International Strategies Group, Ltd. v. Greenberg Traurig, LLP

United States Court of Appeals
For the First Circuit

No. 06-1790

INTERNATIONAL STRATEGIES GROUP, LTD.,

Plaintiff, Appellant,

v.

GREENBERG TRAURIG, LLP, A. JOHN PAPPALARDO, AND
ECKERT, SEAMANS, CHERIN & MELLOTT, LLC,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Rya W. Zobel, U.S. District Judge]

Before

Selya, Circuit Judge,
Stahl, Senior Circuit Judge,
and Howard, Circuit Judge.

Jessica Block with whom Block & Roos, LLP, was on brief for
appellant.
Paul B. Galvani with whom Matthew P. Garvey and Ropes &
Gray, LLP, were on brief for appellees Greenberg Traurig, LLP,
and Pappalardo.
Martha Born with whom William B. Mallin, Timothy S. Coon,
Holland & Knight, LLP, and Eckert Seamans Cherin & Mellott, LLC,
were on brief for Eckert, Seamans, Cherin & Mellott, LLC.

March 30, 2007
 STAHL, Senior Circuit Judge. Plaintiff International

Strategies Group, Ltd. ("ISG") brought suit against attorney A.

John Pappalardo and two law firms, Greenburg Traurig, LLP ("GT"),

Pappalardo's current firm, and Eckert, Seamans, Cherin & Mellott,

LLC ("ESCM"), Pappalardo's former firm. ISG's claims against

defendants arose from the loss of roughly $4 million, which it

invested with Corporation of the BankHouse ("COB"), a Boston-based

investment firm. Attorney Pappalardo represented COB as it sought

to recover about $19 million, including ISG's funds, that COB had

lost through a series of fraudulent transfers.

The district court granted summary judgment as to all of

ISG's claims against the three defendants, finding a failure to

demonstrate causation and to file within the statute of

limitations. We affirm, concluding that summary judgment was

appropriate as to ISG's negligence, misrepresentation, breach of

fiduciary duty, breach of contract, and 93A unfair trade practices

claims because no attorney-client relationship was formed between

ISG and any of the defendants. Further, we hold that ISG's

remaining two claims, for conversion, and aiding and abetting fraud

and breach of fiduciary duty, fail because they were not filed

within the statutory period. We also affirm the district court's

denial of ISG's motion for reconsideration or relief from judgment.

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 I. Background

This case involves a complex set of financial

transactions involving numerous individuals and entities. We do

not delve into every nuance in our recitation of the facts below,

but only those necessary to explain our decision. Because we are

reviewing a grant of summary judgment, we draw all reasonable

inferences in favor of the non-moving party, ISG. Maldonado-Denis

v. Castillo-Rodriguez, 23 F.3d 576, 581 (1st Cir. 1994).

A. The Scheme

ISG, a Hong Kong-based company, invested $4 million with

COB in April 1998, through COB's so-called "Federal Reserve

Guarantee Program." COB told potential investors that this program

generated profits by controlling the circulation of U.S. dollars.

COB promised investors substantial profits, along with a guarantee

of non-depletion of their original investment. Having been

essentially promised profit at zero risk, ISG transferred its $4

million investment to a COB account at ABN Amro Bank in Belgium on

May 15, 1998. Two weeks later, on May 29, 1998, COB made

unauthorized transfers of $821,500 of ISG's investment into an ESCM

bank account in Pennsylvania, and $328,500 into a COB bank account

in Boston. Both transactions violated the non-depletion agreement,

and were made without ISG's permission or knowledge.

COB then engaged in a Ponzi scheme, according to ISG's

allegations, using funds from new investors to cover the depletion

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of funds provided by previous investors, amounting to millions of

dollars in ill-gotten gains by COB and a variety of individuals and

entities not involved in this suit. ISG estimates that COB amassed

about $19 million dollars through this scheme, and then transferred

these funds in November 1998, without the permission of any

investor, to an entity called Swan Trust. Henry Pearlberg, the

trustee of Swan Trust, then depleted the Swan Trust account through

a series of transactions in late 1998 and early 1999, depositing

most of the money ($16.7 million) in an account held by First

Merchant Bank ("FMB"), which ISG characterizes as a "rogue Northern

Cyprus bank." Pearlberg also appropriated about $2.3 million for

his own use. ISG alleges that FMB dissipated the $16.7 million

account through yet another series of fraudulent transactions from

February to May 1999.

In April 1999, COB and its CEO, James Pomeroy, persuaded

Pearlberg to execute a Deed of Assignment, which assigned to

Pomeroy, as agent for COB, all rights to the misappropriated funds

held by FMB, Swan Trust, and Pearlberg. In July 1999, Pomeroy

received a disbursement of $1.2 million from FMB based on this

assignment. These recovered funds were not passed on to the

investors, but were retained by COB or Pomeroy and are now

dissipated.

