Civil action commenced in the Superior
Court Department on May 27, 2016.
The case was tried before Susan E.
Sullivan, J., and a motion for judgment notwithstanding the verdict or for a
new trial or remittitur was considered by her.
Joshua A. McGuire for the defendants.
Michael J. Heineman for the plaintiff.
KINDER, J.
This dispute arises from a business arrangement in which Patrick J.
Hannon and his company, Agritech, Inc. (Agritech), agreed to pay 468 Consulting
Group, LLC (468 Group), a percentage of the revenue received from a soil
reclamation project. 468 Group was
formed by Hannon's longtime attorney, Paul Dee, for the purpose of this
arrangement. After the relationship
between Hannon and Dee soured, 468 Group brought this action against the
defendants -- Hannon, Agritech, and RHR, LLC (RHR), an entity formed by
Hannon's son (PJ[2]) -- to enforce the terms of the parties' agreement. A jury found that the defendants were engaged
in a joint venture, committed breaches of contract, defrauded 468 Group, and
transferred property fraudulently. The
jury awarded $276,000 in damages.
Separately, the judge found that the defendants engaged in unfair or
deceptive acts or practices in violation of G. L. c. 93A and awarded
double damages, costs, and attorney's fees, resulting in a total judgment of
$774,084.[3] The judge denied the
defendants' motion for judgment notwithstanding the verdict, a new trial, or
remittitur.
On appeal, the defendants claim error in
the jury instructions on breach of contract because (1) the judge declined to
instruct that Dee, as Hannon's attorney, had to prove that the transaction was
fairly and equitably conducted, and (2) the instructions permitted the jury to
hold RHR liable for breach of contract as a joint venturer. The defendants also argue that they are not
liable, as a matter of law, on the remaining claims and that, alternatively,
the amount of damages should be reduced.
Finally, the defendants argue that they were prejudiced by improprieties
in 468 Group's closing argument. We
affirm the amended judgment as to liability on the breach of contract,
fraudulent transfer, and G. L. c. 93A claims, and we reverse the amended
judgment as to liability on the fraud claims.
In addition, we reverse the order on the defendants' motion for judgment
notwithstanding the verdict, a new trial, or remittitur insofar as the order
denied the request for a remittitur or a new trial on damages.
Background. The jury could have found the following
facts. In or around 2013, Hannon devised
a business plan to operate a soil reclamation project called Rolling
Hills. The plan was for Rolling Hills to
receive soil from large urban construction sites and to use that soil to fill
an old quarry, so that the quarry could later be used for another purpose. To that end, Hannon formed Agritech on August
27, 2013, to engage in "mineral, environmental and waste activities"
and began negotiating with Immanuel Corporation (Immanuel) to purchase a quarry
in Uxbridge. Around the same time, on
November 7, 2013, Hannon offered Dee five percent of Rolling Hills's
revenue. Hannon made this offer in
recognition of an outstanding debt owed to Dee and to reward Dee for his
loyalty.[4] Dee accepted Hannon's offer
and, the next day, formed 468 Group for purposes of this business arrangement.
A problem soon developed with the sale of
the quarry. Agritech was required to
obtain environmental insurance as a condition of the purchase, but Agritech
could not secure insurance to protect against the possibility that it would
contaminate its own property. On
November 27, 2013, Hannon proposed restructuring the deal so that
(1) Immanuel would sell its stock to another entity, to be named by
Hannon, and (2) Agritech would operate Rolling Hills as a contractor,
which would allow Agritech to obtain the insurance. On December 20, 2013, Immanuel asked Hannon
to provide the name of the other entity, and Hannon responded that the other
entity was RHR. PJ formed RHR three days
later.
On May 5, 2014, RHR and Immanuel entered
into a written licensing agreement (licensing agreement), which permitted RHR
to "[d]eposit [a]cceptable [m]aterials at the [p]remises" and also
granted RHR the option to purchase Immanuel's stock.[5] RHR, in turn, hired Agritech "to
essentially run the day-to-day operations of the site," although there was
no written agreement between Agritech and RHR.
Regardless, Agritech was supposed to bill customers for dumping soil,
and those customers were supposed to remit their payments directly to
Immanuel. Immanuel was then supposed to
pay RHR, which would in turn pay Agritech.
