Opinion
21-20025 Adversary 21-02006
10-28-2021
In re: MICHAEL JAMES DELEO, Debtor. v. ANTHONY VEGNANI, Defendant. MICHAEL JAMES DELEO, Plaintiff,
Kelly W. McDonald Katie M. Krakowka MURRAY, PLUMB & MURRAY Attorneys For Anthony Vegnani
Kelly W. McDonald Katie M. Krakowka MURRAY, PLUMB & MURRAY Attorneys For Anthony Vegnani
MOTION TO DISMISS COMPLAINT WITH INCORPORATED MEMORANDUM OF LAW
Pursuant to Federal Rule of Bankruptcy Procedure 7012(b) and Federal Rule of Civil Procedure 12(b)(6), Defendant Anthony Vegnani ("Vegnani") moves to dismiss the Complaint and Demand for Jury Trial (the "Complaint") filed by plaintiff Michael James DeLeo ("Debtor" or "DeLeo") for failure to state a claim upon which relief may be granted.
PRELIMINARY STATEMENT
1. DeLeo commenced this adversary proceeding asserting that a pending lawsuit, which survived a motion to dismiss and a motion for summary judgment and is ready for trial, constitutes tortious interference with a job he decided to quit. To win on this claim, DeLeo must prove not only that the ongoing litigation by Vegnani against DeLeo's former employer, Medlogix, LLC ("Medlogix"), is itself tortious but also convince this Court to rely on his conclusory assertions that the claims in that lawsuit are baseless and meritless.
2. Because the Debtor cannot satisfy this burden and has otherwise failed to state a plausible claim for tortious interference with an advantageous business relationship under either Maine or Massachusetts law, the Complaint must be dismissed.
There are slight differences in the Maine and Massachusetts elements of Intentional Interference with an Advantageous Economic Relationship. Because the Debtor has not indicated the choice of law he believes governs the instant action, this Motion will address the sufficiency of the facts pled according to the law of both jurisdictions.
Capitalized terms not defined herein shall have the meaning set forth in the Motion.
FACTUAL BACKGROUND
3. At some point in time, DeLeo formed Mass. Medical Services, Inc. ("MMS"), a company providing independent medical examinations for insurance companies. Compl. ¶ 7. In 2001, Vegnani joined MMS and took over various responsibilities for the organization, including managing the company's finances. Compl. ¶ 8.
4. After several years of working for MMS, DeLeo fired Vegnani. Compl. ¶ 10. That termination was wrongful, leading Vegnani to sue MMS and DeLeo and ultimately obtain a final judgment against both for damages. ¶¶ 10-11.
5. While Vegnani's suit against DeLeo and MMS was pending, DeLeo entered into a business relationship with Medlogix. Compl. ¶¶ 10-11. Subsequent to this arrangement, Vegnani sued Medlogix in the Massachusetts Federal District Court under various equitable theories, asserting that the transaction giving rise to the business relationship between Medlogix and DeLeo made Medlogix the successor in interest to MMS and liable to Vegnani for payment of his final judgment ("Merger Litigation"). Compl. ¶¶ 13, 17; Vegnani v. Medlogix, 19-cv-11291-LTS Docket Report, attached hereto as Exhibit A.
6. Since initiating the Merger Litigation, Vegnani has diligently pursued his claims against Medlogix-successfully objecting to both a motion to dismiss the proceeding (Ex. A, D.E. #21) and a motion for summary judgment (Ex. A, D.E. #71; Order on Medlogix, LLC's Motion for Summary Judgment (Doc. No. 58), attached hereto as Exhibit B ("Summary Judgment Order")). Discovery in the case is closed, the initial pretrial conference is complete, and the parties are in the final stages of preparing for trial. Ex. A, D.E. #74.
7. On November 13, 2020, before Medlogix filed its motion for summary judgment, DeLeo resigned from his position and ended his employment relationship with Medlogix. See "Letter of [R]esignation" email from Michael DeLeo to Craig Goldstein, attached hereto as Exhibit C ("Letter of Resignation"). Vegnani has continued to pursue the Merger Litigation after DeLeo's resignation from Medlogix. See Ex. A.
8. DeLeo now asserts that, by initiating the Merger Litigation, Vegnani intentionally interfered with his employment relationship, thereby inducing Medlogix to "forgo" their "business relationship." Compl. ¶ 16.
ARGUMENT
I. Legal Standard for Failure to State a Claim under Fed.R.Civ.P. 12(b)(6).
9. Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, made applicable here by Fed.R.Bankr.P. 71012(b), a complaint may be dismissed if it fails to state a claim upon which relief can be granted. To survive dismissal, a plaintiff must "state a plausible, not merely conceivable, case for relief," Sepúveda-Villarini v. Dep't of Educ. of P.R., 628 F.3d 25, 29 (1st Cir. 2010), by presenting sufficient factual material "to raise a right to relief above the speculative level on the assumption that all allegations in the complaint are true (even if doubtful in fact)." Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 2011) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A threadbare recitation of the necessary elements of a claim is not sufficient for a complaint to survive a motion to dismiss, and the court is not bound to accept any legal conclusions set forth as facts in the complaint. Cardigan Mtn. Sch. v. N.H. Ins. Co., 787 F.3d 82, 84 (1st Cir. 2015); Ocasio-Hernandez, 640 F.3d at 12; see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Thus, "[a] plaintiff is not entitled to 'proceed perforce' by virtue of allegations that merely parrot the elements of the cause of action," Ocasio-Hernandez, 640 F.3d at 12 (quoting Iqbal, 556 U.S. at 680), as "such conclusory statements are 'not entitled to the assumption of truth.'" Maldonado v. Fontanes, 568 F.3d 263, 268 (1st Cir. 2009) (quoting Iqbal, 556 U.S. at 679). Factual allegations in the complaint must cross "the line from conceivable to plausible," Twombly, 550 U.S. at 570; Iqbal, 556 U.S. at 680, and illustrate more than the "sheer possibility that a defendant has acted unlawfully" and is liable for the misconduct alleged. Iqbal, 556 U.S. at 678 (quotation marks omitted).
10. In deciding a motion to dismiss pursuant to Rule 12(b)(6), in addition to the well-pleaded facts in the complaint, a court may consider certain documents and facts susceptible to judicial notice. Nieto-Vicenty v. Valledor, 984 F.Supp.2d 17, 20 (D.P.R. 2013); see also Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55-56 (1st Cir. 2012). Specifically, government documents, including court records and orders, may be subject to judicial notice "on the ground that information contained therein is 'capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.'" Lussier v. Runyon, 50 F.3d 1103, 1114 (1st Cir. 1995) (quoting Fed.R.Civ.P. 201(b)). See also Burnett v. Ocean Properties, Ltd., Civ. No. 16-00359 (JAW), 2018 WL 5316183 (D. Me. 2018). Both the copy of the court docket in the Merger Litigation and the Summary Judgment Order are court records, maintained by and available from the Massachusetts Federal District Court, which, therefore, meet the requirements under the Federal Rule of Evidence 201(b) for judicial notice.
11. Likewise, the Court may take judicial notice of the facts related to documents which a plaintiff relied upon in bringing suit. See Newman v. Krintzman, 723 F.3d 308, 309 (1st Cir. 2013) (recognizing that a court may consider "implications from documents . . . fairly incorporated into the complaint" (quotation marks omitted)); Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993) (acknowledging the "narrow exception" through which a court may consider certain classes of documents to dispose of a motion of dismiss without treating it as a motion for summary judgment, including document central to a plaintiff's claim). The Complaint relies upon the terms and existence of DeLeo's employment agreement with Medlogix, and the fact that the agreement ended (Compl. ¶¶ 12, 15, 16, 20), authorizes the Court to consider the Resignation Letter for the purpose of deciding this motion to dismiss without converting it into a motion for summary judgment.
