PHILADELPHIA (CN) – The 3rd Circuit vacated a $5.7 million award against Carnegie Mellon University issued by a federal judge who found that the school misled one investor about its development of microwave technology.
The investor, Christian Bouriez, had claimed in the original case that the university approached him in 1999 to solicit his investment in microwave technology they were developing.
Bouriez said he eventually invested $5 million in the research, but never entered into a contractual relationship with Carnegie Mellon over the investment. After he lost the investment, he claimed that the university had induced his investment with inaccurate statements about the feasibility of the microwave technology.
On April 6, 2010, a federal judge ordered Carnegie Mellon to repay Bouriez’s investment with interest. A three-judge appellate panel tossed that decision Tuesday, finding that the trial court erred since there was no formal contract between the parties.
“Any claim for negligence … requires the existence of a duty,” Judge Michael Chagares wrote for the court.
Since the trial court never discussed the relationship between Carnegie Mellon (CMU) and Bourierz, it “thus never held that CMU owed Bouriez any legally cognizable duty,” Chagares wrote. Instead, the judge “relied on the existence of the ‘special’ or ‘confidential’ relationship” between the parties, according to the 13-page ruling.
The 3rd Circuit remanded the case to the District Court with directions to “resolve Bourierz’s fraudulent misrepresentation claim in the first instance.”