Jakobiec v. Merrill Lynch Life Insurance , 711 F.3d 217 ( 2013 )

United States Court of Appeals
For the First Circuit
No. 12-2053
THADDEUS J. JAKOBIEC; EDMUND S. HIBBARD, ESQ.,
Administrator of the Estate of Beatrice Jakobiec;
AUDREY LUM, Co-Trustee of the Lillian Smillie Trust; FREDERICK
JAKOBIEC, M.D., Co-Trustee of the Lillian Smillie Trust,
Plaintiffs, Appellants,
v.
MERRILL LYNCH LIFE INSURANCE CO.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul J. Barbadoro, U.S. District Judge]
Before
Lynch, Chief Judge,
Thompson, Circuit Judge,
Casper,* District Judge.
Steven M. Latici, with whom Law Office of Steven M. Latici, PA
was on brief, for appellants.
Emily Gray Rice, with whom Christopher G. Aslin and Bernstein,
Shur, Sawyer & Nelson, P.A. were on brief, for appellee.
March 27, 2013
*
Of the District of Massachusetts, sitting by designation.
THOMPSON, Circuit Judge. Thomas Tessier and his brother
Michael Tessier allegedly bilked brothers Frederick and Thaddeus
Jakobiec and the estate of their mother, Beatrice Jakobiec, out of
millions of dollars.1 This lawsuit is about only one facet of the
Tessiers' overall scheme, their theft of almost $100,000 in life
insurance proceeds due to a trust benefitting Thaddeus. Thaddeus,
along with various persons affiliated with the trust and Beatrice's
estate, brought this lawsuit not against those who actually stole
the money, but against the company that issued the life insurance
policy, Merrill Lynch Life Insurance Co. ("Merrill Lynch"). The
plaintiffs claim that Merrill Lynch made out the insurance proceeds
check to the wrong trust entity, breaching the insurance contract
and thereby allowing the Tessiers to steal the money.
The district court jettisoned the lawsuit on summary
judgment. It concluded that even if Merrill Lynch did breach the
contract, Merrill Lynch did not cause the plaintiffs' losses
because the Tessiers would have stolen the money even if the check
had been made out correctly. We agree with the district court.
BACKGROUND
The Life Insurance Policy
We start our story by adding another family member to the
mix, Beatrice's sister Lillian Smillie. In 1986, Smillie executed
1
Since there are multiple Tessiers and multiple Jakobiecs
involved in this case, we will refer to these individuals by their
first names for ease of reference.
-2-
a will. In it, she bequeathed her entire estate, except for
furniture and funeral and administrative costs, to a trust (which
later received taxpayer identification number XX-XXXXXXX)
benefitting her nephew Thaddeus (the "Smillie Trust").2 Thaddeus,
who has been blind since birth, depended on his family for support.
The will named Thaddeus's brother, Frederick, as trustee of the
Smillie Trust. Smillie passed away in 1988.
In 1989, Beatrice applied for the subject life insurance
policy with Merrill Lynch. Obviously aware of her sister's trust,
Beatrice indicated on the policy application that the policy
beneficiaries would be Frederick and the Smillie Trust, with fifty
percent going to each. The exact language was: "50% Frederick A.
Jakobiec, son, and 50% Frederick A. Jakobiec, Trustee for Thaddeus
J. Jakobiec - IRS ID # XX-XXXXXXX." The policy then issued at some
point, though we do not have a copy of it in the record. Beatrice
passed away some years later on May 11, 2001.
Misplaced Trust
At Beatrice's wake, her son Frederick asked Thomas to
administer Beatrice's estate. Thomas probably seemed like a
natural choice for the task because not only was he a second cousin
to the Jakobiec brothers but he was a licensed attorney that had
represented Beatrice in various matters since 1988, including
acting as the attorney for the Smillie Trust. But Thomas proved to
2
The will did not give the trust an official title.
-3-
be a wolf in sheep's clothing, and Frederick's decision to enlist
his cousin turned out to be a gigantic blunder. You see, Thomas
was going through a bit of a rough patch. His law practice was
struggling, and he had developed a drinking problem that was
getting progressively worse. For Thomas, who admitted that he was
nearing the "tail end" of his career but had failed to build a
"nest egg" for his retirement, the Jakobiecs became the geese that
laid the golden egg.