II. The Complaint Fails to State a Claim under Maine law.
12. To survive this motion to dismiss, the Complaint must sufficiently allege the elements of a claim for tortious interference with an advantageous employment relationship under applicable state law. In Maine, the elements of the tort require DeLeo to prove: (1) a valid contract or prospective economic advantage exists; (2) Vegnani interfered with that contract or advantage through fraud or intimidation; (3) but for that interference, DeLeo's employment with Medlogix would have continued; and (4) the interference served as the proximate cause of damages. James v. MacDonald, 712 A.2d 1054, 1057 (Me. 1998); Barnes v. Zappia, 658 A.2d 1086, 1090 (Me. 1995); MacKerron v. Madura, 445 A.2d 680, 683 (Me. 1982); see Rutland v. Mullen, 798 A.2d 1104, 1110 n.5 (Me. 2002) ("The presence of fraud or intimidation is critical to a claim for tortious interference because it distinguishes unlawful conduct from conduct inherent in a healthy competitive economic environment").
13. The Complaint fails to allege facts sufficient to plead either the second or third prong of the test enumerated above. Relying solely on the initiation of the Merger Litigation to allege interference with his employment relationship, DeLeo fails to allege that Vegnani acted either
A. The Complaint does not allege that Vegnani acted fraudulently or used intimidation in initiating the Merger Litigation.
14. In order to prove interference by fraud, DeLeo must show that Vegnani: (1) ma[de] a false representation; (2) of a material fact; (3) with knowledge of its falsity or in reckless disregard of whether it was true or false; (4) for the purpose of inducing Medlogix to act or refrain from acting in reliance on it; and (5) Medlogix justifiably relied on the representation as true and acted upon it to the damage of DeLeo. See Petit v. Key Bank of Maine, 688 A.2d 427, 430 (Me. 1996) (internal quotations omitted); see also Restatement (Second) of Torts §§ 525-26 (1977).
15. Alternatively, DeLeo would need to show that Vegnani intimidated Medlogix through unlawful coercion or extortion by initiating the Merger Litigation. See Rutland v. Mullen, 798 A.2d at 1111 (citing Black's Law Dictionary 827 (7th ed. 1999)). Intimidation may be demonstrated "not only with a showing of conduct designed to frighten a person for coercive purposes, but also with conduct designed to procure a breach of contract by making it clear to the party with which the plaintiff had contracted that the only manner in which that party could avail itself of a particular benefit of working with defendant would be to breach its contract with plaintiff." Currie v. Indus. Sec., Inc., 915 A.2d 400, 407 (2007) (emphasis added) (quoting Pombriant v. Blue Cross/Blue Shield of Maine, 562 A.2d 656 (Me. 1989)); see also Allstate Inc. Co. v. Chretian, No. 1:12-CV-38-DBH, 2013 WL 6531751, at *13 (D. Me. Dec. 12, 2013).
16. The Complaint does not include allegations sufficient to support either fraud or intimidation under Maine law. DeLeo does not claim that the Merger Litigation constitutes fraudulent behavior, either by citing to specific misrepresentations by Vegnani in the proceeding or by alleging Medlogix relied upon any possible misrepresentations in making decisions about its
B. The Complaint fails to allege facts sufficient to show the Merger Litigation caused DeLeo's employment to end.
17. Allegations of interference with an existing employment relationship require a claimant to demonstrate that the employment relationship would have continued but for the wrongful interference. Madura, 445 A.2d at 683. "[W]herever a person, by means of fraud or intimidation, procures either the breach of a contract or the discharge of a plaintiff from an employment, which, but for such wrongful interference, would have continued, he is liable in damages for such injuries as naturally result therefrom." Perkins v. Pendleton, 90 Me. 166, 176, 38 A. 96, 99 (1897). Termination by an employer, rather than resignation by an employee, is required. See Comerford v. Meier, 19 N.E.2d 711, 715 (Mass. 1939) ("His resignation would not be a breach of such a contract. We do not see how the general principle, giving a right of action against one who has caused another to break his contract with the plaintiff can be held applicable to a case where the plaintiff complains that he himself might be induced to terminate his contract with another"). DeLeo's resignation from his position, rather than termination of his employment by Medlogix, is fatal to his claim.
III. The Complaint Fails to State a Claim under Massachusetts Law.
18. The Complaint similarly falls short of pleading facts sufficient to support a claim for intentional interference with an advantageous employment relationship under Massachusetts law. To do so, DeLeo is required to prove that: (1) he had an advantageous employment relationship with Medlogix; (2) Vegnani knowingly induced Medlogix to break the employment relationship; (3) Vegnani's interference was intentional and was improper in motive or means; and (4) DeLeo was harmed by Vegnani's actions. See Weber v. Cmty. Teamwork, Inc., 752 N.E.2d 700, 715 (Mass. 2001); Blackstone v. Cashman, 860 N.E.2d 7, 12-13 (Mass. 2007); G.S. Enters., Inc. v. Falmouth Marine, Inc., 410 Mass. 262, 273 (1991). It is not sufficient for DeLeo to baldly assert Vegnani's impropriety; instead, the Complaint must plead facts sufficient to establish the wrongful nature of the interference itself. See Falmouth, 410 Mass. at 273; United Truck Leasing Corp. v. Geltman, 551 N.E.2d 20, 23-24 (Mass. 1990) (adopting pleading and evidentiary standards for intentional interference claims from various out of state jurisdictions); Whatley v. Diversified Corp. Res., Inc., No. Civ. 99-284-B, 2000 WL 761797, at *1 (D. Me. Mar. 28, 2000). In other words, DeLeo must plead sufficient facts to allege that not only did Vegnani interfere with his employment relationship, but that the means of that interference was improper under applicable law.
A. The Complaint fails to sufficiently plead how Medlogix acted to "forgo" the employment relationship.
19. As a preliminary matter, the Complaint does not allege how Vegnani induced Medlogix to "forgo" its employment relationship with DeLeo, which is telling given that DeLeo resigned from his position. Compl. ¶¶14, 15; Ex. C. But to satisfy the second prong of the test outlined above, and the pleading requirements under Rule 12(b)(6), DeLeo needed to have alleged facts which plausibly assert not only that the Merger Litigation caused the end of DeLeo's employment with Medlogix but also that the end of that relationship was caused by some affirmative action of Medlogix. See Weber v. Cmty. Teamwork, Inc., 752 N.E.2d at 715. Instead, DeLeo lays out a story relying on vague, if not contradictory, allegations. First, DeLeo claims that the Merger Litigation "induced" Medlogix to "forgo" its employment relationship with DeLeo, Compl. ¶ 16, but does not define "forgo" sufficiently for the Court to draw a reasonable inference that Medlogix did anything more than passively accept DeLeo's resignation. The Complaint supports that interpretation when it alleges that "DeLeo was unable to perform his employment obligations to Medlogix" without also alleging that his inability to perform was related in any way to some affirmative action by Medlogix. See Compl. ¶20. In short, DeLeo has failed to plead facts sufficient to raise his right to relief beyond the speculative level, and, as a result, fails to assert a claim under Massachusetts law.
B. The Complaint fails to properly allege "improper means or motive" as a matter of law.
20. The Complaint also fails to plead sufficient facts to plausibly that Vegnani initiated the Merger Litigation with an improper motive or that the case constitutes improper means. See Geltman, 551 N.E.2d at 816-817 & n.10; see also Restatement (Second) of Torts § 767 (1977). The Massachusetts Supreme Court has provided clear guidance on what constitutes impropriety of motive of means in a litigation context:
The propriety of an actor's motives in a particular setting necessarily depends on the attending circumstances, and must be evaluated on a case-by-case basis. The same generally holds true for the evaluation of the means that an actor relies on to achieve a goal.
In this case, however, the means in question consisted of a lawsuit, an act which is subject to evaluation against objective standards. It is clear, for example, that a party is justified in interfering with a third-party's contract with another by filing a lawsuit in a good faith effort to assert legally protected rights. At the same time, however, a civil action is wrongful if its initiator does not have probable cause to believe the suit will succeed, and is acting primarily for a purpose other than that of properly adjudicating all of his claims.G.S. Enterprises, Inc. v. Falmouth Marine, Inc., 410 Mass. 262, 273 (1991)(citations omitted.)
