Opinion
16-P-1137
05-19-2017
Paul BOUSFIELD v. Brett ELLIS & others.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This case arose following the 1998 transfer of a septic services company from the plaintiff, Paul Bousfield (Paul or the plaintiff), to the defendant, Brett Ellis (Brett). The parties cross appeal from an amended judgment entered following a jury trial in the Superior Court, and several posttrial motions. We affirm in part, and reverse in part.
Because multiple parties share names, we shall refer to the individuals involved by their first names.
Background. The jury reasonably could have found the following facts. In 1998, Paul entered into several contracts with Brett, for the purpose of transferring (or intending to transfer) Paul's business, Bousfield Sanitation Service, Inc. (Bousfield Sanitation), to Brett. One of these contracts was a consulting agreement between Paul and Bousfield Sanitation providing for a weekly payment to Paul, of $1,000 plus cost of living increases, for a term of thirty years. Paul's consultant duties under the agreement were "to provide such business consultation as is appropriate and necessary to conduct the company's business in a profitable and sustainable manner. Consultation may be by any form of communication and from any place." Another contract provided for the lease of several vehicles to Bousfield Sanitation, with Paul as the lessor. A third contract provided Brett with an option to purchase all outstanding shares of stock "at any time by mutual agreement, at the expiration of the term of [s]eller's consulting agreement with the corporation, or within 90 days of the death of the [s]eller." No other contract provided for any consideration from Brett to Paul for the sale of the business.
The arrangement proceeded without incident, until late 2012, when Bousfield Sanitation ceased paying Paul under the consulting agreement. The following year, Brett, and his wife, Melinda Ellis, organized a new corporation, Done Right Excavation and Septic Services, Inc. (Done Right), and then transferred, for no consideration, vehicles from Bousfield Sanitation to Done Right.
In August, 2013, the plaintiff filed a complaint in Superior Court, which he later amended, alleging, inter alia, two counts of breach of contract against Bousfield Sanitation (counts I and II), two counts of breach of contract against Brett (counts IV and V), unjust enrichment against Brett and Done Right (count VI and XIII), interference with contract against Melinda and Done Right (counts X and XII), and fraudulent transfer of corporate assets (five vehicles) (count XIV). The defendants responded with a counterclaim, alleging breach of the lease agreement (count I), breach of the consulting agreement (count II), interference with business relations (count V), and breach of fiduciary duties (count VI).
Further counts for unjust enrichment against Bousfield Sanitation, fraud and interference with contract against Brett, fraud against Melinda, and fraud against Done Right, were later dismissed.
Two additional counts for conversion and unjust enrichment were later dismissed or withdrawn.
A jury trial was held over multiple days in December, 2015; both Paul and Brett testified. The plaintiff advanced the theory that the set of contracts, including the consulting agreement, was actually a purchase and sale agreement between Paul and Brett for the sale of Bousfield Sanitation and that the defendants breached that agreement. The defendants, on the other hand, disputed the plaintiff's interpretation of the contracts and argued that Bousfield Sanitation was entitled to cease payments to Paul because he had ceased his work as a consultant.
At the close of the trial, the judge instructed the jury that the plaintiff had advanced alternative theories of recovery, and that, accordingly, he could not recover "cumulative or duplicative damages on those causes of action." He also instructed the jury that "[w]hen several contractual documents are executed simultaneously, they all must be construed together as a so-called integrated agreement." The jury returned answers to special questions, finding as follows: 1) a contract between Paul and Brett, but no breach; 2) a breach of the contract between Paul and Bousfield Sanitation, with damages for Paul in the amount of $164,540; 3) unjust enrichment of Brett, with damages for Paul in the amount of $44,000; 4) no breach of the consulting agreement by Paul; and 5) a breach of fiduciary duties by Paul, with damages for Bousfield Sanitation in the amount of $38,500. On count XIV, alleging the fraudulent transfer of corporate assets, which the judge had reserved for himself, the defendants stipulated that they were liable.