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B. Attempts to Recover Dissipated Funds

In June 1998, ISG had become concerned that COB was not

honoring the non-depletion agreement and unsuccessfully sought

assurance from COB that its funds were intact. By mid-1999 ISG's

director, Phillip Clark, a Hong Kong attorney, was actively

investigating COB's handling of ISG's investment. By then, ISG

knew that COB had transferred funds to Swan Trust, and that

Pearlberg had subsequently transferred the majority of those funds

to the FMB account. By this time, ISG also had learned of

Pearlberg's assignment to Pomeroy and Pomeroy's recovery of $1.2

million based on the assignment. By April 2000, ISG had learned of

COB's initial depletion of its investment -- the May 1998 transfers

to the ESCM and COB accounts in the United States.1

In July 1999, Pappalardo, then an attorney with ESCM,

began representing COB. On August 11, 1999, COB's Pomeroy sent ISG

an email detailing COB's "options for retrieval" of the lost funds.

Pomeroy also informed ISG that, "I have chosen to move to prepare

litigation against the parties utilizing the law firm of Greenberg

& Traurig. I have utilized the law firm of Seamin Cherin & Melott

[sic] for the criminal assistance against the parties."

1
ISG learned much of this information from its cooperation
with a Belgian judge's investigation into the COB fraud. ISG
communicated with Belgian authorities on its own, without
assistance from Pappalardo. Indeed, during this period, ISG admits
that it filed a criminal complaint with the Belgian authorities
against a COB employee, Albert Pans. ISG filed this complaint
without the assistance of Pappalardo.

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 During this same period, ISG's Clark flew to Boston to

confront COB over the missing funds. When the parties met in

Boston, Pappalardo told Clark that he had been retained by COB;

that COB was also a victim of the fraudulent scheme; that all

necessary steps, including litigation, would be taken to recover

the funds; and that any independent action by ISG against COB,

Pomeroy, or other parties would jeopardize Pappalardo's

negotiations to recover the missing funds. ISG alleges that these

representations, and other events that we detail below, led it to

believe that Pappalardo was ISG's legal representative and that an

attorney-client relationship had been formed.2

Pappalardo informed ISG on several occasions that a

negotiated recovery of the funds was imminent, as was COB's filing

of a civil complaint against the perpetrators of the fraud. When

Pappalardo had neither recovered the funds nor filed a complaint in

over two years, ISG finally retained outside counsel on November 7,

2001. Through counsel, ISG filed suit against COB and Pomeroy in

March 2002. ISG obtained a $10 million judgment in that suit, but

the award has proven uncollectible. ISG also filed suit against

ABN Amro Bank, FMB, and two individuals associated with COB's

scheme. Those suits are currently pending.

2
ISG alleges that it established three attorney-client
relationships, one with each defendant. However, for simplicity,
this opinion analyzes only the alleged ISG-Pappalardo relationship,
because it is the only hook for ISG's allegations regarding the
firms. Pappalardo left ESCM for GT on March 13, 2001.

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C. Proceedings Below

ISG brought three claims against all three defendants:

negligence, in the form of legal malpractice; misrepresentation;

and violation of Chapter 93A, the Massachusetts consumer protection

law, see Mass. Gen. Laws ch. 93A, § 1 et seq. ISG brought two

additional claims against Pappalardo alone, for breach of fiduciary

duty and breach of express and implied contract. Finally, ISG

brought two claims against ESCM alone, for conversion, and aiding

and abetting fraud and breach of fiduciary duty, based on the May

1998 transfer of funds to ESCM's escrow account.

Defendants moved for summary judgment on all counts. The

district court declined the defendants' request to grant summary

judgment on the ground that no attorney-client relationship was

formed. However, holding that ISG had failed to establish a viable

theory of causation, the court granted summary judgment as to most

of ISG's claims, including negligence, misrepresentation, violation

of Chapter 93A, breach of fiduciary duty, and breach of contract.

The court also granted summary judgment as to the remaining two

claims -- conversion, and aiding and abetting fraud and breach of

fiduciary duty -- concluding that the statute of limitations had

expired.

ISG filed a motion for reconsideration or relief from

judgment, which the district court denied. ISG timely appealed the

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district court's grant of summary judgment and denial of its motion

for reconsideration.

II. Analysis

A. Standard of Review

On appeal, we review a district court's grant of summary

judgment de novo, viewing the facts in the light most favorable to

the nonmoving party. See Fontánez-Núñez v. Janssen Ortho LLC, 447

F.3d 50, 54 (1st Cir. 2006). Summary judgment is appropriate where

there is no genuine issue of material fact and the moving party is

entitled to judgment as a matter of law. See Fed. R. Civ. P.

