Opinion
BCD-CIV-2022-00006
06-26-2023
MOULISON LLC, Plaintiff, v. KENNETH MOULISON, DONNA MOULISON, and THE DONNA M. MOULISON REVOCABLE TRUST, Defendants.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
Michael A. Duddy, Judge.
INTRODUCTION
Plaintiff Moulison LLC ("Plaintiff') filed a nine-count Complaint against Defendants Kenneth Moulison, Donna Moulison, and the Donna M. Moulison Revocable Trust (collectively, "Defendants") alleging, inter alia, breach of contract with respect to two promissory notes. Defendants denied the allegations and filed a four-count Counterclaim. The case was transferred to the Business and Consumer Court on January 3, 2022. Presently before the Court is Plaintiffs Motion for Summary Judgment (the "Motion" or "MSJ"), which seeks summary judgment on Counts I-IV and VII-IX of the Complaint, as well as on all counts of Defendants' Counterclaim. Defendants oppose the Motion. For the reasons discussed below, the Court concludes Plaintiff is entitled to summary judgment on Count VII of the Complaint and partial summary judgment on Counts I-IV of Defendants' Counterclaim. However, issues of material fact exist on several other counts. Thus, the Motion is granted in part and denied in part.
BACKGROUND
The dispute in this case concerns two promissory notes. The following factual background is drawn from the parties' statements of material fact.
Plaintiff Moulison LLC is a heavy electrical contractor based in Biddeford, Maine. (S.M.F. ¶¶ 1, 4.) From approximately June 2016 until June 2020, Kenneth Moulison was employed by Plaintiff as the company's president, earning an annual salary between $150,000.00 and $210,000.00. (S.M.F. ¶ 29.) Prior to June 2016, Kenneth was the owner of Plaintiff s predecessor company, Moulison North Corporation ("MNC"). (S.M.F. ¶ 4). During that time, MNC was experiencing financial distress. (S.M.F. ¶ 4.) In order to protect several of MNC's ongoing projects from disruption, Plaintiff was created and purchased MNC's assets. (S.M.F. ¶ 4; Reply S.M.F. ¶ 41.) Subsequently, Kenneth secured a large construction project for the company at the T.F. Green International Airport in Rhode Island (the "T.F. Green Project"). (S.M.F. ¶ 30.) Plaintiff ultimately realized approximately $3.7 million net income from the T.F. Green Project between 2016 and 2017. (Opp. S.M.F. ¶ 48.)
On October 14, 2016, Defendants executed and delivered a promissory note to Plaintiff in the amount of $73,432.00 (the "2016 Note"). (S.M.F. ¶ 5; Pl.'s Ex. A.) The principal sum was to be amortized over a fifteen-year term, with interest accruing at a fixed 5% rate. The 2016 Note further provided as follows: "Payments of all accrued interest and amortized principal shall be due and payable in sixty (60) monthly installments commencing on November 14, 2016 and continuing on like dates until October 14, 2021, when a final payment of all remaining principal and interest shall be due and payable (a balloon payment)." (Pl.'s Ex. A.) Lastly, the 2016 Note provided that "[t]he failure to pay any installment of interest or principal within fifteen (15) days after the due date . . . shall. . . constitute an event of default which shall render the whole amount of the unpaid balance of both principal and interest (if any) immediately due and payable." (Pl.'s Ex. A.) The 2016 Note was signed by both Kenneth and Donna. (Pl.'s Ex. A.)
Plaintiff seeks to recover on the 2016 Note only against Donna. In March 2017, Kenneth filed for bankruptcy in the United States Bankruptcy Court for the District of Maine. He ultimately received a discharge of his personal obligation regarding the 2016 Note. (S.M.F. ¶ 7.) The Court takes judicial notice of the bankruptcy case, docketed as In re Moulison, No. 17-20126 (Bankr. D. Me. 2017).
Defendants used the funds supplied by Plaintiff in connection with the 2016 Note to pay off business-related credit card expenses incurred by Kenneth, mostly in Donna's name, for material purchases to keep MNC operating. (Opp. S.M.F. ¶ 42.) Furthermore, Defendants allege that Plaintiffs Chief Financial Officer at the time, Brent Hartley, reached an agreement with Kenneth that the 2016 Note would be repaid primarily out of profit from the T.F. Green Project, essentially in the form of a bonus. (Opp. S.M.F. ¶ 8; Add. S.M.F. ¶ 46.) Thus, Defendants argue, the terms of the agreement consist not only of the 2016 Note itself, but also the alleged oral condition. (Add. S.M.F. ¶ 47.) Plaintiff disputes these allegations. (Reply S.M.F. ¶¶ 46-47.)
