Court Opinion

ID: 9478681
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:54:49.536164+00
Date Added: 2024-06-11T17:46:33.236039
License: Public Domain

ROSENN, Senior Circuit Judge,
concurring and dissenting:
I concur with the majority that the plaintiff has not adduced evidence from which a jury could reasonably conclude that his claims for conversion, violation of the Uniform Commercial Code, breach of contract, and wrongful transfer are not time-barred, and that the dismissal of these counts should be affirmed. However, I believe the district court did not make any erroneous findings of fact and that the remaining counts of plaintiff’s alleged cause of action are also time-barred. I, therefore, respectfully dissent from the majority’s reversal of these counts and its remand of plaintiff’s claims of federal securities fraud and replevin to the district court for initial proceedings.
I.
A. The Loan to Roland Riddell
Because the majority and I disagree, in part, as to the conclusions to be drawn from the record, I will substantially recount the facts in this dissent. Giving the non-moving party the benefit of all reasonable inferences of disputed material facts, as we are bound to do on a motion for summary judgment, I believe that the *1500record establishes the following pertinent facts. The genesis of this controversy between the plaintiff and the defendants arises out of plaintiffs recurrent financial difficulties which became acute in 1978. The plaintiff, age fifty-one, whom the district court found to be “a savvy business person involved in the real estate business since the early 1960's,” Riddell v. Riddell Washington Corp., 680 F.Supp. 4, 5 n. 3 (D.D.C.1987),1 sought a bank loan of $150,-000 in 1978 to meet his pressing business expenses. He offered his stockholdings in RWC and RPI as collateral.
To support his representation that his stock in the two corporations was worth at least $150,000, plaintiff obtained an appraisal of the underlying properties owned by the corporations from Joseph L. Donnelly, a well known real estate appraiser in Washington, D.C. Donnelly fixed the value for the properties, subject to the ground leases, at $2,854,000, and thereby established that plaintiffs interest amounted to at least $150,000. Although the Donnelly Appraisal was sufficient for plaintiffs purpose of obtaining the desired loan, plaintiff believed that his stock at the time was worth at least 25% more than the $150,000 loan he sought.2
As the district court found, the Donnelly Appraisal stated that the ground leases were to be renegotiated on the basis of a percentage of the land value of the properties at the time of renegotiation. Riddell, 680 F.Supp. at 6 n. 5. The appraisal estimated that the 1981 renegotiation of the RWC lease would result in a substantial rental increase from $40,000 to $133,875, and that the 1992 renegotiation of the RPI lease would produce a rental increase from $36,000 to $86,700. The bank nevertheless rejected the loan request because it concluded that the stock was unmarketable. However, it proposed to make the loan if the corporations would agree to purchase the stock in the event of default.
Reacting to the bank’s proposal, plaintiff requested that his mother, the corporation president, call a directors’ meeting, which she did. The corporation, however, refused to enter into a commitment with the bank to buy back the plaintiff’s stock or to guarantee payment in the event of default. Confronted with her son’s urgent need for the money, Jean Riddell personally offered to lend him the $150,000.3 She made no offer to purchase plaintiff’s stock for $150,-000 because, as his sister Sally testified, “I think she was trying to give Roland the chance to stay in the family businesses and to redeem his stock by paying off the loan.”
The next day, the plaintiff personally typed and executed a promissory note for $150,000 to his mother, endorsed his stock certificates in blank, and delivered them together with the note (dated January 3, 1979) to his mother in exchange for the *1501loan.4 The note expressly gave Mrs. Rid-dell “authority to sell, transfer, [and] rehy-pothecate said collateral.” The note further provided that in the event of default the holder is given full power and authority to sell the collateral at “public or private sale [at] the option of the holder, without demand, advertisement, or notice,” and, after deducting the legal costs and expenses of the sale, to apply the residue of the proceeds to payment of the debt. The surplus, if any, was to be returned to the maker with a full and accurate accounting. As the majority observes, the note also provided that in the event of default, plaintiffs sisters would have a thirty day option to redeem the collateral by paying the principal and interest due the holder, thus relieving plaintiff of further liability.
The plaintiff defaulted in the repayment of the loan in 1979, but his mother did not exercise her rights under the note until several years later. In the meantime, the plaintiff failed to make any payment of principal or interest.