And so, with the help of his brother Michael, a retired
police captain, Thomas engaged in a campaign of forgery and
subterfuge to raid the bank accounts of Frederick and Thaddeus and
the estate of Beatrice, allegedly stealing over $2 million.3 Of
course, most pertinent for our purposes, is the Tessiers' theft of
the life insurance proceeds that had been slated to benefit
Thaddeus and so we focus in on this.
Wheels of Theft Set in Motion
The groundwork for this particular theft was laid when
Thomas was rummaging through Beatrice's papers after her death. To
add some context, Frederick, according to Thomas, was supposed to
3
After the scheme came to light, Thomas was disbarred and
both Tessier brothers were criminally convicted and sent to prison.
Allegations that were revealed during Thomas's disbarment included
that he had committed multiple forgeries and stole funds from at
least twenty different accounts totaling over $1 million. See
Order, In the Matter of Thomas J. Tessier, LD-2008-0002 (Dec. 24,
2008), available at http://www.nhattyreg.org/assets/1245192998.pdf.
We do not assume the truth of these allegations and they do not
factor in our decision, but we describe them for context.
-4-
contact him after the wake to further discuss Thomas administering
the estate; however, Frederick never did. In fact, Thomas says
that despite diligent efforts on his part to contact Frederick, he
never spoke to him again after the wake. Nonetheless, Thomas
decided to go forward with administering the estate and he headed
over to Beatrice's house4 to start going through her papers,
including correspondence, bank statements, and the like. And
Thomas ultimately used these financial records to institute probate
proceedings for Beatrice's estate in New Hampshire probate court.
Most pertinent for our purposes is the fact that Thomas
came across some type of documentation that alerted him to the
existence of the Merrill Lynch life insurance policy, though it is
unclear exactly what he found.5 Once he learned of the policy's
existence, Thomas and Michael launched a two-front attack.
First, they wrestled away control of the Smillie Trust
from Frederick and this is how they did it. On June 11, 2002, they
filed an ex-parte petition (meaning that Frederick did not
participate) with the probate court to remove Frederick as trustee
4
Thaddeus had always lived in this house with Beatrice prior
to her death but after she died he moved to a nursing home.
5
In his deposition, Thomas affirmatively answered yes when
asked if he came across the actual life insurance policy. However,
in a letter to Merrill Lynch, Thomas said that the policy was
unavailable but that he had the "Investor Account documentation"
for the period of April to May 2002. As for the life insurance
application signed by Beatrice, it does not appear that this is
what Thomas found because he testified that he never saw that
document until his deposition.
-5-
and install Michael as successor trustee of the Smillie Trust,
alleging that Frederick had been neglecting his brother Thaddeus
and failing to pay his bills. The probate court granted the
petition and installed Michael as trustee of the Smillie Trust.
Second, a few weeks later, Thomas fraudulently created a second
trust for Thaddeus, called the "Thaddeus Jakobiec Irrevocable Inter
Vivos Trust," later assigned taxpayer identification number 03-
6095858 (the "Fraudulent Trust"). Michael was named as both
trustee and death beneficiary of this second trust. Thaddeus,
whose signature on the document was forged by Michael,6 was unaware
of the Fraudulent Trust's existence. To summarize, by the end of
June 2002, there were two trusts for the benefit of Thaddeus: the
Smillie Trust, which had been lawfully created in Lillian Smillie's
will and which was the rightful beneficiary of the Merrill Lynch
policy, and the Fraudulent Trust, which had been unlawfully created
by the Tessiers.
The Tessiers Complete Their Plan
On or around July 1, 2002, over a year after Beatrice had
died, Thomas notified Merrill Lynch of Beatrice's death. Thomas
claimed to be representing Thaddeus, whom he assumed was a
6
Michael and Thomas forged both Thaddeus and Frederick's
signatures on several other documents not relevant to the theft we
are concerned with, including multiple documents giving Thomas
power of attorney over Thaddeus and Frederick, a document in which
Frederick purportedly disclaimed interest in his mother's estate,
and a petition purportedly filed by Thaddeus for Thomas to serve as
administrator of Beatrice's estate.