Plaintiff does not deny this allegation outright, but states it has no actual knowledge as to the nature of the expenses, given that the credit card statements provided by Kenneth included only the total balances that were owed. (Reply S.M.F. ¶ 42.) Plaintiffs denial is not sufficient to dispute the allegation, so the allegation is taken as fact for purposes of summary judgment.
On June 22, 2017, a foreclosure action was initiated against the Moulisons' residence located at 105 Pennacook Circle in Wells, Maine. (S.M.F. ¶ 9.) Kenneth repeatedly asked Plaintiff for a loan to save the residence from foreclosure, to which Plaintiff ultimately agreed. (S.M.F. ¶ 10.) On March 28, 2018, Tasha Gardner, Plaintiffs then-Vice President and Treasurer, sent an email to Kenneth (the "Gardner Email") with a draft promissory note attached for his review. (S.M.F. ¶ 12; Pl.'s Ex. E.) The Gardner Email included the following text:
The note is due on demand with interest stated at 5%. There are no set repayment terms per se, however the note must be paid in full no later than December 31, 2025 (7+ years). You may make payments on the note as you desire. Future net bonuses (that is, the amount remaining after agreed upon taxes are paid) will be applied against the note. We will provide you with structure around how the bonuses will be calculated based upon Moulison profit calculations obviously, the better the Company performs, the faster the note will be repaid. Repayment of the note is
expected regardless of Company performance. . . . Should you no longer be employed by Moulison, the Company would likely demand payment.(Pl.'s Ex. E.) The Gardner Email contained no other attachments. (S.M.F. ¶ 13.) Kenneth reviewed the draft promissory note with the assistance of counsel and made several minor changes, which Plaintiff accepted. (S.M.F. ¶ 14.) That same day, on March 28, 2018, Kenneth and Donna executed and delivered the revised promissory note to Plaintiff in the amount of $358,000.00 plus 5% interest per annum (the "2018 Note"). (S.M.F. ¶ 11; Pl.'s Ex. D.) The 2018 Note provided as follows: "Payments of all outstanding accrued interest and principal are due on demand with 15 days of written notice by the Company to the Borrower, but in no case shall be paid later than December 31, 2025." (Pl.'s Ex. D.) Several days later, on or around April 9, 2018, Tasha Gardner sent Kenneth a document titled "Note Repayment Arrangement." (S.M.F. ¶ 15; Pl.'s Ex. F, G.) The Note Repayment Arrangement provided a "Possible Repayment" schedule based on seven numbered conditions (including the condition that "[s]hould Ken leave the employment of Moulison, LLC, the note will become due in full") and consisting of seven "Annual Bonus Repayment Example Balances" for the years 2018 through 2024. (Pl.'s Ex. G.) The Moulisons used the funds provided in connection with the 2018 Note to pay off the mortgage, thereby saving their residence from foreclosure. (S.M.F. ¶ 11.)
The parties vigorously dispute the repayment terms of the 2018 Note. (See Opp. S.M.F. ¶¶ 11,17, 25-27, 34-40; Reply S.M.F. ¶¶ ¶¶ 49, 51, 54-55, 57-58.) Defendants allege the 2018 Note was part of a "larger arrangement" between the parties consisting of the 2018 Note itself, the Gardner Email, and the Note Repayment Arrangement. (Add. S.M.F. ¶¶ 49, 57.) In essence, they argue these three documents, taken as a whole, constitute an agreement under which Kenneth was given seven years to repay the 2018 Note out of future bonuses. (Opp. S.M.F. ¶¶ 25-26; Add. S.M.F. ¶ 58.) Moreover, they allege Plaintiffs executives provided oral assurances that they were "in it for the long haul" and "look[ed] forward to building the business." (Add. S.M.F. ¶¶ 45, 72.) Lastly, while Defendants acknowledge the demand language in both the Gardner Email and the Note Repayment Arrangement, they interpreted this language as applying only if Kenneth were to quit or be fired from his position. (Opp. S.M.F. ¶ 27; Add. S.M.F. ¶ 58.) Plaintiff, on the other hand, denies the Gardner Email included any additional terms or altered the express terms of the 2018 Note. (Reply S.M.F. ¶ 51.) Furthermore, Plaintiff contends the Note Repayment Arrangement merely provided one example of a bonus-based repayment schedule, rather than the exclusive means of repayment, and that the document in no way altered the terms of the 2018 Note. (Reply S.M.F. ¶¶ 54-55.) As discussed below, however, the dispute over the 2018 Note's repayment terms is ultimately immaterial, since the underlying obligation itself was not conditional.
