Kramer v. Unitas

• Decision Date: 06 November 1987
• Docket Number: No. 86-5079,86-5079
• Citation: 831 F.2d 994
• Parties: Benjamin KRAMER, as personal representative of the Estate of Harry Kramer, Leo Savino and Mary Savino, his wife, Plaintiffs-Appellants, v. Johnny UNITAS, Jack Drury and Associates, Inc., Jack Drury, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 994

831 F.2d 994

56 USLW 2324

Benjamin KRAMER, as personal representative of the Estate of Harry Kramer, Leo Savino and Mary Savino, his wife, Plaintiffs-Appellants, v. Johnny UNITAS, Jack Drury and Associates, Inc., Jack Drury,

Defendants-Appellees.

No. 86-5079.

United States Court of Appeals,

Eleventh Circuit.

Nov. 6, 1987.

Robert B. Miller, Friedman & Miller, North Miami Beach, Fla., Charles L. Weissing, Kass, Hodges & Massari, Tampa, Fla., for plaintiffs-appellants.

Charles M. Tatelbaum, Melnicove, Kaufman, Weiner, Smouse & Garbis, P.A., Baltimore, Md., for defendants-appellees.

Charles M. Tatelbaum, Kass, Hodges & Massari, Tampa, Fla., for Unitas.

Appeal from the United States District Court for the Southern District of Florida.

Before JOHNSON and EDMONDSON, Circuit Judges, and HOFFMAN ^*, Senior District Judge.

EDMONDSON, Circuit Judge:

This appeal raises an interesting question regarding Florida's state law on fraud. Plaintiffs-appellants challenge the district court's grant of summary judgment to defendants-appellees. Specifically, plaintiffs contend that a jury should decide whether defendants made any misrepresentations and whether defendants acted knowingly or recklessly, inducing plaintiffs' justifiable reliance. Today we affirm the district court and conclude that the court applied the proper legal standards when it granted defendants' summary judgment motions.

Defendant Johnny Unitas is a well known football player who starred as a quarterback for the Baltimore Colts. He does not have any specialized financial acumen, although he has operated a restaurant. In 1979 First Fidelity Financial Services, Inc., a Florida corporation that acted as a licensed mortgage/investment broker, contacted Unitas; First Fidelity offered to pay Unitas a commission if he acted as the company's spokesman. ¹ Thereafter Unitas agreed and provided some pictures and voice work for an advertising campaign.

Defendants Jack Drury and his agency, Jack Drury & Associates, Inc. [collectively referred to as "Drury"], a Florida corporation, handled the agreement between Unitas and First Fidelity. Under that agreement Unitas promised to "render services as an on-camera player for the production of television commercials, radio commercials and allow his likeness to be used in print and collateral material." In return, Unitas received $5,000.00 compensation, while Drury earned $12,000.00. Furthermore, Unitas and Drury reserved the right "to have reasonable approval over all copy for the above services."

Thereafter, Drury helped to develop certain radio spots that featured Unitas as First Fidelity's spokesman. In the spots Unitas reminded his Florida audience of his reputation as a football player and introduced his "friends at First Fidelity." A First Fidelity representative then announced that "you can earn up to 18.33% annual yield," that the investment purchase "may be insured," and that the company meets "all prudent man requirements." Unitas then closed by inviting the public to call First Fidelity for more information.

Subsequently, First Fidelity printed newspaper advertisements and brochures, which it sent to interested investors. These advertisements and brochures contained similar, more detailed information on First Fidelity's investment portfolio; they likewise featured Unitas, whose picture and purported signature ² appeared next to the company's statements. Unlike the radio spots, however, it seems that Unitas never saw or approved of the printed materials. ³

Harry Kramer--whose personal representative Benjamin Kramer now sues on behalf of his estate--, Leo Savino, and his wife, Mary Savino, are Florida residents who invested with First Fidelity. After hearing Unitas' radio spots and seeing the newspaper advertisement, they wrote for more information. First Fidelity responded by sending a company letter along with a brochure. Kramer and the Savinos then called First Fidelity and spoke with a company vice president, who positively assured them a high return on their investment as well as some "insurance." Later, Kramer drove to the offices of Balogh Securities, Inc., a First Fidelity subsidiary. After meeting with a sales representative, Kramer invested $56,500.00 in a First Fidelity mortgage pool. A few days later the Savinos invested $20,000.00.