-6-
beneficiary of the life insurance policy. This call led to a
series of letters between Thomas and John Greenwood, a claims
consultant at Merrill Lynch.7 On July 2, Greenwood sent Thomas a
letter asking him to fill out certain forms, including a claimant's
statement.
Thomas responded on July 15. He explained that he was
enclosing the claimant's statement and trust documentation for "a
Testimentary [sic] Trust Under the Estate of Lillian M. Smillie for
the Benefit of Thaddeus Jakobiec," and apparently, according to the
letter, he enclosed documentation indicating that Michael was
trustee for the Smillie Trust, including his probate court
certificate of appointment. However, for some unknown reason,8 the
tax documentation that Thomas enclosed pertained to, and the
claimant's statement also referred to, not the Smillie Trust but
rather the Fraudulent Trust.9
This documentation referring to the Fraudulent Trust
(which of course was created in 2002, many years after the life
insurance was purchased) confused Greenwood. He sent Thomas a
letter on August 2 seeking to clear things up. He noted that the
7
All of the correspondence went to and from the office of
Thomas's law firm, Christy & Tessier, in Manchester, New Hampshire.
8
The district court found the discrepancy inexplicable and we
too glean no explanation.
9
Of course, Thomas did not call it the "Fraudulent Trust" in
his correspondence with Merrill Lynch, but we continue to use this
moniker for ease of reference.
-7-
life insurance policy named Frederick as a trustee for Thaddeus and
that the trust referenced in the policy was established sometime
before 1989 and had a different taxpayer identification number than
the one Thomas included documentation for. Greenwood asked: "Could
there possibly [be] more than one trust similarly styled?".
Thomas responded on September 16. Yes, he explained,
there were two trusts. The Smillie Trust was created in 1988 with
number XX-XXXXXXX. The trust with number XX-XXXXXXX (the
Fraudulent Trust), which Thomas had included documentation for in
his July 15 letter, was a "totally separate Trust created in 2002."
Thomas went on to ask that the insurance proceeds go to the Smillie
Trust. He requested that the amount be made payable to "Michael
Tessier, Successor Trustee of the Lillian Smillie Trust for the
benefit of Thaddeus Jakobiec" and that the "identification number
as indicated should be XX-XXXXXXX."
This letter answered some of Greenwood's questions but it
raised a new one, which Greenwood brought up in a September 27
letter to Thomas: "Who is Lillian Smillie and how does she relate
to our insured, or our insured's Trust?". In an October 21
response, Thomas sought to unravel the mystery. He explained who
Smillie was, described the creation of the Smillie Trust, and
expounded on how Michael came to replace Frederick as trustee.
Thomas indicated that he made a mistake when he listed the
Fraudulent Trust's taxpayer identification number on the claimant's
-8-
statement, and that the Fraudulent Trust was "totally separate and
distinct from the one that concerns you." The Smillie Trust, he
said, was the correct beneficiary of the life insurance policy.
Thomas, who in the letter had referred to the Smillie Trust as both
the "Lillian Smillie Trust for the Benefit of Thaddeus Jakobiec"
and as the "Thaddeus Jakobiec Trust," concluded by asking Greenwood
to make the check "payable to Michael E. Tessier, Successor Trustee
Under the Estate of Lillian M. Smillie, for the Benefit of Thaddeus
Jakobiec."
On November 18, apparently in response to a request from
Greenwood, Thomas sent a copy of the ex parte probate court
petition that he had filed to have Frederick removed as trustee of
the Smillie Trust. A short time later, on November 27, 2002,
Merrill Lynch finally paid up. It wrote a check for $98,533.76
($92,788.50 death benefit plus $5,745.26 interest accruing since
Beatrice's death), which represented Thaddeus's half of the life
insurance pay-out.10 Merrill Lynch made the check payable to
"Thaddeus J. Jakobiec Trust C/O 37 Salmon St. Manchester NH 03104"
(the address of Thomas's law firm, Christy & Tessier).
10
As the reader will recall, the other half of the death
benefit was supposed to go to Frederick. However, using a forged
power of attorney, the Tessiers also got their hands on Frederick's
share in June of 2003. Frederick's half, having accumulated some
additional interest, was $100,455.63 and the Tessier brothers split
this money evenly.