56(c). An appellate court is not "tied to the district court's

rationale," but may affirm a grant of summary judgment "on any

ground revealed by the record." Iverson v. City of Boston, 452

F.3d 94, 98 (1st Cir. 2006).

We review a district court's denial of a motion for

reconsideration or relief from judgment for abuse of discretion.

See Ruíz-Rivera v. Riley, 209 F.3d 24, 27 (1st Cir. 2000). "To

obtain relief, the movant must demonstrate either that newly

discovered evidence (not previously available) has come to light or

that the rendering court committed a manifest error of law."

Palmer v. Champion Mortgage, 465 F.3d 24, 30 (1st Cir. 2006).

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B. Duty of Care

Most of ISG's claims3 against defendants are predicated

on establishing the existence of an attorney-client relationship or

other duty of care between ISG and the defendants, including the

claims of negligence,4 misrepresentation,5 and violation of Chapter

93A.6 In addition, ISG's claims against Pappalardo, for breach of

fiduciary duty and breach of contract, are also predicated on the

existence of an attorney-client relationship or other duty of care

between Pappalardo and ISG.7

3
All parties agree that Massachusetts law governs ISG's
claims. See Moores v. Greenberg, 834 F.2d 1105, 1107 n.2 (1st Cir.
1987) (a federal court "ordinarily should" honor an agreement
between the parties as to what substantive law controls).
4
See Miller v. Mooney, 431 Mass. 57, 725 N.E.2d 545, 549
(2000) (under Massachusetts law "[e]xistence of an attorney-client
relationship is an element of a malpractice plaintiff's proof.").
5
A misrepresentation claim can rest upon an attorney-client
relationship, or a duty to a nonclient where "the attorney knows
[the nonclient] will rely on the services rendered." Miller, 725
N.E.2d at 550 (quoting Robertson v. Gaston Snow & Ely Bartlett, 404
Mass. 515, 536 N.E.2d 344, 350, cert. denied, 493 U.S. 894 (1989)).
6
In Robertson, the Massachusetts Supreme Judicial Court held
that, where a plaintiff's 93A claim alleges unfair or deceptive
acts during the course of the defendant's "legal representation of
the plaintiff," proof of "an attorney-client relationship between
the plaintiff and [defendant] is critical to the plaintiff's 93A
claim." 536 N.E.2d at 351. Here, ISG predicated its 93A claim on
the existence of an attorney-client relationship with defendants.
Specifically, ISG's 93A count alleges that the defendants wrongly
"under[took] joint representation" and committed unfair and
deceptive acts while "representing ISG."
7
ISG's complaint alleges the existence of a fiduciary duty
based on Pappalardo's "undertaking to represent ISG." Similarly,
ISG's claim of breach of express or implied contract is based on

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 ISG puts forth two theories for the existence of a duty

of care by defendants. First, ISG argues that an attorney-client

relationship was in fact formed. Second, ISG avers that "the

forbearance of ISG induced by Pappalardo while at GT and ESCM,

created a duty of care." This second argument is an invocation of

the foreseeable reliance exception that, under Massachusetts law,

creates a duty of care toward nonclients. See Sheinkopf v. Stone,

927 F.2d 1259, 1268 (1st Cir. 1991). Thus, we first examine

whether an attorney-client relationship was created in fact; if

not, we then consider whether the foreseeable reliance exception

for nonclients applies in this case.

1. Attorney-Client Relationship

Under Massachusetts law, an attorney-client relationship

may be shown by an express contract, see Miller, 725 N.E.2d at 549,

or may be implied "when (1) a person seeks advice or assistance

from an attorney, (2) the advice or assistance sought pertains to

matters within the attorney's professional competence, and (3) the

attorney expressly or impliedly agrees to give or actually gives

the advice or assistance," DeVaux v. Am. Home Assurance Co., 387

Mass. 814, 444 N.E.2d 355, 357 (1983) (quoting Kurtenback v.

TeKippe, 260 N.W.2d 53, 56 (Iowa 1977)). The third prong of the

DeVaux test may be established "by proof of detrimental reliance,

the existence of an obligation by Pappalardo "to use utmost good
faith and due care in protecting ISG's interests."

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when the person seeking legal services reasonably relies on the

attorney to provide them, and the attorney, aware of such reliance,

does nothing to negate it." Id.

It is not entirely clear whether ISG alleges that an

express attorney-client relationship was formed. Nonetheless, we

can easily conclude that this is not the case. There is no

evidence here of a retainer agreement or other contract for legal

services between ISG and any of the defendants; nor is there

evidence of billing or remittances for such services.