The ground leases on the RWC property became subject to renegotiation as of June 30, 1981. As the Donnelly Appraisal had predicted in 1978,5 the rentals were substantially increased on April 15, 1981, although the increase exceeded the Donnelly prediction.
B. The Foreclosure
By the spring of 1981, the plaintiffs financial condition had worsened considerably. Apparently in response to a request from Jean Riddell, Robert Arthur, manager of the corporation’s affairs and Mrs. Rid-dell’s financial advisor, informed her by letter dated May 5, 1981, that Rolan’s loan was in default, that the current balance was then $216,484.55, and that Roland had indicated his inability to repay. Arthur suggested that Mrs. Riddell protect her interest by declaring the note in default and then recovering her money through a sale of the collateral. Around this time, Roland also talked with his mother who “was concerned that my creditors were going to come and get the stock....” Alarmed at the prospect of her son’s creditors garnishing his stock and becoming an intrusive force in a longstanding family business, his mother reluctantly considered foreclosure of his stock. She consulted with other members of her family who expressed similar concerns.6
Jean Riddell ultimately foreclosed on Roland’s stock in July 1981 and sold the shares to herself for the outstanding balance of the loan which, as of May 5, 1981, was $216,484.55. With interest accruing, the debt undoubtedly exceeded that sum at the time of foreclosure. Although Roland disputes his mother’s testimony that in July 1981 she personally sent him a handwritten letter of her intent to foreclose, this fact is immaterial; the very terms of the note permitted the holder to foreclose on default, at either public or private sale, without further notice to the debtor.
C. The Buchanan Appraisal
On September 20, 1981, the Board of Directors of RWC held a special meeting, one of the purposes of which was to discuss the disposition of the foreclosed stock. With Mrs. Riddell abstaining, the Board voted on á motion of Arthur, a director and vice president, that an independent valuation of the foreclosed stock be obtained in order to prepare an offer of its purchase by the corporation from Mrs. Riddell.
*1502Several days later, Arthur wrote to Buchanan & Co. (Buchanan), which Roland identified as “a very well known CPA firm.” In his letter Arthur requested that Buchanan prepare an informal valuation of the corporations’ stock to be used as a basis for the corporate purchase of the foreclosed stock. Arthur further requested that Buchanan advise him as to what information would be needed for the valuation. Apparently in response to Buchanan’s request for further information, Arthur forwarded the data they needed to “render an opinion of value for an 'arm's length purchase[ ]’ ” of the foreclosed stock. The accompanying letter, dated October 28, 1981, advised that the stock was in non-traded, closely held “family corporations.” The data sheet concluded with the statement that, upon arriving at the value for the corporations, Buchanan should, “if appropriate, indicate a substantial factor for discount (35% to 50%) as to the nature of the securities being purchased.” (Emphasis added).
The Buchanan Appraisal, which Ronald Dungan, the accountant who supervised its preparation, believed to be accurate when prepared in 1981, in hindsight, was faulty. The principal errors in the valuation stemmed, however, not from any suggestion or input by Arthur, but from Buchanan's own shortcomings.7 Although Buchanan may have failed to arrive at an accurate valuation of the corporate stock, it nonetheless made an independent valuation.
Furthermore, the valuation was made, not for the purchase of “plaintiff’s equity interest,” Maj. Op. at 1488, but for the clearly established purpose of making an offer to Jean Riddell for the foreclosed stock acquired by her several months earlier. In submitting the offer of purchase to Mrs. Riddell, however, Arthur arbitrarily reduced the Buchanan valuation by an additional discount and arrived at a very low figure of $106,936.00 (Arthur computation). Surprisingly, inasmuch as Mrs. Rid-dell now had well over a $220,000 investment in the stock, including accrued interest, she accepted the offer and was paid $106,936.00, less than 50% of her son’s total unpaid debt. Whatever shortcomings there may have been in the offer, however, the shares were now the property of Jean Riddell, not that- of the plaintiff.
The majority labels the Arthur computation as “Buchanan Appraisal II,” Maj. Op. at 1488, a characterization and identification which may not be only confusing but also one which I do not believe is supported by the record. It is undisputed that Buchanan made only one appraisal. That appraisal makes no reference whatsoever to the Arthur computation which the majority characterizes as “Buchanan Appraisal II.” I therefore refer throughout this dissent to the Buchanan financial statement as the Buchanan Appraisal and to the Arthur computation as such, both of which are so described in plaintiff’s complaint and testimony.