On or about May 4, 2020, Donna Moulison created the Donna M. Moulison Revocable Trust (the "Trust"), with herself listed as settlor, trustee, and sole beneficiary. (S.M.F. ¶ 21.) On May 4, 2020, she transferred the parties' new residence, located at 10 Kimball Farm Lane in York, Maine, to the Trust in exchange for a purchase price of $0.00. (S.M.F. ¶¶ 22-23.) The property was unencumbered at the time of the transfer and was valued at $920,000.00. (S.M.F. ¶ 24.)
In June 2020, Plaintiff sold substantially all its assets, with the exception of the promissory notes, to a third party who continued to operate the business under the name Moulison Electric, Inc. Kenneth's employment with Plaintiff ended at that time, although he continued to be employed by Moulison Electric. (S.M.F. ¶ 32.) The following month, on July 10, 2020, Kenneth made one payment toward the interest accruing on the 2018 Note in the amount of $465.77. (S.M.F. ¶ 33.) With respect to the 2016 Note, Defendants allege they made 42 total payments of $135.00 each, or $5,670.00 in total, toward the 2016 Note via payroll deductions. (Opp. S.M.F. ¶ 39.) Plaintiff implicitly denies this allegation by asserting the total amount due under the 2016 Note as of September 28, 2022, is $125,490.10, an amount which does not reflect any downward adjustment for the alleged payments. (S.M.F. ¶¶ 38-39.)
On June 7, 2021, Plaintiff sent Defendants a notice of default and acceleration regarding the 2016 Note, demanding payment of the entire outstanding principal and interest. (S.M.F. ¶ 34.) Additionally, Plaintiff demanded payment of the entire 2018 Note within 15 days. (S.M.F. ¶ 35.) Aside from the aforementioned payments or alleged payments, Neither Kenneth nor Donna made any additional payments on the 2016 Note or the 2018 Note. (S.M.F. ¶¶ 36, 39.) Plaintiff asserts the total amounts due on the 2016 Note and the 2018 Note as of September 28, 2022, are $125,490.10 and $442,644.26 respectively, exclusive of costs, fees, and additional interest. (S.M.F. ¶¶ 38, 40.) Defendants deny that they are in default or that any amounts are due under either promissory note. (Opp. S.M.F. ¶¶ 34-36, 38, 40.)
STANDARD OF REVIEW
Summary judgment is appropriate when no genuine issue exists as to any material fact and a party is entitled to judgment as a matter of law. M.R. Civ. P. 56(c). A material fact is one having the potential to affect the outcome of the suit and a genuine issue exists when sufficient evidence supports a factual contest to require a factfinder to choose between competing versions of the truth at trial. Burdzel v. Sobus, 2000 ME 84, ¶ 6, 750 A.2d 573. When deciding whether to grant or deny a motion for summary judgment, a trial court may consider only the portions of the record referred to, and the material facts set forth in, the statements of material facts. Corey v. Norman, Hanson &DeTroy, 1999 ME 196, ¶ 8, 742 A.2d 933.
DISCUSSION
I. The Promissory
The bulk of Plaintiff s Motion for Summary Judgment concerns the promissory notes. The pertinent counts include Counts I-III and VII-IX of the Complaint, which collectively assert claims for breach of contract or, in the alternative, unjust enrichment and quantum meruit, as well as Counts I-IV of the Counterclaim, which comprise Defendants' opposite claims for the same as well as their request for declaratory judgment. The Court's summary judgment analysis on these counts involves common principles of law, including the statute of frauds and the parol evidence rule; however, the Court reaches different conclusions as to each promissory note.
