Weber v. Sanborn

• Decision Date: 06 November 2007
• Docket Number: Civil Action No. 06-10125-JLA.
• Parties: Drew WEBER, Plaintiff v. Kurt SANBORN, Play Ball Manchester, LLC, Sanborn Associates, The Sanborn Group, Inc., Gerald R. Prunier, Andrew A. Prolman, Thomas J. Leonard III, and Prunier, Leonard & Prolman, P.A., Defendants.
• Court: U.S. District Court — District of Massachusetts

526 F.Supp.2d 135

Drew WEBER, Plaintiff v. Kurt SANBORN, Play Ball Manchester, LLC, Sanborn Associates, The Sanborn Group, Inc., Gerald R. Prunier, Andrew A. Prolman, Thomas J. Leonard III, and Prunier, Leonard & Prolman, P.A., Defendants.

Civil Action No. 06-10125-JLA.

United States District Court, D. Massachusetts.

November 6, 2007.

COPYRIGHT MATERIAL OMITTED

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Joseph H. Reinhardt, Boston, MA, for Plaintiff.

Phillip Rakhunov, Sullivan & Worcester LLP, Boston, MA, Emily G. Rice, Martha Van Oot, Orr & Reno, P.A., Concord, NH, for Defendants.

CONSOLIDATED ORDER ON

PLAINTIFF'S MOTIONS: (1) FOR LEAVE TO AMEND COMPLAINT and (2) FOR PARTIAL SUMMARY JUDGMENT STRIKING AFFIRMATIVE DEFENSES H, I, J, AND N, AND DEFENDANTS' REQUEST FOR ATTORNEY'S FEES (Docket # 69, 70)

and

DEFENDANTS' MOTIONS: (1) TO STRIKE, EXPERT OPINION OF ANDREW PERLMAN and (2) FOR SUMMARY JUDGMENT ON COUNTS II AND VIII (Docket # 72, 73)

ALEXANDER, United States Magistrate Judge.

Before this Court are four motions, each of which received significant attention during a hearing held October 16, 2007. For the reasons set forth more fully below, this Court holds that: (1) Plaintiffs Motion for Leave to Amend Complaint is DENIED; (2) Plaintiffs Motion for Partial Summary Judgment Striking Affirmative Defenses H, I, J, and N, and Defendant's Request for Attorney's Fees is DENIED; (3) Defendant's Motion to Strike the Expert Opinion of Andrew Perlman is DENIED; and (4) Defendant's Motion for Summary Judgment on Count II is GRANTED and on Count VIII is DENIED.

PROCEDURAL HISTORY

On January 20, 2006, Plaintiff, Drew Weber ("Weber"), filed the initial lawsuit against defendants Kurt Sanborn, Play Ball Manchester, LLC, Sanborn Associates, The Sanborn Group, Inc. (collectively the "Sanborn Defendants"), Gerald R. Prunier, Andrew A. Prolman, Thomas J. Leonard III, and Prunier, Leonard & Prolman, P.A., (collectively "PL & P"). Weber brought claims of Conversion and Breaches of Fiduciary Duty against the Sanborn Defendants and PL & P; claims of Negligent Misrepresentation, Fraud, Participation in a Breach of Trust, Breaches of Express and Implied Contracts, and Violation of Chapter 93A against all defendants; and a claim of professional malpractice against PL & P.

The Sanborn Defendants failed to appear in this matter. Consequently, on June 28, 2006, this Court granted a default judgment in Weber's favor in the amount of $7,749,000 plus costs and interest from the date of filing the Complaint. At that time, Weber also stipulated to dismiss Count III (Fraud) as to PL & P.

Further, because Weber also subsequently stipulated, with prejudice, to the dismissal of Counts I, III, IV, V, and VII, and this Court has dismissed, with prejudice, Count IX of Weber's Complaint, the only remaining claims against PL & P (both the individual lawyers and the firm as an entity) are set forth in Count II (Negligent Misrepresentation) and Count VIII (Legal Malpractice).

FACTUAL BACKGROUND

In the spring of 2002, Weber became involved in the Riverfront Development Project, a $150 million development project in the city of Manchester, New Hampshire ("City") along the banks of the Merrimack River. It was intended to consist of a Minor League Baseball stadium, retail stores, a hotel, residential condominium properties, a power plant, and attendant parking. Weber's main roles in the project were to: (1) acquire a Minor League Baseball team and relocate it to the City for the 2004 season; (2) work with the City in renovating an existing stadium (Gill Stadium) for temporary use during the first season of play; and (3) oversee construction of a new stadium which the team would begin using in 2005. To further that end, Weber formed the corporation 6 to 4 to 3, LLC ("6-4-3").

The City, which would continue to own the developed property, was to provide primary funding for the renovation of Gill Stadium and construction of the new stadium. The City was to lease the property to Manchester Downtown Visions, LLC ("MDV"), the primary development company for the project. Sanborn was an active member of MDV.

