Court Opinion

ID: 9894833
Source: CourtListenerOpinion
Date Created: 2023-11-03 14:04:25.252969+00
Date Added: 2024-06-11T09:10:49.926620
License: Public Domain

United States Court of Appeals
                           FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 22-7140                                                  September Term, 2023
                                                             FILED ON: NOVEMBER 3, 2023

JOHN XEREAS,
                      APPELLANT

v.

MARJORIE HEISS, ET AL.,
                    APPELLEE

                          Appeal from the United States District Court
                                  for the District of Columbia
                                      (No. 1:12-cv-00456)

        Before: SRINIVASAN, Chief Judge, WALKER, Circuit Judge, and GINSBURG, Senior
Circuit Judge.

                                       JUDGMENT

        This appeal was considered on the record from the United States District Court for the
District of Columbia and on the briefs and oral argument of the parties. The panel has accorded
the issues full consideration and has determined that they do not warrant a published opinion. See
D.C. Cir. R. 36(d). It is hereby

      ORDERED AND ADJUDGED that the district court’s order granting summary judgment
be AFFIRMED.

       John Xereas, Marjorie Heiss, and Geoffrey Dawson formed a member-managed LLC to
open a comedy club. The relationship quickly soured, and Heiss and Dawson removed Xereas
from the LLC. Xereas then sued Heiss and Dawson, claiming, among other things, breach of
contract and breach of fiduciary duty.

        The district court allowed Xereas’s breach of contract claim to proceed to trial, where he
was awarded damages. But the court dismissed Xereas’s breach of fiduciary duty claim,
concluding that Xereas had not provided evidence that Heiss and Dawson owed him a fiduciary
duty. Xereas appealed. We held that a fiduciary duty existed between the parties, reversed the
grant of summary judgment on the breach of fiduciary duty claim, and remanded that claim for
further proceedings. Xereas v. Heiss, 987 F.3d 1124, 1130–35 (D.C. Cir. 2021).
                                                 2

         On remand, the district court again granted summary judgment to Heiss and Dawson.
Xereas v. Heiss, 630 F. Supp. 3d 61 (D.D.C. 2022). The court relied on three independent grounds.
First, the court reasoned that Xereas’s breach of fiduciary duty claim was coextensive with his
breach of contract claim and that he should be barred from recovering double damages. Id. at 67–
68. Second, the court held that Xereas had failed to provide evidence that Heiss and Dawson
breached their fiduciary duty. Id. at 68–69. And third, the court determined that Xereas had failed
to provide evidence that Heiss’s and Dawson’s conduct proximately caused Xereas’s alleged
injuries. Id. at 69–70.

        In this appeal, Xereas contends that the district court erred on all three grounds. Viewing
the evidence in the light most favorable to Xereas as the nonmoving party and drawing all
reasonable inferences in his favor, Thompson v. Dist. of Columbia, 832 F.3d 339, 344 (D.C. Cir.
2016), we affirm the district court’s grant of summary judgment against him. Xereas did not
introduce evidence demonstrating that Heiss’s and Dawson’s conduct was a proximate cause of
his alleged damages. Because that conclusion independently sustains the district court’s grant of
summary judgment against Xereas, we have no occasion to address the district court’s other
grounds.

        Xereas’s only evidence supporting proximate cause is the report and trial testimony of
James Morrissey, a forensic accountant. Morrissey opined that the LLC had $5,923,646 of
improperly recorded payments and expenses. Xereas insists that a jury could infer that those
accounting discrepancies were caused by Heiss’s and Dawson’s self-dealing. Because Xereas
retains a 26.67% ownership interest in the LLC, he claims that Morrissey’s report demonstrates
that Heiss and Dawson owe him $1,579,836 in damages.

         Morrissey’s report and testimony, however, do not provide sufficient evidence to create a
genuine dispute of material fact as to proximate causation. Indeed, Morrissey did not offer an
opinion on what caused the accounting discrepancies, whether Heiss and Dawson had acted
improperly, or how liability should be allocated. Morrissey instead assumed the existence of
liability and expressly confined his report to estimating Xereas’s damages. Xereas cannot establish
that Heiss and Dawson engaged in misconduct proximately causing his alleged damages based on
evidence showing only inadequate recordkeeping. Because Xereas did not provide any further
evidence supporting proximate causation, we affirm the district court’s grant of summary
judgment.

        Pursuant to D.C. Circuit Rule 36, this disposition will not be published. The Clerk is
directed to withhold issuance of the mandate until seven days after resolution of any timely petition
for rehearing or rehearing en banc. See Fed. R. App. P. 41(b); D.C. Cir. R. 41.
    3

Per Curiam

              FOR THE COURT:
              Mark J. Langer, Clerk

        BY:   /s/
              Daniel J. Reidy
              Deputy Clerk