         12-3136-cv
         Dover Limited v. T.J. Morrow, T.J. Morrow P.C.

                                 UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                              SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1,
2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.


 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Thurgood Marshall United
 3       States Courthouse, 40 Foley Square, in the City of New York,
 4       on the 23rd day of August, two thousand thirteen.
 5
 6       PRESENT: RICHARD C. WESLEY,
 7                PETER W. HALL,
 8                SUSAN L. CARNEY,
 9                         Circuit Judges.
10
11
12
13       DOVER LIMITED,
14
15                                     Plaintiff-Appellee,
16
17                             -v.-                                                 12-3136-cv
18
19       T.J. MORROW, T.J. MORROW P.C.,
20
21                                     Defendants-Appellants.
22
23
24       FOR APPELLANTS:               (Pro Se Attorney) T.J. Morrow,
25                                     Morrow & Co., New York, NY
26
27       FOR APPELLEE:                 No Appearance; No Opposition brief;
28                                     expressly waived
29
30            Appeal from the United States District Court for the
31       Southern District of New York (Swain, J.).
32
33
1        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED

2    AND DECREED that the judgment of the United States District

3    Court for the Southern District of New York is AFFIRMED.

4        Defendants-Appellants T.J. Morrow and T.J. Morrow P.C.

5    appeal from a judgment following a jury trial held May 14-

6    16, 2012, before the United States District Court for the

7    Southern District of New York (Swain, J.) and an order

8    denying Defendants’ motion for new trial and renewed motion

9    for judgment as a matter of law. We assume the parties’

10   familiarity with the underlying facts, the procedural

11   history, and the issues presented for review.

12       Defendant Morrow is an attorney in private practice in

13   New York. At the time of the events in question, Morrow

14   practiced through a professional corporation bearing his

15   name.   That entity, T.J. Morrow P.C., is a separate

16   defendant in this action. Plaintiff Dover Limited is a Hong

17   Kong investment management company. In 2006, Morrow traveled

18   to Singapore with Thomas Begley to propose a joint business

19   deal to Dover’s board of directors. The parties agreed, and

20   following this meeting, Dover transferred $900,000 to

21   Morrow’s attorney escrow account as a loan to Begley to

22   complete the proposed deal.

23


                                   2
1        Ultimately the venture never materialized. Nonetheless,

2    the $900,000 was disbursed to Begley, Morrow, and other

3    entities. Morrow received $300,000 as a “structuring fee”

4    and an additional $100,000 as a “legal fee,” for his role in

5    the abortive transaction. Afterwards Dover brought claims

6    against Morrow and T.J. Morrow P.C. (collectively,

7    "defendants") for fraud, breach of fiduciary duty, breach of

8    contract, unjust enrichment, violations of the Securities

9    Exchange Act, and conversion. The district court dismissed

10   the securities fraud claim before trial. At trial, the jury

11   found neither defendant liable for breach of contract or

12   fraud.    The jury found Morrow, as an individual, liable for

13   conversion and breach of fiduciary duty, and both Morrow and

14   T.J. Morrow P.C. liable for unjust enrichment. The district

15   court, however, granted Morrow’s post-trial motion to

16   dismiss the conversion claim. Dover did not file a cross-

17   appeal.

18       On appeal, defendants make three arguments.    First,

19   Morrow contends that the district court improperly charged

20   the jury on the breach of fiduciary duty claim.    Second,

21   Morrow argues that the district court should have dismissed

22   the fiduciary duty claim as a matter of law, and both

23   defendants argue that the district court should have


                                    3
1    dismissed the unjust enrichment claim as a matter of law.

2    Finally, for reasons that are not clear, an exhibit that was

3    never introduced as evidence was assertedly available to the

4    jury during its deliberations. Defendants contend that, as a

5    consequence of the first and third errors, they are entitled

6    to a new trial.   For the reasons stated below, we reject

7    each of these arguments.

8    Jury Instructions:

9        Morrow argues that in order to find him liable for

10   breach of a fiduciary duty, his actions must have been a

11   “substantial factor” in causing Dover's loss. Since the

12   district court did not instruct the jury on the “substantial

13   factor” test, Morrow claims, he is entitled to a new trial.

14   Morrow misapprehends the law.

15       As an initial matter, Morrow concedes that he did not

16   preserve this objection and that we review for plain error.

17   Consequently, we will not reverse unless “taken as a whole,

18   the jury instructions gave a misleading impression or

19   inadequate understanding of the law.” Luciano v. Olsten

20   Corp., 110 F.3d 210, 218 (2d Cir. 1997).

21       In arguing for the “substantial factor” jury

22   instruction, Morrow seems to suggest that it is a more


                                     4
1    stringent causation standard than ordinary proximate cause.

