Paraflon Investments, Ltd. v. Fullbridge, Inc.

2020 | Cited 0 times | First Circuit | May 26, 2020

United States Court of Appeals For the First Circuit

No. 19-1913


Plaintiff, Appellant,



Defendants, Appellees.


[Hon. Richard G. Stearns, U.S. District Judge]


Kayatta, Circuit Judge, Souter,* Associate Justice, and Selya, Circuit Judge.

Nicholas D. Stellakis, with whom Michael R. Perry, Anna Baitchenko, and Hunton Andrews Kurth LLP were on brief, for appellant. Lawrence G. Green, with whom Susan E. Stenger, Kelly K. Ballentine, and Burns & Levinson LLP were on brief, for appellees.

* Hon. David H. Souter, Associate Justice (Ret.) of the Supreme Court of the United States, sitting by designation.

May 26, 2020

SELYA, Circuit Judge. When a seemingly delicious

investment opportunity turned rancid and left a foul taste,

plaintiff-appellant Paraflon Investments, Ltd. (Paraflon) went on

the offensive: it sued the once and former object of its

affections, Fullbridge, Inc. (Fullbridge), and Fullbridge's

principals, Peter Olson and Candice Olson, claiming fraud and

misrepresentation. Following a five-day bench trial, the district

court turned Paraflon away empty-handed. See Paraflon Invs., Ltd.

v. Fullbridge, Inc., No. 16-12436, 2019 WL 3759522 , at *12 (D.

Mass. Aug. 9, 2019). Paraflon now seeks appellate review. After

rounding off some ragged edges, we affirm.


We rehearse the relevant facts consistent with the

district court's supportable factual findings. See Dudley v.

Hannaford Bros., 333 F.3d 299 , 301 (1st Cir. 2003). Our tale

begins with an introduction to the protagonists and other leading


Paraflon is a private limited company, principally based

in the British Virgin Islands and wholly owned by a family trust.

The trust's main beneficiary, Michael Sarkesian, scouts investment

opportunities for Paraflon. Founded in 2010 by the Olsons and

based in Massachusetts, Fullbridge develops training courses for

students to facilitate their successful transition into the

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workforce.1 The Olsons served jointly as Fullbridge's chief

executive officers until August of 2015. Thereafter, Peter Olson

alone acted in that capacity. He resigned in May of 2016.

This case has its genesis in Fullbridge's relationship

with Takamol, a subsidiary of the Kingdom of Saudi Arabia's

Ministry of Labor. The Ministry created Takamol with a view toward

bolstering the Saudi labor market through private sector

partnerships. In May of 2014, Takamol issued a Request for

Proposal (RFP) seeking bidders for "Wave 1" of a project involving

the production of online training courses. Fullbridge submitted

a bid and was subsequently notified by Takamol, both verbally and

(at some point) in writing, that it was the winning bidder.

In August of 2014 (after Fullbridge had been selected as

the winning bidder for Wave 1), Takamol and Fullbridge executed a

project agreement, sometimes referred to as the "Master

Agreement." This Agreement provided that it would "serve as a

framework for the terms" governing Fullbridge's work, which would

occur incrementally in line with discrete work orders. Each work

order would function "as a separate contract and [would] adopt the

terms of" the Master Agreement. In turn, the Master Agreement

disclaimed any commitment "that a Work Order will be offered,

1 Where the context admits, we use either the shorthand "Fullbridge" or the term "the defendants" to refer to Fullbridge and the Olsons, collectively.

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awarded or entered into," and declared that no "binding agreement"

would exist "until the relevant Work Order is formally executed."

In the fall of 2014, Takamol issued a second RFP for

"Wave 2" of the project. Fullbridge again submitted a bid and was

awarded a portion of the Wave 2 project. After Fullbridge was

notified of the award, the parties spent weeks negotiating final

pricing, eventually reaching an accord through an exchange of


Although the Master Agreement referenced the Wave 1 RFP,

its application was not expressly confined to Wave 1. And at the

time the Master Agreement was executed, Takamol informed Peter

Olson that it would cover all of Fullbridge's future work for

Takamol, including any projects associated with Waves 2 and 3.

Consistent with this representation, work orders subsequently

issued to Fullbridge for both Wave 1 and Wave 2 incorporated by

reference the terms of the Master Agreement.

Throughout Fullbridge's work on Waves 1 and 2, Takamol

maintained a practice of "perform[] now, paper[] later." Relying

on this practice, Fullbridge began work on Wave 1 before the Master

Agreement had been executed, proceeding on the basis of verbal

assurances from Takamol that it had received the Wave 1 award.

Similarly, Fullbridge began multiple projects months before any

work orders for those projects were executed.

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As Fullbridge's relationship with Takamol matured,

Fullbridge found itself undercapitalized and went hunting for

investors. In the spring of 2015, Paraflon paid $500,000 to

purchase shares of Fullbridge's convertible preferred stock during

the company's Series D financing round. At that time, Paraflon

had made only a handful of other investments (none of which had

been in the education sector).

In April — from this point forward all dates are in 2015

unless otherwise expressly denominated — Takamol issued a third

RFP seeking course developers for Wave 3. This RFP included

provisions requiring successful bidders to enter into three-year

"Framework Agreements" with Takamol. It also required all bidders,

"including those who ha[d] previously entered into an agreement

with Takamol," to complete a "Legal Requirements attachment" since

the standard terms employed in previous RFPs had been updated.

Any successful bidder would be "expected to enter into a Framework

Agreement with Takamol on the basis" of these legal requirements.

Additionally, the RFP stated that "Preferred Bidder[s]" would be

notified of that status in writing.

Fullbridge submitted a bid for Wave 3 in late May. In

August, Takamol requested a meeting with a Fullbridge

decisionmaker to commence negotiations regarding Wave 3. On August

17, three Takamol representatives met with two Fullbridge

representatives in Saudi Arabia, with Peter Olson and two other

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Fullbridge employees participating by telephone. At this meeting,

a Takamol representative stated that Fullbridge had won a

substantial share of the Wave 3 project, to include the development

of approximately 8,000 learning hours over the course of three

years, with the price per learning hour capped at $4,800.2

Fullbridge estimated that, under this arrangement, it would earn

approximately $40 million in revenue.