The jury also found no interference with contract on the part of either Melinda or Done Right, no unjust enrichment of Done Right, and no breach of the lease agreement or interference with business relations by Paul.
Following the trial, each side filed motions for judgment notwithstanding the verdict (JNOV), all of which the judge denied. In the motions, both parties challenged the jury's verdict on the contract and unjust enrichment claims, while the plaintiff claimed error in the award of damages for breach of fiduciary duty. The plaintiff also moved for the entry of judgment as to all the defendants for the fraudulent transfer of corporate assets, and to further amend his complaint to include vehicles and assets in addition to the five enumerated in the earlier amended complaint. An amended judgment entered ordering the transfer of the five vehicles named in the complaint, plus additional vehicles and monetary amounts representing vehicles no longer in Done Right's possession. The judge denied all other requested relief. These cross appeals followed, raising essentially the same points as those raised in the parties' posttrial filings.
The judge also denied motions for a directed verdict filed by each side, as well as Paul's motions for a new trial and motion for judgment against Brett, individually.
Discussion. 1. Breach of contract and unjust enrichment. For different reasons, each side argues that the judgment on the contract-related claims must be vacated. Paul argues that the various contracts at issue constituted a single, integrated agreement. Therefore, he contends that the interpretation was a question of law that should have been resolved by the judge and not submitted to the jury. Brett claims that the contractual and unjust enrichment verdicts are inconsistent, as they were alternate theories of recovery. Because the arguments are rooted in the special questions that appeared before the jury, the threshold question before us, therefore, is whether either party made a timely objection to the form of the special questions. Neither party did, these claims are waived.
Nor, prior to the posttrial motions, did Paul's counsel request that the judge interpret the contracts as an integrated agreement. Rather, counsel agreed to the supplemental jury instruction on integration.
Where there is a lack of objection to special questions before they are submitted, when the jury returns, or prior to discharge of the jury, combined with an absence of objection to the jury instructions relating to those special questions, the law of waiver is clear. See Neagle v. Massachusetts Bay Transp. Authy., 45 Mass. App. Ct. 345, 348 (1998) ("Pursuant to Mass.R.Civ.P. 49(a), [365 Mass. 812 (1974) ], this failure [to object to the special questions] resulted in a waiver of the plaintiff's rights [including the right] to raise the issue on appeal"); Fortier v. Essex, 52 Mass. App. Ct. 263, 265 (2001) ("There was no further discussion of, or objection to, the form of the questions. The plaintiffs' arguments regarding the special verdict questions cannot be raised for the first time on appeal"). See also Scott v. Boston Hous. Authy., 56 Mass. App. Ct. 287, 296-297 (2002) (Berry, J., concurring).
We further note that, were we to reach the issue, it is unclear whether any meaningful review could be performed based on the incomplete evidentiary record and transcripts provided on appeal. Mass.R.A.P. 18(a), as amended, 425 Mass. 1602 (1997). Cameron v. Carelli, 39 Mass. App. Ct. 81, 83-84 (1995).
On appeal, Paul also challenges the judge's order allowing, over his objection, the defendants' motion to amend their counterclaim to add an affirmative defense alleging that "[t]he consulting agreement was terminated for just cause, based upon the [d]efendant's dissatisfaction with [Paul's] conduct, and for grounds reasonably related to the needs of the business." "[A] motion to amend should be allowed unless some good reason appears for denying it." Hamed v. Fadili, 408 Mass. 100, 105 (1990), quoting from Castellucci v. United States Fid. & Guar. Co., 372 Mass. 288, 289 (1977). First, the affirmative defense was a natural response to the plaintiff's case, as pleaded. Second, "[i]t is well-settled that prejudice to the non-moving party is the touchstone for the denial of an amendment." Ibid., quoting from Goulet v. Whitin Mach. Works, Inc., 399 Mass. 547, 550 n.3 (1987). Here, we perceive no abuse of discretion where Paul has failed to show how he was prejudiced by the allowance of the amendment more than a year before trial commenced. See Pielech v. Massasoit Greyhound, Inc., 441 Mass. 188, 197-198 (2004) ("The decision to grant a motion to amend falls within the motion judge's broad discretion") (Pielech ).