21. Coupled with the standards set by the court in Geltman, plaintiffs bringing intentional interference claims based on litigation are required to affirmatively plead that the defendant: (1) lacked probable cause in initiating the underlying case, (2) acted with ulterior motives, and (3) was otherwise unjustified in doing so.
The Restatement (Second) of Torts §675 describes the existence of probable cause as follows:
One who takes an active part in the initiation, continuation or procurement of civil proceedings against another has probable cause for doing so if he reasonably believes in the existence of the facts upon which the claim is based, and either (a) correctly or reasonably believes that under those facts the claims may be valid under applicable law, or (b) believes to this effect in reliance upon the advice of counsel, sought in good faith and given after full disclosure of all relevant facts within his knowledge or information.
22. As a matter of law, DeLeo cannot allege Vegnani lacked probable cause in the Merger Litigation until that dispute has terminated in favor of Medlogix. See Cardival v. Smith, 109 Mass. 158, 158 (1872) (citation omitted) ("courts will be cautious how they discourage men from suing; when a party has been maliciously sued and held to bail, malice, and that it was without any probable cause, must be alleged and proved. The new action must not be brought before the first be determined; because till then it cannot appear that the first was unjust."); Bannon v. Auger, 160 N.E. 255, 257 (Mass. 1928); see also, Restatement (Second) of Torts §§ 674(b), 675 cmt. b; Blake v. Levy, 464 A.2d 52 (Conn. 1983) (standards applied to determination of "improper motive or means" adopted in Geltman, 551 N.E.2d at 23-24.) This is because, under Massachusetts law, Vegnani's success in the Merger Litigation would be conclusive proof of his probable cause in initiating the suit, see Cloon v. Gerry, 79 Mass. 201, 202-203 (June 1, 1859), and also because, to allow both suits to proceed at once would have a chilling effect on the public's free access to petition the government-a result which the Supreme Court has repeatedly held should not be curtailed without an extraordinary showing of abuse. See Levy, 464 A.2d at 56; see also California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508 (1972); Eastern Railroad Conference v. Noerr Motor Freight, 365 U.S. 127 (1961); United Mine Workers v. Pennington, 381 U.S. 657 (1965); Baker Driveaway Co. v. Bankhead Enterprises, Inc., 478 F.Supp. 857, 860 (E.D. Mich. 1979) (finding that the standards espoused by the Supreme Court barred a tortious interference claim where the underlying litigation was not itself a tort).
C. The facts alleged in the Complaint are not sufficient to set forth a plausible right to relief.
24. Even if the Court finds that the Complaint pleads all of the elements of an intentional interference claim under Massachusetts law, and even if the Court finds that the pendency of the Merger Litigation is not dispositive, the Complaint should still be dismissed because DeLeo offers no facts to plausibly suggest that Vegnani brought the Merger Litigation without probable cause or acted primarily for a purpose other than properly adjudicating the claims brought. Instead, the Complaint offers empty conclusions without any factual support. The Complaint describes the Lawsuit as "completely baseless and without merit." Compl. ¶16, but does not allege that Vegnani did not believe facts existed to support the de facto merger claim. See Restatement (Second) of Torts § 675. It alleges that the Lawsuit "was improper in motive and means and was brought solely with the wrongful purpose of destroying the business relationship between Plaintiff DeLeo and Medlogix", but does not allege that Vegnani had an unreasonable belief in the merits of the Merger Litigation. See id. To the extent the facts that the Complaint alleges can be said to plead Vegnani's lack of probable cause, they are insufficient as anything more than plausible rather than conceivable.
25. At the same time, the Complaint acknowledges that Vegnani brought the Lawsuit against Medlogix in an effort to collect the judgment he held against MMS by showing Medlogix to be a corporate successor of MMS. Compl. ¶¶ 11, 13. The Complaint offers no facts to plausibly suggest that in filing the Lawsuit, Vegnani did anything other than to assert his legally protected rights in good faith. Any doubt about that is resolved by the fact that the Lawsuit itself has survived a challenge under Fed.R.Civ.P. 12(b)(6). It is axiomatic that the same lawsuit cannot plausibly state a right to relief yet be baseless, lack merit, and be brought only for ulterior motives.
26. Indeed, the only allegations about the lawsuit appear in Paragraph 18, where DeLeo alleges that the "true state of affairs" are as set forth in the six subparagraphs. Compl. ¶18. However, none of those facts are relevant to or determinative of the principal issue in the Merger Litigation- the presence or existence of a de facto merger as Massachusetts law defines that concept. All six of those facts could be true and a de facto merger could still be found to exist under Massachusetts law. Indeed, the fact that the Lawsuit has survived a motion to dismiss and a motion for summary judgment, notwithstanding the "true state of affairs" as alleged by the Debtor, demonstrates that a court has already determined the viability of the Lawsuit.
"Though '[n]o single factor is necessary or sufficient to establish a de facto merger,' the Massachusetts Supreme Judicial Court ("SJC") has identified four 'factors that courts generally consider in determining' whether a de facto merger has occurred:
Whether (1) there is a continuation of the enterprise of the seller corporation so that there is continuity of management, personnel, physical location, assets, and general business operations; whether (2) there is a continuity of shareholders which results from the purchasing corporation paying for the acquired assets with shares of its own stock, this stock ultimately coming to be held by the shareholders of the seller corporation so that they become a constituent part of the purchasing corporation; whether (3) the seller corporation ceases its ordinary business operations, liquidates, and dissolves as soon as legally and practically possible; and whether (4) the purchasing corporation assumes those obligations of the seller ordinarily necessary for the uninterrupted continuation of normal business operations of the seller corporation. Cargill, Inc. v. Beaver Coal & Oil, Co., 676 N.E.2d 815, 818 (Mass. 1997); accord Milliken, 887 N.E.2d at 255-56."
Exhibit B, Doc. No. 58, Summary Judgment Order.
27. There are simply no facts alleged to plausibly suggest improper motive or means as required by Massachusetts law. Instead, the Complaint simply alleges that the filing of the lawsuit itself constitutes actionable intentional interference. Massachusetts law requires more. See Geltman, 406 Mass. at 815. The complete absence of any facts making improper motive or means plausible, underscores the reality that none exist. Instead, Debtor seeks to bring this claim against Vegnani without any good faith basis in an obvious attempt to intimidate Vegnani, and delay a decision regarding his eligibility for relief under Subchapter V of the Code.
28. As DeLeo alleges no other interference as a basis for his claim, his cause of action necessarily fails as a matter of law. The Court should therefore grant the Motion for failure to state a claim under Fed.R.Civ.P. 12(b)(6).
STATEMENT REQUIRED UNDER FED. R. BANKR. P. 7012(b)
29. The Defendant consents to entry of a final order or judgment by the Bankruptcy Court in this proceeding.
CONCLUSION
For the foregoing reasons, the Court should grant this Motion to Dismiss, together with such other and further relief as the Court deems just and appropriate.
