United States Court of Appeals
For the First Circuit
No. 00-1131
No. 00-1261
GEORGETTE BAGHDADY TILLER,
Plaintiff, Appellant,
v.
SAMI J. BAGHDADY,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joseph L. Tauro, U.S. District Judge]
Before
Torruella, Chief Judge,
Lynch and Lipez, Circuit Judges.
Donald R. Furman, Jr. for appellant.
Gael Mahony, with whom John D. Lawrence and Hill & Barlow
were on brief for appellee.
March 22, 2001
LIPEZ, Circuit Judge. This unhappy case pits brother
against sister. Sami Baghdady, a property developer in
Massachusetts, allegedly used money from the sale of his
sisters' Teledyne stock to purchase land for the development of
a residential apartments complex in Arlington, Massachusetts, in
1971. One of the sisters, Georgette Tiller, sued Baghdady on
several theories, contending that she was promised a partnership
interest in the apartments project, which she never received.
The jury rejected her claim of intentional misrepresentation,
the only claim that the court permitted the jury to consider.
In this appeal, Tiller argues that the trial court
erred in excluding evidence about Baghdady's disposition of the
stock of his other sister, Violette Haddad. She claims that
this evidence would have undermined Baghdady's credibility,
leading the jury to accept her version of the events and reject
his. Tiller also challenges the trial court's decision to grant
Baghdady's motion for judgment as a matter of law on her claims
for breach of an oral contract and negligent misrepresentation.
Although we agree that the court erred in its
evidentiary ruling, that error was harmless. We therefore
affirm.
I.
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Background
The Baghdadys are an entrepreneurial family, at one
time or another pursuing business ventures on three continents.
Sami Baghdady is involved in business investments in the
Northeastern United States. For years, Georgette Tiller owned
and managed a cosmetics merchandise and bakery business with her
sister, Violette Haddad, in Lebanon and locations in Africa.
Into the 1980s, Tiller was also responsible for management of a
family-owned apartment building in Beirut, and she continues to
own real estate in Lebanon. Both Tiller and Haddad now live in
the United States. A fourth sibling, George Baghdady, lives in
Connecticut.
In 1961, all of the family members invested in a
company called ADCOM, which was then run by a family member.
When that company was sold in 1967, Baghdady coordinated the
swapping of shares for interests in Teledyne, Inc. At the time,
Tiller and Haddad were living in Lebanon and the family decided
that the stock certificates might not be secure in Beirut.
Baghdady agreed to hold them for safekeeping. According to her
testimony, Tiller gave explicit instructions to Baghdady
regarding the Teledyne stock: "You don't touch these. These are
untouchables. These are long-term investment [sic] for my old
age." Still, Tiller and Haddad executed Powers of Attorney in
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August 1970, giving Baghdady the authority to manage their
investments through the brokerage firm Bache & Company.
Baghdady's and Tiller's accounts diverge on the
circumstances of the Teledyne stock sale, as well as the
understanding that they reached following the sale. Tiller says
that in April 1971, acting pursuant to the powers of attorney,
Baghdady sold his sisters' and his own Teledyne shares without
notifying them. When Tiller first learned that the shares had
been sold in the summer of 1971, during a visit to the United
States, she was furious. Tiller says that she asked Baghdady to
repurchase the stock, but he replied that he no longer had the
money to do so. She further claims that he used the money to
purchase the land that would become the Cedar Crest real estate
project, a transaction that closed on May 10, 1971. To make
amends, Tiller says Baghdady promised to make her and her sister
partners in the venture, and he indicated that legal papers
would be drafted when he had time. Tiller also acknowledges
that following her protest about the sale of her stock, Baghdady
executed promissory notes to both Tiller and Haddad on August 4,
1971, just before her return to Lebanon. The note to Tiller
stated: "I owe you the sum of (31,000.00) thirty one thousand
dollars. This amount, I received from the sale of Teledyne Inc.
stock in your name. In the event of my death this debt is
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transferred to my heirs and is to be paid to you from my
estate."
