Filed: Mar. 13, 2008
Latest Update: Feb. 22, 2020
Summary: for state banking laws.Massachusetts federal district court and a four-day trial was held.-2-, the custody agreement by issuing erroneous account statements; But Ellrich did not object to the instruction;banking regulations by dishonoring two Convergent checks., 130 F.3d 477, 480 (1st Cir.
Not for Publication in West's Federal Reporter
United States Court of Appeals
For the First Circuit
No. 07-1115
DAVID J. ELLRICH, INDIVIDUALLY,
Plaintiff, Appellant.
__________
MORGAN FINANCIAL ADVISORS, INC.,
Plaintiff,
v.
U.S. BANK NATIONAL ASSOCIATION, d/b/a US Bank,
f/k/a Firstar Bank,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Boudin, Chief Judge,
Selya, Senior Circuit Judge,
and Lipez, Circuit Judge.
David J. Ellrich on brief pro se.
Timothy C. Sullivan and Taft Stettinius & Hollister LLP on
brief for defendant, appellee.
March 13, 2008
Per Curiam. David Ellrich, the plaintiff in the trial
court, served as president of Morgan Financial Advisors ("Morgan"),
which in turn served as investment advisor to the Convergent Market
Fund Series II, LP ("Convergent"). Convergent was a Delaware-based
hedge fund that traded in mutual fund indices and futures, a type
of high risk investing. From December 2000 until April 2003,
Ellrich managed a custodial account on Convergent's behalf with
U.S. Bank National Association ("U.S. Bank" or "Bank"), an Ohio
corporation.
As custodian, U.S. Bank agreed, among other things, to
process orders for the purchase or sale of securities for the
accounts, to accept or withdraw sums upon Convergent's request,
and, pertinently for our purposes, to provide Convergent's designee
with monthly account statements showing all activity from the
previous month and the value of each asset held in the account.
After Convergent dissolved in April 2003 and assigned its
remaining interests to Ellrich, Ellrich brought suit in
Massachusetts state court against U.S. Bank, claiming that
Convergent's losses were caused by U.S. Bank's faulty record-
keeping, violations of the Master Custody Agreement, and disregard
for state banking laws. In due course, the case was removed to the
Massachusetts federal district court and a four-day trial was held.
Ellrich agreed at trial that only two of his claims
should be submitted to the jury: first, that U.S. Bank had breached
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the custody agreement by issuing erroneous account statements; and
second, that U.S. Bank had violated Ohio banking laws by returning
two overdraft checks issued to Morgan out of Convergent's account
after the statutory "midnight deadline" for disavowal. Ellrich
agreed that a third claim, arising under a Massachusetts statute
governing unfair trade practices, would be decided by the trial
judge.
Both the jury and the judge found in favor of the Bank,
and Ellrich now appeals from the final judgment. The heart of
Ellrich's argument at trial was that U.S. Bank violated the terms
of the custody agreement by failing to provide proper monthly
statements. On appeal, Ellrich argues that he was entitled to
judgment as a matter of law on his breach of contract claim because
U.S. Bank conceded before trial that it had issued an erroneous
statement to Convergent.
The short answer is that at trial Ellrich did not move
for judgment as a matter of law on his breach of contract claim
against U.S. Bank and this in turn bars him from making such a
claim on appeal. Fed. R. Civ. P. 50(b); Unitherm Food Sys., Inc.
v. Swift-Eckrich, Inc., 546 U.S. 394, 400-01 (2006). Nor did
Ellrich ask for a new trial after the jury returned its verdict, so
he cannot press such a claim now.
As it happens, the jury would have been hard put to find
that U.S. Bank's issuance of a single inaccurate statement caused
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Ellrich any harm. The Bank's mistake was promptly corrected and
Ellrich did not show that he made any trades in reliance on the
inaccurate version. There appears to have been good reason for the
failure to move for judgment as a matter of law.
Next, Ellrich complains that the district court
incorrectly instructed the jury that only the December 2001
statements remained at issue even though his claim for breach of
contract was based on a three-year "pattern" of contract
violations. But Ellrich did not object to the instruction; indeed,
at the charge conference Ellrich's counsel conceded that the breach
of contract claim should be limited to the December 2001 events
alone, seemingly because damages stemming from the other instances
of alleged breach were too speculative. Any challenge to the jury
instruction is therefore waived. United States v. Wall, 349 F.3d
18, 24 (1st Cir. 2003).
Ellrich then says that the trial court erred in refusing
to admit testimony from his expert witness, William Gormley, about
banking regulations and bank procedures. The district court
pressed Ellrich's counsel to explain what Gormley's testimony would
reveal about whether U.S. Bank's behavior accorded with its
obligations under the Master Custody Agreement. Dissatisfied with
counsel's vague response, the district court excluded Gormley's
testimony.
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We see no abuse of discretion in the district court's
refusal to admit Gormley's testimony. Baker v. Dalkon Shield
Claimants Trust, 156 F.3d 248, 251-52 (1st Cir. 1998). The court
reasonably concluded that Gormley's proposed testimony was not
relevant to the question of whether U.S. Bank violated the Master
Custody Agreement. Even if relevance was not disputed, the meaning
of the pertinent regulations was plainly a matter for the district
court. Nieves-Villanueva v. Soto-Rivera,
133 F.3d 92, 99-100 (1st
Cir. 1997).
Finally, Ellrich urges that the district court erred in
its jury instruction on his claim that U.S. Bank violated state
banking regulations by dishonoring two Convergent checks. The
details are not important because Ellrich raised the instruction
issue only in his reply brief, so it is forfeited. Thomas R.W. v.
Mass. Dep't of Educ., 130 F.3d 477, 480 (1st Cir. 1997).
Affirmed.
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