In the aftermath of the August 17 meeting, Fullbridge

understood that the parties had reached a high-level agreement on

the approximate number of learning hours, the maximum price per

learning hour, and the overall duration of the work. Fullbridge

also understood, though, that the parties still needed to negotiate

a "second layer" of more granular details. These details included

the "families" of course topics that Fullbridge would produce, the

number of courses to be developed within each family, and the exact

price associated with each family. But based on previous

statements that the Master Agreement would govern all of

Fullbridge's work for Takamol, Fullbridge did not believe that it

would be required to execute a new Framework Agreement for Wave 3.

Shortly after the August 17 meeting, a Fullbridge

employee e-mailed Takamol a "pricing offer" containing a proposed

2 At trial, Paraflon objected on hearsay grounds to the admission of testimony about Takamol's statements at the August 17 meeting. The district court overruled this objection. On appeal, Paraflon does not argue that this evidence was improperly admitted.

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breakdown of course families, the price per learning hour

associated with each family, and the average course length per

family. The next day, Abeer AlHashimi (a Fullbridge representative

based in Saudi Arabia) reported that Takamol's "initial feedback"

on Fullbridge's proposed pricing had been positive and that

Fullbridge should expect to hear back from Takamol within two days

"on the exact volume and families awarded."

Fullbridge quickly commenced logistical planning for its

work on Wave 3, remaining in regular contact with Takamol along

the way. Starting in September, Peter Olson checked weekly with

AlHashimi, inquiring whether it would be accurate to tell investors

that Fullbridge's Wave 3 "deal" was "still on." AlHashimi (who

had contact with Takamol's upper echelon) repeatedly confirmed the

deal's continued viability. Apparently still strapped for

capital, Fullbridge sought loans from two venture capital firms.

Both firms requested documentation of the Wave 3 award, sparking

a series of communications between Fullbridge and Takamol about

Wave 3's status. Although we need not recite book and verse,

several data points bear mention.

To begin, Takamol declined to sign a non-binding

statement, drafted by Fullbridge, confirming the Wave 3 award.

Then — in an e-mail to Takamol in late October — Peter Olson

indicated that Fullbridge was ready to begin work in earnest on

Wave 3 "pending the actual award of courses and a clear timetable

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for delivery."3 He requested "a sense of the exact timing and

courses designated." Takamol responded that although it had been

"delayed by issues outside of [its] control," matters seemed to be

"moving in the right direction." Emphasizing that it valued its

"partnership" with Fullbridge, Takamol stated that although it

could not give "a date now," all partners could expect to receive

"a better outlook" the following week.

In an e-mail to AlHashimi a few days later, Takamol

indicated that it was "still waiting for the management approval

in this particular RFP" and proposed that an alternative

arrangement be implemented "to expedite the approval." This

alternative arrangement entailed the issuance of a so-called

buffer order for "a certain number of learning [h]ours" on a

"letter of intent basis" and a fixed price agreement that would

set the "price and the demand for [the] long period agreement."

Takamol's representative noted that although he did not know "how

much" would ultimately be agreed to (an apparent reference to the

volume and/or price of courses), Fullbridge's original pricing

offer was "acceptable" to him. AlHashimi responded that Fullbridge

would accept this arrangement if Takamol confirmed the full scope

3 In this e-mail, Peter Olson described Fullbridge as "delighted to have been shortlisted as a course developer" for Wave 3. He testified at trial that by "shortlisted," he meant that Fullbridge was "honored to be part of a very short list" of successful bidders.

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of the Wave 3 project (specifically, a minimum of 7,200 learning

hours with an average production of 600 learning hours per

quarter). Takamol replied that it could not "accept a minimum

scale" for Wave 3. Fullbridge subsequently agreed to the buffer

order "with no conditions," but Takamol never issued it.

Around this time, Fullbridge opened its D-1 financing

round. On October 30, Fullbridge sought a second investment from

Paraflon, e-mailing Sarkesian a copy of an investor presentation

made earlier that month. This presentation included statements

that Fullbridge had won a "$40mm share of Wave 3" and had a "$40mm

3 year contract with Takamol." On November 16, Fullbridge followed

up with a "Qualitative High Level Summary" stating that it had

"recently won a large flywheel contract/award from [the Kingdom of

Saudi Arabia], signaling [a] large new pipeline fueling top-line

growth over [the] next 2-3 years."4

Sarkesian reviewed these documents and decided to invest

in the D-1 round chiefly because of Fullbridge's representations

about the $40 million Wave 3 award. He never asked to review

documentation relating to the Wave 3 award. Nor did he visit

Fullbridge's "data room," where important documents were made

4 From time to time, Fullbridge referred to both a Wave 3 "contract" and a Wave 3 "contract/award." Since nothing turns on this nomenclature, we use the terms interchangeably.

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available to investors (but he testified that he was unaware of

the data room's existence at the time).

On November 20, Sarkesian made the purchase that gave

rise to this litigation: acting for Paraflon, he agreed to buy

$750,000 worth of Series D-1 convertible preferred stock. He

approved the executed purchase documents, dated November 20, on

November 23. The signed documents were forwarded to Fullbridge

that day. And on December 1, Paraflon wired the purchase money.

Meanwhile, Takamol had continued to delay finalizing the

details of Fullbridge's Wave 3 work. In a November 11 e-mail,

Takamol stated that it was "on the final stages to finalize wave

III awarding," which it expected "to be completed by [the] end of

next week." Roughly two weeks later (on November 26), Takamol

informed Fullbridge that it had "reached the final stage for the

issuance of the letter of award and subsequent agreement" but

Fullbridge would need to accept a maximum of 3,000 learning hours.

Fullbridge estimated that this decreased the value of the award

from approximately $40 million to approximately $14 million. In

addition, Fullbridge interpreted the November 26 e-mail as

requiring it to sign a new Framework Agreement.

