State of Minnesota in Court of Appeals C9-96-707 Patrick J. Rowland, Appellant, vs. Dennis L. Monroe, et al., Respondents. Filed October 15, 1996 Affirmed Crippen, Judge Hennepin County District Court File No. 9417260 James H. Kaster, Steven A. Smith, Nichols Kaster & Anderson, 4644 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402-2242 (for Appellant) Kay Nord Hunt, Stephen C. Rathke, Lommen, Nelson, Cole & Stageberg, P.A., 1800 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for Respondents) Considered and decided by Crippen, Presiding Judge, Parker, Judge, and Short, Judge. Unpublished Opinion CRIPPEN, Judge (Hon. Isabel Gomez, District Court Trial Judge) Appellant contends that there are genuine issues of material fact on his claims of legal malpractice, breach of fiduciary duty, fraud and negligent misrepresentation. We affirm the trial court's summary judgment. Facts Respondent Dennis Monroe is a licensed attorney and a partner in the law firm of Krass, Monroe & Moxness and has substantial legal experience in the area of franchising. Respondent is also chief executive officer of Krass & Monroe Financial Services, Ltd. In 1988, appellant retained respondent to assist in a real estate closing. Subsequent to the 1988 real estate closing, appellant Patrick Rowland hired respondent to prepare his taxes each year and to plan his estate. Through this attorney-client relationship, respondent became privy to the specifics of appellant's financial affairs. In January 1993, respondent contacted several clients of his law firm, including appellant, to inform them of an ``investment opportunity'' that the firm had become ``involved with.'' The investment consisted of upscale laundry franchises that provided entertainment services such as snacks, games, and television. The investment was offered by Clean Duds, Inc., a client of the Krass Monroe law firm. Clean Duds, Inc. formed two partnerships, Duds N' Suds I and II, for the purpose of developing and operating several of the laundry franchises in the Twin Cities metropolitan area. After appellant received respondent's letter on laundry franchises, he asked his investment advisor to look into it. Upon reviewing Clean Duds, Inc. and the partnerships, appellant's investment advisor stated that the investment was speculative and advised appellant not to invest. Despite this advice, appellant decided to invest in one of the partnerships. Appellant met with respondent and Clean Duds, Inc. president Phil Akin in the Spring of 1993. At the meeting, either Akin or respondent informed appellant that the partnership he was investing in would not do well the first year but that it thereafter would become profitable. In addition, appellant was offered articles that informed him about the bankruptcy of Clean Duds, Inc.'s predecessor corporation. After the meeting, appellant personally visited a Duds N' Suds laundry. In May 1993, appellant executed a Subscription Agreement and Limited Partnership Agreement for one of the partnerships. Appellant also completed an Investor Qualification Questionnaire in which he disclosed personal financial information. The Subscription Agreement that appellant signed specifically indicated that he would bear the economic risk of the investment and that the investment was ``speculative'' and involved a ``high degree of risk.'' In the Fall of 1993, respondent learned that Clean Duds, Inc. would not be able to meet its commitment to finance equipment for the partnership in which appellant had invested. Still optimistic about the potential success of the partnerships, respondent and two other investors formed a separate partnership and borrowed $450,000 to fund equipment under lease to appellant's partnership. The three investors personally guaranteed the loan amount. During this time, Clean Duds, Inc.'s financial condition became worse. Eventually, a workout specialist was brought in to save Clean Duds, Inc. The specialist informed Clean Duds, Inc.'s Board of Directors that Clean Duds was in serious financial trouble and that Akin, the president, was partly to blame. Shortly thereafter, Clean Duds, Inc. and the Minnesota partnerships were liquidated, and appellant sustained a total loss on his investment. Decision Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, show that there is no issue of material fact and that the moving party is entitled to a judgment as a matter of law. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). In opposing a motion for summary judgment, a party may not rely on unsubstantiated conclusory statements and allegations alone; rather, the party must demonstrate that the allegations reasonably are based on existing facts. Minn. R. Civ. P. 56.05; Bixler ex. rel. Bixler v. J.C. Penney Co., 376 N.W.2d 209, 215 (Minn. 1985); Hunt v. IBM Mid Am. Employees Fed. Credit Union, 384 N.W.2d 853, 855 (Minn. 1986). On appeal, this court must review the evidence de novo and in a light most favorable to the nonmoving party. Fabio, 504 N.W.2d at 761. I. Legal Malpractice Claim In an action for legal malpractice, a plaintiff must prove that an attorney-client relationship exists and that the lawyer's negligence or breach of contract proximately caused the plaintiff's injuries. Rouse v. Dunkley & Bennett, P.A., 520 N.W.2d 406, 408 (Minn. 1994); See Gustafson v. Chestnut, 515 N.W.2d 114, 116 (Minn. App. 1994) (listing the elements of a malpractice claim not involving the loss of a claim). Although the element of causation is usually a jury issue, ``proximate cause can be decided as a matter of law where reasonable minds can arrive at only one conclusion.'' Raske v. Gavin, 438 N.W.2d 704, 706 (Minn. App. 1989) (citations omitted) (affirming the trial court's grant of summary judgment because ``no material issue of fact on proximate cause has been shown''), review denied (Minn. June 21, 1989); Lennon v. Pieper, 411 N.W.2d 225, 228 (Minn. App. 1987) (same). Appellant claims that respondent breached his duty by failing to disclose interests that conflicted with appellant's interests as an investor. The record shows that respondent purported to act on appellant's behalf but had interests as well in (a) representing Clean Duds, Inc., while appellant made investments in one of its enterprises, (b) earning commissions from Clean Duds for investments produced, including the investment of appellant, (c) producing fee and commission expenses for Clean Duds while appellant's investment was tied to the financial strength of the corporation, and (d) protecting his own investment in Clean Duds, Inc. While serving these interests, respondent related to appellant as his lawyer, and any conflict of the lawyer's interests was substantially enlarged