Goldman v. Bequai, 92-7197

• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)
• Writing for the Court: HARRY T. EDWARDS
• Citation: 19 F.3d 666
• Parties: Florence GOLDMAN, Appellant, v. August BEQUAI, et al., Appellees.
• Docket Number: No. 92-7197,92-7197
• Decision Date: 25 May 1994

Page 666

19 F.3d 666 305 U.S.App.D.C. 227 Florence GOLDMAN, Appellant,
v.
August BEQUAI, et al., Appellees. No. 92-7197. United States Court of Appeals,
District of Columbia Circuit. Argued Jan. 31, 1994.
Decided April 1, 1994.
As Amended April 1, 1994.
Suggestion for Rehearing In Banc Denied May 25, 1994.

Sheldon E. Bernstein, Washington, DC, argued the cause for appellant. With him on the briefs was Lawrence M. Mann, Washington, DC.

David P. Durbin, Washington, DC, argued the cause for appellee. With him on the brief was C. Alexander Hewes, Jr., Washington, DC.

Before: WALD, EDWARDS and BUCKLEY, Circuit Judges.

Opinion for the Court filed by Circuit Judge EDWARDS.

HARRY T. EDWARDS, Circuit Judge:

In this diversity action, Florence Goldman, a widow in her eighties, appeals a grant of summary judgment against her in her suit alleging that appellee August Bequai, an attorney and long-time friend of Goldman's family, fraudulently induced her to convey to him substantially all of her property shortly after the death of her husband. Appellant brought claims against appellee for fraud and deceit, breach of fiduciary obligation, tortious conversion, and legal malpractice; and against appellee's wife, Mary Ryan Bequai, for breach of fiduciary obligation. After permitting limited discovery, the District Court ruled that Goldman's claims against appellee were barred by the three-year statute of limitations in the District of Columbia. The trial court rejected Goldman's contentions

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that the running of the limitations period should have been equitably tolled.

In ruling against Goldman, the District Court found that appellant knew or should have known that she had been injured by August Bequai at the time she conveyed her property to him, rather than four years later when one of the properties was sold and she learned that he had retained half the proceeds. The trial court dismissed appellant's suit against Mary Ryan Bequai for failure to state a claim, ruling that there was nothing in the record to indicate that Goldman and Ms. Bequai had been in a fiduciary relationship.

We uphold the District Court's dismissal of Goldman's claim against Mary Ryan Bequai. However, we reverse the summary judgment granted in favor of August Bequai and remand for further proceedings. The record makes it clear that appellant has alleged facts which, if proven at trial, could serve to equitably toll the statute of limitations under several different doctrines. Under each of these theories, the relevant question is not whether some ill-defined "reasonable plaintiff" should have discovered her injury within the limitations period, but whether it was reasonable for a plaintiff in Goldman's situation to have failed to do so. Appellant's complaint raises a number of material factors that are relevant to this inquiry, such as her advanced age, required use of medication for depression, close relationship with August Bequai, and inexperience in business dealings. Any conclusions to be drawn with respect to these conditions are necessarily highly fact-bound; and the facts and inferences to be drawn therefrom are seriously contested. Thus, Goldman's complaint cannot be disposed of on summary judgment.

I. BACKGROUND

A. Facts of the Case ¹

Florence Goldman's husband died on October 31, 1985, after a long bout with Alzheimer's and Parkinson's diseases. For several years prior to her husband's death, Goldman cared for him at home. During much of her husband's illness and for some time thereafter, Goldman was under the care of a psychiatrist, who treated her for depression stemming from the strain and grief she experienced because of her husband's declining health. As part of this therapy Goldman was treated with antidepressant drugs, which she alleges had a negative effect on her cognitive processes.

Goldman's Complaint described August Bequai as a long-time friend whom she regarded as almost a member of her family. Bequai in turn described Goldman's husband as a "surrogate father," and stated that both Mr. and Mrs. Goldman often referred to him as their "good son." Affidavit of August Bequai pp 10, 11, reprinted in Joint Appendix ("J.A.") 792. Bequai is an attorney, and has written several books about white-collar crime and served as an adjunct professor or lecturer at several universities. Id. p 3 at J.A. 790. Goldman alleged in her complaint that during her husband's illness and after his death, she looked to Bequai as her "adviser and attorney" in her financial affairs. Complaint p 10, reprinted in J.A. 4.