-9-
Within the next week, Michael endorsed the check "Michael
Tessier Trustee," and Thomas added the words "of the Thaddeus J.
Jakobiec Trust." Michael gave the check to Thomas, who deposited
it in his personal bank account on December 4. With the loot
secure, Thomas gave his brother a fifty percent cut - $49,266.88 -
and Michael deposited this money in his wife's personal account the
next day.
PROCEDURE
Thaddeus filed this lawsuit against Merrill Lynch on June
8, 2010. The original complaint contained two counts: breach of
contract and negligence. The complaint alleged that Merrill Lynch
breached the life insurance contract by failing to make out the
insurance check to the Smillie Trust,11 and that Merrill Lynch was
negligent by failing to exercise due care in identifying the
correct beneficiary. After Merrill Lynch filed a motion to
11
The plaintiffs have not been consistent throughout this
litigation with regard to what name they say Merrill Lynch should
have put on the check. The original complaint said that the check
should have been issued to "Michael Tessier, as Successor Trustee
of the Lillian Smillie Trust." The amended complaint stated that
the proper beneficiary was "the Trust of Lillian Smillie for the
benefit of Thaddeus J. Jakobiec," but then stated in the next
paragraph that the check should have been made out to "Michael
Tessier, as Successor Trustee of the Lillian Smillie Trust." The
plaintiffs' brief to this court argues that the outcome may have
been different if Merrill Lynch made out the check to "the Trustee
of the Smillie Trust." These inconsistencies aside, it is clear
that the plaintiffs wanted Merrill Lynch to make payment to the
Smillie Trust (as called for in the life insurance application) and
so, for simplicity sake, we use the "Smillie Trust" as shorthand
for what the plaintiffs say Merrill Lynch should have put on the
check.
-10-
dismiss,12 Thaddeus filed an amended complaint. This complaint
added as plaintiffs the administrator of Beatrice's estate and the
co-trustees of the Smillie Trust, one of whom was Frederick (as one
might expect, Thomas and Michael had been booted from those
positions in the interim). The negligence count was also removed
from the amended complaint and allegations meant to counter a
statute of limitations defense were added.
Merrill Lynch filed a motion to dismiss the amended
complaint, but the district court felt more factual development was
necessary and denied the motion. After discovery, both sides filed
cross-motions for summary judgment. The plaintiffs contended it
was clear that Merrill Lynch had breached the contract. Of course
12
One of Merrill Lynch's arguments was that the lawsuit was
untimely because the supposed wrongful act - its issuance of the
check - happened in 2002, more than seven years before the lawsuit
was filed. The statute of limitations for most tort claims in New
Hampshire is three years but the statute of limitations contains an
exception commonly known as the "discovery rule": "when the injury
. . . [was] not discovered and could not reasonably have been
discovered at the time of the act or omission, the action shall be
commenced within 3 years of the time the plaintiff discovers, or in
the exercise of reasonable diligence should have discovered, the
injury . . . ." N.H. Rev. Stat. Ann. § 508:4; see Lamprey v.
Britton Constr., Inc., 37 A.3d 359, 364-65 (N.H. 2012). Thaddeus
argued that the discovery rule should apply because of the
Tessiers' extensive fraud and Thomas's exclusive control over
Beatrice's personal papers. Thaddeus said he could not have
reasonably discovered this cause of action until 2009 when his
attorney, who had been hired by Frederick to file a malpractice
action against Thomas, received a copy of Merrill Lynch's file and
was granted access to Thomas's personal banking records. The
district court did not definitively decide the statute of
limitations issue, and neither side raises it on appeal, so the
issue is not before us.
-11-
Merrill Lynch disagreed, but it added that even assuming it had
breached the agreement, its breach was not the cause of the
plaintiffs' losses.
The district court agreed with Merrill Lynch's lack of
causation argument. According to the court, the fatal flaw in the
plaintiffs' case was that the Tessiers would have stolen the money
even if Merrill Lynch had made the check out to the correct
beneficiary, the Smillie Trust, as plaintiffs argued. The district
court reasoned, based on the record, that Thomas and Michael had
positioned themselves to have complete control over the Smillie
Trust, and that they intended to use this power to complete the
theft. The district court granted summary judgment to Merrill
Lynch and denied plaintiffs' motion for summary judgment. The
plaintiffs timely appealed.
