Court Opinion

ID: 4504786
Source: CourtListenerOpinion
Date Created: 2020-02-05 20:00:13.795436+00
Date Added: 2024-06-11T14:54:18.788951
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 19-1245

                          JAY FURTADO,

                      Plaintiff, Appellant,

                               v.

               AMY PAGE OBERG; DARROWEVERETT LLP,

                     Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF RHODE ISLAND

       [Hon. John J. McConnell, Jr., U.S. District Judge]

                             Before

                      Howard, Chief Judge,
               Lynch and Kayatta, Circuit Judges.

     Thomas R. Noel, with whom Lyndsey A. Fiore and Noel Law were
on brief, for appellant.
     Jennifer L. Markowski, with whom Catherine M. Scott and
Freeman Mathis & Gary, LLP were on brief, for appellees.

                        February 5, 2020
             LYNCH, Circuit Judge.           In August 2008, three would-be

members of a not-yet-created limited liability company (LLC),

including    the   plaintiff,     Jay   Furtado,       met   with   Rhode   Island

attorney Amy Page Oberg of the firm DarrowEverett LLP, seeking her

help to establish an LLC for a gym.                Out of that 2008 engagement,

this July 2015 lawsuit against Oberg and her firm has emerged.

             In   March   2013,   Oberg      was    rendered   quadriplegic    and

unable to speak.          She is represented in this matter, and her

husband has medical and legal power of attorney, but she has been

unavailable to testify or otherwise participate meaningfully in

discovery.

             The district court entered summary judgment against

Furtado.    We do not adopt its reasoning.             We are free to affirm on

any grounds made manifest by the record, see Bower v. Egyptair

Airlines Co., 731 F.3d 85, 92 (1st Cir. 2013), and we do so here.

                                        I.

             The participants in the 2008 meetings with Oberg were

Furtado, Karin Dreier, and Oswaldo Powell, who together sought to

start a gym called 360 Total Fitness. Dreier was a longtime client

and friend of Oberg's, and Dreier introduced Oberg to Furtado and

Powell.    Oberg recommended to the three that they form an LLC.

             The file contains no engagement letter from Oberg to

Dreier or Furtado.        Nor is there evidence that Oberg communicated

to Furtado that she was not representing him or obtained a waiver

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from him.    Oberg stored the documents related to the LLC matter as

a   new   matter   file   within   Dreier's   existing   client   file   in

DarrowEverett's filing system.         Dreier told Furtado that Oberg

would represent the three potential members of the LLC in its

formation.

             Oberg prepared an initial Operating Agreement (OA) for

the LLC, which the three members each signed on or about August

21, 2008.     LLC Articles of Organization for "360° Total Fitness

Training, LLC" were filed with the Rhode Island Secretary of

State's Corporations Division on August 19, 2008.           The Articles

bore the name and address of Karen Dreier as the LLC's manager and

the person authorized to file the Articles.          The OA provided a

deadline of August 26, 2008, by which the three members had to

execute and deliver to Oberg an Amended Operating Agreement (AOA).

The OA spelled out that a member's failure to execute and deliver

the AOA meant he or she would cease to be a member.           Oberg also

discussed these consequences with Furtado, as he admits.

             On August 23, 2008, Oberg sent Dreier a one-sentence

email extending the August 26, 2008, deadline to September 3, 2008,

with a subject line that instructed Dreier to sign the email and

to have Furtado and Powell sign as acknowledgment.        Dreier did so,

and each of the three signed a printed copy of the email, each

dating it August 23, 2008.

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           Despite being informed of the consequences of failing to

execute the AOA, Furtado never signed an AOA at any point, much

less by the extended deadline. Furtado did not ask Oberg or Dreier

about an AOA at any point between August 24, 2008, and September

3, 2008.   Dreier did sign the AOA, writing "as of August 26, 2008"

below her signature.1   The copy of the AOA in evidence as signed

by Dreier lists only Dreier's name.

           Later in September 2008, Furtado spoke with Oberg to

seek legal advice about a separate matter involving his ownership

of a truck. The complaint against Furtado in that matter was faxed

to Oberg on September 16, 2008, and Oberg settled the matter on

October 30, 2008.    Furtado did not sign an engagement agreement

related to the truck matter, did not receive a bill from Oberg,

and did not pay Oberg, though he did give her a bottle of wine.

           At some point in late 2011 or early 2012, wanting to

assess the company's condition, Furtado asked Dreier if he could

look at the LLC's financials.    Dreier responded that she did not

have to show him the financials because he was "not an owner."

Furtado then tried to contact Oberg, but learned that she was no

longer practicing at DarrowEverett.

           Furtado obtained his own counsel and sued Dreier in state

court in February 2013, asserting that he was an owner of the LLC.

