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San Filippo v. U.S. Trust Co.

June 14, 1984

AUGUSTIN J. SAN FILIPPO, PLAINTIFF-APPELLEE,
v.
U.S. TRUST COMPANY OF NEW YORK, INC., J. GREGORY VAN SCHAACK AND BRUCE P. DENNEN, DEFENDANTS-APPELLANTS, HON. ROBERT M. MORGENTHAU, DISTRICT ATTORNEY FOR THE COUNTY OF NEW YORK, APPELLEE



In a § 1983 action charging conspiracy to deprive plaintiff Augustin San Filippo of his civil and constitutional rights by the presentation of false testimony to the grand jury, defendants U.S. Trust and two of its officers, Bruce P. Dennen and J. Gregory Van Schaack, appeal from two interlocutory orders, denying their motions for summary judgment and for disclosure of grand jury minutes, and ordering them to be deposed.

Lumbard And Van Graafeiland, Circuit Judges.*fn*

Author: Lumbard

LUMBARD, Circuit Judge.

Augustin San Filippo, invoking federal jurisdiction under 42 U.S.C. § 1983, brought suit in the Southern District against United States Trust Company of New York, Inc. (U.S. Trust), and two of its officers, J. Gregory Van Schaack and Bruce P. Dennen, alleging that they conspired with Matthew Crosson, an Assistant District Attorney (A.D.A.) of New York County, to deprive San Filippo of his civil and constitutional rights by falsely testifying to the grand jury concerning San Filippo's involvement in the fraudulent procurement of a $75,000 loan from U.S. Trust. Appellants Van Schaack and Dennen seek review of two interlocutory orders of the district court, denying their motions for summary judgment and for disclosure of the grand jury minutes, and ordering them to be deposed.

Appellants' nonfrivolous claim of absolute immunity from prosecution makes the district court's denial of summary judgment appealable under the "collateral final order" doctrine of Cohen v. Beneficial Loan Corp., 337 U.S. 541, 546, 93 L. Ed. 1528, 69 S. Ct. 1221 (1949). Although we decline to find absolute immunity here, as we assert jurisdiction because of this claim, we exercise our pendent appellate jurisdiction to review all other grounds raised by appellants below in support of summary judgment. We conclude that plaintiff's failure to allege any material facts to support his conclusory allegation of conspiracy warrants summary dismissal of his complaint under either Fed. R. Civ. P. 12(b)(6) or Fed. R. Civ. P. 56. We therefore remand to the district court and direct entry of judgment for the defendants.

I.

This suit grows out of a 1979 New York County criminal prosecution of plaintiff-appellee Augustin San Filippo, attorney to Dora Dodge Moran and Daniel Moran, for aiding the Morans in procuring $75,000 in loans from U.S. Trust in 1977, on the strength of a forged instrument purporting to make Dora Moran the beneficiary of a $9 million trust. We summarize the salient facts leading up to that prosecution, which were recited in the statement of material facts submittted with defendants' motion for summary judgment, and as to which plaintiff in his opposing papers raised no genuine issue. See Local Rule 3(g), Southern District of New York (facts stated by movant deemed admitted unless controverted by opposing party).

The Dodge Estate. In 1953, Dora Dodge Moran, nee Dora Felstad, married Horace E. Dodge Jr., whose father and uncle had sold the Dodge automobile company in 1920 for $120 million. Horace E. Dodge Sr. died later that year, leaving to his widow Anna Thompson Dodge approximately $60 million invested in municipal bonds.

Before their marriage, Horace Jr. had agreed to leave Dora $1 million upon his death, which agreement was guaranteed by Anna Thompson Dodge. A son, John Francis Dodge, was born to Horace Jr. and Dora in 1954. Horace Jr. died in 1963, leaving Dora as his widow, and $12 million in debts and no assets.

In 1964, Dora sued Anna Thompson Dodge for the $1 million guaranteed in the prenuptial agreement and for $9 million for alienating the affection of Dora's deceased husband, who had begun divorce proceedings against Dora prior to his death. The suit was settled in April 1964 by the payment of $1,065,795 to Dora. Regarding Dora's later claims to be the beneficiary of a $9 million trust, no such trust ever existed, and Anna Thompson Dodge never set aside bonds or additional money for Dora in any other form.