On April 17, 2014, two weeks before the
licensing agreement was signed, Hannon and Dee memorialized their November 7,
2013, oral agreement by signing a written consulting agreement between Agritech
and 468 Group (consulting agreement).
Hannon executed the consulting agreement as president of Agritech and
personally guaranteed Agritech's obligations.
The consulting agreement specifically stated as follows:
"The
overriding purpose and intent of this [a]greement is that [468 Group] be paid
five percent (5%) of the total [r]evenues received in connection with the
reclamation, or any other permissible usage, of the real property situated
. . . [in] Uxbridge . . . until the [p]roject thereon has
been legally and properly completed, regardless of which entity or entities
(and their nominees, designees, agents, successors, transferees, or assignees)
bills and/or collects such revenues, and regardless of which entity or entities
comes into actual or constructive possession of monies paid which are related
to the development."
To accomplish the stated intent of the
consulting agreement, Hannon and Agritech agreed that if they "acquire[d]
either a [l]icensing [a]greement to operate the [p]roperty, or acquire[d] title
to the [p]roperty itself, . . . [they would] pay to [468 Group], from
and after the date of commencement of the [p]roject, an amount equal to five
percent (5%) of the [g]ross [m]onthly [r]evenues."[6] The consulting agreement defined gross
monthly revenues, in pertinent part, as "the total amount of revenues
received by [Hannon or Agritech], or any of its agents, designees, nominees,
assignees, transferees or successors."
While 468 Group agreed, in exchange, to provide legal advice and
consulting services, 468 Group was entitled "to full payment
. . . regardless of whether it render[ed] any . . . advice
or services." 468 Group was also
entitled to accountings.
The consulting agreement was the product
of multiple drafts exchanged between Hannon and Dee. Dee created the first draft, which referred
to RHR as a named party to the agreement.
However, at some point during Hannon's review of Dee's first draft, the
references to RHR as a named party were removed. As Hannon explained to Dee, "it wasn't
necessary" to name RHR as a party, but RHR was "understood" to
be a party. In response, Dee inserted
the paragraph about the overriding purpose and intent of the consulting
agreement, the definition of gross monthly revenues, and section 7, see note 6,
supra.
Rolling Hills was in operation from around
2015 to 2017. RHR did not maintain
corporate books, but $5,537,283.11 passed into Agritech's bank accounts during
the operation of the project. Agritech
paid 468 Group $53,805 between April and August of 2015 but made no payments to
468 Group after August 22, 2015. While
Dee made requests for payments and accountings, Hannon testified that he
stopped paying Dee because "the more money that [Hannon] gave to
. . . Dee the pushier he got."
At trial, Hannon and Agritech took the position that they did not owe
anything under the consulting agreement because Dee did not provide any consulting
services.[7] RHR argued that it did not
owe anything under the consulting agreement because RHR "had nothing to do
with [the consulting agreement]."
Discussion. 1.
Breach of contract. a. Business transaction with an attorney. The defendants argue that the judge erred in
declining to instruct the jury, consistent with Pollock v. Marshall, 391 Mass.
543, 556-557 (1984), that in a business transaction between a lawyer and a
client, "the burden is upon the attorney to prove that any influence over
the client which might be presumed to have arisen out of the relationship was
neutralized by independent advice given to the client or by some other means so
that there was no overreaching of the client and no abuse of confidence"
(citation omitted).[8] The defendants
contend that this instruction was necessary because Dee was Hannon's longtime
attorney.
"We review objections to jury
instructions to determine if there was any error, and, if so, whether the error
affected the substantial rights of the objecting party" (citation
omitted). Beverly v. Bass River Golf
Mgt., Inc., 92 Mass. App. Ct. 595, 603 (2018).
We will not set aside a verdict due to an error in the jury instructions
"unless the error was prejudicial -- that is, unless the result might have
differed absent the error" (citation omitted). Id.
As to whether there was error, a
"judge need not instruct the jury on every spin that a party can put on
the facts." Boothby v. Texon, Inc.,
414 Mass. 468, 484 (1993). "But if
an instruction bears on a material issue, it is error for a judge to refuse to
give the substance of the requested instruction." Antoniadis v. Basnight, 99 Mass. App. Ct.