     1    Furtado disputes that Dreier in fact signed on August
26, 2008, but that dispute is not material to the outcome.

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He did not sue Oberg.        In January 2014, some six years after its

opening, the gym closed and the LLC stopped operations.                 Furtado's

state court case against Dreier settled in early 2015, and Furtado

estimates    his    net    proceeds    from     that     settlement    as     "under

[$]30,000."

            On July 27, 2015, apparently dissatisfied with that

settlement, Furtado sued Oberg and the law firm.               He brought three

claims:     legal   malpractice,       breach       of   fiduciary     duty,     and

misrepresentation.        After discovery, the district court entered

summary judgment for defendants.            Furtado appealed.

                                       II.

            In moving for summary judgment at the conclusion of

discovery, the defendants argued that Furtado did not have evidence

of any loss proximately caused by any claimed breach of any alleged

duty owed to him.      Under Rhode Island law, the proximate cause of

a loss is an element of each of Furtado's claims.               Coccoli v. Town

of   Scituate   Town      Council,    184 A.3d 1113,   1120     (R.I.    2018)

(fraudulent misrepresentation); Audette v. Poulin, 127 A.3d 908,

911 (R.I. 2015) (breach of fiduciary duty); Ahmed v. Panone, 779
A.2d 630, 632–33 (R.I. 2001) (legal malpractice).                    The district

court did not consider this alternative ground, as it found no

breach of any duty, in any event.

            On appeal, the defendants prominently raised and fully

developed this argument as an alternative ground for affirmance,

                                      - 5 -
devoting a discrete section of their brief to it.   Furtado's reply

brief developed no opposition to the argument, not even mentioning

it.

          Our case law allows us to affirm on grounds not reached

by the district court in appropriate circumstances.     Bower, 731
F.3d at 92 (noting that "[w]e may affirm on any independently

sufficient grounds made manifest by the record," and dismissing

the plaintiff's claim as preempted, when the district court based

its dismissal on other grounds); Rockwood v. SKF USA Inc., 687
F.3d 1, 9 (1st Cir. 2012) (same, in the summary judgment context).

The argument was plainly and prominently made on appeal as it also

was in the district court2 and, on appeal, Furtado was called upon

to marshal any evidence and argument in opposition.   Allowing the

defendants to press the damages issue on appeal presents no

unfairness to Furtado.

          Our caselaw also makes clear that we may treat a party's

failure on appeal to respond to a properly raised argument for

summary judgment as waiver.   See Latin Am. Music Co. v. Am. Soc.

of Composers Authors & Publishers, 593 F.3d 95, 101 (1st Cir.

2010); United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990);

      2   In the district court, Furtado made only a brief response
and cited no evidence, arguing that the LLC's lack of profits had
not been established and that, as to damages, he gave his time and
labor to a business he reasonably believed he owned. But it is
undisputed that he received compensation for at least some of those
efforts.

                              - 6 -
see, e.g., Rando v. Leonard, 826 F.3d 553, 557 (1st Cir. 2016)

(holding that the plaintiff waived an argument in her appeal after

a grant of summary judgment because the defendant clearly raised

the issue and the plaintiff failed to adequately respond).     Even

if there were any doubt Furtado has waived on appeal any argument

that a reasonable jury could find that any breach by the defendants

proximately caused him harm, we would reach the same result.

          Our own unassisted review of the record discloses no

apparent flaw in the defendants' argument.       Furtado offered no

evidence that the gym ever turned a profit, so any argument that

he would have benefitted from being a member of the LLC is

unsupported.   In discussing other issues, Furtado called into

question reimbursement payments made to Dreier that he thinks may

have been inappropriate.     But Furtado, who bears the burden of

proving proximate cause of loss and damages, has not mounted any

argument -- much less evidence to show -- that any of those

payments were improper.    Nor has he offered any evidence as to the

amounts involved, or whether those amounts were enough to make up

for the documented losses.   Additionally, the defendants point out

that Furtado declined to itemize damages in written discovery.   No

reasonable jury could find on this record that the gym was or would

have been profitable.

          As for any contention that Furtado would have found

different and more gainful employment had he known he was not a

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member of the LLC, which the defendants address clearly in their

response brief, Furtado has not set forward any evidence to back

it up.   When we asked at oral argument, counsel claimed that such

a contention was made in his statement of facts submitted to the

district court.     But we cannot find any such argument or evidence

in that document.    And even if Furtado had testified that he would

have looked for another job, he has not offered evidence that other

employment would have resulted in him making more than what he

netted by training personal clients at the gym.      This simply is

not enough to allow a jury to conclude that Furtado suffered any

lost wages.

           We affirm the entry of summary judgment and award costs

to appellees.

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