Dora became Mrs. Dora Dodge Moran when she married her former bodyguard, Daniel Moran, in 1965. When Anna Thompson Dodge died in 1970 at age 106, Dora's son, John Francis Dodge, inherited about $5,600,000 under the will of his grandfather, Horace E. Dodge Sr. As John was a minor, his inheritance was placed in a custody account, with Dora and Daniel Moran named as guardians.

San Filippo's representation of the Morans. Commencing in 1972, San Filippo represented Dora Dodge Moran in numerous financial transactions, including the purchase and sale of residences, investments in businesses, and the borrowing of money to sustain the lavish lifestyle of the Morans. In July of that year, San Filippo wrote to a business broker as attorney for the Morans, making the first of many representations that Dora Moran was the beneficiary of a large trust from Annna Thompson Dodge: "The bulk of [the Morans'] assets in municipal bonds is in excess of $5,000,000, none of which are pledged or have liens on them, nor can they be due to the provision of a trust resulting from a settlement with Mrs. Dodge. Distribution of these assets is awaiting the final liquidation of the Dodge estate . . .". None of this was true.

In April 1973, San Filippo made a similar claim in a letter to Manufacturers Hanover Trust Company about a loan for the Morans, enclosing a document representing them to be the owners of $5 million in municipal bonds, distribution of which was awaiting final disposition of the family estate. The list of bonds sent with the letter was almost identical to the list in the fraudulent trust agreement delivered to U.S. Trust on January 11, 1977.

In 1973 and 1974, San Filippo acted as counsel for the Morans in their acquisition of Dandor International, of which he became general counsel with an annual retainer of $25,000, and Walker Tool and Die, of which he became vice president.In January 1974, San Filippo attended a closing of Dora Moran's purchase of a Fifth Avenue apartment, and in July of that year he attended the closing of the Morans' purchase of property in Palm Beach, Florida, financed with $1,450,000 in mortgage funds obtained from the Teamsters' Local Pension Fund. In 1975, San Filippo also represented the Morans regarding their $15,000 indebtedness to American Express, for which judgment was entered against them.

Meanwhile, in March 1973, when Dora's son John turned 18, San Filippo arranged for the $3,900,000 then remaining in his custody account to be transferred to a spendthrift trust, of which San Filippo was designated as a trustee with the Morans. At the same time, he also opened up a revolving loan account at a different bank in the name of the trust, with the trust assets pledged as collateral, and with himself, Dora Moran and Daniel Moran as signatories. From 1973 to 1976, sums in excess of $1.5 million were borrowed through the loan account. San Filippo denied negotiating those loans or signing off on the disbursements, most of which ultimately proved to be for the private benefit of Dora and Daniel Moran. However, he was aware that the outstanding loans frequently exceeded $1 million, and that as they came due, they were either rolled over into larger loans or repaid out of the son's trust funds.

In May of 1976, San Filippo was presented with an account statement for the trust fund, showing a balance of $193,750. According to the statement, of the $3.9 million principal in the fund when it was opened in 1973, about $1.5 million had gone to repay loans to the trust fund loan account, and the balance to repay various other loans, including $475,000 of the mortgage on the Morans' Palm Beach property obtained from the Teamster's Local Pension Fund, creditors of the Morans, or directly to the Morans. At his trial, San Filippo acknowledged thinking it was "irregular" that the trust fund had been depleted to virtually nothing and that $1.5 million had apparently been disbursed from the trust fund loan account without his required signature. He testified that he began investigating into those irregularities in the summer of 1976, and ultimately came to the belief that the Morans had breached their trust to Dora's son by using his trust fund for their own purposes -- a belief confirmed by Dora's subsequent guilty plea in June 1977 to looting her son's account while acting as his guardian and trustee.

Notwithstanding any suspicions San Filippo might have had by late 1976 concerning the Morans, he continued to represent them in their financial dealings. In December 1976, when he was contacted, at Dora's suggestion, by an officer of The Chase Manhattan Bank concerning an $11,000 overdraft by Dora, San Filippo confirmed that she was the beneficiary of a $9 million trust currently in probate, detailing the holdings of the trust to support that story. On January 3, 1977, San Filippo reconfirmed the existence of the $9 million trust fund to the officer from ...


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