Paul did not object to the defendants' motion to amend. Rather, he moved in limine to strike the affirmative defense of business necessity; the judge denied that motion prior to the start of the trial.
Finally, Paul argues that the judge should have granted his motion for JNOV because the evidence compelled the jury to find that the contracts formed an integrated purchase and sale agreement for the sale of Bousfield Sanitation. The denial of such a motion is proper if, "anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the [nonmoving party]." Boothby v. Texon, Inc., 414 Mass. 468, 470 (1993), quoting from Poirier v. Plymouth, 374 Mass. 206, 212 (1978).
While the evidence here certainly could have supported a finding of an integrated contract, that conclusion was by no means inescapable. See Gilmore v. Century Bank & Trust Co., 20 Mass. App. Ct. 49, 56 (1985) (relevant factors in determining whether separate agreements must be construed and treated as a single integrated contract are "simultaneity of execution, identity of subject matter and parties, cross referencing, and interdependency of provisions"). While the contracts were executed on the same day, and concerned the same parties, there was no significant or material cross-referencing of provisions. In other words, each contract was comprehensible on its own, without reference to the other contracts. The motion properly was denied.
2. Fiduciary Duty. Paul also argues that the judge should have granted his motion for a directed verdict on the breach of fiduciary duty counterclaim, as the defendants presented insufficient evidence to establish such a duty. We agree.
To establish that Paul owed Bousfield Sanitation the duties of a fiduciary, the defendants "must show at least that the relationship was one of trust and confidence"; that Bousfield Sanitation "relied upon the specialized knowledge or judgment" of Paul; and that Paul was aware of Bousfield Sanitation's reliance upon him. Davidson v. General Motors Corp., 57 Mass. App. Ct. 637, 642 (2003). See Doe v. Harbor Schools, Inc., 446 Mass. 245, 252 (2006). Here, the testimony of Paul and Brett failed to establish either that Brett held Paul in a position of trust and confidence in the running or management of Bousfield Sanitation, or that Paul was aware that he was in such a position. Contrast Chelsea Indus., Inc. v. Gaffney, 389 Mass. 1, 11 (1983) (fiduciary duty existed where employees "were trusted executives composing virtually all of [corporation's] management"). The motion for a directed verdict should have been allowed.
3. Fraudulent transfer. Each side also appeals from the amended judgment entered on count XIV of the amended complaint. Paul seeks to vacate the judgment on the grounds that all assets transferred from Bousfield Sanitation to Done Right should be returned to Bousfield Sanitation. He also claims that the judge should have allowed his second motion to amend, which sought that same relief. The defendants contend that their stipulation on count XIV was limited to the five vehicles listed in the amended complaint. Neither claim is persuasive.
The judge was well within his discretion to amend the judgment to conform to the credible evidence presented at trial regarding the assets transferred to Done Right. Likewise, it was the province of the judge to reject, based on his assessment of the evidence and the credibility of the witnesses, Paul's claim as to all assets transferred. See Goddard v. Goucher, 89 Mass. App. Ct. 41, 49-50 (2016). As for the defendants' claim, they point to no citation in either the transcripts or the record appendix limiting their stipulation to the five vehicles originally listed. There was no error.
Nor was the judge required to allow the plaintiff's motion to further amend his complaint where the amended complaint sought "[s]uch other relief as the [c]ourt may grant based on the law and facts pleaded herein" and the judge could accomplish the goal of adjusting the relief required by amending the previous judgment. See Pielech, 441 Mass. at 197-198.
--------
Conclusion. On count VI of the counterclaim, alleging breach of fiduciary duty, the judgment is vacated, the verdict is set aside, and that count of the counterclaim is dismissed. The March 8, 2016, amended judgment is affirmed in all other respects.
So ordered.
Vacated and dismissed in part; affirmed in part.