Fullbridge had little time to dwell on the downside of

these developments. Within a matter of months, the Wave 3 project

collapsed. In February of 2016, Takamol put the entire project on

hold. The death knell was sounded when Takamol later decided to

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develop its own courses internally. By April of 2016, Candice

Olson was openly bemoaning the "loss of [the] $40mm award."

The parting of the ways between Fullbridge and Takamol

did not end the matter. Stung by the deterioration of its

investment, Paraflon brought suit against, among other parties,

Fullbridge and the Olsons in the United States District Court for

the Southern District of New York. It pressed federal securities

fraud claims, as well as common law claims for breach of contract,

negligent misrepresentation, and fraudulent misrepresentation and

concealment. By agreement, the case was transferred to the

District of Massachusetts. See 28 U.S.C. § 1404(a).

After the close of discovery, a five-day bench trial

ensued. The district court granted Fullbridge's motion for

judgment as a matter of law on Paraflon's breach of contract claim,

and Paraflon has not appealed this ruling. After trial, the

district court took the matter under advisement. In due course,

it issued an exegetic rescript, ruling against Paraflon on both

its federal securities law claims and its state-law

misrepresentation claims.5 See Paraflon, 2019 WL 3759522 , at *12.

Pertinently, the court found that Fullbridge "did not knowingly or

intentionally make a false statement" and that Fullbridge's

5For ease in exposition, we sometimes refer to Paraflon's negligent misrepresentation and fraudulent misrepresentation and concealment claims collectively as the "misrepresentation claims."

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representation of a $40 million award from Takamol "was not false

nor should defendants have known it to be inaccurate at the time

it was made." Id. This timely appeal followed. In it, Paraflon

challenges only the district court's disposition of the state-law

misrepresentation claims against Fullbridge and the Olsons.


Following a bench trial, we review the trial court's

legal conclusions de novo. See Calandro v. Sedgwick Claims Mgmt.

Servs., Inc., 919 F.3d 26 , 33 (1st Cir. 2019). We assay the

court's factual findings for clear error, deferring to those

findings unless careful consideration of the record leaves us with

a firm conviction that they "are simply wrong." Id. (quoting State Police Ass'n v. Comm'r, 125 F.3d 1 , 5 (1st Cir. 1997)). In

undertaking this tamisage, we remain mindful that the trial court

"sees and hears the witnesses at first hand and comes to appreciate

the nuances of the litigation in a way which appellate courts

cannot hope to replicate." Id. (quoting Cumpiano v. Banco

Santander P.R., 902 F.2d 148 , 152 (1st Cir. 1990)).

In this instance, the district court determined that New

York law supplies the substantive rules of decision. Neither side

challenges that determination. When a federal court must make a

choice of state substantive law, it is at liberty to accept,

without particularized inquiry, the parties' reasonable consensus

as to which state supplies the substantive rules of decision. See

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e.g., Borden v. Paul Revere Life Ins. Co., 935 F.2d 370 , 375 (1st

Cir. 1991). Thus, we too apply New York law.

Under New York law, a plaintiff alleging negligent

misrepresentation must prove by preponderant evidence that the

defendant had a duty to impart accurate information to the

plaintiff by virtue of a special relationship; that the defendant

breached this duty by carelessly imparting false information that

he ought to have known was inaccurate; that the defendant

understood that the plaintiff would use the information for a

particular purpose; and that the plaintiff reasonably relied on

this information to his detriment. See Anschutz Corp. v. Merrill

Lynch & Co., 690 F.3d 98 , 114 (2d Cir. 2012); Mandarin Trading

Ltd. v. Wildenstein, 944 N.E.2d 1104 , 1109 (N.Y. 2011); White v.

Guarente, 372 N.E.2d 315 , 319 (N.Y. 1977); Wrynn v. Subaru Town

Motors, Inc., 487 N.Y.S.2d 247 , 247 (App. Term 1984). For a claim

of fraudulent misrepresentation, New York law provides a somewhat

different framework. With respect to such a claim, the plaintiff

must prove by clear and convincing evidence that the defendant

knowingly or recklessly made a false representation of material

fact; that the defendant made the misrepresentation with the intent

of inducing the counter-party's reliance; and that the counter-

party justifiably relied on the misrepresentation to his

detriment. See Merrill Lynch & Co. v. Allegheny Energy, Inc., 500

F.3d 171 , 181 (2d Cir. 2007); Mandarin Trading, 944 N.E.2d at 1108 .

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The first of these elements may also be satisfied by showing an

omission of material information "that the opposing party had a

duty to disclose." Ahern v. Scholz, 85 F.3d 774 , 793 (1st Cir.

1996); see Merrill Lynch, 500 F.3d at 181 ; P.T. Bank Cent. Asia v.

ABN AMRO Bank N.V., 754 N.Y.S.2d 245 , 250 (App. Div. 2003). The

parties appear to agree that such omissions also can give rise to

negligent misrepresentation claims. See Creative Waste Mgmt.,

Inc. v. Capitol Envtl. Servs., Inc., 429 F. Supp. 2d 582 , 609

(S.D.N.Y. 2006). A duty to disclose may attach if the parties are

"in a fiduciary or confidential relationship"; if disclosure is

necessary to correct or complete an earlier "partial or ambiguous

statement"; or if one party enjoys an informational advantage and

knows another party is acting on the basis of bad information.

Brass v. Am. Film Techs., Inc., 987 F.2d 142 , 150 (2d Cir. 1993).

We pause to note an important doctrinal wrinkle. Under

New York law, an investor's claim that a defendant fraudulently

induced its investment generally cannot rest on misrepresentations

or omissions that postdate the investment because the element of

detrimental reliance is "necessarily absent." High Tides, LLC v.

DeMichele, 931 N.Y.S.2d 377 , 381 (App. Div. 2011); see RKA Film

Fin., LLC v. Kavanaugh, 99 N.Y.S.3d 267 , 270 (App. Div. 2019).

This principle has equal bite with respect to negligent

misrepresentation claims, which likewise require proof of

reasonable reliance. See Mandarin Trading, 944 N.E.2d at 1109 .