STANDARD OF REVIEW
We review the grant of summary judgment de novo, meaning
we give a fresh look to the district court's reasoning. Candelario
del Moral v. UBS Fin. Servs. Inc. of P.R., 699 F.3d 93, 99 (1st
Cir. 2012). We view the facts in the light most favorable to the
non-moving party and draw all reasonable inferences in that party's
favor. Rared Manchester NH, LLC v. Rite Aid of N.H., Inc., 693
F.3d 48, 52 (1st Cir. 2012). We need not credit "conclusory
allegations, improbable inferences, and unsupported speculation."
McDonough v. Donahoe, 673 F.3d 41, 46 (1st Cir. 2012) (quoting
-12-
Prescott v. Higgins, 538 F.3d 32, 39 (1st Cir. 2008)). We affirm
summary judgment if the moving party can "show[] that there is no
genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A
'genuine' issue is one that could be resolved in favor of either
party, and a 'material fact' is one that has the potential of
affecting the outcome of the case." Calero-Cerezo v. U.S. Dep't of
Justice, 355 F.3d 6, 19 (1st Cir. 2004).
DISCUSSION
Merrill Lynch offers three different reasons to affirm
the district court, each of which it says would be independently
sufficient. First, it argues that any breach of contract did not
actually cause the plaintiffs' damages (i.e., the rationale of the
district court). Second, it claims that it should not be held
liable because the Tessiers' theft was not a foreseeable
consequence of any alleged breach.13 Third, Merrill Lynch avers
13
Specifically, Merrill Lynch argues that, at the time it
entered into the life insurance contract with Beatrice, it could
not possibly have anticipated that the trustee of the Smillie Trust
(Michael) and the attorney for Beatrice's estate and the Smillie
Trust (Thomas) would steal the policy's proceeds.
-13-
that it did not breach the contract at all.14 Because we agree with
Merrill Lynch on the first issue, we need not reach the other two.
Law of Causation
Even if we assume in the plaintiffs' favor that Merrill
Lynch breached the contract15 by making the check payable to the
"Thaddeus J. Jakobiec Trust," that alone would not be enough for
the plaintiffs to prevail. A defendant who breaches a contract is
only liable for the damages caused by its breach. See Robert E.
Tardiff, Inc. v. Twin Oaks Realty Trust, 546 A.2d 1062, 1065 (N.H.
1988) (providing that "'one who claims damages [for breach of
contract] . . . must, by a preponderance of the evidence, show that
the damages he seeks were caused by the alleged wrongful act'"
(quoting Grant v. Town of Newton, 370 A.2d 285, 287 (N.H. 1977))).
Further, in the contract arena, New Hampshire courts have
14
The particulars of this argument are as follows. Merrill
Lynch contends that it satisfied its contractual obligations
because, regardless of how it made out the check, it delivered the
proceeds to Thomas who was attorney for the estate as well as the
Smillie Trust. The check as written, Merrill Lynch continues, was
sufficient to enable Michael, the trustee of the Smillie Trust, to
apply the funds for the benefit of Thaddeus. In fact, Merrill
Lynch adds, Thomas and Michael were duty bound to apply the
proceeds in this manner.
15
We find it odd that the parties want this court to decide
a breach of contract claim but have not provided us with the
operative contract (the Merrill Lynch policy) or at the very least
stipulated to what it provides. For instance, it would be helpful
to know whether the beneficiary designation in the policy itself
mimicked the designation on the policy application or whether there
were any other provisions in the policy that could shed some light
on what Merrill Lynch's obligations were as far as the manner in
which it was required to pay out proceeds.
-14-
repeatedly followed the Restatement (Second) of Contracts, see,
e.g., Livingston v. 18 Mile Point Drive, Ltd., 972 A.2d 1001, 1006-
07 (N.H. 2009) (relying on the Restatement as further support for
the trial court's determination); Simpson v. Calivas, 650 A.2d 318,
327 (N.H. 1994) (citing the Restatement as support for the trial
court's definition of damages), and so we also look to the
Restatement's treatment of causation. It similarly provides that
the "injured party is limited to damages based on his actual loss
caused by the breach." Restatement (Second) of Contracts § 347
cmt. e. Furthermore, the plaintiff must show that his injury would
not have occurred but for the defendant's conduct.16 See Robert E.
