Opinion
Civ. 21-11347-MLW
09-09-2024
APB REALTY, INC., Plaintiff/Defendant-in-Counterclaim, v. LEBANON AND BLUE MOUNTAIN RAILWAY, LLC, Defendant/Plaintiff-in-Counterclaim v. KIRK BRYANT, Defendant-in-Counterclaim
MEMORANDUM AND ORDER
WOLF, D.J.
I. BACKGROUND
This case arises from an unsuccessful purchase and sale transaction for 100 Aluminum Rapid Discharge Coal Railcars ("RD Cars") between plaintiff APB Realty, Inc. ("APB"), which was seeking to sell the RD Cars, and defendant Lebanon and Blue Mountain Railway, LLC ("LBMR"), which was seeking to buy them. APB claims LBMR is liable for breach of contract for the purchase and sale of the RD Cars and breach of a Non-Circumvent Agreement ("NCA") (Counts I and III of the Amended Complaint (Dkt. No. 10)). APB also seeks declaratory relief regarding a $360,000 payment sent by LBMR to APB (Count II of the Amended Complaint) . LBMR countersued, alleging that APB is liable for unjust enrichment, promissory estoppel, conversion, and fraudulent inducement, and also claiming that both APB and its general manager, Kirk Bryant ("Bryant"), violated Mass. Gen. L. ch. 93A, §11. See Amended Counterclaims (Dkt. No. 42).
LBMR filed a renewed motion for partial summary judgment (Dkt. No. 68), which APB and Bryant jointly opposed (Dkt. No. 72). On March 25, 2024, Magistrate Judge Page Kelley issued a Report and Recommendation (the "Report") recommending that the court allow LBMR's motion for summary judgment on all counts of the Amended Complaint and Counts I (unjust enrichment) and III (conversion) of the Amended Counterclaim, and that the court deny the motion for summary judgment on Counts V and VI (Chapter 93A claims against APB and Bryant, respectively) of the Amended Counterclaim. See Report (Dkt. No. 76).
The Report is attached hereto as Exhibit 1, and to the extent that it is consistent with the court's reasoning in this Memorandum is incorporated in it.
APB has objected to the recommendation that the court allow LBMR's motion for summary judgment on Counts I (breach of contract) and II (declaratory judgment) of the Amended Complaint and Counts I (unjust enrichment) and III (conversion) of the Amended Counterclaim. See APB Objections at 2 (Dkt. No. 77). APB does not object to the recommendation that the court allow LBMR's motion for summary judgment on Count III (breach of the NCA) of the Amended Complaint. See id. LBMR has replied to APB's objections. See LBMR Reply to APB Objections (Dkt. No. 78). LBMR does not, however, object to the Magistrate Judge's recommendation that the court deny its motion for summary judgment on Counts V and VI (Chapter 93A claims against APB and Bryant, respectively) of the Amended Counterclaim.
The court assumes that the parties agree with the recommendations to which neither party has objected. See Templeman v. Chris Craft Corp., 770 F.2d 245, 247 (1st Cir. 1985). Therefore, the court is adopting the Magistrate Judge's recommendation to allow LBMR's motion for summary judgment on APB's breach of contract claim related to the non-circumvent agreement (Count III of the Amended Complaint), see Report at 18-19, and to deny LBMR's motion for summary judgment on its Chapter 93A claims (Counts V and VI of LBMR's Amended Counterclaims), see id. at 22-24.
The court has reviewed de novo the matters to which APB has properly objected. See 28 U.S.C. §636(b)(1); Fed.R.Civ.P. 72(b)(3). The court finds each of APB's objections unmeritorious. More specifically, the court finds that the Magistrate Judge correctly stated the applicable law and identified the material facts not in genuine dispute. The court reaches the same conclusions as the Magistrate Judge, although, as explained in this Memorandum, its reasoning differs in part regarding its decision to allow LBMR's motion for summary judgment on APB's breach of contract claim (Count I of the Amended Complaint).
In particular, the court finds that the Magistrate Judge properly determined that the proposed RD Car transaction is governed by the UCC, rather than Massachusetts common law, because the primary purpose of the transaction was the sale of rail cars, rather than the provision of a service. See Report at 11-12; Cumberland Farms, Inc, v. Drehmann Paving & Flooring Co., 25 Mass.App.Ct. 530, 534 (1988). Neither party has objected to this determination.
II. THE RECORD
The Magistrate Judge properly deemed LBMR's statement of undisputed material facts ("SUMF", Dkt. No. 49) uncontroverted due to APB's failure to comply with Local Rule 56.1. See Report at 3-6. Local Rule 56.1 states that the party opposing a motion for summary judgment "shall include a concise statement of the material facts of record as to which it is contended that there exists a genuine issue to be tried, with page references to affidavits, depositions and other documentation." L.R. 56.1 (emphasis added). APB has not complied with this requirement. Despite repeatedly stating that it "disputes the characterizations" contained in LBMR's SUMF, APB fails to identify the specific facts that it disputes or the evidentiary basis for those disputes. See APB Resp. to LBMR SUMF (Dkt. No. 51) . In addition, APB only includes a single citation to the record, which lacks page references, in its response to LBMR's SUMF. See id. ¶39 (citing to the entirety of Bryant's deposition).
LBMR's SUMF contains redactions. It has also filed an unredacted version of the document under seal (Dkt. No. 49-19 - Sealed). Where necessary or appropriate, the court cites to the sealed version in this Memorandum.
LBMR raised the issue of APB's non-compliance with Local Rule 56.1 on June 2, 2023. See LBMR Reply Supp'g MSJ at 2-3 (Dkt. No. 54) . Over the next six months, the parties participated in two hearings held by the Magistrate Judge and supplemented their summary judgment briefing. However, APB made no attempt to supplement its response to LBMR's SUMF or otherwise comply with Local Rule 56.1. See Report at 5. In fact, APB does not seem to contest the Magistrate Judge's determination that it failed to comply with Local Rule 56.1. See APB Objections at 4 ("APB hereby references the Court's further acknowledgment that 'the Court has the discretion to decide whether to impose the sanction of deeming the [moving party's] factual assertions to be admitted.["] (quoting Butters v. Wells Fargo Advisors, LLC, Civ. No. 10-10072, 2012 WL 5959986, at *2 (D. Mass. Nov. 27, 2012)). Instead, APB emphasizes that it disputes specific facts, supported with record citations and page references, in its opposition to LBMR's motion for summary judgment. See id.; APB Renewed Mem. Supp'g Opp. to LBMR MSJ at 3-5 (Dkt. No. 73). This is true, but does not excuse APB's knowing failure to comply with Local Rule 56.1.
Local Rules "prevent[] litigants from shifting the burden of organizing evidence to the district court." Zimmerman v. Puccio, 613 F.3d 60, 63 (1st Cir. 2010) . A district court may sanction a party who fails to comply with Local Rule 56.1 by deeming the moving party's factual assertions to be admitted. See id.; In re Kupperstein, 61 F.4th 1, 6 (1st Cir. 2023); see also Saad v. JOLO, Inc., 633 F.Supp.3d 478, 479 n.1 (D. Mass. 2022) . "Given the vital purpose that [local] rules serve, litigants ignore them at their peril." Caban Hernandez v. Philip Morris USA, Inc., 486 F.3d 1, 7 (1st Cir. 2007) . APB has not offered a valid excuse for its failure to comply with Local Rule 56.1. Therefore, the court adopts the Magistrate Judge's recommendation and deems LBMR's SUMF uncontroverted for the purposes of this Memorandum and Order. See Report at 6.
APB's attorney, Howard D'Amico, also failed to comply with Local Rule 56.1 when he represented the defendants in Saad. See Saad, 633 F.Supp.3d at 479 n.l. As a result, the court in Saad allowed the plaintiffs' unopposed motion to strike the defendants' response to their statement of undisputed material facts. See id.
