Jonathan Arnold v. Leticia Villarreal

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14-3204
JONATHAN ARNOLD,
Plaintiff-Appellant,
v.
LETICIA VILLARREAL,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 09 C 7399 — Amy J. St. Eve, Judge.
____________________
ARGUED MARCH 29, 2016 — DECIDED APRIL 6, 2017
____________________
Before FLAUM, EASTERBROOK, and SYKES, Circuit Judges.
SYKES, Circuit Judge. In the fall of 2004, Jonathan Arnold
and Leticia Villarreal exchanged marriage vows in California
in a ceremony solemnized by a priest and a rabbi. But they
failed to file their marriage license with the county recorder
within 10 days of the ceremony as required by California
law. Shortly before the license expired, the county recorder
2 No. 14-3204
sent a letter informing them that the license had not yet been
filed and reminding them that they needed to file it to
complete the legal process. The couple did nothing and the
license expired unfiled.
Although they were not legally married, the couple re-
mained together for about three years, had a child, and
purchased a condo in California. By the summer of 2007,
their relationship had deteriorated, and they separately filed
for divorce—she in California, he in Illinois. The divorce
proceedings were terminated when they stipulated that they
were never married.
Arnold then sued Villarreal in federal court in Chicago
on various fraud theories. He claimed that she tricked him
into believing the two were legally married to induce him to
give her gifts, including the California condo. The district
court entered summary judgment for Villarreal, characteriz-
ing the suit as “frivolous.” Frivolous is an apt description.
First, the undisputed facts show that Villarreal told Arnold
early on that she suspected they weren’t legally married.
Indeed, she insisted that they get a new marriage license and
do the whole thing over. They obtained a new license but
did nothing further.
Second, even if we accept that at some point along the
way Villarreal lulled Arnold with reassurances that they
were legally married, Arnold was not justified in relying on
her representations. He knew, because the county recorder
had told them in writing, that the marriage license had not
been filed as required by California law. Accordingly, we
affirm the district court’s judgment. We also grant
Villarreal’s motion for sanctions against Arnold for filing a
frivolous appeal.
No. 14-3204 3
I. Background
Arnold and Villarreal met in 2003. In January 2004
Arnold proposed marriage and Villarreal accepted. On
October 1, 2004, the couple applied for and received a mar-
riage license from the Los Angeles County recorder’s office.
The license was valid through December 30, 2004. On
November 21 they held a wedding ceremony in the pictur-
esque resort town of Dana Point. Father Erwin Castro, one of
two clergymen who participated in the ceremony (the other
was a rabbi), signed the couple’s marriage license but failed
to complete and file it. He did not fill in the date and loca-
tion of the ceremony; he did not obtain a witness’s signature;
and he failed to perform his statutory duty to return the
completed license to the county recorder within 10 days of
the ceremony. See CAL. FAM. CODE § 359(e) (requiring the
person solemnizing the marriage to return the license to the
county recorder “within 10 days after the ceremony”).
Arnold accuses Villarreal of taking the marriage license
away from Castro. Villarreal disputes this, but the key fact is
undisputed: the completed marriage license was never filed
with the recorder’s office.
On December 27 the couple received a letter from the re-
corder’s office informing them that their license had not yet
been returned for filing and would expire on December 30.
The letter urged them to immediately address the matter
and reminded them that filing a completed license was
essential to protect their “marital and property rights.” The
couple took no action in response to the letter.
In mid-2005 as the couple anticipated the birth of their
first child, Villarreal grew uneasy about the validity of their
marriage and told Arnold that she thought their failure to
4 No. 14-3204
file the marriage license meant that they weren’t legally
married. Arnold dismissed her concerns. Nevertheless, in an
attempt to appease her, Arnold agreed to a do-over. In
August 2005 they applied for and received another marriage
license. Remarkably, they again failed to follow through, and
a completed marriage license was never filed.
Villarreal gave birth to their baby on August 21, 2005.
About eight months later Arnold signed a power of attorney
in favor of Villarreal, which she used to obtain financing and
purchase a California condominium in both their names. The
loan and purchase documents refer to the pair as a married
couple. Arnold later transferred his interest in the condo to
Villarreal. He claims he gave her the condo—as well as other
gifts—only because he believed they were married.
After nearly three years, the couple’s relationship began
to disintegrate and they separated. In the summer of 2007,
they filed separate divorce petitions—Arnold in Illinois and
Villarreal in California. They eventually stipulated that they
were never legally married, and the divorce proceedings
were terminated. 1
Apparently unwilling to leave the matter there, Arnold
sued Villarreal in federal court in Illinois alleging various
fraud claims and seeking compensatory damages totaling
about $1 million and another $1 million in punitive damag-
es. He accused Villarreal of tricking him into giving her his
property by misrepresenting that they were lawfully mar-
ried. Villarreal moved for summary judgment, initially
taking the position that Arnold’s fraud suit failed because he
1 The California court retained jurisdiction over the parties’ dispute
concerning custody of their child.