EXHIBIT A
United States District Court
District of Massachusetts (Boston)
Date Filed
#
Docket Text
06/11/2019
1
COMPLAINT against Medlogix, LLC formerly known as Consolidated Services Group, LLC Filing fee: $ 400, receipt number 0101-7725986 (Fee Status: Filing Fee paid), filed by Anthony Vegnani. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7)(Callanan, Christopher) Modified docket text on 6/11/2019 (Pacho, Arnold). (Entered: 06/11/2019)
06/11/2019
Civil Cover Sheet & Category Sheet by Anthony Vegnani. (Callanan, Christopher) (Entered: 06/11/2019) 2
06/11/2019
Civil Cover Sheet & Category Sheet by Anthony Vegnani. (Callanan, Christopher) (Entered: 06/11/2019) 3
06/11/2019
4
ELECTRONIC NOTICE of Case Assignment. District Judge Leo T. Sorokin assigned to case. If the trial Judge issues an Order of Reference of any matter in this case to a Magistrate Judge, the matter will be transmitted to Magistrate Judge Donald L. Cabell. (Finn, Mary) (Entered: 06/11/2019)
06/11/2019
5
Summons Issued as to Medlogix, LLC. Counsel receiving this notice electronically should download this summons, complete one for each defendant and serve it in accordance with Fed.R.Civ.P. 4 and LR 4.1. Summons will be mailed to plaintiff(s) not receiving notice electronically for completion of service. (Pacho, Arnold) (Entered: 06/11/2019)
06/11/2019
6
General Order 09-1, dated January 6, 2009 regarding the E-Government Act and Personal Identifiers entered. (Pacho, Arnold) (Entered: 06/11/2019)
06/17/2019
7
AFFIDAVIT OF SERVICE Executed by Anthony Vegnani. Medlogix, LLC served on 6/12/2019, answer due 7/3/2019. Acknowledgement filed by Anthony Vegnani. (Callanan, Christopher) (Entered: 06/17/2019)
06/28/2019
8
STIPULATION for Extension of Time by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 06/28/2019)
07/01/2019
9
District Judge Leo T. Sorokin: ELECTRONIC ORDER entered. The parties 8 Stipulation for Extension of Time is ALLOWED. Defendant's Answer to Complaint due by 8/2/2019. (Montes, Mariliz) (Entered: 07/01/2019)
08/02/2019
10
Defendant's Memorandum of Law in Support of 11 MOTION to Dismiss by Medlogix, LLC. (Calandrelli, Joseph) Modified on 8/2/2019 to correct description of pleading. Counsel was requested to file the motion to dismiss (Montes, Mariliz). Modified on 8/13/2019 (Montes, Mariliz). Modified on 8/13/2019 (Montes, Mariliz). (Entered: 08/02/2019)
08/02/2019
11
MOTION to Dismiss by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 08/02/2019)
08/12/2019
12
Assented to MOTION for Extension of Time to August 23, 2019 to File Opposition to Medlogix, LLC's Rule 12(b)(6) Motion to Dismiss by Anthony Vegnani. (Callanan, Christopher) (Entered: 08/12/2019)
08/13/2019
13
District Judge Leo T. Sorokin: ELECTRONIC ORDER entered granting 12 Anthony Vegnani's Assented-To Motion for Extension of Time to Oppose Medlogix, LL's Motion to Dismiss. Plaintiff's Opposition due by 8/23/2019. (Montes, Mariliz) (Entered: 08/13/2019)
08/13/2019
14
Reset Deadlines as to 11 MOTION to Dismiss . Responses due by 8/23/2019 (Montes, Mariliz) (Entered: 08/13/2019)
08/23/2019
15
Opposition re 11 MOTION to Dismiss, 10 MOTION to Dismiss filed by Anthony Vegnani. (Callanan, Christopher) (Entered: 08/23/2019)
09/03/2019
16
MOTION for Leave to File Reply in Support of Defendants Motion to Dismiss by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 09/03/2019)
09/04/2019
17
District Judge Leo T. Sorokin: ELECTRONIC ORDER entered granting 16 Motion for Leave to File Document; Counsel using the Electronic Case Filing System should now file the document for which leave to file has been granted in accordance with the CM/ECF Administrative Procedures. Counsel must include - Leave to file granted on (date of order)- in the caption of the document. (Simeone, Maria) (Entered: 09/04/2019)
09/06/2019
18
REPLY to Response to 11 MOTION to Dismiss filed by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 09/06/2019)
10/06/2019
19
NOTICE of Change of Address or Firm Name by Christopher A Callanan (Callanan, Christopher) (Entered: 10/06/2019)
10/28/2019
20
ELECTRONIC NOTICE Setting Hearing on Motion: Motion Hearing on 11 MOTION to Dismiss is set for 11/4/2019 at 03:30 PM in Courtroom 13 before District Judge Leo T. Sorokin. (Montes, Mariliz) (Entered: 10/28/2019)
11/04/2019
21
Electronic Clerk's Notes for proceedings held before District Judge Leo T. Sorokin: Motion Hearing held on 11/4/2019 re 11 MOTION to Dismiss filed by Medlogix, LLC; The court hears the oral argument of counsel and denies the motion without prejudice to renewal after summary judgment for the reasons set forth in open court. The court sets a scheduling for 11/25/2019 02:00 PM in Courtroom 13 before District Judge Leo T. Sorokin. A notice will issue. (denying 11 Motion to Dismiss) (Court Reporter: Rachel Lopez at raeufp@gmail.com.) (Simeone, Maria) (Entered: 11/05/2019)
11/14/2019
22
Assented to MOTION to Continue Scheduling Conference to On or after December 9, 2019 by Anthony Vegnani. (Callanan, Christopher) (Entered: 11/14/2019)
11/15/2019
23
District Judge Leo T. Sorokin: ELECTRONIC ORDER entered granting 22 Motion to Continue. The Scheduling Conference has been reset for 12/9/2019 02:15 PM in Courtroom 13 before District Judge Leo T. Sorokin. (Simeone, Maria) (Entered: 11/15/2019)
11/15/2019
24
Entered in error by Court staff. Please see Doc. No. 23. NEF Regenerated. (Entered: 11/15/2019)
12/03/2019
25
JOINT STATEMENT re scheduling conference . (Callanan, Christopher) (Entered: 12/03/2019)
12/05/2019
26
CERTIFICATION pursuant to Local Rule 16.1 . (Calandrelli, Joseph) (Entered: 12/05/2019)
12/09/2019
27
CERTIFICATION pursuant to Local Rule 16.1 . (Callanan, Christopher) (Entered: 12/09/2019)
12/09/2019
28
Electronic Clerk's Notes for proceedings held before District Judge Leo T. Sorokin: Scheduling Conference held on 12/9/2019; Counsel state the status of the case. the court goes over the proposed schedule and adopts it as an order of the court. Initial disclosures by 1/6/20. Amendments by 1/31/20. Fact discovery by 7/31/20. All experts deposed by 10/31/20. Dispositive motions by 8/31/20(or 11/30/20) A Status conference has been set for 7/31/20 at 2:30pm. Counsel may appear by telephone at this conference. (Status Conference set for 7/31/2020 02:30 PM in Courtroom 13 before District Judge Leo T. Sorokin.) (Court Reporter: Richard Romanow at bulldog@richromanow.com.) (Simeone, Maria) Modified on 12/11/2019 (Simeone, Maria). (Entered: 12/11/2019)
12/09/2019
29
District Judge Leo T. Sorokin: ORDER entered. SCHEDULING ORDER: Initial disclosures must be completed by 1/6/2020; amendments to pleadings may be filed after 1/31/2020; all requests for production of documents and interrogatories must be served by 2/28/2020; fact discovery to be completed by 7/31/2020; Trial experts for the party with the burden of proof must be designated and disclosed by 8/31/2020; rebuttal experts must designated and disclosed by 9/30/2020; all trial experts must be deposed by 10/31/2020; dispositive motions to be filed by 8/31/2020 or 11/30/2020. A Status Conference is set for 7/31/2020 at 2:30 PM in Courtroom 13 before District Judge Leo T. Sorokin. (Montes, Mariliz) (Main Document 29 replaced on 12/12/2019) (Montes, Mariliz). (Entered: 12/12/2019)
01/21/2020
30
ANSWER to 1 Complaint, with Jury Demand by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 01/21/2020)
01/30/2020
31
Assented to MOTION to Amend Complaint to Correct Typographical Errors by Anthony Vegnani. (Attachments: # 1 Exhibit Proposed Amended Complaint)(Callanan, Christopher) (Entered: 01/30/2020)
01/31/2020
32
District Judge Leo T. Sorokin: ELECTRONIC ORDER entered granting 31 Motion to Amend (Simeone, Maria) (Entered: 01/31/2020)
01/31/2020
33
AMENDED COMPLAINT against Medlogix, LLC, filed by Anthony Vegnani. (Callanan, Christopher) (Entered: 01/31/2020)
02/03/2020
34
ANSWER to 33 Amended Complaint by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 02/03/2020)
02/12/2020
35
