Marini v. Adamo
644 F. App'x 33
2d Cir.2016Background
- Plaintiff Rocco Marini (and related plaintiffs) purchased 86 rare coins from dealer Harry Adamo and affiliated coin companies; transactions alleged as investment sales at grossly inflated prices.
- Original 2008 complaint asserted federal RICO and securities claims alongside state-law claims; plaintiffs later dismissed RICO in exchange for a stipulation that the transactions were “securities transactions.”
- After a 12-day bench trial, the district court found Adamo and the coin companies liable under Section 10(b) of the Exchange Act and under New York common law for fraud, breach of fiduciary duty, unjust enrichment, and money had and received; a later order cleared Lisa Adamo of unjust enrichment and money had and received claims.
- The district court made extensive credibility findings and issued detailed findings of fact and conclusions of law supporting fraud and fiduciary-duty findings.
- On appeal, defendants challenged subject-matter jurisdiction (arguing the coin sales were not “securities transactions”) and contended no fiduciary duty arose from the broker relationship; plaintiffs defended the district court’s rulings and damages.
- The Second Circuit affirmed the district court’s judgment largely for the reasons stated below, but held unjust enrichment and money had and received claims were duplicative of fraud/fiduciary claims (so those specific common-law claims could not proceed), without altering damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction / securities characterization | Marini relied on earlier stipulation and argued federal securities claim and long litigation history supported jurisdiction; supplemental jurisdiction appropriate if federal claims lacked merit | Defendants argued the coin transactions were not “securities transactions,” so federal securities claim failed and federal jurisdiction was lacking | Court: District court had jurisdiction; even if transactions were not securities, court properly exercised supplemental jurisdiction over state-law claims given litigation’s advanced stage and familiarity with issues |
| Fraud liability (common law) | Adamo made false, material misrepresentations to induce purchases; Marini reasonably relied | Defendants disputed misrepresentation and reliance; challenged sufficiency of evidence | Court: Affirmed fraud finding — ample evidence and credibility determinations supported liability |
| Fiduciary duty from broker relationship | Marini argued the parties’ close, trust-based relationship created a fiduciary duty beyond an ordinary broker/customer relationship | Defendants argued ordinary non-discretionary broker management does not create fiduciary duty | Court: Held a fiduciary relationship existed because Marini placed complete confidence and reliance in Adamo, giving Adamo control and dominance over Marini |
| Unjust enrichment / money had and received claims | Plaintiffs sought recovery under these equitable theories in addition to fraud/fiduciary claims | Defendants argued overlap with tort claims made these duplicative | Court: Held unjust enrichment and money had and received claims duplicated existing fraud/fiduciary claims and therefore could not proceed — but this did not change damages awarded |
Key Cases Cited
- Kroshnyi v. U.S. Pack Courier Servs., Inc., 771 F.3d 93 (2d Cir. 2014) (factors supporting exercise of supplemental jurisdiction when litigation is advanced)
- Indep. Order of Foresters v. Donald, Lufkin & Jenrette, Inc., 157 F.3d 933 (2d Cir. 1998) (ordinary broker/customer relationship does not generally create fiduciary duty)
- People ex rel. Cuomo v. Coventry First LLC, 13 N.Y.3d 108 (N.Y. 2009) (fiduciary relationship exists when plaintiff reposes high confidence and the other exercises control and dominance)
- Corsello v. Verizon N.Y., Inc., 18 N.Y.3d 777 (N.Y. 2012) (unjust enrichment claim that merely duplicates a conventional contract or tort claim may not proceed)
- Marini v. Adamo, 812 F. Supp. 2d 243 (E.D.N.Y. 2011) (district court consideration of nature of coin transactions during earlier proceedings)
- Marini v. Adamo, 995 F. Supp. 2d 155 (E.D.N.Y. 2014) (bench-trial findings of fact and conclusions of law supporting fraud and fiduciary duty findings)