716 F.3d 296
2d Cir.2013Background
- Terra Firma appeals a 2010 SDNY judgment in Citi case, seeking reversal and new trial due to trial errors.
- EMI Group was auctioned in 2007; Wormsley allegedly told Hands Cerberus was bidding and Terra Firma needed to outbid to win.
- Cerberus allegedly pulled out by May 19, 2007; Terra Firma learned in Sep. 2007 Cerberus did not bid.
- Terra Firma brought fraudulent and misrepresentation claims and tortious interference; district court granted summary judgment on negligent misrepresentation and tortious interference, trial proceeded on others, and Citi won on fraudulent misrepresentation at trial.
- District court instructed the jury on reliance using an English-presumption that Terra Firma argues shifted the burden of proof; the instruction is alleged to be erroneous under English law.
- Second Circuit vacates and remands for new trial due to prejudicial error in jury instruction on reliance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the reliance instruction misstates English law | Terra Firma argues presumption of reliance is a trial burden, not procedural. | Citi contends presumption is procedural and should not shift burden at trial. | Yes, district court erred; misinstruction prejudicial; remand for new trial. |
| Whether negligent misrepresentation should have been decided at summary judgment | Ambiguity in contract terms required factual dispute. | Terms waive negligence liability; proper for summary judgment. | Unpersuasive; affirmed dismissal. |
| Whether fraudulent concealment should have been dismissed as a matter of law | Jury could have found partial truth or later abandonment by Terra Firma. | Evidence insufficient to support concealment claim. | Unpersuasive; affirmed dismissal; |
Key Cases Cited
- Bank of China, N.Y. Branch v. NBM LLC, 359 F.3d 171 (2d Cir. 2004) (misinstruction on burden of proof is not harmless error)
- LNC Invs., Inc. v. First Fid. Bank, N.A., 173 F.3d 454 (2d Cir. 1999) (reversal when jury instructed on standard for reliance)
- United States v. Quattrone, 441 F.3d 153 (2d Cir. 2006) (standard for reviewing jury instruction de novo)
- United States v. Garcia, 413 F.3d 201 (2d Cir. 2005) (district court evidentiary rulings reviewed for abuse of discretion)