MOTION to Stay by Medlogix, LLC. (Attachments: # 1 Exhibit A)(Calandrelli, Joseph) (Entered: 02/12/2020)
02/13/2020
36
Opposition re 35 MOTION to Stay filed by Anthony Vegnani. (Attachments: # 1 Exhibit A (Appeals Court Docket (As of 2-13-2020))(Callanan, Christopher) (Entered: 02/13/2020)
02/14/2020
37
MOTION for Leave to File Reply by Medlogix, LLC. (Attachments: # 1 Exhibit Proposed Reply)(Calandrelli, Joseph) (Entered: 02/14/2020)
02/18/2020
38
District Judge Leo T. Sorokin: ELECTRONIC ORDER entered granting 37 Motion for Leave to File Document; Counsel using the Electronic Case Filing System should now file the document for which leave to file has been granted in accordance with the CM/ECF Administrative Procedures. Counsel must include - Leave to file granted on (date of order)- in the caption of the document. (Simeone, Maria) (Entered: 02/18/2020)
02/19/2020
39
REPLY to Response to 35 MOTION to Stay filed by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 02/19/2020)
02/26/2020
40
Supplemental Opposition re 35 MOTION to Stay Updated Appeals Court Docket Including Decision on Motion to Reinstate filed by Anthony Vegnani. (Callanan, Christopher) (Entered: 02/26/2020)
03/12/2020
41
District Judge Leo T. Sorokin: ELECTRONIC ORDER entered. In this action Plaintiff Vegnani seeks to collect from Medlogix on a judgment Vegnani obtained against Mass. Medical on a theory of successor corporate liability. Medlogix now asks the Court to stay this case on the ground that Vegnani cannot collect from Mass. Medical on the judgment while Mass. Medical has a pending appeal from the judgment. In the course of briefing, the status of the appeal has changed. The Appeals Court has dismissed Mass. Medicals appeal. The Appeals Court rendered that ruling fully aware that Deleo continues to press his appeal from the judgment, that some of his arguments concern only him while other arguments potentially implicate Mass. Medical and Medlogixs pending motion for stay of this case. Most specifically, the dismissal of Mass. Medicals appeal means the judgment against it is final and subject to collection under state law. Thus, there is no basis for a stay and the Motion for a Stay (#35) is DENIED. 35 Motion to Stay (Simeone, Maria) (Entered: 03/12/2020)
05/11/2020
42
Joint MOTION Approve Stipulated Protective Order and Confidentiality Agreement by Medlogix, LLC. (Attachments: # 1 Exhibit 1)(Calandrelli, Joseph) (Entered: 05/11/2020)
05/12/2020
43
District Judge Leo T. Sorokin: ELECTRONIC ORDER entered granting 42 Joint Motion to Approve Stipulated Protective Order and Confidentiality Agreement. (Montes, Mariliz) (Entered: 05/12/2020)
05/12/2020
44
District Judge Leo T. Sorokin: ENDORSED ORDER entered. STIPULATED PROTECTIVE ORDER AND CONFIDENTIALITY AGREEMENT. (Montes, Mariliz) (Entered: 05/12/2020)
06/26/2020
45
Assented to MOTION for Extension of Time to August 31, 2020 to Complete Discovery by Anthony Vegnani. (Callanan, Christopher) (Entered: 06/26/2020)
06/26/2020
46
NOTICE of Change of Address or Firm Name by Christopher A Callanan (Mailing Address Only) (Callanan, Christopher) (Entered: 06/26/2020)
06/29/2020
47
District Judge Leo T. Sorokin: ELECTRONIC ORDER entered granting 45 Plaintiff's Assented-To Motion for Extension of Time to Complete Discovery. Fact Discovery to be completed by 8/31/2020. (Montes, Mariliz) (Entered: 06/29/2020)
06/29/2020
48
NOTICE Resetting a Hearing. The Status Conference currently scheduled for 7/31/2020 is reset for 9/2/2020 at 02:30 PM before District Judge Leo T. Sorokin. This hearing will be conducted by video conference. Counsel of record will receive a video conference invite at the email registered in CM/ECF. If you have technical or compatibility issues with the technology, please notify the session's courtroom deputy as soon as possible. Access to the hearing will be made available to the media and public. In order to gain access to the hearing, you must sign up at the following address: www.forms.mad.uscourts.gov/courtlist.html. For questions r egarding access to hearings, you may refer to the Court's general orders and public notices available on www.mad.uscourts.gov or contact media@mad.uscourts.gov. (Montes, Mariliz) (Entered: 06/29/2020)
07/14/2020
49
MOTION to Compel Communications between Defendant and Michael Deleo by Anthony Vegnani. (Attachments: # 1 Exhibit Privilege Log)(Callanan, Christopher) (Entered: 07/14/2020)
07/23/2020
50
Opposition re 49 MOTION to Compel Communications between Defendant and Michael Deleo filed by Medlogix, LLC. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Calandrelli, Joseph) (Entered: 07/23/2020)
08/26/2020
51
ELECTRONIC NOTICE OF RESCHEDULING The status conference set for 9/2/20 has been rescheduled to 9/16/2020 03:30 PM in Courtroom 13 before District Judge Leo T. Sorokin. This hearing will be conducted by video conference. Counsel of record will receive a video conference invite at the email registered in CM/ECF. If you have technical or compatibility issues with the technology, please notify the session's courtroom deputy as soon as possible. Access to the hearing will be made available to the media and public. In order to gain access to the hearing, you must sign up at the following address: https://forms.mad.uscourts.gov/courtlist.html. For questions regarding access to hearings, you may refer to the Court's general orders and public notices available on www.mad.uscourts.gov or contact media@mad.uscourts.gov. Status Conference set for 9/16/2020 03:30 PM in Courtroom 13 before District Judge Leo T. Sorokin. (Simeone, Maria) (Entered: 08/26/2020)
09/10/2020
52
ELECTRONIC NOTICE OF RESCHEDULING. The Status Conference set for 9/16/20 has been rescheduled 10/1/2020 03:15 PM in Courtroom 13 before District Judge Leo T. Sorokin. This hearing will be conducted by video conference. Counsel of record will receive a video conference invite at the email registered in CM/ECF. If you have technical or compatibility issues with the technology, please notify the session's courtroom deputy as soon as possible. Access to the hearing will be made available to the media and public. In order to gain access to the hearing, you must sign up at the following address: https://forms.mad.uscourts.gov/courtlist.html. For quest ions regarding access to hearings, you may refer to the Court's general orders and public notices available on www.mad.uscourts.gov or contact media@mad.uscourts.gov. Status Conference set for 10/1/2020 03:15 PM in Courtroom 13 before District Judge Leo T. Sorokin. (Simeone, Maria) (Entered: 09/10/2020)
09/21/2020
53
District Judge Leo T. Sorokin: ORDER entered. The Court DENIES Vegnani's 49 Motion to Compel. (Montes, Mariliz) (Entered: 09/21/2020)
10/01/2020
54
Electronic Clerk's Notes for proceedings held before District Judge Leo T. Sorokin. Status Conference held on 10/1/2020. Counsel state the status of the case. Discovery is complete, counsel intend to file summary judgment. The court sets the following deadline. Summary Judgment by 11/30/20. Oppositions/Cross motions by 1/8/21. Reply by 1/22/21. (Motions due by 11/30/2020) (Responses due by 1/8/2021, Replies due by 1/22/2021.). (Court Reporter: Rachel Lopez at raeufp@gmail.com.) (Simeone, Maria) (Entered: 10/05/2020)
11/19/2020
55
Assented to MOTION for Extension of Time to File by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 11/19/2020)
11/20/2020
56
District Judge Leo T. Sorokin: ELECTRONIC ORDER entered granting 55 Assented-To Motion to Extend Summary Judgment Filing Deadlines. Motion for Summary Judgment due by 12/7/2020; opposition due by 1/15/2021; reply due by 1/22/2021. (Montes, Mariliz) (Entered: 11/20/2020)
11/20/2020
57
Reset Deadlines: Motions for summary judgment due by 12/7/2020; opposition/ cross motion due by 1/15/2021; Reply due by 1/22/2021. (Montes, Mariliz) (Entered: 11/20/2020)
12/07/2020
58
MOTION for Summary Judgment by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 12/07/2020)
12/07/2020
59