ISG points to the power of attorney that it executed in

favor of Pappalardo in July 2000, authorizing him to transfer to an

interest bearing escrow account any funds belonging to ISG that he

succeeded in recovering from Swan Trust. However, by executing the

power of attorney, ISG granted only a circumscribed agency power to

Pappalardo in order to facilitate the physical return of the

missing funds. While the power of attorney may have some impact on

our analysis of whether an implied attorney-client relationship was

formed, it is certain that such a limited power of attorney did not

create an express attorney-client relationship. See Williams v.

Dugan, 217 Mass. 526, 528, 105 N.E. 615 (1914) (noting that a power

of attorney creates limited agency relationship as to expressly

enumerated powers and no additional powers may be inferred); see

also Bachner v. Air Line Pilots Ass'n, 113 F.R.D. 644, 649 (D.

Alaska 1987) ("A power of attorney establishes the relationship of

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attorney-in-fact, which is an agency relationship different from

the relationship of an attorney-at-law.").

We turn next to ISG's contention that an attorney-client

relationship was created by implication, under the DeVaux three-

part test. On appeal, ISG contends that, based on Pappalardo's

assurance that he represented the interests of the investors and

his warnings that filing independent charges would jeopardize his

attempts to negotiate a recovery of the funds, ISG reasonably

believed that Pappalardo was its attorney and forebore from

pursuing independent legal action on that basis. In contrast, the

defendants maintain that Pappalardo made clear that he only

represented COB, and ISG demonstrated an understanding of this

fact; that ISG never relied on Pappalardo for legal services; and

that ISG, as a sophisticated, represented entity, understood that

its position was potentially adverse to Pappalardo's client, and

indeed threatened suit against COB on this basis several times.

Our analysis of whether an implied relationship was

created must start with the conjunctive, three-part DeVaux test.

Under part one of the test, we ask whether ISG sought legal advice

or assistance from Pappalardo. See DeVaux, 444 N.E.2d at 357.

Courts interpreting DeVaux have understood this first prong to

require concrete communication by the plaintiff requesting that the

attorney represent him, or explicitly seeking individualized legal

advisement. For example, in Robertson v. Gaston Snow & Ely

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Bartlett, 404 Mass. 515, 536 N.E.2d 344, 351 (1989), the

Massachusetts Supreme Judicial Court ("SJC") found no implied

attorney-client relationship between a corporate officer and a law

firm representing the corporation, where the officer never

explicitly requested that the firm represent him regarding his

employment status at the corporation after a reorganization. The

SJC reached this conclusion even though the officer had previously

been a client of the firm in regard to other matters, had numerous

discussions with the firm about the corporate reorganization and

his future employment with the corporation, and had requested and

received a sample employment agreement from the firm. Id. The SJC

concluded that an implied relationship cannot be formed without

active communication from the plaintiff to the lawyer requesting

legal representation or legal advice:

In spite of several written and many oral
communications between the plaintiff and the
other participants, the plaintiff introduced
no evidence of a specific reference to [the
firm] as his personal counsel. His claim is
essentially, therefore, that he thought that
[the firm] represented him but that he
failed to communicate his thought to anyone.

Id. at 349.

Similarly, in Sheinkopf v. Stone, 927 F.2d 1259, 1266-67

(1st Cir. 1991), this court held that no implied attorney-client

relationship arose under Massachusetts law between an attorney and

an investor, where the investor bought into a joint investment

venture managed by the attorney. We reached this result even

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though the attorney prepared various legal documents for the

investor's signature and requested that he sign them; promised to

"protect" the investor; told the investor that "other clients of

[the firm]" were also investing in the venture; listed the firm's

address on the joint venture's legal documents; and transacted

joint venture business out of his law firm office and with the

assistance of his law firm secretary. Id. at 1265-66. This court

found particularly persuasive that the investor "never explicitly

requested [the attorney] or [the law firm] to represent him, never

sought any legal advice from them, and was never billed for

services." Id. at 1268.

Here, ISG's claim is in some ways weaker than those of

plaintiffs in Robertson and Sheinkopf. Not only is there no

evidence or allegation that ISG explicitly requested legal

representation from Pappalardo, but on at least two occasions ISG

acknowledged that it was not Pappalardo's client. First, in a

March 30, 2000, letter, Clark wrote to Pappalardo:

While I appreciate that you act for
Corporation of the Bankhouse (COB), I find
that your failure to respond to any of our
correspondence insulting and unprofessional.
It is not beyond the parameters of your
ethical requirements for you to correspond
with International Strategies Group (ISG) on
COB's instruction.