when the lawyer actively solicited appellant's investment. The trial court concluded, for the limited purpose of summary judgment, that respondent was acting within the scope of an attorney-client relationship and that respondent had breached his duty as an attorney by suggesting an investment without disclosing the critical facts. But the court also concluded that appellant had failed to provide any evidence that respondent's actions were the direct cause of appellant's losses. Appellant argues that proximate cause is shown by appellant's statement that he trusted respondent and by the opinion of his expert witness, a former director for the Lawyers Professional Responsibility Board, that respondent's actions were the proximate cause of appellant's losses. Respondent argues that in spite of these claims, appellant failed to furnish any evidence that he would not have made the investment notwithstanding respondent's alleged breach. Reciting the testimony of his expert, appellant argues that this court is required under Fiedler v. Adams, 466 N.W.2d 39, 43 (Minn. App. 1991), review denied (Minn. Apr. 29, 1991), to find that a question of material fact exists on the issue of causation. Contrary to appellant's assertion, Fiedler did not hold that material proximate cause questions exist simply because an expert asserts that they do. In Fiedler, the plaintiffs produced ``detailed affidavits from three experts on professional ethics, bankruptcy, commercial transactions, and employee benefit plans.'' Id. The court in Fiedler looked at the totality of the evidence, including the opinions of the three experts, and determined that the evidence before the court was sufficient to create material fact disputes. Although appellant's expert witness provided an explanation of how respondent's actions constituted malpractice, his causation opinion was conclusory, not stated in terms of failure to disclose. And it is not evident that an expert on the ethics of lawyers has expertise on issues of causation relating to investments. By all indications, appellant was well aware of the risks involved when he elected to make his investment. According to the record, appellant made his investment contrary to the advice of his trusted investment adviser, after personally viewing a laundromat and signing forms acknowledging that the investment was risky and speculative, and fully knowing that the president of Clean Duds, Inc. was also respondent's client. Appellant also suggests that respondent is guilty of malpractice by failing to disclose the weak financial standing of Clean Duds, Inc. But appellant has made no adequate showing that respondent knew or believed that Clean Duds was in a perilous financial position. Although appellant argues that respondent's knowledge that the equipment financing was not in place demonstrates such knowledge, there is no indication that lack of equipment financing at the time of appellant's investment would have been fatal to the venture. Appellant also suggests that the respondent conducted himself so as to do harm to Clean Duds, Inc. by miring it in legal fees and commissions. But appellant has failed to show that the fees or commission caused Clean Duds, Inc. to default on its commitment to finance Duds & Suds II or that the legal services given to Clean Duds had less economic value than the fees charged. Finally, appellant also suggests that respondent should not have proposed such a risky investment in light of appellant's physical condition and his resulting special needs. But the trial court noted that notwithstanding appellant's physical disability, he is a mentally acute individual whose needs are no different from any other investor. The evidence indicates that appellant, notwithstanding his physical state, was an aggressive investor. Speculative investments, by their nature, create the possibility of large gains and the risk of large losses. II. Breach of Fiduciary Duty Claim Absent a fiduciary relationship, one party to a transaction has no duty to disclose material facts to the other. Midland Nat'l Bank v. Perranoski, 299 N.W.2d 404, 413 (Minn. 1980). But a fiduciary has a broad common law duty to disclose all material facts. Appletree Square I Ltd. Partnership v. Investmark, Inc., 494 N.W.2d 889, 892 (Minn. App. 1993), review denied (Minn. Mar. 16, 1993). An attorney is under a fiduciary duty to represent clients with undivided loyalty, to preserve client confidences, and to disclose any material matters bearing upon the representation of these obligations. Rice v. Perl, 320 N.W.2d 407, 410 (Minn. 1982) (citation omitted). As to appellant's claim that respondent breached his duty by failing to inform appellant about Clean Duds' weak financial standing, there is no evidence tending to show that respondent, at the time appellant made the investment, knew or should have known that the investment was bad. Although appellant has provided evidence showing that the financing was not in place at the time of his investment, he fails to show how respondent should have known this to be fatal to the venture. Appellant also claims that there was a breach of respondent's fiduciary duty when respondent disclosed appellant's financial circumstances to Clean Duds, Inc. The trial court found that due to appellant's voluntary completion of the investment documents, he had revealed any private financial information that he claims respondent used against his interests. There is no indication that respondent revealed the specifics of appellant's financial circumstances to third parties at any time before appellant's decision to invest. Merely suggesting that a person may be willing to invest does not amount to a breach of fiduciary duty. Finally, as with the attorney malpractice claim, the record does not contain evidence that respondent's alleged breach was the cause of respondent's loss. III. Fraud and Negligent Misrepresentation Claims In his claims of fraud or negligent misrepresentation, appellant proceeds under essentially one theory, claiming that respondent misstated or failed to state the critical facts discussed earlier in this opinion. The trial court correctly determined that disclosures on respondent's interests in the Clean Duds enterprises were not material to appellant's investment decision, and appellant provided no evidence that respondent knew that the company would encounter dire financial straits or that the equipment financing would not have fallen into place. Finally, as to all alleged misrepresentations or nondisclosures, appellant has failed to provide any evidence that it was respondent's actions, and not mismanagement at Clean Duds, that was the proximate cause of appellant's losses. Affirmed.