2    That is incorrect.   New York courts have two “substantial

3    factor” tests for proximate causation. When there are

4    intervening, superceding, or multiple causes creating tort

5    damages, New York applies a “substantial factor” test to

6    determine ordinary proximate causation. In unjust enrichment

7    or restitution cases, however, New York courts have also

8    used a “substantial factor” test for proximate causation

9    that is more generous to plaintiffs. Am. Fed. Grp., Ltd. v.

10   Rothenberg, 136 F.3d 897, 907 n. 7 (2d Cir. 1998).

11       In this case, the district court instructed the jury to

12   determine whether the plaintiff’s loss was a “direct result

13   of” Morrow’s breach of fiduciary duty and the jury awarded

14   Dover only what Morrow allegedly misappropriated.

15   Accordingly, the district court applied the more stringent

16   standard; Morrow's rights were not affected.

17   Fiduciary Duty and Unjust Enrichment:

18       Defendants argues that the district court erred in

19   failing to dismiss the fiduciary duty and unjust enrichment

20   claims against them after dismissing the conversion claim.

21   Specifically, Morrow contends that the money he took was

22   funds loaned by Dover to Begley. Since a creditor ceases to


                                   5
1    have an ownership interest in loan proceeds once they are

2    distributed to the debtor, Morrow argues, even if his taking

3    was wrongful, it was not a wrong against Dover.

4        This argument lacks merit. It is true, as Morrow points

5    out, that a conversion claim requires that the plaintiff

6    have a possessory interest in the converted property.

7    Citadel Mgt. Inc. v. Telesis Trust, Inc., 123 F. Supp. 2d

8    133, 147 (S.D.N.Y. 2000). The district court, however,

9    dismissed Dover’s conversion claim, and Dover does not

10   challenge that ruling.

11       Breach of fiduciary duty, on the other hand, does not

12   have such exacting requirements. It is a broad claim, based

13   on damage resulting from a breach of trust, not the

14   ownership of specific property. Penato v. George, 52 A.D.2d

15   939, 942 (2d Dept. 1976). Unjust enrichment is similarly

16   based on “broad considerations of right, justice and

17   morality.” New York v. Int'l Asset Recovery Corp., 56 A.D.3d

18   849, 852-53(3d Dept. 2008). New York courts have found that

19   a defendant may be liable for unjust enrichment even though

20   the plaintiff technically did not have legal title to the

21   misappropriated property. Id. The jury concluded that Morrow

22   created a relationship of trust with Dover and abused that


                                  6
1    relationship for his own gain. The record supports such a

2    finding and we will not disturb it here.

3    Erroneously Admitted Evidence:

4        Sometime following the trial, Morrow claims to have

5    found a two-page email exchange between one of Dover’s

6    directors, Tom Begley, and several other persons in a box

7    that purportedly contained all the evidence that had been

8    before the jury during its deliberations. The email exchange

9    was pre-marked as plaintiff’s exhibit 38, but was never

10   admitted into evidence. It may be that the email was given

11   to the jury in place of the properly admitted exhibit 38.

12   Whether or how this happened is unclear. Morrow contends

13   that opposing counsel intentionally switched the exhibits,

14   that the email prejudiced him, and that he is therefore

15   entitled to a new trial.

16       We need not address how, or for that matter whether, at

17   the time of the jury’s deliberations, the exhibits were

18   switched to determine that Morrow is not entitled to a new

19   trial. For the purposes of our analysis only, we will assume

20   that the email in question was before the jury during their

21   deliberations. That fact is of no import. “[E]ven an

22   erroneous evidentiary ruling will not lead to reversal



                                  7
1    unless affirmance would be inconsistent with substantial

2    justice. . . .    We will not conclude that a substantial

3    right was affected unless it is likely that in some material

4    respect the factfinder's judgment was swayed by the error.”

5    Perry v. Ethan Allen, Inc., 115 F.3d 143, 150 (2d Cir. 1997)

6    (quotations omitted).

7        Here, Morrow was neither a sender, a recipient, nor

8    even mentioned in what Morrow claims was the email.

9    Moreover, the email exchange took place in 2005, before

10   Morrow’s earliest contact with Dover.    The email does,

11   however, criticize Tom Begley. This actually bolsters

12   Morrow's theory at trial that Begley was responsible for the

13   misappropriation of Dover’s money. Since the erroneously

14   admitted email did not prejudice Morrow, he is not entitled

15   to a new trial.

16       For the foregoing reasons, the judgment of the district

17   court is hereby AFFIRMED.

18                                FOR THE COURT:
19                                Catherine O’Hagan Wolfe, Clerk
20

21




                                    8