(emphasis added). Second, on August 15, 2001, having grown more

frustrated at Pappalardo's lack of communication and failure to

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recover the funds through negotiation, C.M. Barber, another ISG

director, wrote to Pappalardo:

John, you seem to be testing our resolve to
take [independent] action. How do we respond?
. . . We can prepare a comprehensive complaint
to the Massachusetts State Bar with respect to
your treatment of us as third parties,
particularly in the circumstances of the Power
of Attorney.

(emphasis added). These acknowledgments that Pappalardo did not

represent ISG were consistent with Pappalardo's advisement to ISG

on at least two occasions that he represented COB alone. Following

Pappalardo's first meeting with ISG, he wrote to Clark on August

20, 1999:

As you know, I am counsel along with others,
for Societè Bank House ("C.O.B.") and
represent that entity and its employees in
connection with certain matters arising from
their relationship with Swan Trust and its
successors.

Three months later, Pappalardo began a letter to ISG's Barber with

a similar notification: "I am writing to you at the request of my

client, Corporation of the BankHouse, Incorporated ('COB') in

connection with the recovery of funds from the transactions

involving the Swan Trust."

In addition, there is no evidence that ISG requested

legal advice from Pappalardo respecting ISG's potential individual

claims.8 Such a request would have raised a serious ethical

8
There is evidence that ISG asked Pappalardo on several
occasions about the status of COB's potential civil claims to

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dilemma for Pappalardo, as one of ISG's foremost claims would have

been against COB, Pappalardo's client. Indeed, in a March 23,

2000, letter to COB, ISG's Clark acknowledged that ISG did not have

an attorney-client relationship with COB's attorneys, and therefore

prodded COB to consult with its own attorneys regarding the

prospects for a COB civil suit:

[W]e are of the view that the urgent
instigation of civil proceedings against
Swan Trust, May Davis and others is now a
priority. May we seek your consultation
with your civil attorneys as to the process
and timing of implementing same. It is our
view that there will be economies in process
and costs through the various investors
and/or their fiduciary proceeding in concert
and together with Corporation of the
BankHouse ("CoB") in its separate function
as fiduciary to such parties. There would
be a requirement for all such parties to be
privy to the benefits of a client
relationship with your appointed attorneys.

(emphasis added). Though ISG here proposed a joint representation

of all the investors by COB's attorneys, there is no evidence or

recover the funds, including an August 16, 2001, letter from ISG to
Pappalardo. However, ISG asking COB's attorney about potential COB
claims is quite different from ISG seeking legal advice from
Pappalardo regarding its own potential claims, and is not
sufficient to satisfy prong one of DeVaux. Further, even if such
a request for information might in some circumstances satisfy prong
one, the record shows, and ISG concedes, that Pappalardo never
provided ISG with the information it sought regarding COB's
potential civil claims. Therefore, the third prong of DeVaux --
the provision of the requested legal services -- would not be
satisfied, and no implied relationship could be said to have
arisen.

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even allegation that COB responded to this proposal or took any

action to implement it.

In sum, the record indicates that ISG did not explicitly

request legal representation from Pappalardo, nor did it seek

advice regarding its own legal position vis-à-vis the entities

implicated in the fraud. Therefore, we conclude that ISG has set

forth insufficient facts to support its claim of an implied

relationship under part one of the DeVaux test.

We turn next to the third prong of the DeVaux test,9 and

ask whether Pappalardo expressly or impliedly agreed to give or

actually gave the requested advice or assistance. See DeVaux, 444

N.E.2d at 357. This prong may be satisfied if ISG reasonably

relied on Pappalardo to provide legal services, and Pappalardo,

aware of such reliance, did nothing to negate it. Id.

The reasonable reliance test captures the essence of

ISG's allegation that an implied relationship was created. ISG

argues that Pappalardo urged it not to proceed on its own, but

rather to wait for Pappalardo to orchestrate a negotiated return of

the missing funds on behalf of the "team" of investors; therefore,

the argument goes, ISG reasonably relied on Pappalardo to provide

legal services, and Pappalardo, aware of this reliance, did nothing

9
We temporarily skip prong two of DeVaux as our analysis of
prong three will shed considerable light on the outcome under prong
two. We revisit prong two at the end of this section.

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to negate the impression that he was acting as ISG's attorney.

However, the facts before us do not support this account.

