20 Atlantic Ave. v. Allied Waste Industries

• Decision Date: 30 March 2007
• Docket Number: C.A. No. 03-10987-MLW.
• Citation: 482 F.Supp.2d 60
• Parties: 20 ATLANTIC AVENUE CORP., and Michael P. Vining, Plaintiffs and Defendants in counterclaim, v. ALLIED WASTE INDUSTRIES, INC., Defendant, Plaintiff in counterclaim and third-party Plaintiff, v. David T. Vining, Third-party Defendant and Plaintiff in counterclaim, v. Allied Waste Industries, Inc., Defendant in counterclaim.
• Court: U.S. District Court — District of Massachusetts

482 F.Supp.2d 60

20 ATLANTIC AVENUE CORP., and Michael P. Vining, Plaintiffs and Defendants in counterclaim, v. ALLIED WASTE INDUSTRIES, INC., Defendant, Plaintiff in counterclaim and third-party Plaintiff, v. David T. Vining, Third-party Defendant and Plaintiff in counterclaim, v. Allied Waste Industries, Inc., Defendant in counterclaim.

C.A. No. 03-10987-MLW.

United States District Court, D. Massachusetts.

March 30, 2007.

COPYRIGHT MATERIAL OMITTED

James L. Ackerman, Wadland & Ackerman, Andover, MA, for David T. Vining.

Neal James Bingham, Davis, Malm & D'Agostine, P.C., Boston, MA, for David T. Vining and 20 Atlantic Avenue Corp.

Anthony Bolzan, Erica L. Hovani, Dechert LLP, Boston, MA, for Allied Waste Industries, Inc.

Laurence M. Johnson Davis, Malm & D'Agostine, P.C., Boston, MA, for 20 Atlantic Avenue Corp.

Kathleen N. Massey, Dechert LLP, New York, NY, for Michael P. Vining and Allied Waste Industries, Inc.

Edward A. McDonald, Dechert LLP, New York, NY, for Allied Waste Systems, Inc. and Allied Waste Industries, Inc. Stephanie L. Moon, Wadland & Ackerman, Andover, MA, for Allied Waste Systems, Inc. and David T. Vining.

Matthew A. Porter, Jackson Lewis LLP, Boston, MA, for Allied Waste Systems, Inc.

MEMORANDUM AND ORDER

WOLF, District Judge.

The court has received the attached Magistrate Judge's Report and Recommendation on the cross-motions for summary judgment filed by defendant Allied Waste Industries, Inc. and third-party defendant David Vining. The matters as to which objection has been made have been reviewed de novo. See 28 U.S.C. 636(b)(1)(B) & (c); Delgado v. Bowen, 782 F.2d 79, 82 (7th Cir.1986). The court finds the Magistrate Judge's Report and Recommendation to be thorough, thoughtful and, with one exception, persuasive. It is, therefore, hereby adopted by the, court and incorporated in this memorandum, except as follows.

The magistrate judge recommended that the court grant Allied's motion for summary judgment on Count IX, negligent misrepresentation as to the Recycling Agreement, of plaintiff's complaint because she found "no evidence that Allied's misrepresentations as to its present intention to comply with the terms of its Agreement were negligently made." Report and Recommendation at 46. The magistrate judge also recommended that the court deny Allied's motion for summary judgment on Count VII, fraudulent misrepresentation as to the Recycling Agreement, because plaintiff submitted "sufficient facts for a jury to find that Allied misrepresented its present intention to comply with the terms of the Recycling Agreement when it entered into the Agreement in 1997." Id. at 46-47. The magistrate judge essentially recommended that the evidence that is sufficient to prove a fraudulent misrepresentation claim in this case is not sufficient to prove the negligent misrepresentation claim.

Under Massachusetts law, "in order to recover for negligent misrepresentation, a plaintiff must show that the defendant: (1) in the course of its business, (2) supplied false information for the guidance of others (3) in their business transactions, (4) causing and resulting in pecuniary loss to those others (5) by their justifiable reliance upon the information, and (6) that it failed to exercise reasonable care or competence in obtaining or, communicating the information." Cummings v. HPG Int'l, Inc., 244 F.3d 16, 24 (1st Cir.2001). "[T]he degree of culpability a plaintiff must prove to establish liability for negligent misrepresentation is different, and less demanding, than that to establish liability for deceit." Id. Generally, when analyzing negligent misrepresentation claims, Massachusetts courts ask whether the speaker was negligent in failing to discover the falsity of his or her statements. Id. Plaintiff must establish that defendant's statements regarding intent were false when made. Id. at 25. Future performance, or lack thereof, does not alone serve as a basis for a negligent misrepresentation claim. Id. However, lack of present intent to perform is a question of fact susceptible to proof like any question of fact, including resort to circumstantial evidence. See Bolen v. Paragon Plastics, Inc., 754 F.Supp. 221, 226 (citing Barrett Associates, Inc. v. Aronson, 346 Mass. 150, 152, 190 N.E.2d 867 (1963)).