Although no legal documents were forthcoming, Baghdady
allegedly persisted in characterizing the relationship with his
siblings as a partnership. Tiller reports, and her brother
George concurs, that during a tour of the Cedar Crest apartments
in 1977 Baghdady hailed the property and said to his siblings,
"[T]hese are yours. These are the houses you own. Here is your
building." There were supposedly multiple conversations about
the lack of partnership papers between 1971 and 1996. Finally,
in December 1996 when Tiller demanded the papers, Baghdady
responded angrily: "There are no papers, no partnership,
nothing."
In his defense, Baghdady says Tiller herself was
responsible for the stock sale. He states that he only sold his
own Teledyne shares, and deposited their value into one of his
savings accounts to help with the purchase of the Arlington
property. Baghdady also acknowledges that he deposited the
proceeds of Tiller's stock sale into one of his savings
accounts, at his sister's request, in mid-summer 1971, long
after the property purchase was closed. Baghdady states that
when Tiller was returning to Lebanon in August, she told him to
keep the stock sale amount as a loan. He assured the repayment
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in writing, executing the promissory note acknowledged by Tiller
at trial, and writing her a check initiating repayment of the
loan.
Over the next decade or so, Baghdady paid the balance
of the $31,000, plus interest, to Tiller by sending checks, many
of them marked "int." or "interest," on almost a monthly basis.
The cost of health insurance premiums that Baghdady was covering
for Tiller was sometimes deducted from the interest payments.
Although Baghdady did not earn a profit on his real estate
investment for several years, Tiller received ongoing repayment
of the stock proceeds loaned to her brother. Tiller has never
received any percentage of earnings from Cedar Crest, and there
was no evidence of Tiller taking part in the venture's
management.
Tiller filed a diversity action in federal district
court on May 12, 1997, charging fraud and intentional
misrepresentation, negligent misrepresentation, and breach of
oral contract. The 2 1/2 day trial began on December 6, 1999.
At the close of the plaintiff's evidence, the court granted
Baghdady's motion for judgment as a matter of law on both the
negligent misrepresentation and the breach of oral contract
claims. At the conclusion of the case, the court submitted only
the intentional misrepresentation claim to the jury. The first
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question on the verdict form read: "Has the plaintiff proved by
a preponderance of the evidence that the defendant
misrepresented to her that she was his partner in the Cedar
Crest Apartments development?" The jury responded, "No,"
obviating the need to answer any further questions. The court
entered a judgment for Baghdady.
II.
A. Relevance of excluded evidence
At trial, the court refused to allow the admission of
documents pertaining to the sale of the Teledyne shares of
Violette Haddad, Baghdady's other sister. The plaintiff
contends that these documents undermined the veracity of
Baghdady's claim that he did not use the money from the sisters'
stock sale to purchase the land for his real estate project.
The parties first discussed the admissibility of these
documents with the judge the morning the trial began, at a
conference immediately preceding the arrival of the jury. At
this time, Tiller's attorney, Mr. Tariot, noted the discovery
just a few days prior to trial of "Notices of Sale" from Bache
& Company for Haddad's stock.1 Baghdady's attorney, Mr. Mahony,
1 There were three "Notice of Sale" documents at issue:
April 19, 1971 in the net amount of $15,724.98; April 21, 1971
in the net amount of $1,486.46; and April 22, 1971 in the net
amount of $9,167.81. Ultimately, the April 19, 1971 Notice of
Sale became the crucial document from Tiller's perspective. See
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objected to the admission of the Haddad documents, arguing that
they were not relevant to Tiller's claims relating to her own
stock. The court was inclined to agree, but Mr. Tariot
persisted: "They are relevant, I believe, in that the dates of
transactions are from the same brokerage company of the publicly
traded shares and occurred on the identical dates in question
relative to my client." He added that they are "probative and
relevant to some of the checkbook entries [in Baghdady's
account] which are in the agreed exhibits, which show sums of
money received from Bache & Company and tally out to the penny
to the combination of my client's shares and her sister's
shares." Tariot then attempted to show how the checkbook entry
listing deposits to Baghdady's account represented the sum of
Tiller's and Haddad's stock values. The court remained
skeptical, focusing instead on the question of "whether [the
amount] was a loan or whether [Tiller] bought a piece of an
apartment house." Tariot once again explained: "[T]hese
documents are probative as to whether [Baghdady] received the
sum in April at the time he was negotiating the purchase [of the
land], or August." The court disagreed: "If those [notices of
sale] don't mention both people [Tiller and Haddad], I don't see
infra pp. 8, 12.