III. DISCUSSION
A. APB's Breach of Contract and Declaratory Judgment Claims (Counts I and II of the Amended Complaint)
In the Report, the Magistrate Judge correctly stated the summary judgment standard. See Report at 9-10.
This court finds that LBMR is entitled to summary judgment on APB's breach of contract and declaratory judgment claims because, based on the record before the court, no rational factfinder could conclude that a contract for the purchase and sale of RD Cars was formed between APB and LBMR under the UCC.
Under the UCC, a "contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract." M.G.L. ch.106 §2-204(1). When material terms of an agreement are unspecified, "the intent of the contracting parties becomes particularly relevant to conclude the existence of a final binding contract." Hoover v. Osley & Whitney, Inc., 915 F.2d 1556, at *4 (1st Cir. 1990) (unpublished) (emphasis added) (citing M.G.L. ch. 106 §2-204). "The more terms the parties leave open, the less likely it is that they have intended to conclude a binding agreement, but their actions may be frequently conclusive on the matter despite the omissions." Id. §2-204 cmt. ¶3. While the existence of a contract is a question of fact, see Chang v. Winklevoss, 95 Mass.App.Ct. 202, 212 (2019), the issue of whether an agreement is too indefinite to constitute a valid contract is a question of law, see Schwanbeck v. Federal Mogul Corp., 412 Mass. 703, 709 (1992).
APB contends that the parties formed an oral contract during a telephone call on June 17, 2021, pursuant to which they agreed that LBMR would send a non-refundable deposit of $360,000. See APB Objections at 3. However, as explained earlier, the court has deemed LBMR's SUMF uncontroverted. Therefore, the record does not contain any evidence that the parties formed an oral contract or evidence that they agreed the deposit would be non-refundable during a telephone call on June 17, 2021. See LBMR SUMF ¶¶6-11.
Instead, the record contains evidence of the following relevant facts. On June 15, 2021, after learning of LBMR's interest in purchasing rail cars, Bryant emailed specifications for 100 RD Cars to Allen Keller ("Keller"), the founder and former president of LBMR. Bryant Dep. 38:15-24; 40:17-21 (Dkt. No. 49-1). On June 16, 2021, Bryant emailed Keller again, writing that APB would "need a deposit to hold [the rail cars] for [Keller], there are 3 other parties getting close to doing something." Id. at 44:12-14. Bryant emailed Keller a one-page invoice for the proposed transaction the following day. See Jun. 17, 2021 Email & Invoice (Dt. No. 49-3). The invoice described the RD Cars and listed the number of cars for sale, the price per car, and the total price for the proposed transaction. See id. at 2. It also noted a "discount" of $360,000. See id. The invoice did not, however, include several provisions that would be material to any contract for the sale of 100 RD Cars, such as provisions related to: "title and risk of loss, removal and remarking of rail cars, maintenance of liability insurance, indemnification, limitation and warranties, taxes, maintenance, and transportation." Report at 17. Keller wired $360,000 to Bryant on the day that he received the invoice, referencing the invoice number in the wire transfer request. See June 17, 2021 Wire Transfer (Dkt. No. 49-4).
On August 12, 2021, Bryant altered the invoice to replace the word "discount" with the phrase "non-refundable Deposit." See Ex. O, LBMR SUMF (Dkt. No. 49-15); LBMR SUMF ¶32 (metadata depicting when the invoice was modified); Bryant Dep. 106:22-107:21 (Bryant agreeing that metadata indicates that the modified invoice was created on August 12, 2021).
The record does not contain any evidence that the parties explicitly agreed to form a contract for the proposed RD Car transaction on June 17, 2021. Nor could a reasonable factfinder conclude that the parties formed a contract when LBMR sent APB the $360,000 deposit after receiving Bryant's invoice. See M.G.L. ch.106 §2-204(1). While it is true that a contract does not fail for indefiniteness solely because material terms are left open, see M.G.L. ch. 106, §2-204(3), the large number of material terms left unspecified by the invoice in this case indicates that the parties did not intend to create a binding contract on June 17, 2021, see M.G.L. ch. 106, §2-204 cmt. ¶3. The parties' subsequent actions confirm this conclusion. See id. §2-204(1).
On June 30, 2021, Bryant emailed Keller a Non-Circumvent Agreement that Bryant had drafted (the "Draft NCA") (Dkt. No. 495). After making slight revisions, the parties signed the NCA on July 2, 2021 (the "Executed NCA") (Dkt. No. 49-6). Both the Draft NCA and the Executed NCA contained provisions stating that the agreement concerned "the possible purchase, sale or lease" of the RD Cars, which were "SUBJECT TO PRIOR SALE, LEASE OR DISPOSITION." Draft NCA at 2-3 (stylization in original); Executed NCA at 1-2 (stylization in original). The language in the Executed NCA-that is, provisions stating that the agreement concerned the "possible purchase" of property that was "subject to prior sale"-confirms that the parties did not intend to enter a legally binding contract on June 17, and were, instead, only contemplating a "possible" transaction. See M.G.L. ch. 106, §2-204(1). Indeed, another judge on this court reached the same conclusion when it allowed a motion to dismiss a breach of contract claim brought by APB in an unrelated case. See APB Realty, Inc, v. River City Recycling, LLC, Civ. No. 14-13089, Dkt. No. 21 (Oct. 21, 2014) (Stearns, J.) (rejecting APB's claim that a contract for the purchase and sale of rail cars was created when the defendant wired a deposit to hold the cars because the parties subsequently signed an NCA stating that "the Equipment offered is subject to prior sale . . . ") .
APB argues that another case it brought in this court, APB Realty, Inc, v, Georgia-Pacific LLC, "relate[s] more directly to this case" than River City Recycling. APB Objections at 6. Georgia-Pacific does not bolster APB's position, however. Although the First Circuit held that APB had stated a plausible claim for breach of contract, see APB Realty, Inc, v. Georgia-Pacific LLC, 889 F.3d 26, 30 (1st Cir. 2018), the district court later concluded that "no contract was formed between APB and Georgia Pacific" and entered summary judgment against APB, APB Realty, Inc, v. Georgia-Pacific LLC, Civ. No. 15-CV-13142, 2019 WL 1047699, at *5 (D. Mass. Mar. 4, 2019), aff'd 948 F.3d 37 (1st Cir. 2020).
In view of the foregoing, no reasonable factfinder could conclude that APB and LBMR agreed to form a legally binding contract concerning the proposed RD Car transaction. Therefore, LBMR is entitled to summary judgment on APB's breach of contract claim. See Brooks v. AIG SunAmerica Life Assur. Co., 480 F.3d 579, 586 (1st Cir. 2007) (stating that the existence of a "valid, binding contract" is an element of a breach of contract claim under Massachusetts law).
Because a valid contract was not formed, APB does not have a right to continue holding LBMR's $360,000 deposit. See Report at 17-18. Therefore, LBMR is also entitled to summary judgment on APB's declaratory judgment claim. See Kligler v. Att'y Gen., 491 Mass. 38, 44-45 (2022) (noting that a party must have, among other things, a "definite interest in the subject matter" of the controversy to prevail on a declaratory judgment claim (quoting Gay & Lesbian Advocates & Defenders v. Attorney Gen., 436 Mass. 132, 134-135 (2022)).
B. LBMR's Unjust Enrichment and Conversion Counterclaims (Counts I and III of the Amended Counterclaims)
APB has also objected to the Magistrate Judge's recommendation that the court enter summary judgment for LBMR on its unjust enrichment and conversion counterclaims (Counts I and III of the Amended Counterclaim), each of which relate to APB's refusal to return LBMR's $360,000 deposit. See APB Objections at 7-8. Neither objection is meritorious.
