Traverse v. The Gutierrez Co.
| Decision Date | 06 August 2021 |
| Docket Number | 18-cv-10175-DJC |
| Parties | NORMAN TRAVERSE AND NASSRINE TRAVERSE, individually and on behalf of TECHNOLOGY PARK X LIMITED PARNTERSHIP, Plaintiffs, v. THE GUTIERREZ COMPANY, GUTIERREZ CONSTRUCTION COMPANY, ARTURO J. GUTIERREZ, ARTHUR J. GUTIERREZ JR., and TECHNOLOGY PARK X LIMITED PARTNERSHIP, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Plaintiffs Norman Traverse and Nassrine Traverse, individually and on behalf of Technology Park X Limited Partnership (collectively, “the Traverses” or “Plaintiffs”), filed suit against The Gutierrez Company (“TGC”), Gutierrez Construction Company Inc. (“GCCI”), Arturo J. Gutierrez, Arthur J Gutierrez, Jr. and Technology Park X Limited Partnership (collectively, “Defendants”). D. 15. The Traverses have now moved for summary judgment on Defendants' remaining counterclaims for abuse of process (Counterclaim IV) and declaratory judgment regarding same (Counterclaim I). D. 380 (D. 403. The Traverses also move for summary judgment on their claims against Defendants for breach of contract (Count I), breach of fiduciary duty (Count II) and aiding and abetting breach of fiduciary duty (Count III). Id.
Defendants move for summary judgment as to all of the remaining claims against them. D. 386. For the following reasons, the Court DENIES in part and ALLOWS in part the Traverses' motion for summary judgment, D. 380 (D. 403 in its unredacted form), and ALLOWS Defendants' motion for summary judgment, D. 386.
A court grants summary judgment where there is no genuine dispute as to any material fact and the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). “An issue is genuine if ‘it may reasonably be resolved in favor of either party' at trial, and material if it ‘possess[es] the capacity to sway the outcome of the litigation under the applicable law.'” Iverson v. City of Boston, 452 F.3d 94, 98 (1st Cir. 2006) (alteration in original) (quoting Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir. 1997)). The movant “bears the burden of demonstrating the absence of a genuine issue of material fact.” Rosciti v. Ins. Co. of Pa., 659 F.3d 92, 96 (1st Cir. 2011) (quoting Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000)). If the movant meets its burden, the nonmovant “must, with respect to each issue on which she would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in her favor.” Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010). “As a general rule, that requires the production of evidence that is ‘significantly] probative.'” Id. (alteration in original) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)).
The Court views the record “in the light most favorable to the non-moving part[y]” and draws all reasonable inferences in the nonmovant's favor. Pineda v. Toomey, 533 F.3d 50, 53 (1st Cir. 2008). The nonmovant, however, “may not rely on conclusory allegations, improbable inferences, or unsupported speculation” to defeat a motion for summary judgment, “but must, instead, ‘set forth specific facts showing that there is a genuine issue for trial.'” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986)). The nonmovant must offer “definite, competent evidence to defeat a properly supported motion for summary judgment.” Burns v. State Police Ass'n of Mass., 230 F.3d 8, 9 (1st Cir. 2000)
“Cross-motions for summary judgment do not alter the basic Rule 56 standard, but rather simply require [the Court] to determine whether either of the parties deserves judgment as a matter of law on facts that are not disputed.” Adria Int'l Grp., Inc. v. Ferre Dev., Inc., 241 F.3d 103, 107 (1st Cir.2001). “When facing cross-motions for summary judgment, a court must rule on each motion independently, deciding in each instance whether the moving party has met its burden under Rule 56.” Dan Barclay, Inc. v. Stewart & Stevenson Servs., Inc., 761 F.Supp. 194, 197-98 (D. Mass. 1991).
Unless otherwise indicated, the following are undisputed facts drawn from the Traverses' Statement of Material Facts, D. 405, the Defendants' Statement of Material Facts, D. 423, the Traverses' Response and Counterstatement to Defendants' Statement of Material Facts, D. 517, Defendants' Response and Counterstatement to the Traverses' Statement of Material Facts, D. 526, and Defendants' Response to the Traverses' Counterstatement, D. 565.