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how it is probative."2 The court added, however: "If you reach
a point where you think that you have laid a foundation, I will
revisit it then."
Accepting this offer, Mr. Tariot attempted twice more
to gain the admission of Haddad's sale notices. The first
effort came during Mr. Tariot's examination of Violette Haddad,
after her answers established that Baghdady also sold Haddad's
Teledyne stock. The relevant colloquy was as follows:
MR. TARIOT: This is the juncture at
which I would attempt at this time, your
Honor, to revisit the issue of documents.
THE COURT: What do they add?
MR. TARIOT: Excuse me?
THE COURT: What do they add?
MR. TARIOT: They add – They are
cumulative to the testimony, I expect.
THE COURT: I think unnecessarily
cumulative. I will sustain the objection.
If some issue is raised as to the date and
fact of sale, then I will let you offer it.
In response to Mr. Tariot's argument that the evidence was
cumulative in the sense of adding to the evidence already
admitted, the court concluded that the evidence was
2 Other evidence pertaining only to the sale of Haddad's
stock, including Haddad's executed power of attorney and
Baghdady's correspondence promising repayment of the stock sale
amount, were readily referenced at trial by both parties.
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"unnecessarily cumulative" within the meaning of Federal Rule of
Evidence 403, which refers to the "needless presentation of
cumulative evidence."
The second effort to get the sale notices admitted came
during the examination of Sami Baghdady, after Mr. Tariot
established that a notation next to a deposit in one of his bank
accounts read "Bache & Co. $47,314.34." Mr. Tariot next
established that the value of the sale of Tiller's Teledyne
stock was $31,589.36. With the help of Baghdady, Mr. Tariot
subtracted the value of Tiller's stock from the deposit amount.
They arrived at the figure $15,724.98. Mr. Tariot then
presented a document that prompted a bench conference at the
request of Mr. Mahony:
MR. MAHONY: We're now coming to the
issue, your honor, of documents relating to
the sale of Violette's stock.
THE COURT: Yes.
MR. MAHONY: And I have objected on the
grounds that it –
THE COURT: It has nothing to do with
this case.
MR. MAHONY: It has nothing to do with
this case.
MR. TARIOT: If I might be heard, your
Honor?
THE COURT: You can make an offer of
proof.
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MR. TARIOT: I will. Consistent with
your earlier statement, I can do it in
writing, but if I may very briefly be heard?3
It comes down to the penny as to what the
entry is in his checkbook on the date which
precedes – excuse me – which follows the
trade date of two days. It's the same date
as the sister's transaction, which he agrees
it's [sic] a document in evidence. The sum
of these two numbers is to the penny the
entry which goes into the checkbook on that
date.
THE COURT: So?
MR. TARIOT: I believe it's probative
as to when the sale took place. The
defendant has maintained throughout he never
sold these shares – that he got the proceeds
sometime in August, and that he never sold
them in April of 1971.
After further discussion about when and how Baghdady received
the money from the sale of his sisters' Teledyne shares, the
court concluded: "I don't know why we're still talking. I
sustained the objection a long time ago."4
3 On appeal, the defendant argues that the fact that an
offer of proof was never put in writing makes any challenge to
the exclusion of evidence impermissible. We disagree. Federal
Rule of Evidence 103(a)(2) does not require that an offer of
proof appear in any particular form. See 21 Charles Alan Wright
& Kenneth A. Graham, Jr., Federal Practice and Procedure § 5040
(1977). In this case, Mr. Tariot adequately explained the
substance of the evidence he sought to have admitted.