In January, 1986, three months after her husband's death, Goldman conveyed to Bequai joint tenancy with a right of survivorship in a condominium in Bethesda, Maryland, and in a partnership interest in property at 423 Massachusetts Avenue, N.W., in Washington, DC. Ten dollars ($10) was given in consideration for the transfer of each property. See Deed of Sale of Massachusetts Avenue Property, reprinted in J.A. 272; Deed of Sale of Bethesda Property, reprinted in J.A. 277. Goldman had no legal counsel or independent advice of any sort, and she alleges that Bequai did not fully explain the nature of the transactions to her. There were no witnesses to the transactions other than the notary, whose commission apparently had expired several months prior to the signing of the deeds.

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The Massachusetts Avenue property was sold in January, 1990, and the proceeds attributable to the Goldman/Bequai partnership share were distributed to them. Both Bequai and Goldman were represented at the closing by Robert Pollock, an attorney hired by Bequai. Goldman, however, described Pollock as "a flunky who did [Bequai's] bidding." Deposition of Florence Goldman, reprinted in J.A. 405. After the sale of the Massachusetts Avenue property, Bequai accompanied Goldman to the bank, where both placed their proceeds in investment accounts that were opened that day. Bequai placed his money in an account he owned jointly with his wife. Goldman placed her share in a joint account with Bequai.

In her deposition, appellant stated that, at least as early as 1986, she, her son (Dennis Goldman), and Bequai had discussed starting a business that would employ both Goldman and her son. Dennis Goldman stated in an affidavit that Bequai had said that he needed to be listed as an owner of the Massachusetts Avenue property in order adequately to represent the Goldmans' interests during negotiations over the sale of the property, and that Bequai told him that the transfer "would be temporary, and solely for the limited purpose of inflating his financial worth on paper" while he looked for a business in which to invest. Affidavit of Dennis Goldman p 2, reprinted in J.A. 111-12. Florence Goldman stated that Bequai told her that he needed to be a part owner in order to "participate fully" in negotiations for the sale of the property, and to locate a suitable business opportunity for himself and the Goldmans. Deposition of Florence Goldman, reprinted in J.A. 434. Goldman further stated that:

He said that it was necessary in order to represent me that he had to have his name on the property as a half owner. But all the proceeds from whatever I had, except to live on, would be going into the business and a future for my son and a future for me. That's what we were building on.

Id. at J.A. 432-33. According to appellant, "this is why we let him do this, not ever realizing that I was relinquishing my full interest." Id. at J.A. 431. Goldman stated that it was her understanding that the purpose of the documents she signed conveying a joint tenancy in her properties to Bequai was: "To give him stature in negotiating for the business for the three of us." J.A. 439. At several points in her deposition, Goldman stated that she relied on Bequai's representations and so did not read the documents she signed.

In August 1987, at Bequai's dictation, Goldman hand wrote a power of attorney authorizing her son to represent her "in all matters pertaining to the sale" of the Massachusetts Avenue property. See Power of Attorney, reprinted in J.A. 257. The purpose of this power of attorney was ostensibly to allow Dennis Goldman to attend partnership meetings concerning the sale of the property. Florence Goldman indicated that Bequai suggested to her that it would be too much of a strain for her to attend these meetings herself.

Goldman stated in her deposition that her "first inklings" that Bequai had "deceived" her came in June of 1990, after she received the money for the sale of the Massachusetts Avenue property: "His name was on my half. His name was on everything I had: my checking account, my savings account. The other half he put in his name and his wife's name and I couldn't understand that." Deposition of Florence Goldman at J.A. 327. It appears that there was also a disagreement between Dennis Goldman and Bequai at about this time. Both men stated that they formerly were very close friends, and Bequai had employed Dennis Goldman for some time as an administrative member of his legal practice. However, in middle to late 1990, the two had an argument stemming at least in part from Bequai's handling of Florence Goldman's finances. As a result of this quarrel, Bequai dismissed Dennis Goldman from his employ.

B. Decisions Below

Appellant filed her Complaint in the instant action on November 15, 1991, over five years after she conveyed an interest in her property to August Bequai. Goldman brought claims against Bequai for fraud and deceit, breach of fiduciary obligation, tortious conversion, and legal malpractice. In addition,

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appellant brought an action against Bequai's wife, Mary Ryan Bequai, for breach of fiduciary obligation. Ms. Bequai was an employee of Sovran Bank, the bank at which Goldman and August Bequai opened accounts with the proceeds of the sale of the Massachusetts Avenue property; however, the bank was not alleged to have been otherwise...