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Oppenheimer v. Electro-Nucleonics Inc.

April 4, 1979

NORMAN B. OPPENHEIMER, PLAINTIFF-APPELLANT,
v.
ELECTRO-NUCLEONICS, INC., ET AL., DEFENDANTS-APPELLEES; ELECTRO-NUCLEONICS, INC., PLAINTIFF, V. NORMAN OPPENHEIMER, ET AL., DEFENDANTS.



Appeal from the United States District Court for the Southern District of New York.

Present: HONORABLE LEONARD P. MOORE, HONORABLE WILFRED FEINBERG, HONORABLE THOMAS J. MESKILL, Circuit Judges.

This cause came on to be heard on the transcript of record from the United States District Court for the Southern District of New York, and was argued by appellant pro se and by counsel for appellees.

ON CONSIDERATION WHEREOF, it is now hereby ordered, adjudged, and decreed that the judgment of said District Court be and it hereby is AFFIRMED.

This is an appeal by plaintiff from a judgment in plaintiff's favor of approximately $109,000 against four defendants, entered by Judge Constance Baker Motley in the United States District Court for the Southern District of New York. The action was dismissed as against numerous other defendants. Judge Motley wrote three opinions, dated June 21, 1974, July 31, 1975 and September 15, 1976. Appellant challenges the dismissals and also claims that the amount of the judgment obtained is too small.

The case has its origin in a 1965 lease transaction in Puerto Rico, wherein appellant endorsed a warrant for the purchase of Electro-Nucleonics, Inc. stock in blank and delivered it as security. His signature was not guaranteed by a bank, however, which appellant knew was required for effective transfer, as Judge Motley found. After the lease transaction soured, appellant sought to get the warrant back, but it had already been delivered to one Fiel, a defendant in this action. When both appellant and Fiel sought to exercise the warrant, Electro-Nucleonics brought the instant interpleader action, which was subsequently consolidated with an action brought by appellant concerning the same subject matter.

Appellant challenges the dismissal of his action as against defendants Peat, Marwick and Mitchell & Co., Sterling, Grace Securities Corporation, and other defendants who participated in the filing of a Registration Statement with the Securities and Exchange Commission in 1969 for Electro-Nucleonics. The district judge justifiably found that appellant neither alleged nor proved that he either purchased or sold any of Electro's securities covered by that Registration Statement, and thus, for that reason among others, his claims under the securities laws fail.

Appellant challenges the vacatur of default judgments that had been entered against defendants Mariano J. Cabrera and H. Febus Bernardini, and the dismissal of the complaint as against them.We find no abuse of discretion in Judge Motley's vacatur of the default judgments, and also hold that the district court's finding, that appellant had failed to sustain his burden of proof of showing actionable fraud by these defendants against appellant, is not clearly erroneous.

Appellant argues that the amount of the judgment entered in his favor against four of the defendants is too low, and that the amount should have been approximately $243,000, allegedly the highest value of the stock subject to the warrant between the time of issuance of the warrant and the time appellant ultimately re-obtained the warrant when he won the interpleader action. We agree with the district judge that to enter judgment in that amount on these facts would be too speculative, and we hold that the finding of damages in the amount of approximately $109,000 ($25,000 of which is in the nature of punitive damages) is not clearly erroneous, nor indeed ungenerous. The district judge pointed out that if plaintiff could in fact have realized a greater amount from the warrant, had it not been tied up in litigation, he caused much of the difficulty himself by dealing with the warrant in the lease transaction in such a way as to create the confusion that resulted in all the litigation that then inevitably followed.

Appellant has raised other issues, which we find upon due consideration to be without merit. We affirm the judgment of the district court in all respects.

19790404

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