On a more substantive level, the majority concludes that because plaintiff testified he only saw the Arthur computation we must accept his statement as conclusive that he did not review the Buchanan Appraisal and *1503hold that the district court’s factual finding to the contrary is erroneous. I disagree.
Both plaintiffs complaint and his testimony acknowledge that the Buchanan Appraisal and the Arthur computation appear on separate sheets of paper. The plaintiff claims that when his mother informed him in March 1983 of the sale of his stock, she told him that it had been independently appraised but she did not show him the Buchanan work sheets. Although plaintiff does not dispute his mother’s testimony that the Buchanan Appraisal was attached, he claims that she only showed him “the ‘Stock Valuation’ made up by Robert Arthur, but printed on Buchanan & Company stationery.” A court is not bound, however, to accept affidavits or testimony of a party even for purposes of summary judgment, when it is inconsistent with that party’s own testimony or at odds with documentary evidence as it is here.
First, Roland testified that the document which he reviewed was printed on Buchanan stationery. Notably, the Arthur computation, produced as part of plaintiff’s Exhibit 14, appears on a single, plain sheet of paper, not on Buchanan’s stationery. Nowhere on its face does the document purport to be an appraisal by Buchanan or any part thereof. On the other hand, the Buchanan Appraisal, which is preceded by a transmittal letter printed on Buchanan stationery and bears the Buchanan corporate signature, appears to more closely resemble the document reviewed by plaintiff.
Plaintiff also testified that the document his mother showed him mentioned “that due to the limited market, et cetera, et cetera, this is all we can appraise it for.” No such language appears in the Arthur computation. On the other hand, the Buchanan Appraisal does use language similar to the language recalled by plaintiff. For example, the Buchanan Appraisal discounts the 1730 K Street property of the RWC at 50% “because of lack of marketability due to minority interest and 74 years to run on lease.” The Buchanan Appraisal valuating 2801-3 and 2737 Connecticut Avenue also discounts these properties at 33%% “because of lack of marketability due to minority interest.”
Given plaintiff’s recall of the details contained only in the Buchanan Appraisal and notably absent from the Arthur computation, the district court could reasonably conclude that the plaintiff did review the Buchanan Appraisal when his mother showed him the Arthur valuation. Even on motion for summary judgment, a court may disregard a conflicting affidavit or statement that is manifestly untenable. See Martin v. Merrell Dow Pharmaceuticals, Inc., 851 F.2d 703, 706 (3d Cir.1988); Van T. Junkins & Assoc. v. U.S. Industries, Inc., 736 F.2d 656, 657 (11th Cir.1984). Therefore, I do not believe that this court can appropriately hold that the district court’s finding of fact is erroneous.
D. Sale of the Corporations
In December 1986, more than five years after the leases had been renegotiated and more than three years after plaintiff claims he learned of the price paid for his stock, the corporations were liquidated, and their assets and liabilities were transferred to Jean Riddell, Sally Arthur, Marise Reynolds, and Joan Baer as partners. (1150 Amended Cplt.). Earlier that year, the ground lessee of the corporations’ properties decided to purchase the fee title to the land because of proposed “changes in the tax laws” and the prospect of rental increases “down the road.” The lessee initiated discussions in September 1986 and completed them on December 31, 1986, with an agreement on the part of the purchaser to pay the partnership $13,000,000. The plaintiff alleges that in February 1987 his mother informed him of the sale of the ground leases and shortly thereafter he unsuccessfully attempted to obtain information, both personally and through counsel, concerning the sale of “his shares.” (11 52 Amended Cplt.). The plaintiff commenced these proceedings on April 3, 1987.
II.
The majority holds “that a jury could reasonably find that at least some of the defendants actively concealed plaintiff’s *1504RICO and common law fraud, deceit, and conspiracy claims from him” thus tolling the statute of limitations, and reverses the district court’s order granting summary judgment as to those counts. Maj. Op. at 1491. In light of the plaintiff’s own testimony and his Exhibit 14 (Arthur computation), I do not see how any jury could reasonably reach such a conclusion.