Here, plaintiffs are opposing the motion for summary judgment. However, the burden of proof at trial is on plaintiffs. Therefore, to survive summary judgment on its negligent misrepresentation claim, plaintiffs must "`produce specific facts, in suitable evidentiary form,'" McIntosh v Antonino, 71 F.3d 29, 33 (1st Cir.1995) (quoting Morris v. Government Dev. Bank, 27 F.3d 746, 748 (1st Cir.1994)), supporting each of the six elements of negligent misrepresentation. See North Am. Specialty Ins. Co. v. Lapalme, 258 F.3d 35, 42 (1st Cir.2001). The evidence plaintiff submitted in support of its fraudulent misrepresentation claim also supports its negligent misrepresentation claim. Specifically, plaintiff points out that the contract expressly provides that Allied's obligations thereunder "constitute[] a material inducement to the stockholders of Atlantic and Vining to agree to the sale of [VDSI] to Allied[.]" Recycling Agreement at preamble, 2. Immediately following consummation of the agreement, Allied began underperforming its contractual obligations. See Plaintiffs Undisputed Facts, ¶¶ 13-14, 17. Plaintiff Michael Vining complained, but was told that "Allied had other operational problems in the Boston district and couldn't worry about delivering recyclables to [Atlantic]." Id. at ¶ 20. Allied took the position that the agreement "sucked" and was "difficult" to follow. Id. at ¶ 21. Plaintiff also submitted evidence that Allied asserted its belief that the agreement "wasn't worth the paper it's written on." Id. at ¶ 30.

These facts create a genuine question of fact as to each of the six elements plaintiff must prove at trial for summary judgment purposes. Therefore, the court is adopting the magistrate judge's recommendation as to all counts except for Count VII.

Accordingly, for the reasons stated in the Report and Recommendation, except with regard to plaintiffs' negligent misrepresentation claim, it is hereby ORDERED that:

1. Allied's motion for summary judgment (Docket No. 75) as to Counts III (breach of contract), VI (breach of implied covenant of good faith and fair dealing), VIII (fraudulent misrepresentation), X (negligent misrepresentation), and I (Mass. Gen. Laws ch. 93A, to the extent that this count relates to Allied's performance under the 2001 Letter of Intent) is ALLOWED.

2. Allied's motion for summary judgment (Docket No. 75) as to Counts VII (fraudulent misrepresentation), IX (negligent misrepresentation), and I (Mass. Gen. Laws ch. 93A, to the extent this count relates to Allied's performance under the Recycling Agreement) is DENIED.

3. Allied's motion for summary judgment (Docket No. 75) as to the interpretation of the term "Greater Boston Area" and its view that the court should consider the Recycling Agreement an installment contract is DENIED.

4. David Vining's motion for summary judgment (Docket No. 104) is DENIED.

REPORT AND RECOMMENDATION ON ALLIED'S MOTION FOR SUMMARY JUDGMENT

DEIN, United States Magistrate Judge.

November 16, 2006

I. INTRODUCTION

This litigation arises out of several related business transactions between the plaintiffs 20 Atlantic Packaging, Inc. ("Atlantic") and Michael P. Vining ("Michael") (collectively, the "Plaintiffs"), the defendant Allied Waste Industries, Inc. ("Allied"), and Michael's brother, the third party defendant David T. Vining ("David"). Specifically, in 1997, Allied acquired a trash collection business owned by the Vinings. This transaction was detailed in a 1997 Merger Agreement and a related Recycling Agreement. As a result of disputes relating to the parties' performance under these agreements, the parties engaged in discussions concerning Allied's potential acquisition of a separate paper recycling company owned by the Vinings, the plaintiff Atlantic. It was anticipated that the parties' disputes would be resolved in connection with Allied's acquisition of Atlantic. A letter of intent ("LOI") was signed in 2001. However, the acquisition was never consummated, leading to another round of disputes.

This matter is presently before the court on Allied's motion for summary judgment (Docket No. 75) and David Vining's motion for summary judgment (Docket No. 104). For the reasons detailed herein, this court recommends to the District Judge to whom this case is assigned that Allied's motion be ALLOWED IN PART and DENIED IN PART, and that David Vining's motion be DENIED. Specifically, with respect to the three agreements at issue in this case, this court recommends as follows:

The 2001 Letter of Intent: This court finds that the 2001 LOI executed by the parties does not rise to the level of an enforceable contract, and that the record does not support a finding that Allied mis represented its intention to perform under the LOI at the time of its execution. Therefore, this court recommends that Allied's motion for summary judgment be ALLOWED as to Count III (breach of contract), Count VI (breach of implied covenant of good faith and fair dealing), Count VIII (fraudulent misrepresentation), Count X (negligent misrepresentation), and Count I (Mass. Gen. Laws ch. 93A) to the extent this count relates to Allied's performance under the LOI.

The Recycling Agreement: This court finds that the clear terms of the Recycling Agreement does not require Atlantic to proffer its price list monthly as a condition precedent for Allied's obligation to deliver recyclables. Further, the term "Greater Boston area" as used in the Recycling Agreement includes the City of Boston. Therefore, this court recommends that Allied's motion for summary judgment, which asked this court to interpret the Recycling Agreement to the contrary, be DENIED....