Jennie VUCINICH, Appellant, v. PAINE, WEBBER, JACKSON & CURTIS, INC., a Delaware Corporation, and Philip F. Moore, Appellees

Jennie Vucinich sued Paine, Webber and the firm’s employee, Moore, alleging that she had sustained losses caused by the defendants’ investment advice. The district, court ruled in favor of defendants on motions for summary judgment and dismissal and plaintiff appealed. We affirm in part and reverse in part.

In 1977, Vucinich sought advice from Philip F. Moore on how best to hold a portfolio of stocks and mutual fund shares she had inherited. Moore provided her with published materials and suggested, on the basis of his and others’ prognostications as to market trends, that she invest in short positions, a strategy designed to capitalize on a falling stock market. Between January and July 1978, Moore, with Vucinich’s prior approval, sold her portfolio of securities and used the money to open short positions in eleven securities. In addition, he recommended that she use the proceeds from, an inherited parcel of real estate to purchase a retirement annuity.

Contrary to Moore’s predictions, the market remained relatively constant from the middle of 1977 through the beginning of 1980. During this time, Moore continued to advise Vucinich to hold her short positions in anticipation of…