APB argues that summary judgment on LBMR's unjust enrichment counterclaim is inappropriate because the parties' legal obligations are governed by a valid contract. See id, at 7 (citing Chang v. Winklevoss, 95 Mass.App.Ct. 202, 211 (2019)). This objection is unmeritorious because, as explained earlier, a valid contract governing the proposed RD Car transaction was never formed.
APB also objects to the Magistrate Judge's recommendation that the court enter summary judgment for LBMR on its conversion claim. See APB Objections at 7-8. APB does not, however, identify any flaws in the Magistrate Judge's reasoning, as required by Federal Rule of Civil Procedure 72(b)(2). Its "objection" instead consists of a two-sentence recitation of the legal standard for a conversion claim. See id. The court is not required to consider portions of the Report to which a proper objection has not been made. See Fed.R.Civ.P. 72(b)(3).
Nevertheless, the court has considered de novo the Magistrate Judge's recommendation that the court enter summary judgment for LBMR on its unjust enrichment and conversion counterclaims. See id.; 28 U.S.C. §636(b)(1)(C). The court finds that the Magistrate Judge correctly identified and applied the legal standards for these claims. See Report at 19-22. Although APB properly received the $360,000 deposit when negotiations were ongoing, it had no right to retain these funds after negotiations collapsed and the parties failed to enter into a valid contract for the proposed RD Car transaction. It would be unjust and inequitable for APB to retain the $360,000 deposit, and APB has acted intentionally and wrongfully in doing so. See id. Therefore, for the reasons explained in the Report, LBMR is entitled to summary judgment on its unjust enrichment and conversion counterclaims (Counts I and III of LBMR's Amended Counterclaims).
IV. ORDER
For the reasons explained in this Memorandum, it is hereby ORDERED that:
1. LBMR's Renewed Motion for Partial Summary Judgment (Dkt. No. 68) is ALLOWED IN PART. Judgment shall enter for defendant LBMR on all counts of the Amended Complaint (Dkt. No. 10) and on Counts I and III of the Amended Counterclaim (Dkt. No. 42) . LBMR's request for summary judgment on Counts V and VI of the Amended Counterclaim, as recommended in the Report without objection by LBMR, is DENIED.
2. The parties shall, by October 12, 2024, confer and report, jointly if possible and separately if necessary, whether they have reached an agreement to resolve the remaining claims in this case, and, if not, whether they request more time to attempt to do so.
Exhibit 1
REPORT AND RECOMMENDATION ON LEBANON AND BLUE MOUNTAIN RAILWAY, LLC'S RENEWED MOTION FOR PARTIAL SUMMARY JUDGMENT (#68).
March 25, 2024
M. PAGE KELLEY, UNITED STATES MAGISTRATE JUDGE
I. Introduction.
This case involves an unsuccessful purchase and sale transaction for 100 Aluminum Rapid Discharge Coal Railcars (“RD Cars”) between plaintiff APB Realty, Inc. (“APB”), who was seeking to sell the RD Cars, and defendant Lebanon and Blue Mountain Railway, LLC (“LBMR”), who was seeking to buy them. APB claims LBMR is liable for breach of contract for the purchase and sale of the RD Cars and breach of a Non-Circumvent Agreement (“NCA”). Plaintiff additionally seeks declaratory relief regarding a $360,000 payment sent by LBMR to APB. LBMR countersued, alleging APB is liable for unjust enrichment, promissory estoppel, conversion, and fraudulent inducement, and also claiming that both APB and its general manager, Kirk Bryant (“Bryant”), violated Mass. Gen. L. ch. 93A, §11. Here, the Court issues a report and recommendation on Lebanon and Blue Mountain Railway, LLC's Renewed Motion for Partial Summary Judgment. (#68.)
II. Procedural History.
In August of 2021, APB filed a two-count complaint alleging breach of contract (Count I) and seeking declaratory relief regarding a monetary deposit (Count II). (#1.) On September 2, 2021, Judge Wolf referred the case to the undersigned for full pre-trial proceedings and the issuance of Reports and Recommendations on any dispositive motions. (#4.) On December 12, 2021, APB amended its complaint to add a claim for breach of an NCA. (#10.) On December 16, 2021, LBMR filed its answer together with counterclaims against APB for unjust enrichment (Count I), promissory estoppel (Count II), conversion (Count III), fraudulent inducement (Count IV), and violation of Mass. Gen. L. ch. 93A § 11. (#11.) On April 11,2023, after several discovery disputes were resolved by the court, LBMR was granted leave to file an amended counterclaim to join Bryant as a counterclaim defendant and add a claim for violation of Mass. Gen. L. ch. 93A against him (Count VI). (#42.) APB's answer to the amended counterclaim was filed on April 25,2023 (#44), while Bryant's answer was filed on June 13, 2023. (#55.)
On April 28,2023, LBMR filed a partial summary judgment motion on all counts of APB's amended complaint as well as Counts I, III, V, and VI of its amended counterclaim. (#47.) LBMR also filed a memorandum and a statement of material facts in support of its motion. (##48-49.) APB and Bryant filed an opposition to the dispositive motion, a statement of material facts, an affidavit, and a memorandum of law. (##50-54.) A hearing was held on the motion for partial summary judgment on August 14,2023. (#59.) The Court held a further hearing on the dispositive motion on November 16,2023, for the parties to address certain legal issues that had come to light. (#64.) The parties requested and were granted leave to file further memoranda on the question of whether Massachusetts common law or the Massachusetts Uniform Commercial Code applies in this case. (#64.) The parties also consented to have the undersigned deny the motion for partial summary judgment (#47) pending the submission of a renewed motion for summary judgment and further briefing. (#64.)
At the hearing on November 16, the Court also inquired about the applicability of the forum selection clause in the NCA which mandates that any disputes concerning the NCA be heard in the state courts of Massachusetts. (#64.) The parties have since stipulated that they agree to waive application of that forum selection clause through the issuance of a decision on the renewed motion for partial summary judgment. (#65.)
LBMR filed its renewed motion for partial summary judgment (#68) and a supplemental brief (#69) on December 12,2023. The plaintiffs' opposition (#72) and memoranda in opposition (##73-75) were filed on December 27, 2023.
III. The Record.
The court clarifies the record before embarking on a recitation of the undisputed facts. LBMR contends that APB's opposition to the motion for partial summary judgment is procedurally deficient in that it fails to comply with Local Rule 56.1 and fails to controvert LBMR's statements of undisputed facts. (#54 at 2.)
The Federal Rules of Civil Procedure state that “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A party claiming that a fact is genuinely disputed must either “cit[e] to particular parts of materials in the record ... or show[] that the materials cited do not establish the absence... of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c). In the event the moving party satisfies its burden to show that there is no genuine issue of material fact, the nonmoving party has the burden “to go beyond the pleadings and by her own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,' designate ‘specific facts showing that there is a genuine issue for trial.'” Celotex Corp. v. Catrett, 477 U.S, 317.324 (1986). A local rule in this district further requires “[a] party opposing the [summary judgment] motion [to] include a concise statement of the material facts of record as to which it is contended that there exists a genuine issue to be tried, with page references to affidavits, depositions and other documentation.” L.R. 56.1. The local rule also provides that “material facts of record set forth in the statement required to be served by the moving party will be deemed for purposes of the motion to be admitted by opposing parties unless controverted by the statement required to be served by opposing parties.” L.R. 56.1.