172, 178-179 (2021). Here, one of the
main grounds of defense was that Dee was Hannon's longtime attorney. At the same time, there was little
evidentiary support for the defendants' argument that Dee exerted undue
influence over Hannon. It was undisputed
that Hannon had the expertise in the soil reclamation business, not Dee. See Rubin v. Murray, 79 Mass. App. Ct. 64, 70
(2011) (considering client's "knowledge and sophistication"). And it was Hannon, not Dee, who proposed the
consulting agreement. Although Dee
drafted the written agreement memorializing his verbal agreement with Hannon,
Dee testified that it was edited several times after it was reviewed by PJ, a
practicing attorney who Dee understood to be providing legal advice to
Hannon. Thus, even assuming that Dee had
some degree of influence over Hannon, there was evidence that Hannon received
independent legal advice before executing the agreement. See Pollock, 391 Mass. 556-557 (considering
whether client received independent advice).
However, we need not decide whether, on this evidence, the judge erred
in declining to provide the instruction, as we conclude that there was no
prejudice.
Dee was vigorously cross-examined at trial
regarding his ethical obligations and admitted that he did not encourage Hannon
to seek independent review of the contract.
The defendants argued in closing that Dee committed a breach of his
ethical obligations to Hannon and that the jury would have to decide whether
the consulting agreement was fair and reasonable to Hannon. 468 Group responded, in its closing, that
"[t]his agreement was fair [and] reasonable . . . [and] Mr.
Hannon had the benefit of his son the lawyer's advice." Thus, the issue was presented to the jury and
they were well positioned to determine whether the consulting agreement was
unfair to Hannon. For these reasons, we
are confident that the jury would not have reached a different result had a
Pollock instruction been given.
b.
Joint venture. 468 Group's theory
was that RHR, although not a signatory to the consulting agreement, was engaged
in a joint venture with Hannon and Agritech to operate Rolling Hills and that
"to the extent [the consulting agreement] binds . . . one to pay
468 [Group] five percent, it binds them both." On appeal, RHR contends that the jury
instructions and special verdict form erroneously allowed the jury to hold RHR
liable for breach of contract on this joint venture theory. RHR argues that it may be held liable as a
joint venturer only for "accidents" caused in the carrying out of the
joint venture, not for breaches of contract.
We are not persuaded.
"[A] joint [venture] is a partnership
of a sort," Cardullo v. Landau, 329 Mass. 5, 8 (1952), whereby each joint
venturer "is the agent or servant of the others, and . . . the
act of any one within the scope of the enterprise is to be charged vicariously
against the rest" (citation omitted), Bell v. Mazza, 394 Mass. 176, 184
(1985). It has generally been recognized
that, if joint venturers have authority to bind each other, one joint venturer
"may be held liable in contract . . . to third persons for all
acts . . . carried out by [another joint venturer] within the scope
of the joint venture." H.J.
Alperin, Summary of Basic Law § 1:10 (5th ed. 2014). See 48A C.J.S. Joint Ventures § 63, at
390 (2014) ("The fact that one joint venturer did not sign the contract
will not relieve him or her of liability under such contract when a fellow
member of the venture had the authority to bind him or her"). And even if joint venturers do not have
authority to bind each other, "when third parties deal with a [joint
venturer] in good faith and without knowledge of any limitation upon his authority,
the law presumes that the power exists to bind the [joint venturers] by
contracts that are reasonably necessary to carry on the business in which the
joint venture is engaged." 12 R.A.
Lord, Williston on Contracts § 35:75 (4th ed. 2012).
Here, RHR does not dispute that it was
engaged in a joint venture with Hannon and Agritech to operate Rolling
Hills. Nor does RHR argue that the
consulting agreement was outside the scope of the defendants' joint venture or that
Hannon and Agritech lacked authority to bind RHR.[9], [10] Rather, RHR argues that it may not be held
liable for breach of contract because 468 Group "did not have a contract
with RHR, and . . . had not negotiated with RHR." In the circumstances here, however, we
disagree. While it is true that joint
venture liability is more often applied in tort actions, see Stock v. Fife, 13
Mass. App. Ct. 75, 78 n.5 (1982), a party can be liable for breach of contract
where its authorized agent -- that is, its joint venturer -- has made
agreements in furtherance of the joint venture.
Indeed, other States have applied joint venture liability in similar
circumstances. See, e.g., Deicher v.