Under the statute of frauds, a contract that is not intended to be performed within one year must be in writing to be enforceable. See 33 M.R.S. § 51(5). If any promise in the contract cannot be fully performed within one year from the time of the contract's formation, all promises in the contract fall within the statute of frauds. Restatement (Second) of Contracts § 130(1). The statute's applicability is determined by the circumstances and the intent of the parties, rather than whether the contract could conceivably be performed within one year. See Great Hill Fill &Gravel, Inc. v. Shapleigh, 1997 ME 75, ¶ 5, 692 A.2 928. To satisfy the statute of frauds, "the memorandum must contain within itself, or by some reference to other written evidence ... all the essential terms of the contract, expressed with such reasonable certainty as may be understood from the memorandum and other written evidence referred to (if any) without any aid from parol testimony." Gagne v. Stevens, 1997 ME 88, ¶ 9, 696 A.2d 411. Importantly, however, "the one-year provision does not apply to a contract which is performed on one side at the time it is made, such as a loan of money." Restatement (Second) of Contracts § 130 cmt. D; see also Thomsen v. Ward, No. CV-11-14, 2012 Me. Super. LEXIS 75, at *25-26 (June 4, 2012).
In this case, Plaintiff argues any alleged additional terms regarding the 2018 Note are barred by the statute of frauds. Defendants, on the other hand, argue the 2018 Note, Gardner Email, and Note Repayment Arrangement essentially constitute a single "writing" sufficient to satisfy the statute of frauds. Such a writing, they note, "may be in almost any possible form [and may] consist of several separate papers and documents, not all of which are signed by the party to be charged, and none of which is a sufficient [writing] in itself." Wells Fargo Home Mortg., Inc. v. Spaulding, 2007 ME 116, ¶ 20, 930 A.2d 1025 (internal quotations omitted). In Defendants' view, because the Gardner Email referenced both the 2018 Note (which was attached as a draft) and a forthcoming bonus calculation structure (which Plaintiff later provided in the form of the Note Repayment Arrangement), the Gardner Email "contains within itself, or by some reference to other written evidence ... all the essential terms of the contract." Gagne, 1997 ME 88, ¶ 9, 696 A.2d 411 (emphasis added). The Court need not address this line of argument, however, because it finds the statute of frauds wholly inapplicable in this case: both the 2016 Note and the 2018 Note concerned loans of money, and there is no dispute that Plaintiff fully performed by loaning Defendants $73,432.00 dollars in connection with the former and $358,000.00 in connection with the latter. Plaintiffs full performance therefore removed both promissory notes from the statute of frauds. Restatement (Second) of Contracts § 130 cmt. d.
Nevertheless, a promissory note is a contract to which basic principles of contract law, including the parol evidence rule, apply. Briggs v. Briggs, 1998 ME 120, ¶ 6, 711 A.2d 1286. The parol evidence rule "operates to exclude from judicial consideration extrinsic evidence offered to vary, add to, or contradict the terms of an integrated written agreement." Brown Dev. Corp. v. Hemond, 2008 ME 146, ¶ 13, 956 A.2d 104 (quoting Clarke v. Di Pietro, 525 A.2d 623 (Me. 1987)). Accordingly, "application of the parol evidence rule is contingent on an initial finding that the contract at issue is integrated." Yd. If so, any extrinsic evidence offered to alter the unambiguous contract language must be excluded. Id. ¶ 14 (citing Rogers v. Jackson, 2002 ME 130 ¶ 9, 804 A.2d 379.) Where the agreement is partially integrated, extrinsic evidence will be admissible only if the additional terms do not contradict the written terms. Id. Promissory notes, as a matter of law, cannot be fully integrated. Rogers, 2002 ME 140, ¶ 9, 804 A.2d 379; see also Schiebel v. EHR Investments, Inc., No. CV-05-216, 2006 Me. Super. LEXIS 109, at *7 (May 26, 2006) (citing Rogers, 2002 ME 140, ¶ 9, 804 A.2d 379) ("The Law Court has held that a promissory note, which is merely a promise by one party that imposes no contractual duties on the other party, is not a fully integrated agreement.")