The problem with ISG's allegation here is that no

evidence suggests that ISG was relying on Pappalardo to provide ISG

with legal services. Instead, all the evidence suggests that ISG

was relying on Pappalardo to recover the funds for COB, with the

expectation that ISG would be an eventual financial beneficiary of

such a recovery. Pappalardo told ISG that, in his opinion, his

negotiations were more likely to lead to a recovery of the missing

funds if ISG refrained from filing its own charges. This was a

strategic opinion from the attorney of a potential adversary, which

ISG was free to accept at face value, ignore, or seek legal advice

regarding. ISG chose to forego its own action, expecting to

benefit financially from a successful COB recovery. However, ISG's

anticipated financial benefit does not transform Pappalardo's legal

work on behalf of COB into a duty to ISG. Nor does ISG's

expectation of an eventual financial recovery support the notion

that it was reasonable for ISG to rely on Pappalardo for legal

services.

This situation is analogous to one the SJC confronted in

Spinner v. Nutt, 417 Mass. 549, 631 N.E.2d 542 (1994). There,

trust beneficiaries brought suit against the attorneys for the

estate's trustees. The SJC found no duty of care as between the

estate's attorneys and the estate's beneficiaries: "The fact that

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third parties are thus benefitted, or damaged, by the attorney's

performance does not give rise to a duty by the attorney to such

third parties, and hence cannot be the basis for a cause of action

by the third parties for the attorney's negligence." Id. at 546

(quoting Goldberg v. Frye, 266 Cal. Rptr. 483, 489 (Cal. Ct. App.

1990)). The SJC concluded that, "In these cases the third parties

are incidental beneficiaries, and '[a]n incidental benefit does not

suffice to impose a duty upon the attorney.'" Id. (quoting Ronald

E. Mallen and Jeffrey M. Smith, 1 Legal Malpractice § 7.11 (3d ed.

1989)).

Similarly here, where ISG relied on Pappalardo to recover

the missing money on behalf of COB, rather than to provide ISG

directly with legal counsel, ISG put itself in the position of an

incidental third-party financial beneficiary, and therefore no

implied attorney-client relationship was established. ISG relied

on Pappalardo only to recover the missing funds for COB, not to

provide ISG with legal services.

Furthermore, assuming arguendo that ISG did rely on

Pappalardo to provide direct legal services, no reasonable

factfinder could conclude that ISG's reliance in this regard was

reasonable. ISG attempts to rebut this conclusion by pointing to

several pieces of evidence, including three statements made by

Pappalardo. ISG notes that: (1) Pappalardo sent ISG an "action

plan" for recovery of the funds which noted that he "represent[ed]

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the team," comprised of the investors and COB; (2) Pappalardo told

ISG that COB and ISG's interests were "one and the same"; and (3)

Pappalardo told ISG that he was preparing a civil suit against the

fraudulent parties "to protect [ISG's] interest."

However, these comments must be analyzed in the broader

context of the parties' course of dealing. As discussed above,

Pappalardo had told ISG on several occasions that he represented

COB alone, and ISG made several statements which indicated its

understanding of this arrangement. Also, ISG had chosen to

forebear in bringing its own legal action, hoping instead that

Pappalardo's negotiations on behalf of COB would succeed, resulting

in an eventual financial benefit to ISG. Finally, ISG was aware of

its ability to bring suit against COB and Pomeroy, and reminded

Pappalardo and COB of this fact on several occasions.

Evaluating the three statements cited by ISG in this

larger context, we conclude that ISG's alleged reliance was not

reasonable. First, Pappalardo's statement in the "action plan"

that he represented the investors as a team simply reflected the

reality that ISG had chosen to coordinate its strategy with COB by

deferring individual action in favor of Pappalardo's efforts to

recover the funds for COB. Pappalardo's statement that he

represented the team is even less problematic than that made by the

attorney in Sheinkopf, who told an investor that "other clients of

[the firm]" were also investing in the attorney's venture. 927

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F.2d at 1265. We were unpersuaded in Sheinkopf that that statement

was a reasonable basis for an implied relationship. In this case,

Pappalardo's statement accurately reflected a choice made by ISG to

forebear in favor of Pappalardo's efforts on COB's behalf.

Second, Pappalardo's statement that the interests of his

client and ISG were one and the same also did not form a reasonable

basis for ISG's reliance on Pappalardo for legal services. As

discussed above, ISG had threatened to sue COB and Pomeroy on

several occasions, indicating that it was well aware that their

interests were not fully aligned.

