc oln Na

tiona l’ s re pre se ntative s e nliste d B urge ss to obtain suc h a loa n.

2Although B urge ss a lle ge dly prom ise d those re pre se ntative s tha t the loa n would inde e d be non-re c ourse , the loa n B urge ss ultim ate ly

se c ure d he ld Ga le a

pe rsona lly lia ble . B ut Ga le a

signe d a pe rsona l gua

ranty a g re e m e nt. He m a inta ins tha t he did not know tha

t he would be pe rsona lly lia ble on the loa

n, a nd tha t ha d he be e n
a pprise d of the te rm s of the loa n he would ne v e r hav e a gre e d to it. The re is a ge n u ine disputeof m ate ria l fa c t a s to whe the r B urge ss e ve r
re pre se nte d tha

t he would obtain a

non-re c ourse loa

n. M ore ove r, a s the distric t
c ourt obse rve d, “ [e ] xc e pt in therare c a se whe re the undispute d fa c ts le ave no room for a re a sona

ble diffe re nc e of opinion, the que stion of whe the r a

pla intiff’ s re lia

nc e is re a sona ble is a que stion of fa c t.” Blank

e nhe im v . E.F. Hutton &

C o. , 217 C a l. App. 3d 1463, 1475 (1990). W e a gre e with thedistric t c ourt, howe ve r, tha t this is such a

rare c a se . Whate ve r re pre se ntations B urge ss m ay have m a de to Linc oln prom ising tha t he would obtain a

non-re c ourse loa

n, we c annot c onc l ude tha t a re a s ona ble juror
c ould find tha

t Ga le a justifiably

re lie d on the m . Ga le a

e xam ine d the pe rsona l gua ran ty him se lf, whic h de c la

re d in c a pita l le tte rs on the front pa ge of the doc um e nt tha

t it wa s a “ GUAR

ANTY AGR

EEM ENT.” The a g re e m e nt wa s a
re lative ly short e ight-pa ge doc um e nt whic h ide ntifie d Ga le a a s the gua

rantor on the first pa ge , a s we ll a s on the fina l pa ge whe re Ga le a a ffixe d his signa ture . Ga le a
3a

ppa re ntly re c o g niz e d the nature of the gua ra nty a gre e m e nt, a s he a ske d his
a c c ounta nt whe the r the doc um e nt wa s a pe rsona l gua

ran ty . In fa c t , Ga l e a

de c la re d that his unde rsta

n ding wa s tha

t he w ould be pe rsona lly

lia ble for re pa

ym e nt of the loa n if he c anc e lle d the life insura nc e polic y , whic h is e sse ntia lly what ha ppe ne d whe n he fa ile d to re ne w it a nd the polic y

la pse d. Give n the se fa c ts, the distric t
c ourt did not err in c onc luding tha t a ny re l ia nc e by Ga le a on B urge ss’ s a lle ge d
re pre se ntations to othe

rs wa s not justifia

b le a s a m atte r of la

w. 2. The distric t c ourt did not err in gra n ting sum m a ry judgm e nt to B urge ss on Ga le a ’ s ne glige nc e c la im . In the first pla c e , Ga le a ha s fa ile d to de m onstra

te tha t B urge ss owe d

him a profe ssiona l duty

of c are , pa

rtic ula rly sinc e B urge ss wa s not in privity with Ga le a . Ga le a c orre c tly obse rve s tha

t C a lifornia
c ourts ha ve , in som e insta

nc e s, re c ogniz e d tha

t a profe ssiona l m ay

owe a duty of
c are to a third pa rty with whom

he or she is not in privity
. Se e Biak anja v
. Irv ing , 49 C a l. 2d 647, 650-51 (1958). The bulk of thec a se s on whic h Ga le a re lie s
c onc e rne d a

n attorne y ’s p ote n tia l profe ssiona l lia bility to third pa

rtie s not in privity
. S e e , e . g., Luc as v . Hamm , 56 C a l. 2d 583 (1961). A few c a se s, howe ve r, have he ld tha

t othe r profe s siona ls may

owe a sim ila r duty in som e c irc um sta

nc e s. Se e , e .g. , Goone w arde nev . ADP, LLC , 5 C a l. App. 5th 154, 181 (2016), a s modifie d on de nial of re h’g (Nov. 29, 2016) (holding tha t “ a fina nc ia l se rvic e s
4provide r m ay be subje c t to a

duty of c are to a third pa

rty be ne fic ia ry of the c ontra c t be twe e n the provide r and its c lie nt.” ). B ut Ga le a doe s not, in his Se c ond Am e nde d C om pla int, sugge st in w h at profe s siona l c a

pa c ity B urge s s wa s a c ting, a side from obse rving ge ne ra lly

tha t B urge ss pre se nte d him s e lf a s a “ spe c ia list a

n d e xpe rt in the fie ld of life insura nc e pre m ium fina nc i ng.” It is not alle ge d, for e xam ple , tha t B urge ss wa s a c ting a s a

n
a ttorne y , or a s a

fina nc ia l a dvisor. Although Ga le a obse rve s tha

t B urge ss is
re giste re d a s a

n insura nc e a g e nt, a

nd propose s tha

t his c onduc t fe l l be low the sta nda rd of c are for a

life insura

nc e a ge nt, he wa s not a c ting a s Gale a’s insura nc e
a ge nt (or a

ny one e lse ’ s) at a

ny point in the

tra nsa c tion. In fa c t, Ga le a

obta ine d the
re le va nt life insura

nc e polic ie s be fore any one at Linc oln c onta c te d B urge ss. B urge ss’ s role in this pa

rtic ula r dram a wa s lim ite d to broke ring the loa n, not the unde rly ing insura

nc e . W ithout some indic ation of theprofe ssiona l c a pa c ity in whic h B urge ss wa s a c ting, we c annot c onc lude that he owe d a profe s siona l duty

of
c are to a third pa rty suc h a s Ga le a . AFFIRM E D.

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