Opinion
18-P-1469
09-05-2019
COPLEY PLACE ASSOCIATES, LLC v. CARLOS TÉLLEZ-BORTONI.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
A jury found the defendant, Carlos Téllez-Bortoni, liable for fraudulent misrepresentations and unfair or deceptive acts or practices in trade or commerce, see G. L. c. 93A, relating to a lease entered into by Téllez-Bortoni, on behalf of the Irish Pub Group, Inc. (IPG), and the plaintiff, Copley Place Associates, LLC (Copley), in 2011. Judgment entered against Téllez-Bortoni, and his motion for judgment notwithstanding the verdict was denied. Téllez-Bortoni appeals, claiming, in effect, that the evidence was insufficient to support the two fraudulent misrepresentation verdicts, and, as a result, the unfair and deceptive trade practices verdict must also be reversed. We affirm.
Discussion. When reviewing the denial of a motion for judgment notwithstanding the verdict, we consider whether the evidence, viewed in the light most favorable to the nonmoving party, is sufficient to support the verdict. See Reading Co-Op. Bank v. Suffolk Constr. Co., 464 Mass. 543, 555-556 (2013). We do not make credibility determinations or otherwise weigh the evidence, and "ask [only] whether . . . 'the jury reasonably could have returned a verdict for the plaintiff.'" Cahaly v. Benistar Prop. Exch. Trust Co., 451 Mass. 343, 350 (2008), quoting Phelan v. May Dep't Stores Co., 443 Mass. 52, 55 (2004). We look for "any combination of circumstances . . . from which a reasonable inference could be drawn" in support of the verdict; however, these inferences "must be based on probabilities rather than possibilities and cannot be the result of mere speculation and conjecture." Cahaly, supra, quoting Phelan, supra.
A detailed recitation of the facts of this case can be found in Copley Place Assocs., LLC v. Téllez-Bortoni, 91 Mass. App. Ct. 186, 187 (2017), where this court vacated the partial summary judgment entered against Téllez-Bortoni because certain material facts remained in dispute.
In May of 2011, Téllez-Bortoni signed a lease on behalf of IPG, for the use and occupancy of commercial space owned by Copley in its mall located in Boston. In signing the lease, Téllez-Bortoni warranted that he was signing it as "an officer of [the corporation]" who was "duly authorized to sign and execute" the lease. Among other things, the lease called for the establishment of an escrow account in which both parties were to deposit funds to be used for renovations to the leased space. In December, 2011, Raymond Houle attempted to cash a check drawn from the escrow account for approximately $452,000. The bank flagged the transaction, and Copley's parent company sought additional information from Téllez-Bortoni and IPG. During the brief investigation that followed, Téllez-Bortoni told employees of Copley's parent company that Houle was now "part of [IPG]," and, according to e-mails among the parent company's employees following a telephone call with Téllez-Bortoni, that he had personally hired Houle. Ultimately, IPG did not complete the proposed renovations, defaulted on the lease, and did not return the money drawn from the escrow account. The jury found Téllez-Bortoni liable for fraudulent misrepresentation both for his representation that he was an officer of IPG, and for his assurance that Houle was an employee of IPG; this conduct also formed the basis for the unfair and deceptive trade practices verdict.
"Under the common law, fraud is a knowing false representation of a material fact intended to induce a plaintiff to act in reliance, where the plaintiff did, in fact, rely on the misrepresentation to his detriment." Fordyce v. Hanover, 457 Mass. 248, 257 (2010). "Such reliance by the plaintiff must be reasonable." Masingill v. EMC Corp., 449 Mass. 532, 540 (2007). Téllez-Bortoni argues that he could not be held liable for common-law fraudulent misrepresentations, as a matter of law, because Copley's reliance on the representation that he was an officer of IPG was unreasonable, and because Houle was in fact an employee of IPG; consequently, he claims, the unfair and deceptive trade practices verdict must also be reversed. We disagree.
The reasonableness of one's reliance is a question of fact for the jury to decide. See Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43, 59 (2004); Collins v. Huculak, 57 Mass. App. Ct. 387, 391-392 (2003). The jury should consider whether the plaintiff's reliance was justifiable in the circumstances, and whether the plaintiff took ordinary measures to ensure the veracity of the statement and did not blindly rely on representations that would have been understood to be false with a "cursory examination or investigation" (citation omitted). Collins, supra at 392. In doing so, the jury may consider whether one party has attempted to mislead the other, or to lull them into ignoring obvious conflicts in the facts. See Kuwaiti Danish Computer Co. v. Digital Equip. Corp., 438 Mass. 459, 468 (2003).