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Against this backdrop, Paraflon marshals three separate

lines of attack.6 Each line of attack centers on the district

court's findings about Fullbridge's state of mind.7 First,

Paraflon argues that the district court misidentified the correct

cut-off date for Fullbridge's duty to disclose and, by extension,

assessed Fullbridge's state of mind at the wrong temporal moment.

Second, Paraflon argues that the district court cabined its

assessment of Fullbridge's state of mind to Fullbridge's

subjective belief in a Wave 3 contract, failing to evaluate whether

that belief was objectively reasonable. Third, Paraflon argues

that any finding that Fullbridge reasonably believed it had a $40

million contract was erroneous. We address these arguments


We start with Paraflon's contention that the district

court botched its assessment of the misrepresentation claims by

6 To the extent that Paraflon has attempted to raise other arguments along the way, those arguments are undeveloped, meritless, or both. Thus, we reject them out of hand. 7 The parties use the phrase "state of mind" to refer to the element of negligent misrepresentation requiring proof that the defendant "should have known" that its representation was inaccurate. Anschutz, 690 F.3d at 114 (quoting Hydro Inv'rs, Inc. v. Trafalgar Power Inc., 227 F.3d 8 , 20 (2d Cir. 2000)). They use the same term to refer to the element of fraudulent misrepresentation requiring proof that the defendant knowingly or recklessly made a false statement with the intent to induce reliance by the counter-party (scienter). See Merrill Lynch, 500 F.3d at 181 ; Mandarin Trading, 944 N.E.2d at 1108 . To avoid confusion, we follow the parties' lead and employ the same terminology where appropriate.

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treating the date of Fullbridge's initial representation that it

had a $40 million contract (October 30), rather than the date of

Paraflon's D-1 investment, as the end point for evaluating

Fullbridge's state of mind and the fulfillment of its disclosure

duties. By misapprehending this pivotal date, Paraflon's thesis

runs, the district court excluded from its decisional calculus

various pre-investment events that Fullbridge either should have

disclosed or that bore on its state of mind at the time of

Paraflon's investment. Before embarking on this circuitous path,

we offer a brief primer on pertinent New York precedent and note

the applicable standards of review.

When — as in this case — a plaintiff alleges that the

defendant's misrepresentations or omissions induced its

investment, New York law indicates that the defendant's state of

mind and satisfaction of its disclosure duties should be assessed

up until the date of the plaintiff's investment. Cf. High Tides,

931 N.Y.S.2d at 381 (framing plaintiff's investment as temporal

touchstone for determining whether misrepresentations or omissions

can form basis for fraud claims). Even if post-investment

developments might be said to trigger some disclosure duty on the

defendant's part, see Brass, 987 F.2d at 150 , misrepresentations

or omissions about such events are generally of no consequence in

an action premised on fraudulent inducement of an investment. See

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High Tides, 931 N.Y.S.2d at 381 (explaining that in such a

situation, detrimental reliance is "necessarily absent").

New York courts have not been crystal clear about when

an investment should be deemed to have occurred for purposes of

misrepresentation claims. This question becomes especially thorny

where, as here, the plaintiff arguably bound itself to participate

in the transaction as an investor before the transaction was

formally consummated in all respects. What little precedent there

is, though, suggests that, in this context, an investment should

be deemed to have occurred once the plaintiff has decided to invest

and bound himself to the transaction sufficiently that subsequent

developments cannot be said to have influenced his already-

solidified investment decision. Cf. id. (holding that post-

investment misrepresentations and omissions cannot form basis for

fraud claims). Contrary to Paraflon's importunings, we think this

pivotal date may, under the right factual circumstances, occur

earlier than the technical consummation of all aspects of the


Turning to the applicable standards of review, we review

de novo whether the district court, as a matter of law, apprehended

that the date of Paraflon's investment was the relevant cut-off

date for assessing Fullbridge's state of mind. See Calandro, 919

F.3d at 33 ; see also United States v. 15 Bosworth St., 236 F.3d

50 , 54 (1st Cir. 2001) ("[W]hen a trial court bases its findings

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of fact on an inaccurate appraisal of controlling legal principles,

the rationale for deference [to those findings] evaporates

entirely."). If so, we then must determine what finding, if any,

the district court made about the date of Paraflon's investment

decision. Because the precise timing of a particular investment

is a factbound determination that can only be made after a holistic

assessment of the specific purchase documents and the attendant

circumstances, cf. Crellin Techs., Inc. v. Equipmentlease Corp.,

18 F.3d 1 , 7 (1st Cir. 1994) ("[S]o long as the evidence does not

point unerringly in a single direction . . . the question of

whether a contract has been formed between two parties is a

question of fact to be determined by the factfinder."), we review

any factual finding about the timing of Paraflon's investment only

for clear error, see Calandro, 919 F.3d at 35 .

We begin with a de novo inquiry into whether the district

court, as a matter of law, grasped the pivotal cut-off date for

appraising Fullbridge's state of mind. In mounting this inquiry,

we are quick to acknowledge that the district court was not

altogether clear as to its temporal focal point. Taken in

isolation, a few of the court's findings may be read to suggest

that the court confined its conclusions to the period demarcated

by Fullbridge's October 30 representations. See, e.g., Paraflon,

2019 WL 3759522 , at *10-12. This suggestion is given a boost by

the court's citation to an unpublished decision that may be read

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to suggest that a defendant's state of mind need only be evaluated

as of the time of the alleged misrepresentation. See id. at *10, *12 (citing IP Cube Partners Co. v. Telecomm. Sys., Inc., No. 15

CV 6334, 2016 WL 3248500 , at *2 (S.D.N.Y. June 13, 2016) ("An

essential element of both fraud and negligent misrepresentation is

that the defendant knew or should have known that its statements

were false at the time they were made.")).

