Court Opinion

ID: 6942513
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:10:01.934018+00
Date Added: 2024-06-11T16:07:45.242845
License: Public Domain

FERNANDEZ, Circuit Judge,
concurring and dissenting:
It is impossible not to recognize that this is a case of biting off more than one can chew. Daisy was not satisfied with being a major player in the computer field; it decided to gobble up another major player — Cadnetix. It thought that it would then be an even bigger and more powerful company. Instead, it choked on the bite. Its trustee in bankruptcy is now looking for a deep pocket. Perhaps he has found it in the trousers of Bear Stearns.
The issue is close, but on the evidence presented it is just barely possible that a trier of fact will determine that Bear Stearns performed negligently and that the negligence led to the collapse of Daisy. That is so even though Daisy had designs on Cadnetix before it even contacted Bear Stearns; that Daisy did not even seek Bear Stearns’ advice for the deal it actually finally consummated; that Daisy did not seek financing help from Bear Stearns until its attempts at self help created an almost impossible timing situation; and, finally, that it was Daisy which failed to conduct its business in a way that allowed it to meet even in its own financial projections. Still, I suppose a reasonable trier of fact could determine that Bear Stearns is responsible for Daisy’s debacle, and that is the summary judgment test. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-52, 106 S.Ct. 2505, 2511-12, 91 L.Ed.2d 202 (1986).
However, Kenney reaches too far when he says that the facts could possibly support a breach of fiduciary duty claim. The district court, with that perceptive and informed sen-tentiousness that often characterizes the work of our district judges, said that:
Merely because Bear Steams was hired as an expert consultant to render financial services does not mean it was in a position of superiority in this relationship between two sophisticated business entities. Daisy’s “complete” dependence on Bear Steams, even if it is true, is unjustified and does not render Bear Steams liable for an arms-length business transaction that has gone sour. In addition, the conclusory allegations that Daisy was somehow vulnerable to Bear Steams or that Bear Steams “exerted undue influence” over Daisy are unsupported....
Just so. Nothing in this case suggests that there was any fiduciary relationship whatever between these sophisticated entities or that Kenney can honestly plead one. Ken-ney’s attempt to clothe Daisy in the weeds of a poor put-upon consumer of professional services borders on the ludicrous; I suspect that it is only in conditions of litigation that Daisy’s high-powered executives would be willing to say that they were mere lambs under the protection of the shepherds at Bear Steams. Finally, while there is at least some indication of negligence on the part of Bear Steams, there is no indication of a breach of fiduciary duty.
Thus, with some misgivings, I agree that there may have been negligence. But to leverage this action into a fiduciary duty case breaks down all barriers between mere negligence and breach of fiduciary duty. Of course, I agree that the district judge properly granted summary judgment on the issue of negligent misrepresentation.
Therefore, I concur in part and dissent in part.