Third, when read in the context of the entire letter,

Pappalardo's statement that he was preparing a civil suit on behalf

of COB in order to "protect [ISG's] interest" also does not provide

a reasonable basis for ISG's reliance. ISG highlights just one

sentence in the October 22, 1999, letter from Pappalardo to ISG:

"To also protect your interest and as part of pursuing our position

for collection, COB has been preparing its own civil fraud case

against the US based parties." It is a sign of the tenuousness of

ISG's claim that the sentence it chose to highlight contains a

clear statement by Pappalardo that the civil suit would be brought

solely on behalf of his client, COB. Further, because ISG knew

that the suit would be brought on behalf of COB alone, it is clear

that the "interest" that Pappalardo referred to was simply ISG's

recovery of its investment funds as an incidental beneficiary of

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the lawsuit. This is particularly so given that the same letter

began, "I am writing to you at the request of my client,

Corporation of the BankHouse Incorporated ("COB") . . ." and the

second paragraph stated:

As our client is bound by confidentiality
agreements, I am reluctant to share specifics
of the details or process, for fear of
jeopardizing the sensitive arrangements
involved or breaching specific confidentiality
agreements that are integral to the matters
involved. However, I want to provide you with
an understanding of the actions that are being
taken on behalf of COB.

(emphasis added).

ISG also points to the power of attorney and accompanying

"side letter" as grounds for its alleged reasonable reliance on

Pappalardo for legal services. As discussed above, the power of

attorney granted to Pappalardo the limited agency right to transfer

any recovered ISG funds to an interest-bearing escrow account. The

"side letter" was drafted by ISG and given to Pappalardo along with

the signed power of attorney. It read:

The Directors of ISG seek to . . . clarify . .
. that the captioned Power of Attorney is
given to [ESCM and Pappalardo] upon the
understanding that it will be actioned by the
attorney with the utmost good faith and due
care having regard to the interests of ISG.

The "side letter" simply reiterated the duty of care that

accompanies any agency relationship and did not expand the very

limited grant of authority contained in the power of attorney. No

reasonable factfinder could conclude that ISG, a sophisticated

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entity, was reasonable to rely on Pappalardo to provide broad legal

services simply because it appointed him attorney-in-fact for the

limited purpose of transferring funds. Indeed, in an August 2001

letter to Pappalardo, ISG acknowledged that it remained a nonclient

third party even after the power of attorney was signed.10

Therefore, we hold that ISG's claim fails the third prong

of DeVaux because ISG did not rely on Pappalardo for legal

services, but merely for incidental financial benefit. Further, we

conclude that even if ISG did rely on Pappalardo for legal

services, such reliance was not reasonable given the parties'

course of dealings.

We also briefly note that these conclusions are fatal to

ISG's claim under prong two of DeVaux, which requires the plaintiff

to have sought advice or assistance on a matter within the

attorney's professional legal competence. See DeVaux, 444 N.E.2d

at 357. As we noted in Sheinkopf, attorneys "routinely wear a

multitude of hats," 927 F.2d at 1265, and mere interaction with an

attorney for assistance of any kind is not enough under DeVaux.

The assistance sought must be legal in nature. The facts here show

that ISG relied on Pappalardo only for a financial benefit. ISG

10
In the August 15, 2001, letter, ISG threatened to file ethics
charges against Pappalardo for his "treatment of [ISG] as third
parties, particularly in the circumstances of the Power of
Attorney."

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having failed all three prongs of the DeVaux test, we conclude that

no implied attorney-client relationship was created.

2. Foreseeable Reliance Exception for Nonclients

Generally, under Massachusetts law, an attorney only owes

a duty of care to clients. See One Nat'l Bank v. Antonellis, 80

F.3d 606, 609 (1st Cir. 1996) ("'[A]n attorney's liability for

negligence arises out of a duty owed to a client.'") (quoting

Norman v. Brown, Todd & Heyburn, 693 F.Supp. 1259, 1265 (D. Mass.

1988)). However, Massachusetts courts have carved out a limited

"foreseeable reliance" exception to this rule, which creates a duty

to nonclients where the attorney knew, or should have reasonably

foreseen, that the nonclient would rely on his services. See

Antonellis, 80 F.3d at 609; Sheinkopf, 927 F.2d at 1268.

Nonetheless, this duty will not be imposed if "such an independent

duty would potentially conflict with the duty the attorney owes to

his or her client." Antonellis, 80 F.3d at 609 (quoting Lamare v.

Basbanes, 418 Mass. 274, 636 N.E.2d 218, 219 (1994)).

ISG invokes this nonclient exception to no avail, for the

simple reason that ISG and COB were potentially adverse parties.

Imposing on Pappalardo a duty to ISG would create a potential

conflict with Pappalardo's preexisting duty to COB, his client.

See id. ("Massachusetts and federal case law has consistently found

that a potential conflict between an attorney's duty to his or her

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client and the alleged duty to the nonclient is sufficient to

defeat the nonclient's malpractice claim.").