A. The RICO and Fraud Claims
The statute of limitations periods for both the RICO count and the fraud count are similarly applied. The four year statute of limitations period for plaintiff’s RICO claim and the three year statute of limitations period for the fraud claim accrue on the date plaintiff discovered, or should have discovered through the exercise of reasonable diligence, the fraudulent activity in question. Hartford Life Ins. Co. v. Title Guarantee Co., 520 F.2d 1170, 1174 (D.C.Cir.1975). As the district court here stated, where plaintiff did not actually discover the alleged fraud, the court inquires as to whether “ ‘storm warnings’ of the possibility of fraud triggered] a plaintiff’s duty to investigate in a reasonably diligent manner.” Maggio v. Gerard Freezer & Ice Co., 824 F.2d 123, 128 (1st Cir.1987). The court will make an objective inquiry to determine if and when the plaintiff possessed sufficient knowledge of the alleged fraud to require him to proceed diligently, and whether plaintiff actually exercised the requisite due diligence.
Based on the above standards, the district court found that the limitations period here accrued on the date of sale, or, at the latest, in March 1983, both of which would result in a finding that the claims are time-barred. Plaintiff argues, however, that under the doctrine of fraudulent concealment, the statute of limitations for both the RICO and fraud claims should be be tolled until February 1987 when he claims to have learned the true value of his stock.
1. Fraudulent Concealment
The doctrine of fraudulent concealment tolls the statute of limitations when the defendant has fraudulently concealed facts that prevented the plaintiff from discovering the alleged fraud. The majority concludes that, under the facts presented here, the plaintiff has adduced sufficient evidence to go to the jury on both the self-concealing and the subsequently concealed theories of fraudulent concealment, and reverses the district court’s order as to the counts of RICO and common law, fraud, deceit, and conspiracy. Maj. Op. at 1491.
The majority reaches this conclusion as to Robert Arthur holding that “his instruction” to Buchanan to discount their appraisal, combined with his expressed expectation that plaintiff might well challenge the resulting valuation, that is, the figure produced by Arthur’s further discount, “constituted sufficient evidence for a jury to conclude that Arthur defrauded plaintiff as to the existence of his cause of action.” Maj. Op. at 1492. However, as I have already shown, Arthur never gave any instruction to Buchanan to discount the stock, but merely made such a suggestion, an indisputable standard practice with respect to valuations of non-trading minority interest stock. As to Arthur’s expectation that “plaintiff might well challenge the resulting valuation” that expectation, for what little evidentiary value it might have, was only expressed in the November 22, 1981, board meeting with respect to the Buchanan Appraisal. There never was expressed any expectation that a similar challenge might be made with respect to “the figure produced by Arthur’s further discount,” the Arthur computation for the offering price. Thus, the premises upon which the majority reaches its conclusion are faulty.
As to Jean Riddell, the majority concludes there is sufficient evidence of fraudulent concealment to go to the jury because “a jury could reasonably conclude that her presentation of Buchanan Appraisal II to plaintiff and her representation to him that the appraisal had been performed independently constituted an affirmative misrepresentation.” Maj. Op. at 1492. However, Jean Riddell only represented to plaintiff that the Buchanan Appraisal had been performed independently. Moreover, as I discuss infra at 1505-06, the plaintiff *1505could not have mistaken the Arthur computation for the Buchanan Appraisal because any examination of that computation disclosed on its face that it did not constitute an appraisal by Buchanan or anyone else, or purport to be an appraisal, and could not be considered to be an appraisal by any reasonable person.
As to Marise Reynolds, the majority concludes that “her representation to plaintiff that his stock had been independently appraised, when she knew that it had not, could reasonably be found to constitute an affirmative misrepresentation.” Maj. Op. at 1492. Marise Reynolds’ representation, however, was directed only to the Buchanan Appraisal, not to the Arthur computation. Her representation was neither incorrect nor an affirmative misrepresentation. Even if we were to assume, arguendo, that Arthur had “instructed” Buchanan to take a discount, there is no evidence that Reynolds was aware of such “instruction.”
The majority further concludes that acts of fraudulent concealment may be imputed to the corporations based on a theory of agency, and to Sally Arthur and Joan Baer based on a theory of conspiracy. However, as I have demonstrated, because Robert Arthur, Jean Riddell, and Marise Reynolds have not engaged in any such acts, neither the corporations, nor Sally Arthur or Joan Baer may be charged with acts of fraudulent concealment.