Corkery, 205 Cal. App. 2d 654, 662-663 (1962); Baker Farmers Co. v. ASF Corp.,
28 Ill. App. 3d 393, 395-396 (1975); Nesbitt v. Flaccus, 149 W. Va. 65, 73-74
(1964). In light of the undisputed
evidence that RHR participated in a joint venture with Hannon and Agritech to
operate Rolling Hills, and that the consulting agreement was within the scope
of that joint venture, we discern no error in the judge's joint venture
instruction or in the special jury question regarding RHR's joint venture
liability for breach of contract.
2.
Fraud. The defendants argue that
468 Group did not satisfy its burden of proof on the fraud claims. We agree.
To prove fraud, 468 Group had to prove the defendants (1) made a false
representation, (2) of a matter of material fact, (3) with knowledge of its
falsity, (4) for the purpose of inducing action thereon by 468 Group, and (5)
that 468 Group justifiably relied on the representation as true and acted upon
it to 468 Group's detriment. See
Sullivan v. Five Acres Realty Trust, 487 Mass. 64, 73 (2021). "Deception need not be direct to come
within reach of the law. Declarations
and conduct calculated to mislead and which in fact do mislead one who is
acting reasonably are enough to constitute fraud" (citation omitted). Id. In
determining whether the jury verdict on the fraud claims may be sustained, we
ask whether "anywhere in the evidence, from whatever source derived, any
combination of circumstances could be found from which a reasonable inference
could be made in favor of [468 Group]" (citation omitted). O'Brien v. Pearson, 449 Mass. 377, 383 (2007).
468 Group's fraud theory shifted over the
course of the case. The complaint
alleged that the defendants "used the corporate form in effort to commit a
fraud" against 468 Group. In its
opening statement, 468 Group vaguely suggested that the circumstances
surrounding RHR's creation were fraudulent.
In response to the defendants' motions for a directed verdict, 468 Group
argued that the jury could find fraud based on Hannon's representation that RHR
did not need to be named in the consulting agreement. In closing argument, 468 Group urged the jury
to find fraud on the following facts:
(1) references to RHR were removed from the consulting agreement, (2)
RHR, rather than Agritech, signed the licensing agreement, and (3) money from
Rolling Hills was spent on real estate for Hannon's family. The judge did not identify the alleged false
representation or conduct in the jury instructions, and the special jury
verdict form asked only whether Hannon committed "a fraud upon the
plaintiff."[11]
Nothing about RHR's involvement, in and of
itself, defrauded 468 Group. Hannon
proposed the idea of RHR to solve an insurance problem, and 468 Group knew of
RHR's involvement prior to entering into the consulting agreement. The only alleged false representation was
Hannon's statement that "it wasn't necessary" to name RHR as a party
to the consulting agreement, because RHR was "understood" to be a
party. The exact meaning of Hannon's
representation was unclear, but we assume for purposes of our review that Hannon
intended to convey that RHR would not later dispute being a party.[12] See
McEvoy Travel Bur., Inc. v. Norton Co., 408 Mass. 704, 709 (1990) (statements
misrepresenting "present intention as to future conduct may be the basis
for a fraud action"). We also
assume that Hannon's representation was a statement of material fact rather
than one of opinion, and that Hannon knew the statement was false when he made
it. Even assuming these facts, there was
insufficient evidence that Dee relied on the statement to his detriment.
The evidence regarding Hannon's representation
that it was not necessary to name RHR in the consulting agreement was
straightforward. Dee testified that
Hannon made the representation and that Dee then revised the consulting
agreement to include other language in an attempt to protect 468 Group. From this evidence, it is apparent that Dee,
a practicing attorney, understood the importance of the terms of a written
contract and did not rely on Hannon's representation that it was
"understood" that RHR would be a party to the consulting agreement. Significantly, Dee did not testify that
Hannon's representation factored into his decision to have 468 Group enter into
the consulting agreement.[13] Simply put, the evidence did not support a
reasonable inference that Dee and 468 Group relied on Hannon's alleged false
statement to their detriment.[14], [15]
Accordingly, the defendants' motions for a directed verdict on the fraud
claims should have been allowed.
3.