First Fidelity proved to be a fraud. ⁴ The business soon filed for bankruptcy, and its investors lost practically all of their money. The present case arose when Kramer and the Savinos sued Unitas and Drury for common-law fraud, inter alia. ⁵

Before the pre-trial conference, all defendants moved for summary judgment on the grounds that the facts did not establish any elements of claims for fraud or conspiracy. ⁶ A magistrate found no evidence of a conspiracy and recommended that Drury be granted summary judgment; the magistrate recommended against summary judgment for Unitas. After Unitas objected to the magistrate's report, the district court considered all of defendants' motions.

On December 19, 1985, the district court partially adopted the magistrate's report and granted defendant Drury's summary judgment motion. ⁷ On May 29, 1985, the district court granted Unitas' summary judgment motion and entered summary final judgment based upon the following rationale:

Plaintiffs do not contest Unitas' contention that he had no involvement with the creation, promotion or dissemination of the brochures.... Without the premise that Unitas actually made the misrepresentation at issue, the Court's analysis must cease. The unrebutted facts of this case show that Unitas did not make any representation upon which the plaintiffs relied and thus no case for actionable fraud can be made against him.

Kramer v. Unitas, No. 83-1324 (S.D.Fla. May 29, 1986).

On appeal our review of this case necessarily begins with a jurisdictional question that we raise sua sponte. Plaintiffs filed their notice of appeal after the district court granted defendant Drury's summary judgment motion, but apparently before the court formally granted defendant Unitas' motion. See note 7. Plaintiffs thus ask us to review all defendants' motions even though no summary final judgment had been entered prior to plaintiffs' notice of appeal. Our case law states that "a premature appeal [is] reviewable where a subsequent judgment of the district court effectively terminated the litigation ... [and] [n]o new notice of appeal was filed after the subsequent judgment...." Robinson v. Tanner, 798 F.2d 1378, 1382 (11th Cir.1986) (interpreting the holding in Jetco Electronic Industries, Inc. v. Gardiner, 473 F.2d 1228, 1231 (5th Cir.1973)), cert. denied, --- U.S. ----, 107 S.Ct. 1979, 95 L.Ed.2d 819 (1987); ⁸ see also Markham v. Holt, 369 F.2d 940, 942 (5th Cir.1966). Thus, even though the notice of appeal was premature, we find that appellate jurisdiction properly exists in this case to review all of plaintiffs' claims.

We next turn to the procedural posture of plaintiffs' appeal. Because the district court granted defendants' summary judgment motions, we likewise look to the Fed.Rule Civ.Proc. 56(c) standard: ⁹ summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The Supreme Court has interpreted this standard to mandate summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which the party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (discussing the quantum of evidence necessary to withstand summary judgment). ¹⁰ Several recent cases have granted summary judgment to defendants who faced fraud or fraud-like claims. See, e.g., Windon Third Oil & Gas v. Federal Deposit Ins. Corp., 805 F.2d 342, 345-47 (10th Cir.1986) (relying on Celotex and Anderson, while upholding summary judgment against plaintiffs' SEC Rule 10b-5 claims), cert. denied, --- U.S. ----, 107 S.Ct. 1605, 94 L.Ed.2d 791 (1987); Macon-Bibb County Hosp. Auth. v. Georgia Kaolin Co., 646 F.Supp. 90, 92-95 (M.D.Ga.1986) (relying on Celotex while granting summary judgment against plaintiff's common-law fraud claim), aff'd, 817 F.2d 98 (11th Cir.1987).

Although fraud claims ordinarily involve material fact disputes that may preclude a grant of summary judgment, this is not such a case. As the district court aptly noted, based on the record plaintiffs failed to surmount at least one elementary hurdle: neither Drury nor Unitas made any false representations regarding First Federal's investment offerings. Defendants concededly approved and participated in the Florida radio spots; but Unitas merely introduced himself, called first federal representatives his "friends", and asked the audience to call First Federal for more information. Unitas' contract reserved the right to approve all subsequent promotional features; yet nothing in the district court's records suggests that Unitas or Drury knew about the newspaper advertisements or brochures, which in any event contained no representations by the defendants.

To prevail under Florida law plaintiffs had to prove all of the following elements: "a false representation of material fact, with knowledge of the representation's falsity or a negligent representation without a reasonable basis, intent to induce reliant action, and damage resulting from justifiable reliance." Cameron v. Outdoor Resorts of America, Inc., 608 F.2d 187, 195 (5th Cir.1979), modified on reh'g, 611 F.2d 105 (1980). Plaintiffs fail to meet even the first, threshold element.

Plaintiffs cite several authorities that apply...