For reasons already discussed, there is no evidentiary basis upon which a jury could reasonably believe that any of the defendants intended that plaintiff be lulled by the Arthur computation into accepting as reasonable the amount that Jean Riddell had paid for the stock in the initial sale. For the same reasons, a jury could not reasonably find that plaintiffs belief that the Arthur computation represented an independent appraisal prevented him from challenging either the initial sale or her subsequent sale to the corporation. Therefore, the district court properly refused to toll the statute of limitations.
2. Notice
Even assuming, arguendo, that the majority is correct in holding that defendants engaged in acts of fraudulent concealment, the doctrine of fraudulent concealment “does not come into play, whatever the lengths to which a defendant has gone to conceal the wrongs, if a plaintiff is on notice of a potential claim.” Hobson v. Wilson, 737 F.2d 1, 35 (D.C.Cir.1984), cert. denied, 470 U.S. 1084, 105 S.Ct. 1843, 85 L.Ed.2d 142 (1985). A plaintiff is charged with possessing notice of his potential claims either (1) when a plaintiff is apprised of the facts unique to a claim (actual notice); or (2) when a plaintiff has not exercised due diligence in conducting an inquiry upon knowledge of facts that indicate a possibility of a cause of action (inquiry notice). See id. at 35 & n. 107; Foltz v. U.S. News & World Report, Inc., 627 F.Supp. 1143, 1150 (D.D.C.1986). Therefore, where a plaintiff “has learned of facts which would cause a reasonable person to inquire further,” and has failed to investigate, that plaintiff “is charged with the knowledge of all facts such an investigation would have disclosed.” Jensen v. Snellings, 841 F.2d 600, 607 (5th Cir.1988); accord Grant v. U.S. News & World Report, Inc., 639 F.Supp. 342, 349 (D.D.C.1986).
Here, the information contained in the Arthur computation alone should have provided Roland the necessary notice to further investigate the transaction rather than have “prevented him from investigating further any transaction in which he did have an interest" as the majority holds. Maj. Op. at 1498. When the language of the Arthur computation8 is parsed, one finds the following:
*1506(1) the opening paragraph refers to a second report, “the accounting report,” dated November 5, 1981, and then makes an assessment of the data that follows.
(2) In assessing that data, Arthur observed that “[f]our methods were used to determine a mean value of the corporation assets before any attempt was made to value the stock itself.” Then follows the mean value with discounts.
(3) As to the “Riddell Properties,” there is only a single line setting forth the “mean value” less discounts.
(4) The handwritten figure merely aggregates the mean values for both corporations less discounts.
Any reasonable person reviewing this sheet, let alone a “savvy business person” familiar with these very properties, who had himself obtained an appraisal from a “very good” real estate appraiser within the preceding five years, would have recognized that it did not purport to be an appraisal of the underlying properties, the corporations’ primary assets. And it certainly was not a financial statement or audit, informal or formal, of the corporations by a certified public accounting firm. The opening lines, moreover, put him on notice that there was an “accounting report” dated November 5, 1981, presumably the Buchanan Appraisal, out there somewhere, if not attached to it. In addition, the Arthur computation notes that four methods of valuation were used to determine the mean value, but does not describe those methods, the omission of which should have notified the plaintiff that another report relevant to the valuation existed. The Arthur computation itself clearly indicated, therefore, that a prior accounting report, presumably the Buchanan Appraisal, formed the basis for the computation which should have prompted any reasonable person to make further inquiries. Plaintiff, however, made no effort to obtain that essential underlying document.
Moreover, given plaintiffs extensive real estate experience and his own testimony, I find incredible his claim that he relied upon either the Buchanan Appraisal or the Arthur computation, which he claims he believed to be the Buchanan Appraisal. Plaintiff plainly believed that any real estate valuation was of limited benefit when prepared by accounting firms such as Buchanan. As plaintiff testified, these firms, which are comprised of accountants and CPAs, “refer all the time to appraisals, but they don’t go out and do appraisals.” On the other hand, he implicitly conceded that a valuation by a real estate appraiser, such as Donnelly, is more reliable because they “[do] the appraisals; Buchanan & Company does what CPA’s do.” Furthermore, plaintiff believed that even real estate appraisals were of questionable value in assessing property encumbered by long-term leases such as the ones held by RWC and RPI. As he testified, “most appraisers in this area, even though they are MAI’s [Member of the Appraisal Institute] are not experienced in appraising properties with 99 year leases.”