4 At this point, the defendant also argued that the evidence
in question was not covered by a pre-trial stipulation entered
into in June 1998, and thus was not admissible. The trial was
initially scheduled for September 1998. After a continuance was
granted due to an illness, the parties agreed to freeze
evidence, pursuant to a stipulation, thereby precluding the
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Under Federal Rule of Evidence 401, relevant evidence
is "evidence having any tendency to make the existence of any
fact that is of more consequence to the determination of the
action more probable or less probable than it would be without
the evidence." Fed. R. Evid. 401. "The district court has
broad discretion in making relevancy determinations and we must
review its decisions only for abuse of that discretion." United
States v. Brandon, 17 F.3d 409, 444 (1st Cir. 1994). However,
"a trial court's discretion is not unlimited." Loinaz v. EG &
G, Inc., 910 F.2d 1, 6-7 (1st Cir. 1990). A judge abuses this
discretion "when a relevant factor that should have been given
significant weight is not considered." United States v.
Hastings, 847 F.2d 920, 924 (1st Cir. 1988) (quoting United
States v. Kramer, 827 F.2d 1174, 1179 (8th Cir. 1987)). We
acknowledge that, "[t]here is no neat, standardized test for
judging abuse of discretion; each case must be judged on its own
facts and circumstances." Loinaz, 910 F.2d at 7; see also
admission of evidence in the delayed trial not identified at
that time. Such a stipulation does not necessarily preclude the
admission of additional evidence in subsequent proceedings. As
we have said, "It was within the discretion of the district
court to hold parties to compliance with the pretrial
stipulation." Jay Edwards, Inc., v. New England Toyota
Distributor, Inc., 708 F.2d 814, 824 (1st Cir. 1983). The court
had the option of admitting this evidence if it deemed it
relevant. In any event, the court's exclusionary ruling was
based on its sense of relevance, not the stipulation, and the
issue of the stipulation was never reached.
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Espeaignnette v. Gene Tierney Co., Inc., 43 F.3d 1, 10 (1st Cir.
1994).
Tiller claimed that Baghdady needed the proceeds from
the sale of her Teledyne stock and her sister's to purchase the
land necessary for his real estate project in May 1971. When
she discovered this use of her stock in the summer of 1971, she
was furious and told Baghdady so. To mollify her, she says,
Baghdady promised for the first time to make her a partner in
the real estate project. Baghdady insists that he used his own
money to purchase the land, and that he did not borrow the money
from his sisters, available from the proceeds of the sale of the
Teledyne stock, until mid-summer 1971.
Given this dispute, evidence tending to show that
Baghdady secured the stock sale amounts from his sisters
immediately prior to the close of his land purchase cannot be
characterized as "only tangentially related to the issue at
hand." Elgabri v. Lekas, 964 F.2d 1255, 1261 (1st Cir. 1992)
(holding that the exclusion of marginally relevant evidence was
within the court's discretion). As the plaintiff explains in
her brief on appeal:
[A]dding the April 19, 1971 Teledyne stock
sale notices of Ms. Tiller ($31,589.36) and
Ms. Haddad ($15,724.98) will sum to
$47,314.34. This amount is the exact amount
reflected as a deposit in Mr. Baghdady's
personal business account. The deposit date
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(April 27, 1971) immediately precedes Mr.
Baghdady's receipt of deeds evidencing his
purchase of the real estate on May 10, 1971
comprising the Cedar Crest project.
This match between the amount of the deposit to Baghdady's
account and the combined value of the sale of stock of both
sisters is a relevant fact that might prompt a fact-finder to
question Baghdady's insistence that he did not use the proceeds
from the sale of his sisters' Teledyne stock to purchase the
land. Doubt on this point, in turn, might prompt further doubts
about Baghdady's account of his business dealings with Tiller.