AFFIDAVIT in Support re 58 MOTION for Summary Judgment . (Attachments: # 1 Exhibit 1-34)(Calandrelli, Joseph) (Entered: 12/07/2020)
12/07/2020
60
AFFIDAVIT in Support re 58 MOTION for Summary Judgment . (Attachments: # 1 Exhibit A)(Calandrelli, Joseph) (Entered: 12/07/2020)
12/07/2020
61
STATEMENT of facts re 58 MOTION for Summary Judgment . (Calandrelli, Joseph) (Entered: 12/07/2020)
01/15/2021
62
Opposition re 58 MOTION for Summary Judgment filed by Anthony Vegnani. (Callanan, Christopher) (Entered: 01/15/2021)
01/15/2021
63
Statement of Material Facts L.R. 56.1 re 58 MOTION for Summary Judgment filed by Anthony Vegnani. (Callanan, Christopher) (Entered: 01/15/2021)
01/15/2021
64
AFFIDAVIT of Christopher A. Callanan Attaching Exhibits Referenced in Opposition to Motion for Summary Judgment in Opposition re 58 MOTION for Summary Judgment filed by Anthony Vegnani. (Callanan, Christopher) (Main Document 64 replaced on 1/20/2021) (Montes, Mariliz). (Additional attachment(s) added on 1/20/2021: # 1 Exhibit) (Montes, Mariliz). Modified on 1/20/2021 to detach exhibits (Montes, Mariliz). (Entered: 01/15/2021)
01/22/2021
65
REPLY to Response to 58 MOTION for Summary Judgment filed by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 01/22/2021)
01/22/2021
66
RESPONSE to Motion re 58 MOTION for Summary Judgment Objection and Response to Vegnani's Statement of Additional Facts in Support of Opposition filed by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 01/22/2021)
03/15/2021
67
ELECTRONIC NOTICE Setting Hearing on Motion. A Motion Hearing on 58 MOTION for Summary Judgment is set for 3/31/2021 at 03:45 PM in Remote Proceeding: Boston before District Judge Leo T. Sorokin. This hearing will be conducted by video conference. Counsel of record will receive a video conference invite at the email registered in CM/ECF. If you have technical or compatibility issues with the technology, please notify the session's courtroom deputy as soon as possible. Access to the hearing will be made available to the media and public. In order to gain access to the hearing, you must sign up at the following address: https://forms.mad.uscourts.gov/courtlist.html. For questions regarding access to hearings, you may refer to the Court's general orders and public notices available on www.mad.uscourts.gov or contact media@mad.uscourts.gov. (Montes, Mariliz) (Entered: 03/15/2021)
03/16/2021
68
ADDENDUM re 58 MOTION for Summary Judgment Anthony Vegnani's Motion for Leave to Submit Michael Deleo's March 9, 2021 Bankruptcy Court Testimony for Consideration in Connection with Medlogix's Motion for Summary Judgment filed by Anthony Vegnani. (Callanan, Christopher) (Entered: 03/16/2021)
03/22/2021
69
Opposition re 58 MOTION for Summary Judgment Opposition to Motion for Leave to Submit Additional Testimony filed by Medlogix, LLC. (Calandrelli, Joseph) (Entered: 03/22/2021)
03/31/2021
70
Electronic Clerk's Notes for proceedings held before District Judge Leo T. Sorokin. Motion Hearing held on 3/31/2021. The court hears the oral argument of counsel re 58 MOTION for Summary Judgment filed by Medlogix, LLC and will take the matter under advisement. (Court Reporter: Rachel Lopez at raeufp@gmail.com.) (Simeone, Maria) Modified on 4/1/2021 (Simeone, Maria). (Entered: 04/01/2021)
04/07/2021
71
District Judge Leo T. Sorokin: ORDER entered. Medlogix's Motion for Summary Judgment (Doc. No. 58) is DENIED. (Montes, Mariliz) (Entered: 04/07/2021)
04/07/2021
72
ELECTRONIC NOTICE of Hearing. An Initial Pretrial Conference is set for 4/22/2021 at 02:15 PM in Remote Proceeding: Boston before District Judge Leo T. Sorokin. This hearing will be conducted by video conference. Counsel of record will receive a video conference invite at the email registered in CM/ECF. If you have technical or compatibility issues with the technology, please notify the session's courtroom deputy as soon as possible. Access to the hearing will be made available to the media and public. In order to gain access to the hearing, you must sign up at the following address: https://forms.mad.uscourts.gov/courtlist.html. For questions regarding access to hearings, you may refer to the Court's general orders and public notices available on www.mad.uscourts.gov or contact media@mad.uscourts.gov. (Montes, Mariliz) (Entered: 04/07/2021)
04/20/2021
73
NOTICE Resetting a Hearing. The Initial Pretrial Conference set for 4/22/2021 will be held at 02:45 PM in Remote Proceeding: Boston before District Judge Leo T. Sorokin. This hearing will be conducted by video conference. Counsel of record will receive a video conference invite at the email registered in CM/ECF. If you have technical or compatibility issues with the technology, please notify the session's courtroom deputy as soon as possible. Access to the hearing will be made available to the media and public. In order to gain access to the hearing, you must sign up at the following address: https://forms.mad.uscourts.gov/courtlist.html. For questions regarding access to hearings, you may refer to the Court's general orders and public notices available on www.mad.uscourts.gov or contact media@mad.uscourts.gov. Persons granted remote access to proceedings are reminded of the general prohibition against! photographing, recording, and rebroadcasting of court proceedings. Violations of these prohibitions may result in sanctions, including removal of court-issued media credentials, restricted entry to future hearings, or denial of entry to future hearings, and such other sanctions, including for contempt of court, as may be deemed appropriate or necessary by the court. Initial Pretrial Conference set for 4/22/2021 02:45 PM in Remote Proceeding: Boston before District Judge Leo T. Sorokin. (Simeone, Maria) (Entered: 04/20/2021)
04/22/2021
74
Electronic Clerk's Notes for proceedings held before District Judge Leo T. Sorokin. Initial Pretrial Conference held on 4/22/2021. The court goes over the trial status of the case. The Plaintiff anticipates a jury trial lasting approx 5 days. Defense counsel states the case is a Bench Trial. Both parties are willing to mediate. Counsel are to confer regarding the jury issue and file a joint status report in 2 weeks as to whether you agree or disagree on the issue and how you would like to resolve it and if you would like to attend the courts mediation program, file a one page joint request to be referred or that you intend to mediate privately and have a date set. (Status Report due by 5/6/2021). (Court Reporter: Kristin Kelley at kmob929@gmail.com.)(Attorneys present: Atty Callanan; Atty Calandrelli) (Simeone, Maria) (Entered: 04/22/2021)
EXHIBIT B
April 7, 2021
ORDER ON MEDLOGIX, LLC'S MOTION FOR SUMMARY JUDGMENT (DOC. NO. 58)
SOROKIN, J.
Anthony Vegnani has sued Medlogix, LLC, in an effort to recover on a state-court judgment he holds against Mass. Medical Services, Inc. ("MMS"). Medlogix seeks summary judgment, arguing Vegnani "has no reasonable expectation of proving" that, through agreements with MMS's founder and president, Medlogix became the corporate successor of MMS. Doc. No. 58 at 11. Vegnani opposes summary judgment, urging that material facts are disputed and require resolution at trial. Doc. No. 62. The Court heard oral argument on March 31, 2021.
Several facts central to this action are not in dispute. Nearly thirty years ago, Michael Deleo founded MMS, a company that primarily coordinated independent medical examinations ("IMEs") for insurance companies. Doc. No. 63 at 1. Vegnani, who has a background in finance, joined MMS as Deleo's partner in 2001. Id. at 1-2. Deleo fired Vegnani in 2014 and, thereafter, was MMS's sole shareholder. Id. at 2-3. Vegnani sued MMS and Deleo in state court, seeking severance payments pursuant to the terms of a written employment agreement. Id. at 3. There is no dispute that, as a result of the state-court action, Vegnani holds a valid and final judgment for more than $600,000 against Deleo and MMS, who are liable jointly and severally. Doc. No. 59-1 at 435.