The First Circuit has “reiterated the importance of such rules [including L.R., D. Mass. 56.1] to the district courts in preventing litigants from shifting the burden of organizing evidence to the district court, and ‘we treat the district court's decision to apply [them] with deference.'” Zimmerman v. Puccio, 613 F.3d 60, 63 (1st Cir, 20IQ) (quoting Carreras v. Sajo, Garcia & Partners, 596 F.3d 25, 31 (1st Cir, 20 IQ)); T.K. through G.K. v. Town of Barnstable, No. 17-CV-11781-DJC, 2020 WL 3183164, at *1 (D. Mass. June 15, 2020) (“Many of the facts included in Plaintiffs' response are unsupported and thus do not comply with Local Rule 56.1. As such,... the Court declines to accept any facts or alleged factual disputes that are not supported by required citations.” (citations omitted)); United States v. Pfizer, Inc., 188 F.Supp.3d 122. 128 (D. Mass. 2016), aff'd sub nom. United States ex rel. Booker v. Pfizer, Inc., 847 F.3d 52 (1st Cir, 2017) (“[D]isregard of the Local Rules ... is certainly grounds to deem admitted the statements set forth in Pfizer's statement of uncontested facts.” (citation omitted)).
Discovery in this case is closed. (See #51 ¶ 40.) APB and Bryant have been on notice regarding the deficiencies in their response to defendant's Local Rule 56.1 statement since June 2023 when LBMR filed its reply. The Court has held two hearings on the partial summary judgment motion, during which neither APB nor Bryant sought leave to supplement their statement of material facts. Repeatedly stating that APB and Bryant “lack[] sufficient knowledge to dispute/not dispute” certain of LBMR's material facts, or that APB and Bryant “dispute[] the characterizations” contained in certain of LBMR's material facts simply is inadequate under the local rule. (See #51 ¶¶ 4, 5, 15, 23-28, 30, 32-34, 36.) Failure by a nonmoving party “to provide any citations whatsoever in their opposition statement constitutes noncompliance with the local rule.” Zimmerman, 613 F.3d at 63. Similarly, disputing a statement of fact and pointing to Bryant's entire deposition as support falls well short of the requirement that page references are to be cited. (See #51 ¶ 39.)
APB and its counsel are not novices at litigation. APB has been the plaintiffin at least three prior cases in this court, where it was represented by the same attorney. See, e.g., ABP Realty, Inc. v. Cargill, Incorporated, 13-CV-10976-THS; APB Realty, Inc. v. River City Recycling, LLC, 14-cv-13089-RGS; and APB Realty, Inc. v. Georgia-Pacific LLC, 15-cv-13142-NMG, which went to the First Circuit twice, 889 F,3d 26 (2018) and 948 F.3d 37 (2020).
There is no doubt that “‘[d]istrict courts enjoy broad latitude' in adopting and administering such local rules.” NEPSK, Inc. v. Town of Houlton, 283 F.3d 1.6 (1 st Cir, 2002) (quoting Air Line Pilots Ass'n v. Precision Valley Aviation, Inc., 26 F.3d 220, 224 (1st Cir, 1994)): see also Ramsdell v. Bowles, 64 F.3d 5, 7 (1st Cir, 1995) (noting district court's “great leeway in the application and enforcement of its local rules”). As such, “[w]here a party opposing a motion for summary judgment fails to comply with Local Rule 56.1, the court has the discretion to decide whether to impose the sanction of deeming the moving party's factual assertions to be admitted.” Butters v. Wells Fargo Advisors, LLC, No. 10-cv-10072, 2012 WL 5959986. at *2 (D. Mass. Nov. 27, 2012) (citing Swallow v. Fetzer Vineyards. 46 F, App'x 636, 638-39 (1st Cir, 2002)): Plourde v. Sorin Grp. USA, Inc.. 517 F, Supp, 3d 76, 81 (D. Mass. 2021) (quoting Butters, 2012 WL 5959986. at *2) (same); Berg v. Ciampa, No. 21-CV-l 1733-ADB, 2023 WL 5435942. at *1 (D. Mass. Aug. 23, 2023).
Local Rule 56.1 requires admission of the LBMR's factual assertions "‘unless controverted by the statement required to be served by” APB and Bryant. In light of the rule, and having weighed all the circumstances in this case, unless otherwise noted, the Court considers LBMR's statement of material facts as uncontroverted for purposes of the present motion.
IV. The Facts.
The following facts are admitted as undisputed in accordance with Fed, R, Civ, P, 56 and Local Rule 56.1. For purposes of summary judgment, the facts are presented in the light most favorable to APB and Bryant, the nonmoving parties, and all reasonable inferences are made in their favor. McCauley v. Groblewski, No. 18-2167. 2020 WL 6265069. at *1 (1st Cir. July 28, 2020); Cruz v. Mattis, 861 F.3d 22, 24 (1st Cir, 2017): Nieves-Romero v. United States. 715 F.3d 175. 378 (1st Cir, 2013): Dennis v. Osram Sylvania, Inc., 549 F.3d 851.855 (1st Cir, 2008).
APB is a Massachusetts corporation with its principal place of business in Massachusetts. (#49 ¶ 1.) At all relevant times. Bryant was the General Manager of APB. and conducted APB's business out of his home in Massachusetts. (#49 ¶¶ 2-3.) LBMR is a limited liability company organized and authorized to conduct business in Pennsylvania. (#49 ¶ 4.) Allen Keller (“Keller”) was LBMR's founder, owner, and president until his death in 2022. (#49 ¶ 5.)
On June 3, 2021, the two companies began communicating when Bryant emailed Keller to inquire about certain railroad cars that Keller had posted for sale online. (#49 ¶ 6.) Keller promptly notified Bryant that those cars were no longer available, but also advised Bryant that he, too, had an interest in buying and selling railroad locomotives and rail cars. Id. On June 15, 2021, Bryant sent an email to Keller with specifications for 100 RD Cars. (#49 ¶ 7.) The following day, Bryant sent Keller another email stating, "Let me know if you have interest quickly[,] we will need a deposit to hold them for you. there are 3 other parties getting close to doing something.” (#49 ¶ 8.)
According to Bryant, on June 17. 2021, he and Keller had a telephone conversation during which Bryant contends they negotiated the terms of the transaction. (#53 at 3.) Bryant asserts that the RD Cars were identified, as were the number of cars to be exchanged (100). (#53 at 4.) Bryant and Keller also allegedly agreed that each car would be sold for $12,000 and that LBMR would need to pay a $360,000 non-refundable deposit. Id.
The statements in this paragraph are culled from plaintiffs memorandum in opposition (#53) and are repeated for the purpose of setting the parties' arguments in context. These statements do not constitute undisputed facts.
Bryant sent Keller an email with an attached Invoice No. 061721-100 on June 17, 2021 (the "June Invoice”). (#49 ¶ 9.) The June Invoice set out wiring instructions to APB's bank account and included a total purchase price for the RD Cars of $1,200,000 to which a “discount” of $360,000 was applied; the June Invoice did not contain the term “non-refundable.” (#49 ¶¶ 910.) Later that same day, Keller, on behalf of LBMR, sent APB $360,000 by wire transfer, referencing Invoice No. 061721-100. (#49 ¶ 11.)
The June Invoice was sent as a PDF document entitled “Scan 2021-6-17 11.53.02”. (#49 ¶ 10.) At his deposition, Bryant agreed that the title of the PDF document was generated automatically and reflected the time at which the June Invoice was scanned. Id. After reviewing the metadata for the June Invoice, Bryant acknowledged that the metadata indicated that the PDF document was both “created” and “last modified” on June 17, 2021, at 11:53. Id.
On June 30, 2021, Bryant emailed Keller and attached a draft Non-Circumvent Agreement (“Draft NCA”) using a template non-circumvent agreement kept by APB. (#49 ¶¶ 12-13.) Keller and Bryant signed a revised NCA on July 2, 2021. (#49 ¶ 14.) The NCA contained a provision stating that “[t]his Agreement... is made ... concerning ... all information relating to the possible purchase, sale or lease of certain equipment described and designated below.” Id. The NCA also incorporated a provision that “Description of equipment to be inspected: (All material offered is SUBJECT TO PRIOR SALE OR DISPOSITION)." Id.: (bold, italics, and capitalization in original.)