But elsewhere in its rescript, the court clarified its

thinking. Citing pertinent New York precedent, it twice singled

out the date of investment as the pivotal moment. See id. at *10- 11 (citing High Tides, 931 N.Y.S.2d at 381 ). Take, for instance,

its extended discussion of Takamol's November 26 e-mail reducing

the size of the Wave 3 award to approximately $14 million. Noting

that "Paraflon had purchased the stock on November 20" and

"executed the purchase agreement on November 23," the court held

that "even assuming that [Fullbridge] had a duty to disclose the

reduction in the award after the purchase," that disclosure would

have "had no bearing on Paraflon's initial decision to invest in

Fullbridge." Id. at *11 (citing High Tides, 931 N.Y.S.2d at 381 ).

Although the court mentioned in passing that Paraflon's

"decision to invest" had occurred "a month prior to the [November

26] e-mail," the surrounding context makes reasonably clear that

the court viewed that initial investment decision as merely

tentative and the final (analytically significant) investment

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decision as having occurred in November.8 Id.; see id. at *6-7. This sequencing is consistent with real-world business practices:

prospective investors typically make a preliminary decision to go

forward because a given investment looks promising but withhold

their final decision — usually evidenced by signing on the dotted

line — until the details of the investment are in place. Given

the realities of the marketplace, the court's invocation of the

November purchase dates and its apparent understanding that

Paraflon's actual investment decision occurred in November

persuade us that it deemed the November 26 e-mail inconsequential

because that e-mail was transmitted after Paraflon had already

committed itself to the investment.

In all events, any lingering concern that the district

court froze its analysis at October 30 is dispelled by the court's

factual findings anent November events and its reliance on a number

of those findings in reaching its conclusions. See, e.g., id. at

*4-7, *11. Taking the court's rescript as a whole, it makes

8 For example, as we read its rescript, the district court made a finding that Sarkesian reviewed both the October 30 investor presentation and the summary chart that Fullbridge provided on November 16 before deciding to invest in the D-1 round of financing. See Paraflon, 2019 WL 3759522 , at *6. In addition, the court sandwiched its suggestion that Paraflon had made some sort of decision to invest in October between a citation to this finding and a reference to another finding that Paraflon had purchased the D-1 stock on November 20. See id. at *11. Taken together, these findings and surrounding statements help to refute any suggestion that the court treated Paraflon's actual investment decision as having occurred in October.

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reasonably evident that the court did not mean to limit the

temporal parameters of its conclusions to October 30.

We add a coda. When a district court presides over a

bench trial in a complex case and makes lengthy findings, some

imprecision is not uncommon. Where such imprecision exists, a

reviewing court ordinarily should attempt to resolve any

uncertainty by construing that court's findings and conclusions as

a whole. Cf. Calandro, 919 F.3d at 31 ("Bench trials evoke a

deferential standard of review."). Here, a careful review of the

totality of the district court's findings and conclusions makes

manifest that the court did not stop the analytical clock at

October 30 but, rather, treated the time of Paraflon's actual

investment decision (November 20-23) as the cut-off for assessing

Fullbridge's state of mind.

As we read its rescript, the district court unarguably

found that Paraflon purchased the D-1 stock on November 20 and

executed the purchase agreement on November 23. See Paraflon,

2019 WL 3759522 , at *7, *11. Additionally, the court indicated

that those November dates were more significant than December 1

(when Paraflon wired its D-1 purchase money). See id. at *11 ("While the funds were wired on December 1, 2015, Paraflon had

purchased the stock on November 20, 2015, and had executed the

purchase agreement on November 23, 2015."). And because there is

no material difference between the November 20 date and the

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November 23 date with respect to either Fullbridge's state of mind

or its disclosure duties, we will assume, favorably to Paraflon,

that the court found the later date to be the date of Paraflon's

D-1 investment.

The next question, of course, is whether this finding is

supportable as a matter of fact. As we have said, findings about

when particular investments occur are "ineluctably factbound" and,

thus, reviewable only for clear error. Calandro, 919 F.3d at 35 .

We discern nothing resembling clear error here.

To begin, by "execut[ing] and deliveri[ng]" the investor

signature page in the D-1 stock purchase agreement on November 23,

Paraflon "agree[d] to be bound by and be a party to" the agreement

as an investor "as of the date set forth" on the signature page

(November 20). While the agreement specifies elsewhere that sales

of securities can only be "consummated" by Fullbridge's

"acceptance of offers to purchase" stock, the undisputed evidence

of Fullbridge's earnest solicitation of Paraflon's investment

supports an inference that Fullbridge's acceptance was a foregone

conclusion. And even though Paraflon did not wire the purchase

money until December 1, its counsel essentially conceded at oral

argument that, absent fraud or misrepresentation prior to the

execution of the agreement, it had no ability to renege on the

transaction once it forwarded the investor signature page on

November 23.

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We add, moreover, that the district court premised its

finding about the date of Paraflon's investment in part on

Paraflon's own pretrial stipulation that it "purchased" the D-1

stock on November 20 and in part on undisputed evidence showing

that Sarkesian directed the transmittal of the executed purchasing

documents to Fullbridge on November 23. Paraflon, 2019 WL 3759522 ,

at *7. The district court was free to factor these considerations

into its decisional calculus. See Chao v. Hotel Oasis, Inc., 493

F.3d 26 , 32 (1st Cir. 2007); T I Fed. Credit Union v. DelBonis, 72

F.3d 921 , 928 (1st Cir. 1995).

To cap the matter, Paraflon itself suggested in its

opening brief that November 23 was the date on which a "meeting of

[the] minds on all essential terms" occurred between Paraflon and

Fullbridge. We conclude, therefore, that the district court's

finding that Paraflon made its actual investment decision and bound

itself to the transaction as of November 23 was not clearly

erroneous. It follows that any subsequent misrepresentations or

omissions could not be said to have induced its investment. See

RKA Film Fin., 99 N.Y.S.3d at 270 ; High Tides, 931 N.Y.S.2d at

381 .

Paraflon resists this conclusion, seizing on the stock

purchase agreement's provision that sales of D-1 stock could not

be "consummated" until Fullbridge accepted Paraflon's purchase

offer. With this in mind, Paraflon contends that Fullbridge did

- 24 -

not accept its investment until the D-1 round officially closed on

January 22, 2016. The rub, though, is that Paraflon never argued

below that January 22 should be deemed the pivotal date on which

its D-1 investment occurred. "If any principle is settled in this

circuit, it is that, absent the most extraordinary circumstances,

legal theories not raised squarely in the lower court cannot be

broached for the first time on appeal.” Teamsters Union, Local

No. 59 v. Superline Transp. Co., 953 F.2d 17 , 21 (1st Cir. 1992).