Téllez-Bortoni claims Copley's reliance on the written representation that he was a corporate officer of IPG was unreasonable because IPG's corporate filing with the Secretary of the Commonwealth listed another person as IPG's president, treasurer, and secretary. IPG's corporate filing is not, however, the operative written statement on which Copley should have relied, nor is it conclusive on the issue of Téllez-Bortoni's role in IPG. We reject this argument because it focuses on the wrong document, and because it exaggerates the significance of and level of detail contained in corporate filings.
The operative written statement here is the contract between the parties -- that is, the lease -- and not IPG's corporate filing. Compare Masingill, 449 Mass. at 543. Focusing on the lease, which contained promises directed toward Copley and stated that Téllez-Bortoni was an officer of IPG, a jury could certainly find it was reasonable for Copley to rely on the lease statements over a corporate filing that was, by all outward appearances, perfunctory and did not contain a comprehensive list of corporate officers. More importantly, however, even were the Secretary of the Commonwealth filing relevant, that document does not contradict the terms of the lease: the filing merely lists one person as holding the titles of president, treasurer, and secretary, and it was reasonable for Copley to believe other, unnamed corporate officers of IPG existed. Compare Collins, 57 Mass. App. Ct. at 392. Copley was told, and believed, that Téllez-Bortoni was the chief executive officer of IPG; the filing with the Secretary of the Commonwealth did not identify the chief executive officer of IPG. Considering the terms of the lease, along with the evidence that Téllez-Bortoni was involved in negotiating the lease, that he hosted Copley executives at his Miami restaurant during the negotiation process, that he personally signed the lease, and that he regularly communicated with Copley after its execution, we conclude the jury could find that Copley reasonably relied on the lease's warranty, and all the other indications, that Téllez-Bortoni was an officer of IPG.
Téllez-Bortoni next argues that his representation that Houle was "part of [IPG]" could not be found to be fraudulent because Houle was, in fact, involved with IPG. To support this contention, he points to the fact that as of December 3, 2011, when Téllez-Bortoni made that representation, Houle was listed as IPG's president, treasurer, and secretary on updated filings with the Secretary of the Commonwealth. To begin, just as the corporate filing was not conclusive on the issue of Téllez-Bortoni's involvement with IPG, it is not conclusive on the issue of Houle's actual involvement in IPG. Even accepting that Houle was in some way involved with IPG, however, our decision does not turn on the precise status of IPG's and Houle's relationship at the time Téllez-Bortoni made these statements to Copley's parent company.
The jury could reasonably infer that Téllez-Bortoni was not being entirely honest with Copley, and that this "[f]ragmentary information [was] as misleading . . . as active misrepresentation." Greenleaf Arms Realty Trust I, LLC v. New Boston Fund, Inc., 81 Mass. App. Ct. 282, 292 (2012), quoting Kannavos v. Annino, 356 Mass. 42, 48 (1969). As we have said before, regardless of duties owed between contracting parties, "if a party does speak 'to a given point . . . he is bound to speak honestly and to divulge all the material facts bearing upon the point that lie within his [or her] knowledge.'" Greenleaf Arms Realty Trust I, LLC, supra at 291-292, quoting Kannavos, supra. Viewing the evidence in the light most favorable to Copley, the jury could find that Copley inquired as to Houle's involvement with the IPG, Téllez-Bortoni did not know that Houle was replacing the person formerly listed on the Secretary of the Commonwealth filing or even who Houle was, yet Téllez-Bortoni provided assurances of Houle's involvement with IPG and indicated he personally hired Houle, and that at the same time an agreement was being negotiated to buy Téllez-Bortoni out of his arrangement with IPG. That evidence warranted the jury's conclusion that Téllez-Bortoni's statement that he "was advised to inform [Copley] that [Houle] is part of [IPG]" was misleading, and fraudulent, because it did not convey all material facts as they were known to Téllez-Bortoni at the time. Having acted to ease Copley's concerns about Houle depositing a check drawn from the escrow account, Téllez-Bortoni's "half-truth[]" was "actionable as a whole lie" (citation omitted). Kannavos, supra.
Copley contends, and the judge agreed, that Téllez-Bortoni's statement, during a telephone call, that he "personally hired" Houle was also a false statement that justifies the verdict on this claim. Although the record does not clearly reflect the fact that Téllez-Bortoni made that statement, internal e-mails among Copley Place's parent company's employees create a reasonable inference that Téllez-Bortoni made this statement during a December, 2011, telephone conference. Nevertheless, we base our decision on what the record reflects Téllez-Bortoni knew, and he and IPG were discussing, at the time, and Téllez-Bortoni's material omissions when discussing the issue of Houle's role with Copley.
Judgment affirmed.
Order denying motion for judgment notwithstanding the verdict affirmed.
By the Court (Green, C.J., Maldonado & Hand, JJ.),
The panelists are listed in order of seniority. --------
/s/
Clerk Entered: September 5, 2019.