On July 6, 2021, an email with an attached “Draft PSA” was sent? (#49 ¶ 15). While the Draft PSA identified APB as the owner of the RD Cars, in fact APB never held title to the RD Cars. (#49 ¶¶ 16-17.) The Draft PSA provided that “the sale shall be effective on the date on which [LBMR] wires or otherwise transfers the Purchase Price set out in Section 3 below to [APB], and [APB] executes a bill of sale ... but in no event later than July 9, 2021.” (#49 ¶ 20.) Section 3 of the Draft PSA stated that “The Purchase Price is $1,200,000, which sum shall be paid to [APB] by wire transfer to [APB's] account, less the pre-paid deposit of $360,000 for a balance of $840,000 upon the execution of this Agreement.” (#49 ¶ 18.) The term “non-refundable” did not appear anywhere in the Draft PSA. (#49 ¶ 19.) Neither LBMR nor APB ever executed the Draft PSA. (#49 ¶¶ 21,22.) LBMR never paid the Purchase Price. (#49 ¶ 21.)
Both the email and Draft PSA were filed under seal. (#49 ¶ 15.)
Keller emailed Bryant on August 12, 2021, to inform him that the air valves on all the RD Cars were non-compliant with AAR Rules and Regulations and so needed to be replaced. (#49 ¶ 29.) After detailing the anticipated cost of that work, Keller requested an adjustment of the purchase price. (Id.) Following receipt of Keller's email, on August 12, 2021, Bryant modified the June 17, 2021, Invoice No. 061721-100 by replacing the term “discount” in relation to the $360,000 deposit with the phrase “non-refundable deposit.” (#49 ¶¶ 31, 32.)
APB filed suit on August 18, 2021. (#49 ¶ 35.) LBMR asserts that after the initiation of the lawsuit the parties tried to salvage the deal. (#49 ¶ 36.) On August 24, 2021, LBMR's attorney proposed via email a revised PSA to plaintiff s counsel that included numerous changes to the Draft PSA. (#49 ¶ 36.) APB never agreed to accept the terms of the revised PSA, and never signed that document. (#49 ¶ 37.) LBMR never purchased the RD Cars. (#49 ¶ 38.) There is no record evidence indicating who, if anyone, purchased the RD Cars, or whether that transaction was connected to the alleged breach of the NCA. (#49 ¶ 39.)
V. Summary Judgment Standard.
As previously noted, “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Drew Co., Inc. v. Wolf. 511 F, Supp, 3d 15, 17 (D. Mass. 2021). “Facts are material when they have the 'potential to affect the outcome of the suit under the applicable law.'” Cherkaoui v. City of Quincy, 877 F.3d 14, 23 (1st Cir, 2017) (quoting Sanchez v. Alvarado, 101 F.3d 223, 227 (1st Cir. 1996)). “And, ‘[a] dispute is ‘genuine' if 'the evidence about the fact is such that a reasonable jury could resolve the point in the favor of the non-moving party.'” Rivera-Rivera v. Medina & Medina, Inc.. 898 F.3d 77. 87 (1st Cir, 2018) (quoting Cherkaoui. 877 F.3d at 23-24) (alteration in original).
To prevail on a motion for summary judgment, the moving party bears the initial burden of averring the absence of a genuine issue of material fact and “support[ing] that assertion by affidavits, admissions, or other materials of evidentiary quality.” Mulvihill v. Top-Flite Golf Co., 335 F.3d 15, 19 (1st Cir. 2003) (citations omitted). “It can meet its burden either by offering evidence to disprove an element of the plaintiff's case or by demonstrating an absence of evidence to support the nonmoving party's case.” Burgos Martinez v. City of Worcester, 502 F, Supp, 3d 606.614 (D. Mass. 2020) (quoting Rakes v. United States, 352 F, Supp, 2d 47.52 (D. Mass. 2005), aff'd, 442 F.3d 7 (1st Cir, 2006)) (internal quotation marks omitted).
Once the moving party asserts the absence of a genuine issue of material fact, the nonmovant must demonstrate the existence of a factual dispute with requisite sufficiency to proceed to trial. Fontanez-Nunez v. Janssen Ortho LLC, 447 F.3d 50, 54-55 (1st Cir. 2006). “[I]mprobable inferences, conclusory allegations, or rank speculation” cannot alone defeat summary judgment. Id. (quoting Ingram v. Brink's, Inc., 414 F.3d 222, 228-29 (1st Cir. 2005)).
In determining whether summary judgment is proper, courts view the record in the light most favorable to the nonmoving party, and all reasonable inferences must be drawn in the nonmovant's favor. Burns v. Johnson, 829 F.3d 1, 5, 8 (1st Cir. 2016). Upon a party's motion, Rule 56 requires the entry of summary judgment where a party fails to establish the existence of any one essential element on which that party will bear the final burden of proof. Celotex Corp., 477 U.S. at 323. “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Scott v. Harris, 550 U.S. 372, 380 (2007) (internal quotation marks omitted) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87(1986)). At summary judgment, the judge's function is not to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue fortrial. Burns, 829 F.3d at 8 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)).
The parties agree that Massachusetts law applies.
VI. Discussion.
A. Claims in the Amended Complaint.
1. Count I-Breach of Contract.
The parties originally briefed the contract dispute under Massachusetts common law. When an alleged contract involves a transaction in goods, however, the provisions of the Uniform Commercial Code (UCC) govern; common law is only applicable to the sale of goods in areas where the UCC is silent. See Mass, Gen, L, ch, 106. $2-102- In Massachusetts, to determine whether common law or the UCC applies, courts examine the primary purpose of the alleged contract. “In mixed contracts [of sales and services] ... the test is whether the predominant factor, thrust, or purpose of the contract is (1) the rendition of service, with goods incidentally involved,... or is [instead (2)] a transaction of sale, with labor incidentally involved ....” Cumberland Farms, Inc. v. Drehmann Paving & Flooring Co.. 25 Mass, App, Ct, 530, 534 (1988) (alteration in original) (internal citations and quotation marks omitted); Carrozza v. CVS Pharmacy, Inc.. 992 F.3d 44, 60 (1st Cir, 2021).
“Goods” are “all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities ... and things in action.” Mass, Gen, L, ch, 106, $2-105. Courts in other states have applied their UCC statutes to resolve disputes involving railroad car transactions. See, e.g., Butts v. Glendale Plywood Co., 710 F.2d 504 (9th Cir. 1983): City of New York v. Pullman Inc., 662 F.2d 910 (2d Cir, 1981): Soo Line R. Co. v. Fruehauf Corp.. 547 F.2d 1365 (8th Cir, 1977): Continental Oil Co. v. General America Transp. Corp.. 409 F, Supp, 288 (S.D. Tex. 1976); Scullin Steel Steel Co. v. PACCAR Inc., 748 S.W.2d 910 (Mo.Ct.App. E.D. 1988). Given that the RD Cars were objects movable when identified for sale between the parties in this case, they qualify as goods.
The UCC defines “merchant” as:
a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.Mass. Gen, L, ch, 106. $ 2-104(1). In this instance both Keller and Bryant qualify as merchants under the UCC definition.
The parties failed to point to any specific service provided by APB, such as an intermediary service where APB facilitated putting LBMR in contact with a third party such that a single transaction would occur between LBMR and the third party while APB received a commission for its effort. Rather, in this case, APB intended to be the intermediary title holder between two separate transactions. APB planned to buy the RD Cars from the third party, and then sell the RD Cars to LBMR. In short, because the primary purpose of the interaction between LBMR and APB was the sale of the RD Cars rather than a service around the sale, the UCC governs.
Under the facts of this case, APB's contract breach allegations are without merit regardless of whether there was an oral contract pursuant to which the parties agreed to have a nonrcfundable deposit. Under the UCC, a “‘[c]ontract,' as distinguished from 'agreement,' means the total legal obligation that results from the parties' agreement as determined by [chapter 106 of the General Laws of Massachusetts] as supplemented by any other applicable laws.” Mass, Gen, L, ch, 106, § 1-201(121 “A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.” Id. § 2-204(1). “Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.” Id. § 2-204(3). The test to determine indefiniteness is whether the “commercial standards on the point of ‘indefiniteness' are intended to be applied.” Id. § 2-204 cmt. ¶ 3.