Importantly, the Law Court recognized a caveat to the parol evidence rule in Rogers v. Jackson, 2002 ME 140, 804 A.2d 379. In that case, the defendant signed and delivered to the plaintiffs a promissory note for $3,000 but failed to pay any amount due under the note. Id. ¶ 2. In his defense, he contended the note was part of a larger agreement which included an oral condition that he would pay the $3,000 only "if and when" he was able. Id. ¶ 3. In vacating the lower court's grant of summary judgment for the plaintiffs, the Law Court held that an oral condition which makes payment pursuant to a promissory note contingent upon the occurrence of certain circumstances is not necessarily repugnant (i.e., contradictory) to the terms of the note. Id. ¶ 11. Ultimately, the Law Court concluded that the defendant's alleged oral condition supplemented, rather than contradicted, the promissory note; thus, proof of the oral condition was not barred by the parol evidence rule and its existence was a question of fact. Id. ¶ 12.
In this case, there is no dispute that the promissory notes contain final expressions of at least some of their respective terms. See Restatement (Second) of Contracts § 209(1) ("An integrated agreement is a writing or writings constituting a final expression of one or more terms of an agreement."). Defendants do not dispute the existence or validity of the promissory notes, but rather argue that each contains a supplemental term or condition. Thus, the promissory notes are at least partially integrated, and the parol evidence rule permits introduction of supplemental terms only if they do not contradict the written terms of the promissory notes. See Rogers v. Jackson, 2002 ME 140, ¶ 21, 804 A.2d 379 (Saufley, J., dissenting); see also Restatement (Second) of Contracts § 217 ("Where the parties to a written agreement agree orally that performance of the agreement is subject to the occurrence of a stated condition, the agreement is not integrated with respect to the oral condition.").
Turning first to the 2018 Note, the precise issue before the Court is whether the alleged seven-year repayment timeframe contradicts the unambiguous demand language. Defendants insist the situation in this case is analogous to Rogers and that the parol evidence supplements, rather than contradicts, the express terms of the 2018 Note. The two cases are indeed similar in one respect: both involve an unambiguous promissory note that was subsequently challenged with extrinsic terms. However, they are fundamentally different in another, critically important respect: the alleged oral term in Rogers did not assert an alternate timeframe for payment, but rather conditioned the payment obligation itself on the availability of funds. Rogers, 2002 ME 140, ¶ 3, 804 A.2d 379. Because the oral condition made the obligation contingent, it effectively preceded operation of the demand language and therefore supplemented, rather than contradicted it. Id. ¶ 11. That is not the case here. An obligee's right to demand full payment at any time with 15 days' written notice is plainly inconsistent with an obligor's right to delay payment until the expiration of a seven-year term. Simply put, the two terms cannot coexist. Moreover, although Kenneth testified extensively regarding the 2018 Note during his deposition, this testimony at most establishes Kenneth's subjective beliefs and impressions regarding the terms of the 2018 Note. It is insufficient to recast the alleged term as supplementary or generate an issue of material fact. The Court therefore finds and concludes that the alleged term directly contradicts the 2018 Note's unambiguous demand language and is therefore barred by the parol evidence rule.
Following Kenneth and Donna's depositions on June 17, 2022, the parties engaged in a lengthy dispute regarding Defendants' proposed errata sheets. While the Court declines to recite the full history of the errata dispute herein, it takes judicial notice of all prior orders regarding that issue, including the initial strike order dated November 22, 2022 and subsequent reconsideration orders dated December 29, 2022, March 6, 2023, and April 24, 2023. Defendants' proposed erratas were ultimately accepted and incorporated into their deposition transcripts. For purposes of deciding this Motion for Summary Judgment, the Court has used the revised deposition transcripts. (See Opp. S.M.F. ¶ 37; Add. S.M.F. ¶¶ 49, 58.)
Several conclusions of law necessarily follow from this point. First, because Defendants have failed to generate a genuine issue of material fact regarding the obligation to repay the 2018 Note, Plaintiff is entitled to summary judgment on Count VII of the Complaint. To prevail on a breach of contract claim, a plaintiff must not only establish the existence of a legally binding contract, but must also demonstrate that the defendant breached a material term of the contract and caused the plaintiff to suffer damages. Tobin v. Barter, 2014 ME 51, ¶¶ 9-10, 89 A.3d 1088. In the absence of admissible parol evidence, the express terms of the 2018 Note control. Defendants were therefore obligated under the 2018 Note's unambiguous demand language to pay all outstanding accrued interest and principal upon 15 days' written notice from Plaintiff. Having failed to do so, Defendants materially breached the contract, thereby damaging Plaintiff in the amount of $442,644.26. Plaintiff is entitled to judgment as a matter of law in that amount.
