Megadyne Information Systems v. Rosner, Owens & Nunziato

Megadyne Information Systems (Megadyne) (plaintiff) secured a contract with the Orange County Transportation Authority (OCTA). Megadyne had made its bid for the contract relying on misinformation that the OCTA provided it, and Megadyne became aware that the information had been misrepresented in November of 1995. Under state law, Megadyne had one year to file a tort claim against the OCTA after learning of the misrepresentation. The window to file a claim expired in November 1996. In 1997, Megadyne retained the law firm Rosner, Owens & Nunziato to pursue damages against the OCTA. The law firm spent years attempting to litigate the matter, but the efforts proved futile due to the statute of limitations having already run. Megadyne sued both the law firm and the three partners in their individual capacities for breach of fiduciary duties. Megadyne’s theory was that the law firm and the individual partners knew from the outset that all litigation was doomed but continued to pursue the matter and charge for legal services. Rosner and Nunziato (defendants) testified that they were uninvolved in the litigation and that Owens, as the only partner involved in the matter, was the only partner who could be held personally liable to Megadyne for the torts of the firm. Megadyne alleged that Rosner and Nunziato may have had discussions with Owens as to Megadyne’s potential legal claims. The trial court granted summary judgment in favor of Rosner and Nunziato, finding no triable issue of material fact that could be resolved in such a way as to hold them personally liable to Megadyne. Megadyne appealed.