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Furtado v. Oberg

United States District Court, D. Rhode Island

February 4, 2019

JAY FURTADO, Plaintiff,
v.
AMY PAGE OBERG and DARROWEVERETT LLP, Defendants.

          MEMORANDUM AND ORDER

          JOHN J. MCCONNELL, JR., UNITED STATES DISTRICT JUDGE

         Jay Furtado has sued Attorney Amy Page Oberg and the law firm of DarrowEverett LLP for legal malpractice, breach of fiduciary duty, and misrepresentation, alleging that they failed to properly advise and represent him in the formation of Total Fitness LLC. Defendants have moved for summary judgment. ECF No. 76. The defining inquiry in his case is whether the parties had an attorney-client relationship. Finding that there are no material facts in dispute over this question and that no such relationship formed, the Court GRANTS Defendants' motion.

         I. FACTS

         Getting to a resolution of this dispute has taken a wandering path, including two lawsuits and two different courts, hindered by Ms. Oberg's unavailability and spotty records. Leveling its focus on the facts material to the question at hand, the Court recites only the pertinent undisputed facts as the parties have ably laid out.

         Karin Dreier and Jay Furtado decided to open a gym together in 2008 in the name of Total Fitness LLC.[1] Ms. Dreier invested the money to get the gym started and Mr. Furtado's investment was to be $25, 000, which Ms. Dreier would front, and he would pay her back on an amortization schedule prepared by Ms. Dreier's brother, an investment banker. ECF No. 83-2 at ¶¶ 139-140. Ms. Dreier sent the payback schedule to Mr. Furtado by email' Mr. Furtado did not receive it-he was unsure if he was using the email address and did not recall agreeing to the loan. Id. at ¶ 141. That said, there is no dispute that Mr. Furtado knew about Ms. Dreier's expectation that he would invest $25, 000 but did not pay the money back. Id. At ¶ 142.

         Attorney Oberg was Ms. Dreier's long-time friend and attorney so Ms. Dreier engaged her to provide legal services in forming that limited liability company.[2] ECF No. 78 at ¶¶ 16-17. Ms. Dreier told Mr. Furtado that Attorney Oberg intended to represent the three owners of the gym. ECF No. 83-2 at ¶ 96. Attorney Oberg did not supply a written engagement letter or engagement agreement to Ms. Dreier or to Mr. Furtado about her representation or the formation of the gym. Id. at ¶95. Attorney Oberg never talked to Mr. Furtado about any conflict of interest issues and never asked him to sign a waiver. Id. At ¶ 102.

         She did, however, draw up an Operating Agreement (OA) governing the formation of the LLC. The OA specified that the LLC members had to execute and deliver an Amended Operating Agreement (AOA) no later than four days later, on August 25, 2008 and that if a member did not execute and deliver that AOA, he or she would cease to be a member of the LLC. ECF No. 78 at ¶ 34. Ms. Dreier, Mr. Furtado, and Mr. Powell all signed the OA. Id. at ¶36. Shortly thereafter, they agreed to extend the deadline to sign the AOA until September 3, 2008. Id. At ¶ 39. Ms. Dreier distributed an email from Attorney Oberg, showing the agreement to extend to Mr, Furtado and Mr. Powell for them to sign. Id., at ¶¶ 40, 43. They all acknowledged the new deadline when they signed the email. Id. at ¶44. Ms. Dreier timely signed the AOA. Id. at ¶46. Mr. Furtado never signed the AOA even though Attorney Oberg discussed with him the consequences if he did not sign it. Id. At ¶¶ 37, 49. He testified that he never saw the AOA yet never followed up with either Ms. Dreier or Attorney Oberg. Id. At ¶ 49. The invoices for legal services for the LLC went to Ms. Dreier's home, addressed to the LLC, and she paid them out of the LLC's account that she funded. Id. At ¶ 25.

         Around the same time the parties formed the LLC, Mr. Furtado talked to Attorney Oberg about an unrelated legal complaint (the Farina matter). ECF No. 83-2 at ¶¶ 124-125. She agreed to help him with that legal issue and they met on three separate occasions to discuss the case. Id. at ¶¶ 125-126. Attorney Oberg did not have Mr. Furtado sign an engagement agreement. Id. at ¶ 127. She settled the case and did not charge Mr. Furtado any fees, Id. at ¶¶128-129. During her interactions about this unrelated legal matter, Attorney Oberg asked Mr. Furtado if she could provide any help related to the LLC, but never talked about the AOA (which he had not signed) and the fact that his failure to sign the AOA meant that he was not an owner. Mat H ¶130-131.

         Total Fitness operated from October 2008 until January 2014, but it never generated a profit. Mr. Furtado asked Ms. Dreier if he could review the gym's financials in 2012, but she refused, telling him that he was not an owner. ECF No. 78 at ¶ 60. The gym closed in 2014, but not before Mr. Furtado sued Ms. Dreier in 2013 in state court seeking a declaration that he was an owner of Total Fitness.[3] ECF No. 83-2 at ¶ 180. That case settled, but this malpractice suit against the attorney and firm followed.

         Mr. Furtado brings three claims against Defendants-Legal Malpractice (Count 1), Breach of Fiduciary Duty (Count 2), and Misrepresentation (Count 3). Mr. Furtado alleges in his complaint that Attorney Oberg failed to give him the AOA, failed to let him know that Ms. Dreier signed the AOA, failed to let him know later that the LLC's charter was being revoked, and then helped DarrowEverett cover up these failures and their prior representation of Mr. Furtado. ECF No. 1.

         II. STANDARD OF REVIEW

         The Court can grant summary judgment only when it finds that no genuine dispute as to the material facts of the case exists and that the undisputed issues support an entitlement to judgment as a matter of law. See Wilson v. Moulison N. Corp., 639 F.3d 1, 6 (1st Cir. 2011). The Court should and will view evidence in the light most favorable to the non-moving party and draw all reasonable inferences in his favor. Id.

         III. ANALYSIS

         A. Legal Malpractice and ...


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