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Keywords

plaintiffdefendanttrialmotionsummary judgmentfiduciaryfiduciary dutyrelevance
plaintiffdefendanttrialmotionfiduciaryfiduciary duty

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Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 716 F.Supp.2d 236

Facts

A group of investors sought to recover losses from the liquidation of two hedge funds managed by Lancer Management Group LLP. The funds were placed into receivership in July 2003, leading to significant financial losses for the investors. The plaintiffs filed claims against the former directors and the funds' administrator, Citco Fund Services, alleging that the administrator improperly relied on position reports from the prime broker, which were misleading and unofficial. The Citco Defendants filed motions to exclude certain evidence ahead of trial.

In July 2003, the Funds were placed into receivership in the Southern District of Florida, resulting in plaintiffs' loss of over $550 million.

Issue

Whether the plaintiffs were judicially estopped from introducing evidence regarding the administrator's reliance on unofficial reports and whether public statements were relevant to establish a fiduciary duty.

The equitable doctrine of judicial estoppel provides that, ‘[w]here a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, [it] may not thereafter, simply because [its] interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by [it].’

Rule

Judicial estoppel does not bar a party from introducing evidence if the current arguments are not inconsistent with prior positions, and evidence is relevant if it tends to make a fact of consequence more or less probable.

Judicial Estoppel Mem. at 6.

Analysis

The court found that the plaintiffs' current arguments regarding the administrator's reliance on unofficial reports were not inconsistent with their previous positions in the summary judgment motion against the prime broker. Additionally, the court determined that the public statements made by the Citco Defendants were relevant to the question of whether a fiduciary duty existed, as they could help establish the scope of that duty.

The doctrine of judicial estoppel does not bar plaintiffs from introducing evidence at trial either that CFS–Curacao improperly relied on BAS's position reports or that the reports were unofficial.

Conclusion

The court denied the Citco Defendants' motions in limine, allowing the plaintiffs to introduce evidence regarding the administrator's reliance on reports and the relevance of public statements to their claims.

For the foregoing reasons, the Citco Defendants' motions in limine are denied.

Who won?

The plaintiffs prevailed in the motions in limine, as the court ruled that they could introduce the contested evidence at trial, which was crucial for their claims against the Citco Defendants.

The Citco Defendants' arguments against presenting the Public Materials' use of the term “fiduciary” are premised on two legal principles: (1) that merely including the word “fiduciary” in publicly available materials does not create a fiduciary duty between the distributor of the materials and the readers.

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