No. 14-3204 5
wasn’t deceived about anything: they really were validly
married under California law. The district judge stayed the
case while Villarreal returned to California state court to try
to undo her stipulation. The state court refused to vacate its
judgment.
Once the California court had spoken, the district judge
lifted the stay, and Villarreal again moved for summary
judgment. This time she argued that Arnold’s fraud suit
failed because he could not have justifiably relied on any
misrepresentations she might have made about the legal
validity of their marriage. Arnold responded on the merits
and also sought time for additional discovery under
Rule 56(d) of the Federal Rules of Civil Procedure.
Judge John Grady, the district judge initially assigned to
the case, granted Villarreal’s motion and denied Arnold’s
Rule 56(d) request. The judge rejected Arnold’s argument
that he justifiably relied on Villarreal’s representations as
both “preposterous” on its face and utterly belied by the
undisputed record evidence. The judge also held that “[n]o
amount of discovery would remedy the flaws in Arnold’s
frivolous theory.”
Arnold moved to alter the judgment under Rule 59(e) of
the Federal Rules of Civil Procedure. He argued that the
court had failed to consider all of the relevant evidence in
the record. Meanwhile, in anticipation of Judge Grady’s
retirement, the case was administratively transferred to
Judge Amy St. Eve. She denied the Rule 59(e) motion, agree-
ing with Judge Grady that “[t]he undisputed facts amply
demonstrate that Arnold’s claims are frivolous.”
6 No. 14-3204
Although his claims had been deemed frivolous by not
one but two district judges, Arnold nevertheless filed this
appeal. Villarreal responded on the merits and moved for
sanctions against Arnold for filing a frivolous appeal.
II. Discussion
The parties agree that California law applies to Arnold’s
claims, so to the extent that the appeal entails a dispute
about the law, our task is to predict how the Supreme Court
of California would resolve it. 2 See BMD Contractors, Inc. v.
Fid. & Deposit Co. of Md., 679 F.3d 643, 648 (7th Cir. 2012).
As relevant here, Arnold invokes three different provi-
sions of California law: California Civil Code sections 1709
(fraudulent deceit), 1572 (actual fraud), and 1573 (construc-
tive fraud). We do not need to analyze these claims separate-
ly. Each one requires Arnold to prove that he justifiably
relied on Villarreal’s misrepresentations regarding the
validity of their marriage. Conroy v. Regents of Univ. of Cal.,
203 P.3d 1127, 1135 (Cal. 2009) (fraudulent deceit); Chi. Title
Ins. Co. v. Superior Court, 220 Cal. Rptr. 507, 513 (Cal. Ct.
App. 1985) (actual fraud and constructive fraud). Given the
undisputed facts, Arnold cannot prevail on this common
element of his fraud claims.
2 Subject-matter jurisdiction is secure under 28 U.S.C. § 1332 because
(1) Arnold and Villarreal are citizens of different states and (2) the
“domestic relations” exception to diversity jurisdiction doesn’t apply.
Arnold brings fraud claims; the case doesn’t fall within the domestic-
relations exception just because his factual allegations touch on the
subject of marriage. See Friedlander v. Friedlander, 149 F.3d 739, 740–41
(7th Cir. 1998).
No. 14-3204 7
We begin, however, by noting the distinct possibility that
Arnold’s claims are categorically barred as a matter of law.
California courts follow the general rule that one may never
justifiably rely on a representation of law (as opposed to a
representation of fact) because the law is equally accessible
to all. See Cicone v. URS Corp., 227 Cal. Rptr. 887, 891 (Cal. Ct.
App. 1986); 5 WITKIN, SUMMARY OF CAL. LAW (10TH), TORTS
§ 779 (2005); accord Lyon Fin. Servs., Inc. v. Ill. Paper & Copier
Co., 732 F.3d 755, 765 (7th Cir. 2013) (explaining the ration-
ales commonly given for the rule). The misrepresentations
alleged here appear to be legal in nature: Arnold claims that
Villarreal misled him about the legal status of their relation-
ship and the legal consequences of their failure to file their
marriage license with the county recorder.
The general rule is subject to a “fiduciary relationship”
exception, however, and the exception might apply here.
37 AM. JUR. 2D Fraud and Deceit § 103 (2016). Arnold and
Villarreal did not have a literal fiduciary relationship, but
California courts appear to have extended the fiduciary
exception to a broader category of “confidential relation-
ships.” Cicone, 227 Cal. Rptr. at 891; Bank of Am. v. Sanchez,
38 P.2d 787, 789 (Cal. Ct. App. 1934) (stating that the excep-
tion “has been extended to every possible case in which a
fiduciary relation exists as a fact[,] … [including] moral,
social, domestic, or merely personal [relationships]”). And
there is some indication that Arnold and Villarreal’s rela-
tionship would be considered “confidential” in the sense
meant by California law. See Spellens v. Spellens, 305 P.2d 628,
643 (Cal. Ct. App. 1956) (holding that a jury could reasona-
bly find that parties who were engaged to be married occu-
pied “a confidential relationship”), vacated on other grounds,
8 No. 14-3204
Spellens v. Spellens, 317 P.2d 613 (Cal. 1957); Mathewson v.
