Tocco v. Richman Greer Professional Ass'n
912 F. Supp. 2d 494
E.D. Mich.2012Background
- Tocco loaned or invested millions with Zada from 1998–2008; Zada owes Tocco about $5 million remaining.
- Tocco’s funds originated from third-party loans to him by friends and family; no written security or contract with those lenders.
- Zada’s business and financing history includes SEC actions, a state case, and a significant pending inheritance scheme alleged to fund repayments.
- Tocco obtained a March 2009 Settlement/Consent Judgment against Zada, but Zada failed to pay; a separate July 2009 Consent Judgment was entered after litigation.
- Defendants Richman Greer Professional Association and John R. Whittles represented Zada in attempts to settle debts, including Zada’s debt to Tocco, and later faced Tocco’s 2011 misrepresentation suit in Michigan state court.
- Plaintiff asserts state-law claims of fraudulent, negligent, innocent misrepresentation, and silent fraud, arising from Defendants’ supposed misrepresentations to facilitate Zada’s repayment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraudulent misrepresentation viability | Tocco relied on Zada/Defendants’ false inheritance claims. | Defendants did not knowingly misrepresent; statements were beliefs/opinions. | Fraudulent misrepresentation claims dismissed; no evidence of knowingly false statements or reasonable reliance. |
| Negligent misrepresentation viability | Defendants owed Tocco a duty of care and misrepresented facts. | Attorneys owed no duty to adversary; no reasonable reliance. | Negligent misrepresentation claim fails; no duty to adversary established and reliance not reasonable. |
| Innocent misrepresentation viability | Misrepresentations were made in connection with a contract and injury benefitted defendants. | No privity or injury inure to Defendants’ benefit; no contract-based misrepresentation. | Innocent misrepresentation claim fails; no privity or injury inure to the benefit of Defendants. |
| Silent fraud viability | Defendants concealed material facts to create a false impression about Zada’s funds. | No duty of disclosure to adversary; no causal link. | Silent fraud claim dismissed; no duty to disclose or intentional concealment shown. |
Key Cases Cited
- Friedman v. Dozorc, 412 Mich. 1 (1981) (attorney duty conflicts prohibit adversary fiduciary duties)
- Beaty v. Hertzberg & Golden, P.C., 456 Mich. 247 (1997) (no fiduciary duty to nonclient when client’s interests adverse)
- Prentis Family Found., Inc. v. Barbara Ann Karmanos Cancer Inst., 266 Mich.App. 39 (2005) (law firm owes fiduciary duty to client, not adversary)
- Titan Ins. Co. v. Hyten, 817 N.W.2d 562 (Michigan 2012) (no duty to disclose absent special circumstance; opinion on misrepresentation)
- Ouwinga v. Benistar 419 Plan Servs., Inc., 694 F.3d 783 (6th Cir. 2012) (reliance considerations in lawyer-defendants context at summary-judgment stage)
- Vora v. Prather & Assoc., P.C., (Michigan Ct. App. 2001) (2001) (rejects prima facie fraud when evidence insufficient; reliance standards)