Plaintiff also knew that the stock value depended upon the value of the underlying properties which, in turn, would be highly dependent upon rental revenue. Because he should have known, if only from the Donnelly report, that rentals would be renegotiated and increased in 1981, he had good reason to be “shocked at what the value was” when he was shown the Buchanan Appraisal in 1983. Yet, he did nothing. He never attempted to obtain an update on the Donnelly Appraisal or even to obtain a new independent appraisal. He never asked for an opportunity to see the newly negotiated terms of the ground leases. He never even requested corporate financial statements from his mother, the president of the corporations.9
*1507Moreover, when plaintiff obtained the Donnelly Appraisal, he believed from that appraisal that his interest in the underlying properties had a value of at least $150,000, even after Donnelly had discounted the value by 50%. Yet, in spite of this information, and common knowledge that real estate values generally were rising in the urban United States during this period, he failed to act when he discovered in March 1983 that the sale price to the corporation was substantially below what he considered to be the value of his interest in the properties in 1978 and that it was even below the earlier Donnelly Appraisal.
Under the foregoing circumstances, which demonstrate the information possessed by and available to plaintiff, no jury could reasonably believe that the Buchanan Appraisal or the Arthur computation prevented plaintiff from timely challenging either the initial sale to Mrs. Riddell or her sale to the corporation. Therefore, the district court properly refused to toll the statute of limitations.
B. Federal Securities Fraud and Replev-in Claims
I agree with the majority that the federal securities fraud and replevin claims were included only in the amended complaint and were not directly addressed by the district court. However, plaintiff has not challenged the district court’s authority to dismiss the case without directly addressing these claims. Rather, plaintiff treats the claims as if they had been denied by the court and argues that they are not time-barred. There is no reason, therefore, that, in the interest of judicial economy, we should not dispose of them now.
A replevin action lies to recover possession of personal property wrongfully taken and detained. Wardman-Justice Motors, Inc. v. Petrie, 39 F.2d 512, 515 (D.C.Cir.1930). As the district court found with respect to the claims of conversion and wrongful transfer, the wrongful transfer, if any, occurred upon the foreclosure in July 1981. Because the state of limitations for replevin is only three years, D.C.Code § 12-301(2), the limitations period ran in July 1984, or, at the very latest, in March 1986, three years after plaintiff claimed that he learned of the foreclosure. The replevin action is therefore time-barred.
Plaintiff claims that Jean Riddell violated the federal securities law, Rule 10b-5, by failing to disclose the rental increase of the ground leases and the corresponding increase in the value of his shares of stock. As determined by local law, this claim accrues upon the contract of sale and is subject to a two year statute of limitations. D.C.Code § 2-2613(e). See also Forrestal Village, Inc. v. Graham, 551 F.2d 411, 414 (D.C.Cir.1977); Grant v. U.S. News & World Report, Inc., 639 F.Supp. at 347. As plaintiff acknowledges, the contract of sale occurred in July 1981 when Jean Rid-dell foreclosed on the stock and purchased the stock herself. (¶ 72 Amended Cplt.). Because the limitations period ran in 1983, this final claim is also time-barred.
III.
As discussed above, p. 1502, I do not see how on this record a fair-minded jury could reasonably conclude that there were two Buchanan appraisals. Even if the plaintiff were shown only the Arthur computation, as he claims, and not the Buchanan Appraisal, as the district court found, no jury could reasonably find that the Arthur computation constituted an appraisal by Buchanan. There was nothing in that computation that prevented him from investigating further any transaction in which he did have an interest. On the contrary, by its very nature, substance, and plaintiff’s claim that he was “shocked” when he saw the handwritten figure, the computation should have prompted further inquiry and investigation. The plaintiff admittedly did nothing, and I see nothing in the record upon which a fair-minded jury could find evidence of self-concealing or affirmative acts of fraud by Mrs. Riddell and her co-defendants.
I believe that the district court neither made any erroneous findings of fact nor disregarded any genuine issues of material fact which would preclude the grant of sum*1508mary judgment in this familial dispute. I would, therefore, affirm the judgment of the district court in every respect.