Sanborn is also the sole owner of Sanborn Associates, The Sanborn Group, Play Ball Manchester, LLC, and a member of 6-4-3 (although he never fulfilled the terms that conditioned his financial interest in 6-4-3). Sanborn's financial interest in MDV and his affiliation with both Weber and 6-4-3 created an alleged conflict of interest as Weber contends that Sanborn often advanced the interests of MDV, to the detriment of Weber, in connection with the development project.

On December 11, 2002, PL & P, as Sanborn's attorneys, filed a certificate of formation for 6-4-3 in New Hampshire based on the agreement that Sanborn would hold a 30% membership interest in the company, in consideration of a capital contribution of $3,000,000. Although PL & P was aware that no capital contribution had been made, it nonetheless caused the issue of the 30% interest and conducted business as though Sanborn had authority to act on behalf of 6-4-3. On December 13, 2002, PL & P agreed to represent Weber, acting through 6-4-3, on all zoning and development issues. Weber alleges that PL & P then represented him personally in a number of transactions. For example, under PL & P's representation, Weber acquired a substantial line of credit in order to front the costs of certain land acquisitions and other soft costs for the entire development project; he claims he did so based only on Sanborn's promises that Weber would be reimbursed for said costs. On July 31, 2003, PL & P executed a written agreement between 6-4-3 (represented by Weber). and MDV (represented by Sanborn as its "manager") to appoint MDV as the construction manager of the Gill Stadium renovations and the construction of the new stadium, at a cost to Weber of $200,000 annually. PL & P, thus, represented both parties to the transaction. Weber alleges that at no time did PL & P discuss any conflicts of interest with him or seek any type of conflict waiver.

Although not part of the original Memorandum of Understanding, the City's legal counsel presented to PL & P drafts of agreements that would impose upon Weber a personal guarantee and a $2.7 million letter of credit as security for the lease of the stadium land, as well as a proposal that Weber be personally responsible for the relocation of Singer Park. Instead of suggesting changes to the documents, PL & P recommended that they be signed as drafted. Additionally, PL & P did not alert Weber that Sanborn had grossly misrepresented the cost of the park's relocation (originally intended to be split between MDV and 6-4-3).

Weber also alleges that Sanborn embezzled substantial sums of money with the aid of PL & P, who issued checks drawn on the firm's client trust account to nonexistent contractors based on falsified invoices created by Sanborn. Weber claims that PL & P did not alert him that the checks it issued were deposited in Sanborn's accounts, and were either not endorsed or falsely endorsed.

THE MOTIONS

(1) Plaintiff's Motion For Leave to Amend Complaint

(Docket # 69)

Immediately following this Court's dismissal of Count IX of Weber's Complaint (Violation of 93A: Massachusetts Unfair and Deceptive Trade Practices Statute), Weber filed the instant Motion for Leave to Amend his Complaint, seeking to add Count X (Violation of NH RSA 358-A: New Hampshire's Unfair and Deceptive Trade Practices Statute).

The command of Fed.R.Civ.P. 15(a) that leave to amend "shall be freely given when, justice so requires ..." is consistent with a broad policy underlying the Federal Rules of Civil Procedure that in most instances disputes should be decided on their merits. See Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); United States v. Hougham, 364 U.S. 310, 317, 81 S.Ct. 13, 5 L.Ed.2d 8 (1960). Nevertheless, a court considering a motion to amend should consider the totality of the circumstances and balance the equitable considerations which bear on the motion. Whether the proposed amendment would unfairly prejudice the opposing party, whether the party seeking the amendment has exercised due diligence, and whether the proposed amendment involves futility, unseemly delay, bad faith, or waste of the court's or the parties' resources are all factors which may be considered. Quaker State Oil Refining Corp. v. Garrity Oil Co., 884 F.2d 1510, 1517 (1st Cir.1989); Carter v. Supermarkets Gen. Corp., 684 F.2d 187, 192 (1st Cir.1982).

Where a considerable period of time has passed between the filing of a complaint and the motion to amend, courts have placed the burden of proof on the movant to show some "valid reason for his neglect and delay." Carter, 684 F.2d at 187 (citation omitted). In Quaker, the First Circuit identified "relevant indicators [that] point uniformly toward disallowance," such as whether the facts upon which the motion to amend is based were known to the party throughout, whether a great deal of discovery had already taken place before the motion was filed, and whether the moving party proffered a satisfactory explanation for its delay. Quaker, 884 F.2d at 1518 (denying defendant's motion to amend where he was unable to offer a reason for his delay, virtually all discovery was complete, and facts upon which the motion rested were known to the defendant throughout).

As to a futility argument, both parties debate whether Weber's amendment properly relates back, and whether it would, nonetheless, be barred by NH RSA 358-A's statute of limitations. This Court finds, however, that regardless of whether Weber's claim relates back to the original transaction or occurrence, or is subject to a statute of limitations preclusion, his argument fails. In Zee-Bar, Inc. v. Kaplan, 162 F.R.D. 422, 427 (D.N.H.1993), the court held that although plaintiff's motion for leave to amend a negligence complaint under a New Hampshire statute was based on...