Citations to "Doc. No. __" reference documents appearing on the court's electronic docketing system; pincites are to the page numbers in the ECF header.
While the state-court action was pending but before judgment entered, Deleo began discussions with Medlogix, a company looking to expand its presence in New England and whose menu of services included coordinating IMEs. Doc. No. 63 at 3-4, 19. Those discussions ultimately led to written agreements between Deleo and Medlogix pursuant to which Deleo agreed to dissolve MMS, which was struggling financially, and join Medlogix first as an "independent contractor" and later as a vice president of sales. Doc. No. 59-1 at 382-89, 416-29. All parties agree that the written agreements defining the terms of Deleo's transition from MMS to Medlogix did not expressly describe a merger of MMS with Medlogix. Id.
The parties dispute whether Medlogix is liable for Vegnani's state-court judgment as a result of its relationship with Deleo, but they agree that resolution of this question turns on the doctrine of successor liability under Massachusetts law. That doctrine "is equitable in both origin and nature," requiring evaluation of "a transaction according to its real nature, looking through its form to its substance and intent." Milliken & Co. v. Duro Textiles, LLC, 887 N.E.2d 244, 257 (Mass. 2008). To establish that Medlogix is the corporate successor to MMS and, thus, is liable for the judgment against Deleo and MMS, Vegnani must make two showings. First, he must prove that Medlogix received "all, or substantially all," of MMS's assets as a result of its agreements with Deleo. Premier Capital, LLC v. KMZ, Inc., 984 N.E.2d 286, 292 (Mass. 2013). Then, he must demonstrate that one of the following scenarios applies: 1) Medlogix "expressly or impliedly assume[d]" MMS's liabilities; 2) the agreements between Deleo and Medlogix amounted to “a de facto merger or consolidation”; 3) Medlogix “is a mere continuation of” MMS; or 4) the agreements between Deleo and Medlogix were “a fraudulent effort to avoid liabilities of” MMS. Id. at 292-93.
Here, the parties focus on the second scenario-de facto merger. Though "[n]o single factor is necessary or sufficient to establish a de facto merger," the Massachusetts Supreme Judicial Court ("SJC") has identified four "factors that courts generally consider in determining" whether a de facto merger has occurred:
whether (1) there is a continuation of the enterprise of the seller corporation so that there is continuity of management, personnel, physical location, assets, and general business operations; whether (2) there is a continuity of shareholders which results from the purchasing corporation paying for the acquired assets with shares of its own stock, this stock ultimately coming to be held by the shareholders of the seller corporation so that they become a constituent part of the purchasing corporation; whether (3) the seller corporation ceases its ordinary business operations, liquidates, and dissolves as soon as legally and practically possible; and whether (4) the purchasing corporation assumes those obligations of the seller ordinarily necessary for the uninterrupted continuation of normal business operations of the seller corporation.Cargill, Inc. v. Beaver Coal & Oil Co., 676 N.E.2d 815, 818 (Mass. 1997); accord Milliken, 887 N.E.2d at 255-56.
To the extent Medlogix implies or outright argues that any one factor requires a finding in its favor, e.g., Doc. No. 58 at 16-17 (urging that Vegnani cannot prevail absent evidence of shareholder continuity or in the face of evidence MMS never formally dissolved), that view has been roundly rejected by the Massachusetts courts and the First Circuit applying Massachusetts law. E.g., DeJesus v. Park Corp., 530 Fed.Appx. 3, 6-7 (1st Cir. 2013); Cargill, 676 N.E.2d at 818-20.
Because the pending motion is one by Medlogix for summary judgment, the Court draws all reasonable inferences in Vegnani's favor and considers whether Medlogix has established that the undisputed facts would preclude a jury from concluding the prerequisites to imposition of successor liability are satisfied here. Medlogix has not met this burden.
A number of facts bearing directly on the criteria for successor liability summarized above are either squarely in dispute or are undisputed and reasonably viewed as potentially supporting Vegnani's claim. For instance, Vegnani points to the following evidence which, if credited by a jury, would support a finding that the relevant transaction was not a mere hiring of a salesman, as Medlogix urges, but a de facto acquisition of MMS by Medlogix:
Medlogix invites the Court to "disregard" Vegnani's recitation of disputed facts, suggesting they are immaterial and that Vegnani's presentation of them "does not comply with the language or spirit of Local Rule 56.1." Doc. No. 66. Medlogix is wrong on both counts-in fact, the very Local Rule it cites expressly mandates such a submission-so its objection is OVERRULED.
● At the outset of its discussions with Deleo in August 2017, Medlogix was openly considering acquiring MMS (not simply hiring Deleo), and Deleo was interested in selling MMS (not simply finding a new job). E.g., Doc. No. 59-1 at 339-40, 342.
● The written agreement pursuant to which Deleo became an "independent contractor" of Medlogix in September 2017 required Deleo to "efficiently and seamlessly wind[] down" MMS's operations entirely-with Medlogix's assistance-and to ensure that "no new business" would operate under the MMS name; it did not simply require Deleo, as an individual, to cease his own work on behalf of MMS. Id. at 382, 384.
● In the press release publicizing the transaction with Deleo-the draft of which was circulated internally at Medlogix under a subject line referencing the "MMS Announcement"-Medlogix described its "partnership" with MMS, not simply its hiring of Deleo. Doc. No. 64-1 at 644-46, 741.
● When it reached the relevant agreement with Deleo, Medlogix also hired a second MMS employee, Sarah Savage. Id. at 744-47. Thus, Medlogix employed half of MMS's staff as it stood at the time of the transaction. Doc. No. 59-1 at 360.
● After the transaction, Medlogix decided to keep MMS's website operational, with users automatically redirected to Medlogix's website. Doc. No. 59-1 at 241; Doc. No. 64-1 at 721. Medlogix paid the 2018 fee for the MMS website. Doc. No. 64-1 at 363, 719.
● After signing their agreements with Medlogix, both Deleo and Savage continued to work out of the MMS office space in Woburn, Massachusetts, using MMS equipment. Id. at 297-98, 303-04. Medlogix paid rent for that office, though at some point it characterized those payments as a loan to Deleo, and Medlogix decided when to terminate the lease. Id. at 189-90, 356-57, 556; Doc. No. 59-1 at 300, 454.
● Deleo and Savage retained and/or requested forwarding of their existing MMS phone numbers and e-mail addresses. Doc. No. 64-1 at 371-73, 438-40.
● At Medlogix's request, Deleo provided historical information including IME reports that MMS had coordinated for several years prior to the transaction. Doc. No. 59-1 at 433; Doc. No. 64-1 at 373-74.
● According to Deleo, MMS had no cash or other assets-besides his relationships with customers and doctors, his reputation, the Woburn office, and the website customers used to initiate IME requests-at the time of the transaction. Doc. No. 64-1 at 197.
● The January 2018 employment agreement between Deleo and Medlogix assigned to Deleo the title "Vice President of Sales," referred to him as an "Executive," and designated him a "member of senior management." Doc. No. 59-1 at 416, 421.
● When Medlogix decided not to renew the lease for the Woburn office, Deleo notified the landlord that MMS "was acquired by" Medlogix, and that he had "sold [his] company to Medlogix." Doc. No. 64-1 at 495, 524. The landlord sent the refund for the security deposit directly to Medlogix. Id. at 520, 533.
● Starting with an "upfront payment" at the time of the September 2017 transaction and continuing at least through the end of 2018, Medlogix made a number of payments to resolve outstanding MMS liabilities. E.g., Doc. No. 59-1 at 380, 383, 454. The record suggests these payments totaled approximately $180,000, with Deleo signing a promissory note for a list of disbursements that arose after the "upfront payment." Id. at 447-54. Most, if not all, of these payments were internally justified and approved by Medlogix because they were deemed necessary to permit MMS's business operations (via Deleo's sales) to continue. E.g., id. at 413; Doc. No. 64-1 at 318-31.