. The plaintiff, a college graduate with a bachelor’s degree in Business Administration, exhibited extensive real estate experience, dating back to 1968. When deposed in 1987, he was serving as president of the Mortgage Investment Corporation, and immediately prior thereto had been president of the Century Mortgage Company. Between 1981 and 1983, he had brokered real estate loans, and between 1974 and 1981, he had served as president of Mortgage America, an organization of mortgage bankers. Prior to 1974, he had also served in various capacities for other mortgage and real estate companies, including, for a brief period between 1968 and 1969, Riddell Realty.

. However, the plaintiff also stated, rather inconsistently, that the corporation was in fact "worse off than the Donnelly appraisal showed,” and that the stock was worth less than the appraisal. He attributed this diminution in value to several considerations which Donnelly did not take into account: “One was that we were trapped ... in a very poor tax situation with the corporate structure we had.... [T]he leases were very poor, and although they appeared to have a certain income stream, the lessees could virtually mortgage us out of existence if they wanted to, and that these were leases that somebody wouldn’t use today.”

.Lending money to Roland or assisting him in borrowing was not an unusual experience for his mother. According to the plaintiff, he borrowed $23,000 from his mother in 1966 which he did repay. In 1976 he borrowed a total of $21,000, at least $10,000 of which he admits he did not repay. In 1981, his mother co-signed a $75,000 bank loan which "she had to repay” when he defaulted. She loaned him an additional $3,000 in 1983 which also remains unpaid.

. For the most part, the note tracked the language of the promissory note that Roland had obtained from the Security National Bank.

. The district court found that the Donnelly Appraisal, which plaintiff secured and read in 1978, “stated on its face the date on which the rental prices would increase and the fact that the renegotiated rents would be based on a percentage of the land value of the property. The plaintiff was on notice of the fact that the rents would increase from an appraisal he himself obtained.” Riddell, 680 F.Supp. at 6 n. 5. This finding of fact is not clearly erroneous, and plaintiffs claim that he was not on notice of the anticipated rental increases must be rejected.

.By letter dated June 8, 1981, Arthur wrote Mrs. Riddell, sending for her approval a form of notice to be given to Roland of her intention to foreclose and asking for instructions "on what we are going to do.”

. The majority construes Arthur's suggestion to discount the value of the stock as “instructions” to Buchanan and thus concludes that this suggestion destroyed the independence of the appraisal. Maj. Op. at 1487-88. I disagree with this characterization. Arthur was merely suggesting or reminding Buchanan of a common practice in the marketplace of discounting stock in closely held, non-traded family corporations. Dungan testified that he discounted because of the nature of the corporations and because the underlying properties were subject to unexpired ground leases. He based the precise discount factor on his “experience for state tax valuation.” Notably, the Donnelly report obtained by plaintiff had taken a similar discount.
The Buchanan appraisal was apparently flawed, however, though due neither to a lack of independence nor to the use of a discount. Instead, the error can be attributed to (1) Buchanan’s failure to recognize that the Donnelly appraisal, which formed one of the four bases for the valuation, had already been discounted to account for the reduced marketability of the stock; and (2) its failure to incorporate the increased rentals resulting from the recent renegotiation of the ground leases. Both these errors arguably resulted in an undervaluation of the corporations’ stock.

. Except for the date, caption, and the handwritten figure at the bottom, the sheet in its entirety consists merely of the following twelve typewritten lines:
RIDDELL WASHINGTON CORPORATION Regarding the accounting report on the prospective purchase by the corporation of the common stock held by Jean M. Riddell (see report, dated 5 November 1981) the following data is assessed as follows:
Four methods of valuation were used to determine a mean value of the corporation assets before any attempt was made to value *1506the stock itself or to discount the stock because of "family held and nontrading”
Mean value $758,250.00 X 25% = $189,562 X 50% = $94,781
RIDDELL PROPERTIES
Mean value $221,000 X 11% = $24,310 x 50% = $12,155

. During this period, the plaintiff acknowledges that he was still borrowing money from his mother, see supra note 3, as well as receiving annual gifts from her of $10,000 through 1987, and annual payment of college tuition for his several sons, in addition to private academy fees for others.