Tardiff, Inc., 546 A.2d at 1066 (finding that the defendant, in
16
Here, all the parties and the district court appear to agree
that it is proper to assess whether but-for causation exists with
respect to a breach of contract action under New Hampshire law.
Our review of New Hampshire law, as well as the Restatement
(Second) of Contracts, supports this proposition. Other states and
circuits have considered this type of causation with respect to
breach of contract claims as well. See, e.g., Barkan v. Dunkin'
Donuts, Inc., 627 F.3d 34, 40 (1st Cir. 2010) (holding that to
succeed on a breach of contract claim under Rhode Island law, the
plaintiff must prove that the defendant's breach was the but-for
cause of his damages, such that the plaintiff would have developed
Dunkin' Donuts stores but for defendant's breach); Citizens Fed.
Bank v. United States, 474 F.3d 1314, 1319 (Fed. Cir. 2007)
(explaining that requiring an injured party to prove but-for
causation in lost profits breach of contract cases is one approach
taken by the courts in the Federal Circuit); Point Prods. A.G. v.
Sony Music Entm't, Inc., 215 F. Supp. 2d 336, 341 (S.D.N.Y. 2002)
(finding that in a breach of contract action, "[p]laintiff cannot
recover if it would have suffered the harm regardless of
defendant's actions"). Of course we do not know the outer
boundaries of how New Hampshire courts would treat this
relationship between but-for causation and contract law, and so we
limit our analysis to what New Hampshire courts have done thus far.
-15-
support of its breach of contract counterclaim, had the burden of
proving that its losses "would not have been incurred but for
[plaintiff's] delay"); Restatement (Second) of Contracts § 347 cmt.
e ("Recovery can be had only for loss that would not have occurred
but for the breach."); see also Mahoney v. Town of Canterbury, 834
A.2d 227, 234 (N.H. 2003) (explaining, in a wrongfully issued
injunction case, that the prevailing party "may recover expenses
that would not have been incurred in the absence of (i.e., but for)
the injunction itself").
Applying the Law to the Facts
Here we think the district court got it right; based on
the undisputed facts on record it is clear the Tessiers would have
stolen the money even if Merrill Lynch had made the check out to
the so-called correct beneficiary, the Smillie Trust. Plaintiffs
have not made the requisite causation showing.
First, it is clear from the record that Thomas was
looking to pilfer the insurance proceeds all along. In fact,
Thomas admitted in deposition testimony that he intended to steal
the money (clearly, a declaration against interest) and
circumstantial evidence confirms this. Within a week of getting
control of both the Smillie Trust and the Fraudulent Trust, Thomas
contacted Merrill Lynch to begin the process of getting the
proceeds. Indeed, the next year, Thomas repeated a similar scheme
to steal Frederick's half of the insurance proceeds. This time
-16-
line, in the context of the Tessiers' broader scheme to bamboozle
the Jakobiecs out of their assets (a sweeping criminal scheme, the
existence of which is clear based on the record), makes pellucid
that the Tessiers were hell-bent on stealing the insurance money
from the get-go. Simply put, this is not a case where a wrongfully
made out check fell into the lap of a well-intentioned trustee who
was suddenly induced to commit a crime - in fact plaintiffs do not
even attempt to make such an argument.
Second, and most significantly, the uncontradicted
evidence confirms that the Tessiers had unfettered control of the
two trusts that could have potentially received the insurance
money. First, with respect to the Smillie Trust, Thomas got
Frederick completely out of the picture and installed Michael as
trustee. Second, Thomas created the Fraudulent Trust, in which
Michael played the dual role of trustee and death beneficiary.
Accordingly, when the dust settled, Thomas was in place as the
attorney for both the Smillie Trust and the Fraudulent Trust, and
Michael was positioned as the trustee for both. The Tessiers
effectively controlled the whole swindle A to Z. Therefore if the
check had been made out to the Smillie Trust, it too would have
been sent to Thomas's firm (since he was the attorney for that
trust), Thomas would have called in Michael (since he was the
trustee of the Smillie Trust), and Michael as trustee would have
-17-
endorsed the check. So we end up right back in the same place -
with the funds deposited in the personal accounts of the Tessiers.