The circumstances here are not extraordinary and, thus, Paraflon's

belated argument is foreclosed.

In an effort to pull a large rabbit out of a small hat,

Paraflon launches an alternative argument. It presents December

1 (when it wired its D-1 purchase funds) as the next most plausible

date on which its investment should be deemed to have occurred.

The district court rejected this alternative argument, see

Paraflon, 2019 WL 3759522 , at *11, and so do we. Paraflon has

failed to offer any persuasive reasoning as to why the factfinder

was obliged to privilege the date on which Paraflon wired its

purchase funds over the dates on which it effectively bound itself

to participate in the transaction.

This brings us to Paraflon's complaint that the district

court mistakenly evaluated Fullbridge's state of mind as of October

30, instead of evaluating it as of November 23. As we explain

below, this complaint is unavailing.

- 25 -

To be sure, the district court — in elaborating upon its

conclusion that the "[d]efendants did not act with the intent to

deceive or with reckless disregard for the truth" — found that "in

October of 2015, [the] defendants reasonably believed, and had a

good faith basis for representing, that Fullbridge had been awarded

$40 million of business over three years from Takamol." Id. But

rejecting any inference that Fullbridge's financial troubles

prompted it to mislead investors either "purposefully or

recklessly," the court went on to find that Fullbridge "acted from

August through November of 2015 consistently with the belief that

it would receive the $40 million award from Takamol." Id. We

think it apparent that the "belief" found by the court was a

reasonable, good-faith belief in the $40 million award. Id. What

is more, the court found that this belief persisted notwithstanding

Fullbridge's difficulties in securing written confirmation from

Takamol — difficulties that (as the court's accompanying citation

to an earlier factual finding made clear) continued into November.

See id.

Taking these state-of-mind findings in the aggregate, we

are satisfied that the district court intended those findings to

capture more than the period ending October 30. In our view, the

totality of the court's statements on the subject amount to an

implicit finding that Fullbridge reasonably believed it had been

awarded a $40 million portion of Wave 3 and that such a belief

- 26 -

persisted through November 23. It was not until November 26 (when

Takamol reduced the Wave 3 award and made clear that Fullbridge

would be required to sign a Framework Agreement) that Fullbridge's

hopes were dashed. See id.

We recognize, of course, that the district court's

decision is not a model of clarity. But "[b]ench trials evoke a

deferential standard of review," Calandro, 919 F.3d at 31 , and

wherever possible, we afford the district court's findings a

generous reading. Employing "this respectful standard," we are

satisfied that the court below made at least an implicit finding

about Fullbridge's state of mind at the time of Paraflon's

investment. Id.

Battling on, Paraflon contends that the district court

failed to consider certain events, postdating October 30, that

bore upon Fullbridge's state of mind and duty to disclose. This

contention is woven out of whole cloth.

At least three of the items on Paraflon's list of

"omitted" events — the November 26 e-mail, Takamol's subsequent

failure to make any "commitments to Fullbridge," and Fullbridge's

use of Paraflon's investment to defray basic operating expenses —

occurred after Paraflon's investment on November 23. Thus, none

of these developments could have influenced Paraflon's investment

decision. See RKA Film Fin., 99 N.Y.S.3d at 270 ; High Tides, 931

N.Y.S.2d at 381 ; see also Paraflon, 2019 WL 3759522 , at *11

- 27 -

(recognizing this reality with respect to the November 26 e-mail).

And since Paraflon has not advanced a plausible claim that any of

these events evinced pre-investment misrepresentation or

concealment, they cannot breathe life into Paraflon's

misrepresentation claims.

We also give no weight to Paraflon's allusion to a

conversation "[s]ometime before November 26" in which Takamol

supposedly informed Fullbridge "that the scope of Wave 3 was being

reduced" by some unspecified amount. For one thing, there is no

evidence establishing that this conversation, if it occurred at

all, took place before the November 23 cut-off date. For another

thing, the allusion is untimely: Paraflon never argued below that

this conversation either should have been disclosed or was in some

way revelatory of Fullbridge's state of mind.9 Arguments not

raised below are typically deemed abandoned, see Teamsters Union,

953 F.2d at 21 , and so it is here.

9 In a post-argument letter purporting to pinpoint a place in the record where such an argument was raised below, Paraflon gestured only to a trial exhibit — buried in a voluminous record — which references this conversation. That unelaborated reference does not advance Paraflon's cause. To preserve an argument "for appeal, some developed argumentation must be put forward in the nisi prius court." B & T Masonry Constr. Co. v. Pub. Serv. Mut. Ins. Co., 382 F.3d 36 , 40 (1st Cir. 2004). The obligation to spell out an argument clearly and distinctly is not satisfied by inviting the trial court "to ferret out an evanescent needle from an outsized paper haystack." Rivera-Gomez v. de Castro, 843 F.2d 631 , 635 (1st Cir. 1988).

- 28 -

This leaves two other events that Paraflon suggests the

district court may have overlooked. The first such event is a

November 9 e-mail from Ramón Rivera, Fullbridge's chief financial

officer, acknowledging that Fullbridge had been unable to secure

confirmation of the Wave 3 award from Takamol. The second is

Takamol's November 11 e-mail telling Fullbridge that it was "on

the final stages to finalize wave III awarding," which it expected

to be completed shortly. Despite Paraflon's self-serving attempt

to characterize these events as missing pieces of the puzzle, the

record reflects that they were part and parcel of the district

court's decisional calculus.