Naylor, 64 P.2d 979 (Cal. Ct. App. 1937) (same).
We’re hesitant to go further down this road. The parties
haven’t briefed this possible legal barrier to Arnold’s claims,
and the California cases on this doctrine are fairly old.
Ultimately, we have no need to predict how the California
Supreme Court would construe the “confidential relation-
ship” exception on these facts. Arnold’s fraud claims clearly
fail for a different reason.
California law holds that a plaintiff cannot justifiably rely
on a misrepresentation when his own conduct is manifestly
unreasonable “in the light of his own intelligence and infor-
mation.” All. Mortg. Co. v. Rothwell, 900 P.2d 601, 609 (Cal.
1995) (en banc) (quotation marks omitted). Whether the
plaintiff has acted so unreasonably that recovery should be
denied is normally a jury question, but it “may be decided as
a matter of law if reasonable minds can come to only one
conclusion based on the facts.” Id. (quotation marks omit-
ted).
It’s undisputed that Arnold knew the marriage license
was never filed with the recorder’s office as required by state
law. He received the recorder’s letter to that effect and did
nothing to rectify the problem. Moreover, as the birth of
their child approached, Villarreal told Arnold that she was
worried that they weren’t legally married, so they restarted
the process by applying for a new marriage license. The
county recorder issued the new license, but the couple did
nothing to follow through and it too expired. On these facts
Arnold’s claim that he justifiably relied on Villarreal’s later
affirmations of the validity of their marriage is manifestly
No. 14-3204 9
unreasonable. 3 Judge Grady properly entered summary
judgment for Villarreal.
For the same reason, Judge Grady’s rejection of Arnold’s
Rule 56(d) motion for additional discovery was eminently
sound. A district judge may delay consideration of a
summary-judgment motion and order additional discovery
if the requesting party demonstrates that “it cannot present
facts essential to justify its opposition.” FED. R. CIV. P. 56(d).
We review these orders deferentially, for abuse of discretion
only. Sterk v. Redbox Automated Retail, LLC, 770 F.3d 618, 622–
23 (7th Cir. 2014).
Judge Grady was clearly right to deny Arnold’s
Rule 56(d) motion. As the judge aptly put it, “[n]o amount of
discovery would remedy the flaws in Arnold’s frivolous
theory.” The undisputed evidence already in the record
established beyond question that any reliance by Arnold
was manifestly unreasonable based on what he knew about
his own failure to ensure that the marriage license was
properly completed and timely filed.
Finally, Villarreal has moved for sanctions under Rule 38
of the Federal Rules of Appellate Procedure, which author-
izes us to award “just damages and single or double costs”
against an appellant for filing a frivolous appeal. An appeal
is frivolous “when the result is obvious or when the appel-
3 Arnold harps on two entirely irrelevant facts: (1) Villarreal held herself
out as his wife when she purchased the California condo; and (2) she
argued in her first summary-judgment motion that they were legally
married. That Villarreal may have kept innocent third parties in the dark
(e.g., the seller of the condo, the mortgage lender, the court) does not
bear on the question whether Arnold’s alleged reliance was justified
given what he himself knew.
10 No. 14-3204
lant’s argument is wholly without merit.” Harris N.A. v.
Hershey, 711 F.3d 794, 802 (7th Cir. 2013) (quotation marks
omitted). That describes this appeal.
Rule 38 sanctions are discretionary, not mandatory. Id.
But Arnold’s appeal is precisely the kind for which an award
of sanctions is most appropriate. He filed it after two district
judges had characterized his suit as frivolous. There is no
theory of justifiable reliance that could overcome the undis-
puted fact that he knew his marriage license was never
properly completed and filed as required by California law.
Arnold’s appeal simply rehashes his allegation that Villar-
real assured him that the marriage was legally valid and
repeats bromides about the court’s obligation to draw all
inferences in his favor. He appears to think that catching
Villarreal in a lie is enough to entitle him to relief. It is not.
Arnold has utterly failed to confront what two district
judges recognized: that his fraud claims are not merely
meritless but are frivolous. We are left with the distinct
impression that he prosecuted this appeal simply to harass
Villarreal. As Judge Grady drily noted, the courts “are not a
proper venue for petty score-settling.”
Accordingly, Villarreal may submit, within 28 days, an
affidavit and supporting papers specifying the damages she
incurred in this frivolous appeal. Arnold’s response is due
within 28 days of Villarreal’s submission.
AFFIRMED; RULE 38 SANCTIONS ORDERED.