The evidence about the amounts derived from the sale of the
sisters' stock is "inseparably intertwined" with the partnership
question at issue in this case; the evidence is necessary to
"complete the story." United States v. Rosario-Diaz, 202 F.3d
54, 71 (1st Cir. 2000). The Haddad notices of sale were the
only evidence establishing the date of the sale of her Teledyne
stock prior to Baghdady's land purchase and the precise amount
of the proceeds from the stock sale. This evidence was not
unnecessarily cumulative. We conclude, therefore, that the
trial court erred in excluding the evidence about Haddad's stock
sale.5
5 Judge Lynch does not agree there was an abuse of
discretion in excluding the evidence, particularly after
plaintiff's counsel conceded it was cumulative.
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B. Harmless error
An error is harmless when "we can say with fair
assurance . . . that the judgment was not substantially swayed
by the error." United States v. Gaines, 170 F.3d 72, 82 (1st
Cir. 1999) (quoting Vincent v. Louis Marx & Co., Inc., 874 F.2d
36, 41 (1st Cir. 1989)). That is our conclusion here.
First, even if the evidence about the Haddad stock
transaction had been admitted, there would have remained
uncertainty about when the proceeds from the sale of the
sisters' Teledyne stock became available to Baghdady. While the
trade dates for the sale of Tiller's Teledyne stock indicate
transactions on April 19th and 22nd, there was correspondence to
Tiller from Bache & Company dated June 8, 1971 requesting
documentation of a power of attorney "[i]n order to complete the
transfer" from the stock sale. If, as Baghdady contended, a
response to this request was necessary for Tiller or Baghdady to
receive money from the stock sale, whenever it may have
occurred, this money would not have been available to Baghdady
for the land purchase on May 10, 1971. Furthermore, there is no
evidence that the April deposit into Baghdady's savings account,
alleged to be the value of his sisters' Teledyne stock, was then
used to fund the purchase of the land that would become Cedar
Crest Apartments.
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More importantly, the overwhelming weight of the
evidence in this case supports Baghdady's version of this
dispute. Tiller only has her account of a few conversations
with Baghdady, confirmed by testimony from her brother and
sister, over a period of twenty-five years. By contrast,
Baghdady has the promissory note he executed for Tiller and
accepted by her setting forth her agreement to receive repayment
of the $31,000. As the note specifies, "[t]his amount, I
received from the sale of Teledyne Inc. stock in your name." At
trial, Mr. Mahony painstakingly reviewed with Tiller the series
of checks, drafted over more than a decade, which represented
the repayment with interest of the loan documented in the
promissory note. Based on this substantial evidence, we can say
with fair assurance that the jury's verdict against Tiller on
her intentional misrepresentation claim was not substantially
swayed by the court's error in excluding evidence about the sale
of Violette Haddad's Teledyne stock.
III.
Motion for judgment as a matter of law
Tiller claims error in the court's decision to grant
a judgment as a matter of law on the claims of breach of oral
contract and negligent misrepresentation. Assuming arguendo
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that there was such an error, any error was unmistakably
harmless.
In concluding that Baghdady had not "misrepresented to
[Tiller] that she was his partner in the Cedar Crest Apartments
Development," the jury decided that Baghdady had not told Tiller
that she would become his partner. That alleged promise was
central to the breach of contract claim. That claim necessarily
failed along with the intentional misrepresentation claim.
Similarly, a finding of a misrepresentation is a necessary
element of both a negligent and intentional misrepresentation
claim. See Zuckerman v. MacDonald's Corp., 35 F. Supp. 2d 135,
144 (D. Mass. 1999). The jury's conclusion that there was no
misrepresentation necessarily defeats both claims. Thus, any
error in keeping the breach of oral contract and negligent
misrepresentation claims from the jury was harmless.
Judgment affirmed.
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