Unless otherwise unambiguously indicated by the language or circumstances
(a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;
(b) an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods, but such a shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer.Id. §2-206(1).
“An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.” Id. § 2-205.
The UCC contains a statute of frauds:
Except as otherwise provided in this section a contract for the sale of goods for the price of five hundred dollars or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.Mass, Gen. L, ch. 106. § 2-20U1). “Failure to satisfy the requirements of this section does not render the contract void for all purposes, but merely prevents it from being judicially enforced in favor of a party to the contract.” Id. § 2-201 cmt. 4.
To the extent an oral contract based on the industry standards in the railroad car market was created during the telephone call between Bryant and Keller as argued by plaintiff, and the nonrefundable deposit was a term of such contract, APB still is not entitled to retain the funds. A contract could have been formed under § 2-207(1) of the UCC. When a contract is formed under § 2-207(1), the next step is to look at § 2-207(2). “[W]hether writings are treated as confirmations or acceptances of the parties' contracts, any additional terms will be reviewed as proposals for additional terms and analyzed under section 2-207(2).” Packgen v. Berry Plastics Corp., 973 F. Supp, 2d 48, 63-64 (D. Maine. 2013) (citing Aceros Prefabricados, 282 F.3d 92, 98-99 (2d Cir. 2002)). Section 2-207(2) in the Massachusetts code is unique because it expressly treats additional and different terms interchangeably. See Mass. Gen. L. ch. 106 § 2-207(2); cf. U.C.C. § 2-207(b) (Am. L. Inst. & Unif. L. Comm'n 2002). Under the subsection, “additional or different terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless... they materially alter it.” Mass. Gen. L. ch. 106 § 2-207(2)(b). “Whether or not additional or different terms will become part of the agreement depends upon the provisions of subsection (2). If they are such as materially to alter the original bargain, they will not be included unless expressly agreed to by the other party.” Id. § 2-207 cmt. 3.
The Court assumes without deciding that the alleged statements attributed to Mr. Keller would be admissible under the Rules of Evidence.
This section provides: “A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.” Mass, Gen, L. ch, 106, 2-207.
After the alleged oral contract was made, APB drafted and sent the invoice indicating the $360,000 was a “discount.” The first step to determine whether the modified term put forward by the invoice becomes a valid part of the contract is to conduct an analysis under § 2-207(1). One of the methods to form a contract under the subsection (1) is “if the parties exchange forms with divergent terms, yet the seller's invoice does not state that its acceptance is made ‘expressly conditional' on the buyer's assent to any additional or different terms in the invoice." Com. & Indus. Ins. Co. v. Bayer Corp., 433 Mass. 388. 393 (2001) (quoting JOM, Inc. v. Adell Plastics, Inc., 193 F.3d 47, 53 (1st Cir, 1999)). In the present case, APB did not include any provisions in the email containing the June Invoice nor in the Invoice itself making acceptance of additional or different terms expressly conditional. (See #49, Ex. C).
While APB has insisted that a nonrefundable deposit was a material term of the oral contract (#53 at 4), it essentially then created a different term, i.e., that the deposit was a discount, which LBMR accepted. The June 16 email in combination with the June Invoice act as a firm offer. Once LBMR accepted the offer by sending the signed wire transfer payment, APB was unable to change again the terms of the offer. When Bryant modified the invoice, he never notified LBMR about the change. LBMR did not learn about the alteration until discovery. Thus, a contract under subsection 2-207(1) could not be formed given that there was neither a definite and seasonable expression of acceptance nor a written confirmation.
Regardless of the possible permutations around whether a contract was formed between the parties, the result is the same. APB does not have a contractual legal right or interest in the deposit under the Massachusetts UCC.
Even if Massachusetts common law applied, the breach of contract claim would still fail. “To prevail on a claim for breach of contract, a plaintiff must demonstrate that there was an agreement between the parties; the agreement was supported by consideration; the plaintiff was ready, willing, and able to perform his or her part of the contract; the defendant committed a breach of the contract; and the plaintiff suffered harm as a result.” Vacca v. Brigham & Women's Hosp., Inc., 98 Mass, App, Ct. 463, 467 (2020) (quoting Bulwer v. Mount Auburn Hosp., 473 Mass- 672. 690 (2016)). The Massachusetts Appeals Court has explained:
“[I]t is essential to the existence of a contract that its nature and the extent of its obligations be certain.” Caggiano v. Marchegiano, 327 Mass, 574.579.99 N.E.24 861 (1951). Where an alleged agreement “is silent as to material matters important in its interpretation for the ascertainment of the obligations of the parties,” the contract may be too indefinite to enforce (citation omitted). Held v. Zamparelli, 13 Mass. App. Ct. 957, 958, 431 N.E.2d 961 (1982). “Nevertheless, ‘ [i]t is not required that all terms of the agreement be precisely specified' so long as the material terms are ascertainable” (citation omitted). JPMorgan Chase & Co. v. Casarano, 81 Mass. App, Ct, 353, 356, 963 N.E.2d 108 (2012).Vacca, 98 Mass.App.Ct. at 468.
It is black-letter law that without a valid contract between the parties, there cannot be a breach of contract. See Brooks v. AIG Sunamerica Life Assurance Co., 480 F.3d 579.586 (1st Cit 2007); Coll v. PB Diagnostic Sys., 50 F.3d 1115-1122 (1st Cir. 1995); George P. Johnson Hong Kong Ltd. v. L.E.K Consulting LLC, 512 F.Supp.3d 101, 104 (D- Mass. 2020).
In a previous case involving APB, Judge Steams rejected APB's claim that an invoice wire transfer formed a contract between two parties because a subsequent NCA contained provisions signaling that the contract was not complete and the final agreement was not a mere formality. APB Realty, Inc. v. River City Recycling, LLC, Case No. 1:14-cv-13089-RGS (Docket No, 21, Oct. 21,2014). In the current case, the NCA concerns “any and all information relating to the possible purchase, sale or lease of certain equipment described and designated ....” (#49 at Ex. F.). Mentioning that a transaction is “possible” indicates that the contract is not complete.
Judge Steams wrote:
When the preliminary agreement incorporates all of the material terms of a contract, and the execution of the final instrument is a mere formality, a binding contract is formed. Goren v. Royal Investments, Inc., 25 Mass- App, Ct, 137, 140-141 (1987). Whether a document contains the elements which make it an enforceable contract is a question of law, rather than fact Schwanbeck v. Federal-Mogul Corp., 412 Mass, 703, 709 (1992) (quaere whether there is a common law obligation to negotiate in good faith absent an express agreement to do so). While contemplation of the execution of a final written agreement normally signals the intent of the parties not to be bound by earlier negotiations, if the ultimate agreement is a mere formality, the contract is complete. Hiinneinan Real Estate Corp. v. The Norwood Realty, Inc.. 54 Mass, App, Ct, 416, 421 (2002). That is not the case here. In fact, plaintiff attaches and incorporates into the Amended Complaint a “NonCircumvent and Letter of Intent Agreement" that states "[i]t is agreed that until a Sales Agreement is duly executed by both parties, Buyer will have no obligation or exclusive rights to purchase the Equipment. It is further understood that the Equipment is offered subject to prior sale, or other disposition ....”APB Realty, Inc., 14-cv-13089-RGS (#21).