ISG and COB were potentially adverse parties since ISG

invested in COB's scheme. ISG became aware of an actual conflict

with COB when it began investigating the fraudulent transfers in

early 1999. In a letter to COB sent in early 1999, before

Pappalardo was hired, ISG bitterly complained that COB was not

keeping ISG apprised of its account positions, and threatened to

pursue legal actions if COB "had been in any way misleading or

inaccurate" regarding the funds:

You seem to be under the mistaken impression
that I am posturing with respect to the need
for ISG to consider it's [sic] legal options.
I should clarify perhaps that [ISG directors]
could well be taken to task with regard to our
failure to take local state legal advice.

Given this very real conflict between ISG and COB, we decline to

impose on Pappalardo a duty to ISG as a nonclient.

Therefore, because we have determined that no reasonable

factfinder could conclude that an attorney-client relationship was

created, either expressly or by implication, and that no duty of

care was owed to ISG as a nonclient, we conclude that summary

judgment was appropriate as to the five counts11 predicated upon the

existence of such a duty.

11
See supra, Part II.B.

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C. The Remaining Claims

Two claims remain -- conversion, and aiding and abetting

fraud and breach of fiduciary duty, both brought against ESCM

alone. ISG bases these claims on COB's unauthorized transfer of

$821,500 of ISG's investment to an ESCM account on May 29, 1998.

Both claims against ESCM sound in tort, see Gallagher v. R.E.

Cunniff, Inc., 314 Mass. 7, 49 N.E.2d 448, 449 (1943) (conversion);

Arcidi v. Nat'l Ass'n of Gov't Employees, Inc., 447 Mass. 616, 856

N.E.2d 167, 173 (2006) (aiding and abetting breach of fiduciary

duty), meaning the claims are subject to a three-year statute of

limitations, see Mass. Gen. Laws ch. 260, § 2A ("Except as

otherwise provided, actions of tort, actions of contract to recover

for personal injuries, and actions of replevin, shall be commenced

only within three years next after the cause of action accrues.").

Massachusetts courts have said that a tort claim accrues

when the plaintiff knew or should have known of the alleged injury.

See Joseph A. Fortin Constr., Inc. v. Mass. Hous. Fin. Agency, 392

Mass. 440, 466 N.E.2d 514, 516 (1984) ("[I]t is a well-settled rule

that causes of action in tort generally accrue under G.L. c. 260,

§ 2A, at the time the plaintiff is injured."); Hendrickson v.

Sears, 365 Mass. 83, 310 N.E.2d 131, 135 (1974) ("[A] cause of

action accrues on the happening of an event likely to put the

plaintiff on notice.").

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 The defendants assert that the limitations period began

to run in April 2000, when ISG learned of the transfer of funds to

ESCM's account.12 Citing the doctrine of continuous representation,

ISG argues that the limitations period should be equitably tolled

during the period that ISG was allegedly represented by Pappalardo.

See Murphy v. Smith, 411 Mass. 133, 579 N.E.2d 165, 167 (1991) (the

continuing representation doctrine "tolls the statute of

limitations in legal malpractice actions where the attorney in

question continues to represent the plaintiff's interests in the

matter in question"). Thus, ISG suggests that the statutory period

did not begin to run until October 2001, when ISG "disengaged

entirely from its relationship with Pappalardo and his firms."

Because we have determined that no attorney-client

relationship existed between ISG and Pappalardo, the continuous

representation doctrine clearly is not applicable here. Therefore,

ISG's claims accrued in April 2000, when it first learned of its

injury. Because more than three years elapsed between April 2000

and the filing of this action on June 30, 2004, ISG's claims were

12
It is clear from the record that ISG had actual notice of
this transfer by April 17, 2000. On that date, ISG faxed to
Pappalardo a summary of the information it had learned from a
Belgian judge who was investigating the fraudulent transfers. The
document presents a timeline of eight separate unauthorized
transfers of ISG funds by COB, including the first on the list:
"29th of May 1998: USD 821.500 to MELLON BANK, Pittsburgh, USA . .
. holder ECKERT DEMANS [sic] CHERIN & MELLOT."

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not timely filed, and the district court correctly granted summary

judgment on this basis.

D. Motion for Reconsideration or Relief from Judgment

We also affirm the district court's rejection of ISG's

motion for reconsideration or relief from judgment. ISG's motion

for reconsideration, which we review for abuse of discretion, see

Barrett v. Lombardi, 239 F.3d 23, 28 (1st Cir. 2001), consisted

only of "theories previously advanced and rejected," Palmer v.

Champion Mortgage, 465 F.3d 24, 30 (1st Cir. 2006), and arguments

unrelated to the grounds upon which we found summary judgment to be

appropriate.

III. Conclusion

For the foregoing reasons we affirm the district court's

grant of summary judgment in favor of defendants as to all of ISG's

claims. Costs to appellees.

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