In 1981, Plaintiff Norman Traverse (“Norman”) and TGC executed the Tech Park Associates Joint Venture Agreement (“JVA”) to develop property in Billerica, Massachusetts (the “Property”). D. 423 ¶¶ 6-7; D. 517 ¶¶ 6-7 D. 405 ¶ 1. Pursuant to the JVA, Norman and TGC agreed to take steps to develop office and research development buildings in Billerica. D. 388-1 at 6-7. The JVA provided that TGC would “assume complete responsibility in the coordination, design, marketing and construction of the improvements to be located at the premises.” Id. at 7. In 1987, prior to the execution of a lease to build a 449, 055 square foot office building on the property (the “Tech Park X Building”), Norman and TGC formed the Technology Park X Limited Partnership (“Tech Park X”), which was created by the Tech Park X Limited Partnership Agreement (the “LP Agreement”). D. 423 ¶ 18; D. 517 ¶ 18; D. 405 ¶ 1. Tech Park X's principal asset remains the Tech Park X Building, located at 600 Technology Park Drive, Billerica, Massachusetts. D. 423 ¶ 17; D. 517 ¶ 17; D. 405 ¶ 1. In 2003, pursuant to the assignment of JVA, Norman affirmed, and Plaintiff Nassrine Traverse (“Nassrine” or “Mrs. Traverse”) agreed, that they would be “subject to and bound by the [JVA] just as if they were signatories thereto.” D. 423 ¶¶ 14-15; D. 517 ¶¶ 14-15. Pursuant to this assignment, Norman assigned his interest in the joint venture to himself and Nassrine as joint tenants with rights of survivorship. D. 423 ¶¶ 14, 19; D. 517 ¶¶ 14, 19.
The Traverses hold a 38 percent limited partnership interest in Tech Park X and are jointly Tech Park X's Class A Limited Partner. D. 423 ¶ 19; D. 517 ¶ 1; D. 405 ¶ 3. TGC is a real estate development company and is Tech Park X's general partner. D. 423 ¶ 1; D. 517 ¶ 1; D. 405 ¶ 10. Section 4.3 of the LP Agreement grants TGC “the exclusive right to manage the business of the Partnership.” D. 390-1 at 11. Defendant Arturo J. Gutierrez (“Arturo”) served as President of TGC and GCCI until 2006, after which Defendant Arthur Gutierrez, Jr. (“Arthur”) served as President of both companies. D. 423 ¶ 5; D. 517 ¶ 5; D. 405 ¶ 6. GCCI, founded by Arturo, provides construction management services to various TGC properties, including the Tech Park X Building. D. 423 ¶ 2; D. 517 ¶ 2; D. 405 ¶ 2. Arturo continued to serve as Chairman of TGC and GCCI until 2015. D. 423 ¶ 3; D. 517 ¶ 3; D. 405 ¶ 3. In 2015, Arturo sold his ownership interests in TGC and GCCI to his children, including Arthur. D. 423 ¶ 4; 517 ¶ 4. The interest held by members of the Gutierrez family comprise approximately 43 percent interest in Tech Park X with former TGC employees and former employees' family members holding approximately 19 percent interest and the Traverses holding approximately 38 percent interest. D. 423 ¶ 20; 517 ¶ 20.
Pursuant to the JVA, TGC manages the Tech Park X Building, and the Gutierrez Company receives a fee “equal to five percent (5%) of the gross income [or three percent of gross income for a triple-net lease transaction] of the building(s) calculated and paid on a monthly basis, including in the computation of gross income, without limitation, operating/maintenance payments and real estate tax payments” for management services. D. 388-1 at 18-10. The LP Agreement specifies that “[t]he Partnership shall enter into a fixed price contract excluding change orders with the Contractor [defined as GCCI] for the construction of the [Tech Park X] Building and related improvements on the Property.” D. 390-1 at 19. GCCI is TGC's wholly owned subsidiary, D. 565 ¶ 206, and is paid a fee of 5 percent of the construction costs for work that takes place at the Tech Park X Building. D. 390-1 at 19-20. The LP Agreement permits TGC to enter agreements on behalf of Tech Park X and TGC (the “Partnership”) and retain the services of affiliated or third-party entities. D. 423 ¶ 25; 517 ¶ 25. The LP Agreement provides that any amounts paid by the Partnership in connection with such agreements, “shall be at reasonable and competitive market rates.” D. 390-1 at 12. One of the motivating factors for TGC to enter the JVA was for GCCI to provide all project management and construction services for any construction projects that took place at the Tech Park X Building. D. 423 ¶ 9; D. 517 ¶ 9.
From the opening of the Tech Park X Building in 1989 until 2010 the building had one tenant, Nortel. D. 423 ¶ 31; 517 ¶ 31. In or about 2010, Nortel filed for bankruptcy. D. 423 ¶ 32; D. 517 ¶ 32; D. 405 ¶ 14. Given the Tech Park X Building's need to attract new tenants, TGC decided to convert the Tech Park X Building into a multi-tenant building and invest in base building improvements, such as a new fitness center and upgraded cafeteria. D. 423 ¶ 33; D. 517 ¶ 33; D. 405 ¶¶ 16-17. These base building improvements were completed in phases between 2012 and 2016 by mostly, if not entirely, subcontractors. D. 423 ¶¶ 35, 36; D. 517 ¶¶ 35, 36. GCCI charged Tech Park X a 5 percent fee based on the actual costs paid to the third-party subcontractors on...
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