Plaintiffs try to get around this illation by arguing
that we do not know what would have happened if the check had been
made out correctly; something they say might have tripped up the
Tessiers along the way. Plaintiffs suggest that a rightfully made
out check might have tipped off someone in Thomas's law office as
to what was happening. Plaintiffs opine that because the Smillie
Trust was an open file in Thomas's office, a check made out to the
Smillie Trust might have raised a red flag (they do not say what
kind) with someone (they do not say who) in the office. This
theory is pure speculation. There is no evidence in the record to
support it and plaintiffs' counsel admitted as much at oral
argument. There is no deposition testimony from the office staff
and no documentation about office procedures. We do not know if
members of Thomas's office staff were in any position to see the
check in the first place, or how incoming proceeds were ordinarily
directed for processing, or who (if anyone) had the authority to
confront Thomas about any discrepancies. Conclusory allegations
and unsupported speculation are insufficient to defeat summary
judgment, rather "a measure of factual specificity is required."
Iverson v. City of Boston, 452 F.3d 94, 98 (1st Cir. 2006). We do
not have that specificity here.
-18-
Nor is there any evidence that the Tessiers' scheme could
have been picked up by the probate court, as the district court
correctly noted. Even though Thomas realized once he started
communicating with Greenwood that the Smillie Trust was the proper
beneficiary of the life insurance policy, Thomas never reported
this fact to the probate court, though he should have since the
proceeds were assets of the estate. And because he never told,
Thomas never had to account to the probate court to dispose of the
proceeds, and so the probate court was never in a position to
detect the theft. Any suggestion to the contrary is pure
optimistic conjecture.
Also relevant to our causation determination is the fact
that Thomas twice specifically asked Greenwood to make the
insurance check payable to the Smillie Trust. He obviously thought
that was the best way to get his hands on the money. In fact, the
October 21 letter directed Greenwood not to make the check out to
the Fraudulent Trust, stating: "[t]hat trust is totally separate
and distinct from the one that concerns you." Far from thwarting
the theft (as the plaintiffs now claim), making the check out to
the Smillie Trust would have effectuated Thomas's scheme exactly as
he planned it.
The summary judgment stage is "the put up or shut up
moment in litigation." Goodman v. Nat'l Sec. Agency, Inc., 621
F.3d 651, 654 (7th Cir. 2010) (internal quotation marks omitted).
-19-
Faced with a defendant's motion for summary judgment, a plaintiff
must come forward with some evidence showing a genuine dispute of
material fact if he wants to get in front of a jury. A plaintiff's
failure to produce any evidentiary proof concerning one of the
essential elements of his claim is grounds for summary judgment.
See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Here
plaintiffs cannot establish causation because, as we said,
plaintiffs can only recover if their loss would not have happened
but for Merrill Lynch's breach. The undisputed facts on record,
detailed above, make clear that even if Merrill Lynch had made out
the check to the Smillie Trust, as plaintiffs so advocate, the
Tessiers still would have taken that check and converted it to
their own personal use.
The record presents overwhelming evidence in Merrill
Lynch's favor and no persuasive evidence in the plaintiffs' favor
on the issue of causation. Unfortunately for plaintiffs, the
summary judgment stage is the time when a plaintiff must
"affirmatively point to specific facts that demonstrate the
existence of an authentic dispute." Kenney v. Floyd, 700 F.3d 604,
608 (1st Cir. 2012) (internal quotation marks omitted). Plaintiffs
have not done that here. Because the evidence is so lopsided on
the essential element of causation that no reasonable jury could
decide for the plaintiffs, Merrill Lynch is entitled to summary
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judgment. See Collins v. Univ. of N.H., 664 F.3d 8, 20 (1st Cir.
2011).
CONCLUSION
The Jakobiecs have undoubtedly suffered grave injustices
but those injustices were caused by the Tessiers, and not by
Merrill Lynch. Because of the extensive groundwork laid by the
Tessiers for their criminal scheme, they could have and would have
stolen the insurance money even if Merrill Lynch did exactly what
the plaintiffs think it should have done. The district court
correctly granted summary judgment to Merrill Lynch, and denied
plaintiffs' motion for summary judgment.
Affirmed.
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