Pray v. Smpo Properties Inc.
| Decision Date | 13 October 2010 |
| Docket Number | Civil Action No. 09–11923–NMG. |
| Citation | 746 F.Supp.2d 317 |
| Parties | Scott PRAY, Plaintiff,v.SMPO PROPERTIES, INC. and Oscar Seelbinder, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
OPINION TEXT STARTS HERE
Richard E. Briansky, Prince, Lobel, Glovsky & Tye LLP, Boston, MA, for Plaintiff.Richard J. Welch, Stephen A. Izzi, Moses & Afonso, Ltd., Providence, RI, for Defendants.
Plaintiff Scott Pray (“Pray”) brings suit against defendants SMPO Properties, Inc. (“SMPO”) and its president Oscar Seelbinder (“Seelbinder”) (collectively “the defendants”) for breach of contract, breach of the covenant of good faith and fair dealing, unfair and deceptive acts and practices in violation of the Massachusetts Consumer Protection Act, Mass. Gen. Laws ch. 93A, §§ 2 and 11, negligent or intentional misrepresentation and breach of fiduciary duty. Pray also names 7–Eleven, Inc. as a reach and apply defendant. Before the Court are the parties' cross-motions for summary judgment and Pray's motion to amend his complaint.
Pray is a local contractor and the president of D.F. Pray, Inc. SMPO is a national developer and manager of commercial property. Seelbinder is the president and 100% owner of SMPO. This dispute arises out of a series of meetings at which, Pray alleges, the parties formed a joint venture to locate and develop real estate.
In late 2006 or early 2007, Pray contacted Jack Mitchell (“Mitchell”), a national developer. This led to a lunch meeting in Providence, Rhode Island at which Mitchell, Pray and Seelbinder discussed the possibility of pursuing a joint venture to locate and develop real estate for CVS stores. No formal agreement was executed. Seelbinder maintains that he and Mitchell were working through Warwick RICS, LLC (“Warwick RICS”), an entity owned or controlled by Mitchell, Seelbinder and Jerry Sklar (“Sklar”).
The parties held a number of subsequent meetings. Pray maintains that they formed a joint venture, pursuant to which, Pray would locate potential sites for development and receive a 25% interest in the joint venture's initial transaction and a 33% interest in all future ventures. Seelbinder claims that they discussed the formation of a new limited liability company called “MARICS, LLC” that would be owned by Pray and Warwick RICS for the purpose of real estate development. Pray allegedly stated that he had strong ties with the people in charge of real estate development at CVS and Walgreens.
Pray claims that, after these meetings, he identified property then owned by 7–Eleven located at 228 Broadway, Taunton, Massachusetts (“the Property”) as a potential location for the development of a CVS pharmacy.1 The Property was one of four abutting parcels of real estate that together made up the proposed site for the CVS pharmacy (“the Taunton Site”). Pray claims that he invested significant time and effort in locating the Property. The defendants, however, allege that Mitchell had already spoken with 7–Eleven about acquiring the Property before they first met with Pray. The defendants further allege that Pray directed Seelbinder and Mitchell to work with James Leach (an employee or partner of Pray's) to secure purchase and sale agreements for the other three parcels making up the Taunton Site.
Soon thereafter, Seelbinder began negotiations with 7–Eleven for the purchase of the Property. Seelbinder and Pray discussed the terms of an offer to purchase the Property. On February 23, 2007, SMPO executed a letter of intent to purchase the Property. On March 11, 2007, Sklar sent Pray's attorney, David Tracy (“Tracy”), a draft operating agreement by email. The draft operating agreement provided for the formation of the MARICS, LLC in which the “Scott Pray Entity” would own 33 1/3% of the membership interests and Warwick LLC would own 66 2/3%. Pray never signed the draft agreement.
On August 28, 2007, SMPO executed a purchase and sale agreement whereby it agreed to purchase the Property for $1.2 million. After that agreement was executed between SMPO and 7–Eleven, Scott Weymouth, through his company Arista Development LLC (“Arista”), offered to acquire SMPO's interest in the Property. In an email sent on September 5, 2007, Seelbinder informed Pray of Arista's offer. He confirmed his “agreement” with Pray and that “the Taunton location [will] serve as our initial project with your participation at 25% and all future projects [will] reset your participation at 33% of our entity.” On February 12, 2008, SMPO assigned its right to purchase the Property to Arista for $600,000.2 Pray subsequently called Seelbinder demanding 25% of the assignment, or $150,000, which Seelbinder refused to pay.