General Laws c. 93A. The
defendants argue that their conduct did not rise to the level of G. L.
c. 93A (c. 93A) violations.[16]
Chapter 93A, § 2 (a), declares unlawful "unfair or
deceptive acts or practices in the conduct of any trade or commerce."[17] "While a breach of contract alone does
not qualify, we have said that '[t]o be held unfair or deceptive under
c. 93A, practices involving even worldly-wise business people do not have
to attain the antiheroic proportions of immoral, unethical, oppressive, or
unscrupulous conduct, but need only be within any recognized or established
common law or statutory concept of unfairness.'" Exhibit Source, Inc. v. Wells Ave. Business
Ctr., LLC, 94 Mass. App. Ct. 497, 501 (2018), quoting VMark Software, Inc. v.
EMC Corp., 37 Mass. App. Ct. 610, 620 (1994).
In reviewing the judge's conclusion that the defendants' conduct was
unfair or deceptive, we "review the judge's subsidiary findings of fact
under the clearly erroneous standard, while reviewing de novo [her] ultimate
conclusion of law." Zabin v. Picciotto,
73 Mass. App. Ct. 141, 170 (2008).
Here, there was more than a simple breach
of contract. Leading up to the breaches
of contract, the defendants kept Dee and 468 Group "on a string" for
close to two years by (1) offering Dee five percent of the revenue from Rolling
Hills as a means of repaying Dee,[18] (2) representing that RHR did not need to
be named as a party in the consulting agreement, (3) agreeing to alternative
language that was intended to address RHR's involvement, and (4) making some
initial payments to 468 Group. See
Greenstein v. Flatley, 19 Mass. App. Ct. 351, 356 (1985) (c. 93A claim
supported where, in part, defendant kept plaintiff "on a
string"). See also Lambert v. Fleet
Nat'l Bank, 449 Mass. 119, 127 (2007) ("'stringing along' that induces
detrimental reliance can, in some cases, constitute a G. L. c. 93A
violation"). Deceptively strung
along in this way, Dee, as the judge found, "did not undertake steps to
collect the fees owed to him."
Then, after Dee forwent bringing a lawsuit against Hannon, and just as
Rolling Hills began to generate significant revenue, the defendants
manufactured excuses to stop paying 468 Group.
Instead, the defendants spent the money on real estate for other family
members. This was not a good faith
dispute over contract terms. See Exhibit
Source, Inc., 94 Mass. App. Ct. at 501 (c. 93A claim supported where, in
part, defendant manufactured reasons for not returning deposit). We discern no error in the judge's conclusion
that the defendants' conduct rose to the level of unfair or deceptive acts or
practices, even if that conduct was not fraudulent. See Heller v. Silverbranch Constr. Corp., 376
Mass. 621, 626 (1978) (act may be unfair or deceptive even if not fraudulent).
4.
Damages. Next, the defendants
argue that the damages awarded were excessive.
"We will affirm . . . an award [of damages] unless the
court below committed an abuse of discretion . . . amounting to an
error of law" (quotation and citation omitted). DaPrato v. Massachusetts Water Resources
Auth., 482 Mass. 375, 393 (2019). It is an
error of law for a court to allow an award of damages that "is clearly
excessive in relation to what the plaintiff's evidence has demonstrated damages
to be" (citation omitted). Id.
468 Group urged the jury to award
$223,059.15, which represented five percent of the $5,537,283.11 that passed
into Agritech's bank accounts minus the $53,805 that Agritech had already paid
468 Group.[19] The jury, however,
awarded $276,000, which represented approximately five percent of the
$5,537,283.11 that passed into Agritech's bank accounts, without any reduction
for the $53,805 that Agritech had already paid 468 Group. This award was clearly excessive in relation
to what 468 Group's evidence demonstrated the damages to be.[20] The
defendants' motion for remittitur should have been allowed, and 468 Group
should have been permitted to elect a new trial on damages or to accept the
jury's damages award reduced by the $53,805 that 468 Group was paid. On remand, 468 Group may make this
election. Should 468 Group accept the
remitted damages, the judge's separate award of multiple damages for the
c. 93A violation should be recomputed based on that amount.
5.
Closing argument. 468 Group
argued to the jury that, as part of the consulting agreement, Dee relinquished
his right to sue Hannon for Hannon's unpaid legal fees. The defendants claim that this argument was
improper because it was not supported by the evidence, and that the defendants
were prejudiced because they had taken the position that the consulting
agreement was not supported by consideration.