With respect to the November 9 e-mail, the district court

made a specific factual finding and cited that finding twice when

rendering its conclusions. See Paraflon, 2019 WL 3759522 , at *4,

*11. And even though the district court did not make a specific

finding concerning the November 11 e-mail, it heard testimony that

Fullbridge understood Takamol's statement about "finaliz[ing] wave

III awarding" as a reference only to the finalization of the second

layer of Wave 3 details. We do not assume "that the trial judge

slept through the trial" simply because his opinion does not

explicitly address every scintilla of evidence. Richard v. Reg'l

Sch. Unit 57, 901 F.3d 52 , 59 (1st Cir. 2018). As long as the

trial court makes the basis for its disposition of a case

reasonably clear, it is not obliged to respond, piece by piece, to

- 29 -

each evidentiary fragment. See Nevor v. Moneypenny Holdings, LLC,

842 F.3d 113 , 119 (1st Cir. 2016). We think that this tenet

effectively disposes of any contention that the district court

committed reversible error by failing to comment specifically on

the November 11 e-mail. See Richard, 901 F.3d at 59 (observing

that trial court need not "expressly respond like a debate champion

to every evidentiary or factual contention made by the losing


Next, Paraflon challenges the scope of the district

court's state-of-mind findings. Paraflon insists that the court

only made findings about Fullbridge's subjective belief in a $40

million contract, without inquiring into the objective

reasonableness of that belief. Specifically, Paraflon argues that

for purposes of its negligent misrepresentation claims, the court

ought to have inquired into what Fullbridge "should have known."

Anschutz, 690 F.3d at 114 (quoting Hydro Inv'rs, Inc. v. Trafalgar

Power, Inc., 227 F.3d 8 , 20 (2d Cir. 2000)).

This argument is fruitless: it ignores the district

court's unequivocal finding that there was insufficient proof that

Fullbridge "should . . . have known" that its representation about

the contract was "inaccurate at the time it was made." Paraflon,

2019 WL 3759522 , at *12. Here, moreover, that finding was

buttressed by other findings that Fullbridge "reasonably believed"

that it had received the award and that it had "a good faith basis

- 30 -

for representing . . . [it] had been awarded $40 million of

business over three years." Id. at *11 . And as we have explained,

a holistic evaluation of the court's state-of-mind findings

reveals an implicit finding that Fullbridge maintained this good-

faith belief through November 23. See id. Seen in this light,

the futility of Paraflon's plaint that the district court failed

to evaluate the objective reasonableness component of its

negligent misrepresentation claims becomes starkly apparent.

Paraflon also asserts that the district court dispensed

with its fraud claim "based on a cramped understanding of

scienter," accusing the court of focusing exclusively on whether

Fullbridge intentionally induced Paraflon's investment by

knowingly misrepresenting the existence of a $40 million contract.

In Paraflon's estimation, the court utterly failed to assess

whether Fullbridge acted with reckless disregard for the truth.

See Bd. of Educ. v. Sargent, Webster, Crenshaw & Folley, 539

N.Y.S.2d 814 , 820 (App. Div. 1989); Burgundy Basin Inn, Ltd. v.

Watkins Glen Grand Prix Corp., 379 N.Y.S.2d 873 , 879 (App. Div.

1976). Once again, the district court's findings refute Paraflon's


Most importantly, the district court twice rebuffed the

notion that Fullbridge acted recklessly by representing that it

had a $40 million contract with Takamol. See Paraflon, 2019 WL

3759522 , at *11. Although the court did not use the buzz words

- 31 -

that Paraflon touts — in particular, it did not comment upon

whether Fullbridge made only a "pretense of knowledge," DiRose v.

PK Mgmt. Corp., 691 F.2d 628 , 632 (2d Cir. 1982) (quoting

Ultramares Corp. v. Touche, 174 N.E. 441 , 444 (N.Y. 1931)); Bd. of

Educ., 539 N.Y.S.2d at 820 — its findings that Fullbridge

"reasonably believed" that it had received the award and "had a

good faith basis" for its representation to Paraflon fairly

encompass this point, Paraflon, 2019 WL 3759522 , at *11. While a

trial court sitting without a jury must make its findings

reasonably clear, there is no general requirement that it use

particular words or pet phrases in performing such a task. Cf.

Valsamis v. González-Romero, 748 F.3d 61 , 63 (1st Cir. 2014)

(observing, in context of a Federal Rule of Civil Procedure

52(a)(1) challenge, that "substance trumps form").

Endeavoring to change the trajectory of the debate,

Paraflon submits that to the extent the district court reached

"bare conclusion[s]" about objective reasonableness, those

conclusions are so tersely stated and thinly supported that they

frustrate meaningful judicial review. We do not agree: the basis

for the challenged findings is readily apparent from context. For

example, the court discussed, in close proximity to its findings

about objective reasonableness, Takamol's statements in the August

17 meeting, Takamol's averment that the Master Agreement would

govern Fullbridge's work on Wave 3, Takamol's "performance first

- 32 -

and paper later" philosophy, and what it found to be the "credible

testimony" of Fullbridge representatives. Paraflon, 2019 WL

3759522 , at *11. The court also made pellucid that it had factored

into the mix Fullbridge's struggle to secure written confirmation

of the Wave 3 award, Fullbridge's activities from and after August,

and AlHashimi's repeated assurances that the Wave 3 deal remained

viable. See id.

No more was exigible. Following a bench trial, a

district court "need only make brief, definite, pertinent findings

and conclusions." Fed. R. Civ. P. 52(a), advisory committee's

note to 1946 amendment. "[T]here is no necessity for over-

elaboration of detail or particularization of facts." Id. Where,

as here, "'the district court's decision contains sufficient

findings and reasoning to make plain the basis for its disposition

of the case,' we pay little heed to claims that it should have

done more." Richard, 901 F.3d at 59 (quoting Valsamis, 748 F.3d

at 63 ). We are especially reluctant to entertain such claims when

— as in this case — the complaining party never moved for

additional findings under Federal Rule of Civil Procedure 52(b).

See Irving Tanning Co. v. Kaplan, 876 F.3d 384 , 390 (1st Cir.