● The record contains a number of statements and documents reflecting the tendency of various representatives of Medlogix to refer interchangeably to Deleo and MMS, both at the time of the relevant transactions and during depositions related to this action. E.g., Doc. No. 59-1 at 360; Doc. No. 64-1 at 224, 330.
Despite its title, the agreement and the manner in which it was implemented bore many similarities to Medlogix's original (unconsummated) proposal to acquire MMS. See Doc. No. 59-1 at 347-53.
Medlogix has urged that MMS had contracts and cash at the time of the relevant agreements with Deleo, that Medlogix did not receive those assets, and that this forecloses a finding of successor liability. But the record does not establish MMS had any contracts of value, and it contains evidence from which a factfinder could conclude that MMS had no cash to transfer. Besides Deleo's testimony describing MMS's lack of such assets, the record contains bank records showing that: in the month of September 2017, an MMS account at Cambridge Trust fluctuated from a "low balance" of "$-1, 901.72" to a high of approximately $38,000 (apparently due to a direct transfer from Medlogix itself as part of the up-front payment Deleo received in the relevant transaction), Doc. No. 59-1 at 394-401; and MMS had to open a new bank account in June 2020 in order to receive a government loan or grant arising from a COVID-19 relief program, id. at 465.
Having evaluated the factual record, including the evidence highlighted herein, through the summary judgment lens, the Court concludes that triable issues exist as to all but one of the factors guiding a determination under Massachusetts law of whether Medlogix is liable to Vegnani as MMS's corporate successor. A factfinder could conclude that Medlogix acquired all or substantially all of MMS's assets, based on evidence that it acquired Deleo's connections to MMS's customers and doctors in the New England region, MMS's website, MMS's office and exam space, and MMS's historical IME information, and that it publicly touted its "partnership" with MMS. And, a factfinder could conclude that three of the four de facto merger factors identified in Cargill favor Vegnani. On the present record, the only factor that cuts decisively against Vegnani is shareholder continuity, as Deleo did not receive Medlogix stock as part of the transaction. However, a "continuation of the enterprise" might be found based on evidence that Deleo and Savage provided "continuity of management" and "personnel" when they transitioned from MMS to Medlogix, and that they continued working from the same physical location using the same contact information and equipment to perform the same business operations. Further, though Medlogix urges otherwise, the record favors Vegnani on the third Cargill factor. MMS "was required to, and did, cease all its operations" under the terms of Deleo's agreements with Medlogix. Cargill, 676 N.E.2d at 819. Though MMS "was not dissolved, that does not preclude a finding of de facto merger," according to the SJC. Id. Finally, the last Cargill factor strongly favors Vegnani, as the record contains ample evidence showing that Medlogix satisfied those obligations of MMS that it viewed as "necessary for the uninterrupted continuation of normal business operations" by MMS. It paid certain MMS creditors, settled claims against MMS by doctors, paid MMS's landlord, and covered the cost of the MMS website.
Though shareholder continuity is a "key factor" in assessing whether a de facto merger has occurred-and it favors Medlogix here-the SJC has "repeatedly instructed" that none of the Cargill factors are dispositive, and the First Circuit has reiterated that point. DeJesus, 530 Fed.Appx. at 6; see also, e.g., Lanee Great Plastic Co. v. Handmade Bow Co., No. SUCV200705245, 2010 WL 6650330, at *4-5 (Mass. Super. Ct. Dec. 26, 2010) (Fabricant, J.) (denying summary judgment where there was no continuity of ownership but evidence established genuine issues of material fact as to the remaining Cargill factors); Mass Printing & Forms, Inc. v. RKS Health Ventures Corp., No. Civ. A. 98-00489-F, 2000 WL 744564, at *2-3 (Mass. Super. Ct. May 22, 2000) (Gants, J.) (same); cf. Pontacolini v. Dailybreak/CP, LLC, No. 15-CV-1442-H, 2016 WL 1110318, at *2-3 (Mass. Super. Ct. Mar. 21, 2016) (Curran, J.) (denying summary judgment without considering shareholder continuity factor, as to which no evidence had been adduced, because triable issues existed as to other three Cargill factors). Thus, under the totality of these circumstances, a jury could consider the relevant factors and conclude that the "real nature" of the transaction at issue supports imposition of successor liability against Medlogix.
Of course, a factfinder also could reject some or all of the evidence outlined above or draw inferences different than those urged by Vegnani. But whether, in the end, the evidence will support Vegnani's claim of successor liability against Medlogix is a question for the jury to resolve after a trial. It is not a question the Court can decide as a matter of law on the present record. And, contrary to Medlogix's repeated entreaties-first in its motion to dismiss, and now on summary judgment-the answer to this question is not simply dictated by the terms of the relevant contracts. As a creature of equity, the doctrine of successor liability not only permits but requires consideration of circumstances beyond the language of the written contracts to discern the true "substance and intent" of the transaction. Milliken, 887 N.E.2d at 257.
SO ORDERED.
EXHIBIT C
Michael J. Deleo
November 13, 2020
Medlogix Corp. 300
American Metro Blvd.
Suite 170
Hamilton, N.J. 08619
Dear Craig Goldstein,
Please accept this letter as official notice of my resignation.
As you know, over the last 8 months, we have had many differences of opinion regarding the process for when I should return to work. I also know that many of the employees at my level in the company have returned to full time status. This conflict has affected my ability to earn an income to support my family. It is clear to me from our conversations and your emails that the company's position with respect to my return is a result of the legal action brought against the company by Anthony Vegnani and you would like to have all the legal issues between Mr. Vegnani and Medlogix resolved before me returning to my position. I have no control over how or when those issues can be resolved. The Vegnani matter brought against Medlogix has clearly interfered with my employment and left me no choice but to seek alternative working opportunities.
I resign from the position of Vice President of Business Development effective immediately. Please have someone from Human Resources contact me to work through the transfer of any benefits.
Sincerely,
Michael J. DeLeo
NOTICE OF HEARING
Anthony Vignani ("Vignani" or "Defendant") filed a Motion to Dismiss Complaint and Incorporated Memorandum of Law on April 30, 2021 [D.E. #9] (the "Motion"). A hearing on the Motion will is scheduled to be held before the Honorable Michael A. Fagone, at the United States Bankruptcy Court for the District of Maine, 202 Harlow Street, 3rd Floor, Bangor, Maine on June 10, 2021 at 2:00 pm. You are invited to attend. If you intend to participate in the hearing via telephone you are required to register with CourtCall at 1-866-582-6878, no later than 3:00 p.m. that last business day prior to the hearing.
If you do not want the Court to approve the Motion, then on or before May 14, 2021 (the "Objection Deadline"), you or your attorney must file with the Court a response or objection explaining your position and serve the same on counsel for the Defendant. If you are not able to access the Court's CM/ECF electronic filing system, then your response should be served upon:
Monica Bigley, Clerk
United States Bankruptcy Court for the District of Maine
202 Harlow Street
Bangor, Maine 04401
- and -
Katherine M. Krakowka
Murray, Plumb & Murray
P.O. Box 9785
Portland, Maine 04104-5085
Please note that your rights may be affected. You should read these papers carefully. You may want to discuss them with an attorney, if you have one, and you may want to consult with an attorney if you do not already have one.
If you or your attorney do not take these steps, then the Court may decide that you do not oppose the relief sought in the Motion, and may enter an order granting the requested relief without further notice of hearing.
Date: April 30, 2021
Kelly W. McDonald
Katie M. Krakowka
MURRAY, PLUMB & MURRA
Attorneys For Anthony Vegnani
ORDER GRANTING MOTION TO DISMISS COMPLAINT
Michael A. Fagone, United States Bankruptcy Judge
Upon consideration of the Motion to Dismiss Complaint and Incorporated Memorandum of Law (the "Motion") [Dkt. No. ___], [1] filed by Anthony Vegnani, after adequate notice and a hearing thereon, if necessary, and good cause having been demonstrated to the Court, it is hereby ORDERED as follows:
1. The Motion is GRANTED.
2. The Complaint is dismissed for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).