Unpublished Disposition, 905 F.2d 1541 (9th Cir. 1990)

MEMORANDUM^** 

This is a diversity case which is controlled by Washington law. The plaintiffs, Barry M. Wolfson (Wolfson) and Deborah Wolfson, and Hubert V. Gregan (Gregan) and Jacqueline Gregan, sued Great Western Savings Bank and its wholly-owned subsidiary, Benchmark, Inc., both Washington corporations, and certain bank employees, to recover for losses they sustained in dealing with one Charles Engle. Engle and Donna Engle, his wife, were also named as defendants, but were never served. Engle was an established customer of Great Western, and the plaintiffs alleged that they entered into ill-fated transactions with Engle in reliance on statements made by officers of the defendants. (Hereafter we refer to the defendants collectively as Great Western.)

After the issues had been narrowed and several other defendants dismissed, Great Western made a series of motions for summary judgment. Though they had asserted other claims, the plaintiffs opposed the summary judgment motions only with respect to their common law fraud and negligent misrepresentation claims. The district court granted summary judgment and entered a final judgment dismissing the complaint with prejudice.

Briefly, the facts in this case are as follows. The plaintiffs were experienced, sophisticated real estate investors. One of the plaintiffs, Gregan, had a meeting with Great Western officers in October or November 1984. The purpose of the meeting was to determine whether Great Western was interested in employing municipal bonds to finance Gregan's purchase of any repossessed properties that Great Western was holding. Great Western had no such properties, and the discussion then turned to the possibility of Gregan using municipal bond financing to purchase some of Engle's properties.

According to the plaintiffs, during this discussion one of Great Western's officers described Engle as an "astute investor" who had been successful in a number of joint ventures with Great Western, and as "one of, if not the largest property owner in the northwest." According to an associate of Gregan's, who was present at the meeting, the bank officer said that Engle was the bank's "biggest or almost the biggest borrower." In November 1984 Gregan was advised that Great Western was not interested in his proposal. There was no contact between the plaintiffs and Great Western after the 1984 meeting.

In April 1985 Gregan and Wolfson made a loan to Engle, secured by seventeen parcels that Engle had acquired with funds loaned by Great Western. Thereafter, Gregan and Wolfson became more deeply involved with Engle, investing large sums of money with him. In 1986, Great Western began foreclosures on the Engle properties in which plaintiffs had invested.

In addition to satisfying other requirements, a plaintiff seeking to recover damages for fraud or negligent misrepresentation must prove that he justifiably relied upon a false statement by the defendant. Hoffer v. State, 110 Wash. 2d 415, ---, 755 P.2d 781, 787-89 (Wash.1988). The plaintiffs in this case utterly failed to establish the existence of the critical element of justifiable reliance. Viewing all facts in support of their claims in a light most favorable to the plaintiffs, we find no genuine issue of material fact.

In reviewing summary judgment we follow recent Supreme Court decisions, as described in California Architectural Bldg. Prod., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987), cert. denied, 484 U.S. 1006 (1988), where the court stated:

In three recent cases, the Supreme Court, by clarifying what the non-moving party must do to withstand a motion for summary judgment, has increased the utility of summary judgment. First, the Court has made clear that if the non-moving party will bear the burden of proof at trial as to an element essential to its case, and that party fails to make a showing sufficient to establish a genuine dispute of fact with respect to the existence of that element, then summary judgment is appropriate. See Celotex Corp. v. Catrett, --- U.S. ----, 106 S. Ct. 2548, 2552-53, 91 L. Ed. 2d 265 (1986). Second, to withstand a motion for summary judgment, the non-moving party must show that there are "genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., --- U.S. ----, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986) (emphasis added). Finally, if the factual context makes the non-moving party's claim implausible, that party must come forward with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986). No longer can it be argued that any disagreement about a material issue of fact precludes the use of summary judgment.

Application of these standards to the record in the present case leads to the conclusion that the district court properly granted summary judgment.

The judgment of the district court is AFFIRMED.