The upshot is that the court below made its findings

reasonably clear — certainly clear enough to permit meaningful

appellate review. No useful purpose would be served by requiring

- 33 -

it to add hues to a sufficiently vivid rainbow. We do pause,

however, to address Paraflon's repeated references to the district

court's suggestion that Fullbridge "may have" engaged in "a heaping

ration of wishful thinking" when forming its belief that it had

landed the $40 million contract. Paraflon, 2019 WL 3759522 , at

*11. This remark simply cannot bear the analytical import that

Paraflon attempts to attribute to it. In fairness, the remark

must be read in conjunction with the court's findings that

throughout the relevant period, Fullbridge maintained a sincere

and objectively reasonable belief in the $40 million award. See

id. at *11 -12. Such an integrated reading makes luminously clear

the court's view that although Fullbridge may have indulged some

wishful thinking, it nonetheless operated under a reasonable,

good-faith belief in its securing of the $40 million award. See


The last leg of our journey takes us to Paraflon's

asseveration that no objectively reasonable person could have

thought, as late as November 23, that Fullbridge had a $40 million

award from Takamol. We review factual findings related to scienter

and objective reasonableness for clear error. See Calandro, 919

F.3d at 36 ; Brotherston v. Putnam Invs., LLC, 907 F.3d 17 , 27 (1st

Cir. 2018), cert. denied, 140 S. Ct. 911 (2020); Healey v. Chelsea

Res., Ltd., 947 F.2d 611 , 618 (2d Cir. 1991); ACA Fin. Guar. Corp.

v. Goldman, Sachs & Co., 15 N.Y.S.3d 764 , 766 (App. Div. 2015).

- 34 -

We conclude that the court below did not clearly err in finding

that Fullbridge reasonably believed it had been awarded a $40

million slice of Wave 3. Nor did the court commit clear error in

finding that Fullbridge did not act recklessly by representing to

investors that it had received a $40 million award. We explain


The district court's state-of-mind findings, fairly

construed, rest largely on its decision to credit the trial

testimony of the Olsons and other Fullbridge witnesses. Of central

importance, the court gave credence to the Olsons' testimony that

Takamol informed Fullbridge it had been awarded a sizable portion

of the Wave 3 project, agreed to the broad terms of a deal

(amounting to a projected $40 million in revenue), and left open

for negotiation a second layer of more granular details within

that broad framework. So, too, the court credited testimony that

Fullbridge's past working relationship with Takamol was

characterized by Takamol's "perform now, paper later" ethos,

resulting in Fullbridge's commencement of work on Wave 1 before

the execution of the Master Agreement and on other projects months

before the issuance of formal work orders. Finally, the court

credited testimony that Takamol had informed Fullbridge that the

Master Agreement would govern its work on Wave 3 and that

Fullbridge believed it would not be required to negotiate a new

Framework Agreement.

- 35 -

Paraflon views much of this testimony with a jaundiced

eye, regarding it as suspect and in tension with its interpretation

of the documentary evidence. But credibility determinations are,

within wide limits, grist for the trial court's mill. See

Calandro, 919 F.3d at 35 . As we repeatedly have said, "weighing

the evidence and assessing the witnesses' credibility is uniquely

the province of the district court." Fed. Refinance Co. v. Klock,

352 F.3d 16 , 29 (1st Cir. 2003).

Nor does Paraflon's reliance on various items of

documentary evidence get it very far. Much of the documentary

evidence to which Paraflon points is capable of supporting

competing inferences relating to Fullbridge's state of mind at the

time of Paraflon's November 23 investment. A few examples suffice:

 Fullbridge's internal minutes from the August 17

meeting and associated e-mails could support an

inference that Fullbridge understood (or should

have understood) that the parties had only

discussed a tentative pricing benchmark that was

entirely dependent on further negotiations. But by

the same token, these minutes could be viewed as

consistent with the Olsons' testimony that the

parties had reached a firm agreement on broad terms

and left open only a second layer of granular

details within that framework.

- 36 -

 Takamol's evasion of Fullbridge's requests for

written confirmation of the Wave 3 award could be

viewed as foreboding signs that its representations

on August 17 had been far from ironclad or

conversely (as the Olsons testified and the

district court apparently found) could be viewed as

altogether typical manifestations of Takamol's

modus operandi (perform now, paper later).

 Competing inferences could also be gleaned from

Peter Olson's October 20 e-mail seeking "a sense of

the exact timing and courses designated" and

Takamol's October 22 response stating that although

"things [were] moving in the right direction," it

could not give a specific timetable for Wave 3; the

e-mails surrounding Takamol's October 24 proposal

for a buffer order and fixed price agreement; and

Takamol's November 11 e-mail stating that it was

"on the final stages to finalize wave III


The short of it is that, on this scumbled record,

rational factfinders could have reached different conclusions

about whether it was objectively reasonable for Fullbridge to

believe (and, thus, represent) that it had a $40 million award for

Wave 3 as of November 23. Which conclusion appealed to a

- 37 -

particular factfinder would depend largely on how the factfinder

viewed not only Fullbridge's explanation of the documentary

evidence but also the credibility of various witnesses. Thus, the

case at hand falls squarely within the maxim that when a factfinder

is confronted by "two permissible views of the evidence," the

"choice between those competing views cannot be clearly

erroneous." Id. It was for the district court to weigh the

evidence and decide whether Fullbridge should have realized, on or

before November 23, that its representations about a $40 million

award were overly optimistic. So, too, it was for the district

court to decide whether Fullbridge acted with fraudulent intent,

a reckless disregard for the truth, or a false pretense of

knowledge by making these representations. The district court

acquitted its responsibilities adequately, and its findings pass

muster under clear-error review.


We need go no further. The decisive question here is

not whether we, if writing on a pristine page, would have resolved

this dispute in the same way as the district court. What matters,

we think, is that we discern no clear error in the district court's

determination that, as of November 23, Fullbridge had a good-faith

belief that it had received the lucrative award from Takamol. Of

equal significance, we discern no clear error in the district

court's determination that Fullbridge's good-faith belief was

- 38 -

objectively reasonable based on its experience with Takamol and

what it knew at the time of Paraflon's investment. Given these

determinations and the impotence of Paraflon's various claims of

error, the judgment of the district court must be


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