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TORRES v. BORZELLECA

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


August 7, 1986

ADOLFO G. TORRES
v.
HAZEL BORZELLECA and PROFESSIONAL MANAGEMENT CONSULTING v. GERALD D. GALLOP, THE GALLOP GROUP, INC., ROBERT A. FREEMAN, individually and as General Partner of RGH, LTD., LPC, LTD., and AGI, LTD. and DAVID DWORSKY, individually and as General Partner of RGH, LTD., and AGI, LTD.

Broderick, J.

The opinion of the court was delivered by: BRODERICK

MEMORANDUM

BRODERICK, J.

 The plaintiff, Adolfo G. Torres, M.D., a Maryland citizen, brought this action against Hazel Borzelleca, a Pennsylvania citizen, who is a management consultant. In Count I, Dr. Torres alleges that Borzelleca violated section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) and Rule 10b-5, 17 C.F.R. § 240.10b-5, by falsely and misleadingly stating that certain investment programs offered to Dr. Torres, consisting of interests in limited partnerships organized to install energy-saving equipment in commercial buildings, would generate tax savings in an amount greater than the required investment outlays. Count II alleges that Dr. Torres was defrauded by Borzelleca by making false statements concerning his investments. Counts III and IV allege that Borzelleca has committed the tort of negligent misrepresentation in a business transaction by failing to exercise due care in reviewing investment data and in advising Dr. Torres in connection with various investment programs.

 Borzelleca filed a third-party complaint against Robert A. Freeman and David Dworsky, California citizens and general partners in the limited partnership interests sold to Dr. Torres, and against Gerald Gallop and the Gallop Group, Inc., a California financial service company which marketed the limited partnerships.

 Borzelleca has filed a motion for summary judgment attached to which are portions of the depositions of Dr. Torres and his accountant, Harry McCrory, and portions of the final pretrial order filed by the parties. The third-party defendant, Gerald Gallop, filed a motion for summary judgment which adopts and incorporates Borzelleca's motion. Dr. Torres opposes both motions and has attached portions of Borzelleca's deposition to his memorandum of law. For the reasons that follow, Borzelleca's and Gerald Gallop's motions for summary judgment will be granted. The material facts concerning which there are no genuine issues may be summarized as follows: On or about December 8, 1982, Dr. Torres telephoned Borzelleca, a management consultant. During the telephone conversation, Borzelleca recommended that Torres invest in tax shelters, specifically RGH, Ltd., a California limited partnership. Borzelleca sent Torres a letter dated December 9, 1982 in which she explained, inter alia, some of the risks of investing in a tax shelter. Enclosed with this letter was a worksheet prepared by Borzelleca for Torres, which set forth "ACTUAL TAX WRITE-OFF" as follows: 1982 1983 1984 1985 1986 $ 44,720.70 $ 17,871.30 $ 29,130.30 $ 26,012.80 $ 23,828.50

19860807

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