See Mass. G. Evid. § 1113(b)(3)(A) (2021). We agree that the consulting agreement did
not contain an express waiver of Dee's right to sue Hannon for his legal fees,
but Dee testified that after entering into the consulting agreement, he no
longer viewed Hannon as having a debt for the unpaid legal fees. In any event, we discern no prejudice where,
regardless of whether the consulting agreement contained such a waiver, the
purpose of the consulting agreement was for Hannon to repay Dee and there was
other evidence of consideration. The
consulting agreement obligated Dee to provide consulting services and legal
advice. In these circumstances, 468
Group's closing argument on this point, even if improper, could not have made a
difference in the jury's conclusion. See
Fyffe v. Massachusetts Bay Transp. Auth., 86 Mass. App. Ct. 457, 472 (2014).[21]
Conclusion. For these reasons, so much of the amended
judgment as imposes liability on the fraud claims is vacated, and so much of
the amended judgment as imposes liability on the breach of contract, fraudulent
transfer, and c. 93A claims is affirmed.
In addition, the order denying the defendants' motion for judgment
notwithstanding the verdict, a new trial, or remittitur is reversed insofar as
the order denied the request for a remittitur or a new trial on damages. On remand, 468 Group may elect a new trial on
damages or accept the remitted damages.
Should 468 Group accept the remitted damages, the judge's separate award
of multiple damages for the c. 93A violation should be recomputed based on
that amount.
So ordered.
footnotes
[1] Patrick J. Hannon and RHR, LLC.
[2] Hannon's son is also named
Patrick. For simplicity, we refer to him
as PJ.
[3] The total judgment included $116,475
in attorney's fees and $98,976.36 in prejudgment interest.
[4] Dee was owed approximately $275,000
for legal services he performed for Hannon, as evidenced by information filed
in connection with Hannon's 2012 bankruptcy petition. Hannon's bankruptcy was not allowed, and his
debt to Dee was not discharged.
[5] The licensing agreement provided that
RHR could exercise this stock option after paying Immanuel one million dollars.
[6] Section 7 of the consulting agreement
further provided as follows:
"The parties
reasonably contemplate that, should [Hannon and Agritech] acquire either a
[l]icense to operate the [p]roperty, or the [p]roperty itself, the name of the
present corporate client may be changed; and, ownership of the corporation
which presently holds title to the [p]roperty may also be changed. It is the intention of the parties that the
newly-named corporate client(s) will become a party (or, parties) to this
[a]greement, prospectively, thereby assuming all of the duties and obligations
which are presently placed on Agritech . . . by virtue of this
[a]greement."
[7] Hannon attempted to explain the
consulting agreement by stating that it was, essentially, a fiction, an entity
created solely because Dee needed a document showing he had a steady stream of
income for purposes of unrelated legal proceedings.
[8] The defendants' proposed instructions
initially included a request that the judge instruct the jury on the text of
Mass. R. Prof. C. 1.8, as appearing in 471 Mass. 1349 (2015), which governs a
lawyer's ethical responsibilities in business transactions with clients. The defendants withdrew that request at the
charge conference. The defendants'
argument that Mass. R. Prof. C. 1.8 should have been included in the jury
instructions is therefore waived. See,
e.g., Toney v. Zarynoff's, Inc., 52 Mass. App. Ct. 554, 563-564 (2001).
[9] Even if RHR had raised these
arguments, there was ample evidence that (1) Hannon and PJ formed Agritech and
RHR, respectively, for purposes of jointly operating Rolling Hills and (2) the
consulting agreement, which required Dee to provide legal advice and consulting
services in connection with Rolling Hills, was within the scope of the
defendants' joint venture.
[10] The judge did not instruct on the
ability of Hannon and Agritech to bind RHR or on whether Dee was a third party
dealing in good faith. However, RHR did
not request those instructions and does not claim error in the failure to give
them. This issue is therefore
waived. See, e.g., Toney v. Zarynoff's, Inc.,
52 Mass. App. Ct. 554, 563-564 (2001).
[11] On appeal, 468 Group also argues that
Hannon's promise to pay Dee five percent of the revenues supports 468 Group's
fraud claims because that promise was knowingly false when made. This argument was raised for the first time
on appeal, however, and we decline to address it. See Boston Water & Sewer Comm'n v.