Seelbinder acknowledges in his deposition that he pursued the Taunton CVS and another potential project involving a Brooks Pharmacy Corporate Headquarters on behalf of the joint venture. He testified that, at the time, he thought that Warwick RICS and Pray had an agreement. Seelbinder argues, however, that Pray never fulfilled his end of the bargain because he never signed the operating agreement for the MARICS, LLC and was absent for approximately 12 months until March, 2009 when Pray allegedly called to claim his share of the sale proceeds. He claims that he realized there would be no joint venture in March, 2008 when Pray refused to accept or return his phone calls.
Pray brings an action for breach of contract, alleging that the parties had a joint venture agreement which the defendants breached by failing to pay him $150,000. Pray further alleges that the breach of contract constitutes an unfair or deceptive act in violation of Mass. Gen. Laws ch. 93A, §§ 2 and 11, a breach of the covenant of good faith and fair dealing, negligent or intentional misrepresentation and a breach of fiduciary duty.
Pray filed a complaint in the Massachusetts Superior Court on October 15, 2009. One month later, the case was removed to this Court upon a motion by the defendants. Trial was originally scheduled for August 9, 2010. The reach and apply action was terminated as to defendant 7–Eleven, Inc. in March, 2010. Shortly thereafter, in succession, Pray moved to amend his complaint and moved for summary judgment and the defendants filed a cross motion for summary judgment. Trial has been rescheduled to commence on October 18, 2010.
III. Legal AnalysisA. Cross–Motions for Summary Judgment
The role of summary judgment is “to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir.1991) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir.1990)). The burden is upon the moving party to show, based upon the pleadings, discovery and affidavits, “that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c).
A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “Factual disputes that are irrelevant or unnecessary will not be counted.” Id. A genuine issue of material fact exists where the evidence with respect to the material fact in dispute “is such that a reasonable jury could return a verdict for the nonmoving party.” Id.
Once the moving party has satisfied its burden, the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine, triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court must view the entire record in the light most hospitable to the non-moving party and indulge all reasonable inferences in that party's favor. O'Connor v. Steeves, 994 F.2d 905, 907 (1st Cir.1993). Summary judgment is appropriate if, after viewing the record in the non-moving party's favor, the Court determines that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.
The issues before the Court are whether a contract was formed between the parties and, if so, the terms of that agreement. Pray argues that he is entitled to summary judgment on all counts because he has shown that: 1) he, Seelbinder and Mitchell formed a joint venture, or a general partnership for a particular purpose, the terms of which provided that Pray would locate potential sites for development and receive 25% of the first real estate project and 33% in all future ventures and 2) the defendants breached the agreement by refusing to pay Pray 25% of the revenue that the defendants collected from assigning the purchase and sale agreement for the Property to Arista.
The defendants contend that they are entitled to summary judgment on all counts because no joint venture or enforceable contract was formed. First, the defendants maintain that Pray failed to perform the condition precedent to the agreement of executing an operating agreement for MARICS, LLC. Second, they argue that Pray abandoned the proposed venture and did not perform his obligations under the agreement of obtaining a) a commitment from either CVS or Walgreens to build a store on the Taunton Site or b) purchase and sale agreements for the other three parcels needed to complete the Taunton Site.
In Massachusetts, the formation of a joint venture depends on the parties' manifest intent. Shain Inv. Co. v. Cohen, 15 Mass.App.Ct. 4, 443 N.E.2d 126, 129 (1982).3 A written agreement is not necessary for the creation of a partnership or a joint venture. Kansallis Fin., Ltd. v. Fern, 40 F.3d 476, 479 (1st Cir.1994); Mass. Prop. Ins. Underwriting Ass'n v. Georgaklis, 77 Mass.App.Ct. 358, 931 N.E.2d 995, 999 (2010). Courts consider a number of factors in determining the parties' intent:
(1) an agreement by the parties manifesting their intention to...
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