Moreover, an agreement can be unenforceable due to indefiniteness not only if it lacks a single material term, but also if there are a series of terms the omission of which in the aggregate render the agreement too indefinite to be enforced by courts. Conway v. Licata. 104 F. Supp, 3d 104, 114 (D. Mass. 2015). APB claims that during a telephone call the parties formed an oral contract, but here the alleged oral contract lacks numerous significant clauses such as: title and risk of loss, removal and remarking of rail cars, maintenance of liability insurance, indemnification, limitation of liability and warranties, taxes, maintenance, and transportation. While the individual absence of several of these clauses might not invalidate the alleged agreement, the combined absence of all of them would.
For the above reasons, the court recommends that summary judgment be granted on Count I of the amended complaint in favor of LBMR.
2. Count II-Declaratory Relief.
The Massachusetts Supreme Judicial Court has explained that “[t]he declaratory judgment act, G. L. c. 231A, § 1, authorizes courts to make 'binding declarations of right, duty, status and other legal relations' where the parties present an ‘actual controversy.' Such relief is appropriate only if a plaintiff can demonstrate the existence of an actual controversy, as well as ‘the requisite legal standing to secure its resolution.'” Kligler v. Att'y Gen., 491 Mass- 38, 44 (2022) (quoting Entergy Nuclear Generation Co. v. Dep't of Env't. Prot., 459 Mass, 319, 326 (2011)); Buffalo-Water 1, LLC v. Fid. Real Est. Co., LLC, 481 Mass- 13.18 (2018).
APB seeks a declaration regarding the parties' rights to, and ownership of, the $360,000 deposit. As explained above, because there was no enforceable contract between APB and LBMR, ABP has no legal interest in the funds or right to retain the money. Summary judgment should enter in LBMR's favor on Count II, the declaratory judgment claim.
3. Count III-Breach of the NCA.
The NCA is a contract between the parties to regulate the behavior of the brokers during the transaction. Massachusetts common law applies rather than the UCC. “To prevail on a claim for breach of contract, a plaintiff must demonstrate that there was an agreement between the parties; the agreement was supported by consideration; the plaintiff was ready, willing, and able to perform his or her part of the contract; the defendant committed a breach of the contract; and the plaintiff suffered harm as a result.” Vacca, 98 Mass. App, Ct, at 467 (quoting Bulwer v. Mount Auburn Hosp., 473 Mass, 672, 690 (2016)); Squeri v. Mount Ida Coll., 954 F.3d 56, 71 (1st cir. 2020); Durbeck v. Suffolk Univ., 547 F, Supp. 3d 133,144-45 (D. Mass. 2021).
LBMR argues that there is a dearth of evidence in the record either to show who, if anyone, purchased the RD Cars, or whether any such transaction is related to the alleged breach of the NCA by LBMR. Even if the Court were to consider Bryant's deposition testimony (#52 at p.113, 1.7 through p. 116, 1.3) cited in Plaintiff/Defendant-in-Counterclaim and Defendant in Counterclaim's Memorandum (#53 at 5), that testimony does not aid APB's cause.
APB disputed LBMR's statement that “[t]here was no record evidence as to who, if anyone, purchased the RD Cars, or whether that transaction was in any way connected to any alleged breach of the NCA.” (#49 ¶ 39; #51 ¶ 39.) In support, ABP relied on the entire deposition of Bryant (#51 ¶ 30), which clearly is improper.
Initially Bryant testified that he was not sure if LBMR ever purchased the RD Cars identified in the amended complaint, then he stated that he had reason to believe that LBMR purchased the railcars, but he did not know from whom. (#52 at p. 113 ll 2-20.) Bryant then explained that the same company for which Keller was purchasing the RD Cars, Reading and Blue Mountain Railroad, bought the cars. (#52 at p. 113, 11. 23-24, p. 114, 11.13.) Bryant agreed that Reading and Blue Mountain Railroad and LBMR are not the same company. (#52 at p. 114,ll. 1417.) Bryant was not sure if he had produced any documents to demonstrate that LBMR had purchased the RD Cars. (#52 at p. 115 ll. 3-24, p.116,ll.1-6.) This deposition testimony, which is essentially based on Bryant's “belief' as to what transpired, is inadequate to raise a genuine issue of material fact to be tried.
The court recommends that LBMR be granted summary judgment in its favor on Count III of the amended complaint.
B. Claims in the Amended Counterclaim.
1. Count I - Unjust Enrichment.
“Unjust enrichment is defined as retention of money or property of another against the fundamental principles of justice or equity and good conscience.” Sacks v. Dissinger, 488 Mass, 780. 789 (2021) (quoting Santagate v. Tower. 64 Mass. App, Ct, 324, 329 (2005)). The elements of unjust enrichment are: “(1) a benefit conferred upon the defendant by the plaintiff; (2) an appreciation or knowledge by the defendant of the benefit; and (3) acceptance or retention by the defendant of the benefit under the circumstances would be inequitable without payment for its value.” Mass. Eye & Ear Infirmary' v. QLT Phototherapeutics, Inc., 552 F.3d 47, 57 (1st Cir.), decision clarified on denial of reh'g, 559 F.3d I (1 st Cir, 2009); Reed v. Zipcar, Inc., 883 F. Supp, 2d 329, 334 (D. Mass. 2012), aff'd. 527 F, App'x 20 (1 st Cir, 2013): PerkinElmer Health Seis., Inc. v. LabQ Clinical Diagnostics LLC, 673 F, Supp, 3d 69, 71 (D. Mass. 2023).
“Massachusetts courts emphasize the primacy of equitable concerns in a finding of unjust enrichment or quasi-contract: “[Considerations of equity and morality play a large part in constructing a quasi contract.'” Mass. Eye & Ear Infirmary, 552 F,3d at 57 (quoting Salomon v. Terra, 477 N,E.2d 1029, 1031 (Mass. 1985)). Under Massachusetts law, to succeed on an unjust enrichment claim, LBMR. the plaintiff-in-counterclaim, “must establish ‘not only that the defendant received a benefit, but also that such a benefit was unjust.'” Bonina v. Sheppard. 91 Mass, App, Ct, 622, 625 (2017) (quoting Metropolitan Life Ins. Co. v. Cotter, 464 Mass, 623, 644 (2013)). The inquiry as to “[w]hether the benefit was unjust turns on the reasonable expectations of the parties.” Bonina, 91 Mass, App, Ct, at 625 (internal citations and quotation marks omitted).
LBMR has established the elements of its claim. The undisputed facts show that in wiring the $360,000 to APB on June 17, 2021, LBMR conferred a benefit on APB. By the actions it has taken to retain those funds, for example, filing a declaratory judgment claim, APB has demonstrated its awareness of the benefit. In the absence of an enforceable contract between the parties, or an agreement that the deposit was nonrefundable, APB has no legal right to the $360,000, and it would be inequitable to allow it to retain the funds. LBMR is entitled to summary judgment on its unjust enrichment claim.
2. Count III-Conversion.
“Conversion is the intentional or wrongful exercise of ownership or control by defendant over the personal property of another to which it has no right of possession.” Barkhordar v. President & Fellows of Harvard Coll., 544 F. Supp, 3d 203, 215 (D. Mass. 2021) (quoting Omori v. Brandeis Univ., 533 F. SUDD. 3d 49.56 (2021)).
The Massachusetts Appeals Court has explained that:
When reviewing the adequacy of an equitable claim, “it is immaterial that [the plaintiff] may have also a plain, adequate, and complete remedy at law” under the same theory of recovery. Boston v. Santosuosso, 298 Mass. 175, 180 (1937). However, if a party prevails on both legal and equitable claims based on the same or similar facts, he or she is not eligible to receive double redress. See Zelby Holdings, Inc. v. VideogeniX, Inc.,92 Mass. App, Ct, 86, 93 (2017).Sacco v. Circosta, No. 17-P-251, 2018 WL 2436734, at *3 n. 9 (Mass. App. Ct. 2018).