Commonwealth, 64 Mass. App. Ct. 611, 618 (2005).
[12] Or perhaps Hannon intended to convey
that the consulting agreement bound RHR, regardless of whether RHR was named as
a party. Assuming such a representation
would have been one of fact rather than opinion, it would have been an accurate
representation based on RHR's role as a joint venturer.
[13] Indeed, in these circumstances, Dee's
reliance on Hannon's lay opinion regarding what was necessary to bind RHR under
the consulting agreement would have been unreasonable.
[14] In light of our conclusion, we need
not reach RHR's separate argument that it could not have been found liable for
fraud as a joint venturer.
[15] RHR's argument regarding the
fraudulent transfer claim is made in cursory fashion and without citation to
legal authority. It is therefore
waived. See Halstrom v. Dube, 481 Mass.
480, 483 n.8 (2019). Even were we to
reach the issue, the damages awarded by the jury were tied directly to the
breach of contract claim, see infra, and RHR does not identify additional
damages awarded based on the fraudulent transfers. Thus, there was no prejudice from the finding
of liability on the fraudulent transfer claim.
[16] 468 Group's c. 93A claims were
reserved for the judge, who concluded that the defendants committed willful or
knowing violations of the statute and awarded double damages in accordance with
c. 93A, § 11. The defendants
do not raise any separate arguments with respect to the judge's conclusion that
the violations were willful or knowing.
[17] The defendants argue that this was a
private transaction to which c. 93A does not apply. The defendants rely on a line of cases limiting
the reach of c. 93A to exclude disputes arising from private transactions,
such as the private sale of one's home, or from intra-enterprise
transactions. See Milliken & Co. v.
Duro Textiles, LLC, 451 Mass. 547, 563-564 (2008). Contrary to the defendants' arguments, this
was not a private or intra-enterprise transaction; this was a commercial
transaction between two separate businesses.
[18] As found by the judge, Dee agreed to
enter into the consulting agreement "in lieu of taking other action to
collect [the] fees owed to him."
The defendants argue that this finding was clearly erroneous. We disagree; Dee testified that after
entering into the consulting agreement, he no longer viewed Hannon as having a
debt for the hundreds of thousands of dollars in unpaid legal fees.
[19] The defendants argue that some of the
money that passed through Agritech's bank accounts was not attributable to
Rolling Hills and that the amount of damages was also excessive for this
reason. We disagree. Where Agritech was formed for the purpose of
operating Rollings Hills, and there was no evidence that Agritech received
money from any other business pursuits, the jury reasonably could have inferred
that all of the money that passed through Agritech's bank accounts was attributable
to Rolling Hills. There was no evidence
supporting 468 Group's related statement that Agritech was taking payments on
the side, and that argument should not have been made. However, we are confident that this isolated
comment did not make a difference in the jury's verdict, especially in light of
the judge's clear instructions that the jury were to decide the case based only
on the evidence and not based on arguments of counsel. See Fyffe v. Massachusetts Bay Transp. Auth.,
86 Mass. App. Ct. 457, 472 (2014).
[20] The judge's findings of fact on the
c. 93A claim included the following finding: "[p]ursuant to the [consulting
agreement] . . . [468 Group] was entitled to $276,864.15 from the
money that passed through the Agritech account less the $53,805.00 previously
paid for a total of $223,059.15."
Yet the judge ordered that judgment be entered in favor of 468 Group on
its c. 93A claims in the amount of $276,000, together with reasonable
costs and attorney's fees. The judge was
not required to follow the jury's damages award. See Exhibit Source, Inc., 94 Mass. App. Ct.
at 500.
[21] The defendants also argue that 468
Group improperly shifted the burden of proof by commenting on the absence of
documentary evidence showing that (1) RHR sought financing from a third party
before the defendants and Immanuel settled on the deal set forth in the
licensing agreement and (2) Hannon's girlfriend attempted to obtain a
traditional mortgage to purchase the home in Uxbridge. Even assuming these comments were improper,
they were related to tangential issues, and we are confident that they did not
affect the jury verdict on the breach of contract or fraudulent transfer claims
or the judge's finding on the c. 93A claims.