To prevail on a claim for conversion under Massachusetts law, a ‘plaintiff must show that (1) the defendant intentionally and wrongfully exercised control or dominion over the personal property; (2) the plaintiff had an ownership or possessory interest in the property at the time of the alleged conversion; (3) the plaintiff was damaged by the defendant's conduct; and (4) if the defendant legitimately acquired possession of the property under a good-faith claim of right, the plaintiffs demand for its return was refused.'Unum Grp. v. Loftus, 220 F.Supp.3d 143. 148 (D. Mass. 2016) (quoting U.S. v. Peabody Const. Co., Inc., 392 F.Supp.2d 36 (D. Mass. 2005)); Reem Prop., LLC v. Engleby, 251 F.Supp.3d 274, 278 (D. Mass. 2017); In re Hilson, 448 Mass. 603, 611 (2007) (“The elements of conversion may be established by a showing that one person exercised dominion over the personal property of another, without right, and thereby deprived the rightful owner of its use and enjoyment.”).
While money may be sought by means of a conversion claim, “the plaintiff must identify a specific pool or fund in which he or she has a possessory interest.” Omori, 533 F, Supp, 3d at 56 (citing Wollaston Indus., LLC v. Ciccone, No. 19-cv-10678, 2019 WL 6841987. at *2 (D. Mass. Dec. 16, 2019)); In re Hilson, 448 Mass, at 611 (“Money may be the subject of conversion.”). “[T]he relevant purposeful act in the tort of conversion is the exercise of dominion over a chattel, which may entail liability even though the defendant initially acted on a good-faith, non-maritime claim of right.” Evergreen Marine Corp. v. Six Consignments of Frozen Scallops, 4 F.3d 90, 95 (1st Cir. 1993) (citation omitted). An “actor is not relieved of liability ... for conversion by his belief, because of a mistake of law or fact not induced by the other, that he... is entitled to ... immediate possession [of the converted chattel].” Id. (quoting Restatement (Second) of Torts § 244 (Am. Law Inst. 1965)).
In this case, a specific fund of money, the $360,000, has been identified and so may be the subject of conversion. The money was wired by LBMR to APB as a deposit toward the purchase of the RD Cars. The parties never reached a mutually agreeable purchase and sale agreement, and a deal was never consummated. While APB properly acquired the $360,000, when the agreement to purchase the RD Cars foundered, APB had no legal right to retain the funds. APB has wrongfully withheld the money from LBMR, and LBMR has been damaged as a result. Summary judgment should enter for LBMR on its conversion claim.
3. Count V-Violation of Mass. Gen. L. ch. 93A by APB.
To prevail on a claim under Section 11, a plaintiff must establish:
(1) that the defendant engaged in an unfair method of competition or committed an unfair or deceptive act or practice, as defined by G.L. c. 93A § 2, or the regulations promulgated thereunder; (2) a loss of money or property suffered as a result; and (3) a causal connection between the loss suffered and the defendant's unfair or deceptive method, act, or practice.Auto Flat Car Crushers, Inc. v. Hanover Ins. Co., 469 Mass, 813, 820 (2014) (footnote omitted). It is a question of fact whether the alleged conduct was unfair or deceptive, but it is a question of law whether that conduct rose to the level of a Chapter 93A violation. H1 Lincoln, Inc. v. South Washington St., LLC, 489 Mass, 1, 14 (2022). A breach of contract is not inherently an unfair trade practice under Chapter 93A. Zabin v. Picciotto, 73 Mass.App. Ct, 141, 169. “[T]o rise to the level of a c. 93A violation, a breach must be both knowing and intended to secure ‘unbargained-for benefits' to the detriment of the other party.” Id.
In addition to establishing that the defendant engaged in an unfair trade practice, a plaintiff bringing a Section 11 claim must also demonstrate “a loss of money or property” and “a causal connection between the loss suffered and the defendant's ... practice.” Auto Flat Car Crushers, Inc.. 469 Mass, at 820. The loss of money must stem from the defendant's deceptive act, separate and apart from loss under a breach of contract claim. Callahan v. Harvest Bd. Int'l, Inc., 138 F, Supp, 2d 147, 167 (D. Mass. 2001). It is a question of fact whether the requisite causal connection has been proven. Arthur D. Little, Inc. v. Dooyang Corp., 147 F.3d 47, 56 (1st Cir, 1998).
On August 12, 2021, following an email from Keller requesting an adjustment to the purchase price, APB modified the June 17, 2021. invoice by changing the term “discount” to “non-refundable deposit” in reference to the $360,000 deposit. (#49 ¶¶ 29, 31, 32.). LMBR argues the alteration was a means of pressuring LBMR to complete the purchase, and thus was an unfair and deceptive act, i.e., conduct that was “an 'extreme or egregious' business wrong or 'commercial extortion,' or rise[s] to some similar level of‘rascality' that raises ‘an eyebrow of someone inured to the rough and tumble of the world of commerce.'” Hampshire House Corp. v. Fireman's Fund Ins. Co., 557 F, Supp, 3d 284, 301 (D. Mass. 2021) (quoting Peabody Essex Museum, Inc. v. U.S. Fire Ins. Co., 802 F.3d 39. 54 (1st Cir, 2015)).
Unilaterally altering the terms of the invoice to its own advantage in an apparent attempt to bolster its effort to retain the $360,000 was a deceptive act by APB and satisfies the first requirement for a claim under Section 11. See Hampshire House Corp., 557 F. Supp, 3d at 301. However, there remain genuine issues of material fact regarding the requisite loss and causal connection to APB's act. LBMR has stated it was after litigation had commenced, on November 5, 2021, that it received a copy of an invoice including the term “nonrefundable.” (#36 at 2.) In its Amended Counterclaims, LBMR merely alleges that “[a]s a result of these unfair and deceptive acts or practices, LBMR has sustained damages in an amount to be determined at trial.” (#42 ¶ 59.) There is a lack of evidence indicating APB's specific conduct of altering the invoice pressured LBMR into consummating the deal and was causally connected to a loss of money or property by LBMR. Thus, genuine issues of material fact exist regarding the causal connection between the altered invoice and any loss of money or property suffered by LBMR, as required by Section 11. See NEC Elecs., Inc. v. New England Cir. Sales, Inc., 722 F, Supp, 861, 867 (D. Mass. 1989). Summary judgment should be denied on this claim.
4. Count VI-Violation of Mass. Gen. L. ch. 93A by Bryant.
For the same reasons stated with respect to Count V, the claim for violation of Mass. Gen. L. ch. 93A by APB, summary judgment on Count VI of the amended counterclaim against Bryant should be denied.
VII. Recommendation.
I RECOMMEND that Lebanon and Blue Mountain Railway, LLC's Renewed Motion for Partial Summary Judgment (#68) be ALLOWED on all counts of the Amended Complaint and on Counts I and III of the Amended Counterclaim. I FURTHER RECOMMEND that summary judgment be DENIED on Counts V and VI of the Amended Counterclaim.
VIII. Review by the District Judge.
The parties are advised that any party who objects to this Report and Recommendation must file specific written objections with the Clerk of this Court within fourteen (14) days of the date of this Report and Recommendation. The objections must specifically identify the portion of the Report and Recommendation to which objections are made and state the basis for such objections. The parties are further advised that the United States Court of Appeals for the First Circuit has repeatedly indicated that failure to comply with Fed, R, Civ- P- 72(b) shall preclude further appellate review. See Keating v. Secretary of Health & Human Servs., 848 F.2d 271 (1st Cir, 1988); United States v. Emiliano Valencia-Copete, 792 F.2d 4 (1st Cir, 1986); Scott v. Schweiker, 702 F.2d 13. 14 (1st Cir, 1983); United States v. Vega, 678 F.2d 376, 378-9 (1st Cfc 1982); Park Motor Mart, Inc. v. Ford Motor Co., 616 F.2d 603 (1st Cir, 1980); see also Thomas v. Arn, 474 U.S. 140 (1985).