Second, given the Court's ruling on Count VII of the Complaint, Plaintiffs alternative claims for unjust enrichment and quantum meruit are moot. Summary judgment must therefore be denied on Counts VIII and IX of the Complaint.
Third, Plaintiff is entitled to partial summary judgment on Count I of Defendants' Counterclaim, which seeks declaratory judgment "as to whether the 2016 Note and the 2018 Note are independent demand notes that can be called at the Company's sole discretion or whether they are components of larger agreement between the parties." (Counterci. ¶ 40.) Given that any evidence of the purported additional term is barred by the parol evidence rule, the 2018 Note cannot be said to be part of a larger agreement between the parties. Thus, there is no genuine issue of material fact as to the nature of the 2018 Note.
Lastly, Plaintiff is entitled to partial summary judgment on Counts II and III of Defendants' Counterclaim. Given the Court's analysis above, Plaintiff did not commit breach of contract by demanding payment in accordance with the unambiguous demand language of the 2018 Note. Additionally, because a claim for unjust enrichment presupposes the absence of a contractual relationship between the parties, York Cty. v. Prcperiyhfo Corp., 2019 ME 12, ¶ 27, 200 A.3d 803, Defendants' unjust enrichment claim must fail. Plaintiff is entitled to judgment as a matter of law on both counts with respect to the 2018 Note.
Rogers compels a different result regarding the 2016 Note. To recap, the unambiguous language of the 2016 Note provides that payment was to be due and payable in 60 monthly installments over a five-year period, with a final "balloon payment" due at the end of the term. However, Defendants allege Kenneth Moulison reached an oral agreement with Plaintiffs Chief Financial Officer, Brent Hartley, under which the 2016 Note was to be repaid primarily out of profit from the T.F. Green Project. This oral condition, Defendants argue, is analogous to the oral condition in Rogers. The Court agrees. If the parties in fact agreed that any profit from the T.F. Green Project would be used to repay the 2016 Note, such amounts would necessarily displace Kenneth's payment obligation, and the express terms of the 2016 Note would be inapplicable as to them. Unlike the extrinsic term alleged with respect to the 2018 Note, the oral condition affects the existence of the payment obligation itself, rather than the timing of repayment: it affects whether, not when, Kenneth was obligated to pay. Because the alleged oral condition makes repayment of at least some portion of the loan contingent on certain circumstances, it arguably supplements, rather than contradicts, the express terms of the 2016 Note. See Rogers, 2002 ME 130 ¶ 11, 804 A.2d 379. Thus, evidence of the condition is not barred by the parol evidence rule and its existence is a question of fact. Id. ¶ 12.
Because Defendants have established a genuine issue of material fact, summary judgment must be denied on Count I of the Complaint and the remainder of Counts I and II of Defendants' Counterclaim. Likewise, in the absence of a determination as to the contractual relationship between the parties regarding the 2016 Note, summary judgment must be denied on Counts II and III of the Complaint and the remainder of Count III of Defendants' Counterclaim.
Finally, Plaintiff seeks summary judgment on Count IV of Defendants' Counterclaim, which asserts promissory estoppel regarding both the 2016 Note and the 2018 Note. "Promissory estoppel is a contract doctrine invoked to enforce promises which are otherwise unenforceable so as to avoid injustice." Cottle Enters, v. Town cf Farmington, 1997 ME 78, ¶ 17 n.6, 693 A.2d 330 (citing Chapman v. Bomann, 381 A.2d 1123, 1127 (Me. 1978)). "Thus, a claim of promissory estoppel requires demonstration of' [a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person.'" Id. (quoting Restatement (Second) of Contracts § 90).
Plaintiff argues no such promise or promises were made regarding the agreements evidenced by the promissory notes. Defendants, on the other hand, point to the statements contained in the documents previously discussed, including the Gardner Email and the Note Repayment Arrangement, as well as alleged oral representations by Plaintiffs executives. According to Defendants, these statements amount to promises which Plaintiff should have reasonably expected to induce forbearance. However, the Gardner Email, like the 2018 Note itself, plainly states that the 2018 Note was due upon demand and that Plaintiff would likely demand payment if Kenneth was no longer employed with the company. (Pl.'s Ex. E.) The Note Repayment Arrangement not only reiterated this condition, but also, by its own terms, contained only a "possible" repayment schedule based on "example" balances. (Pl.'s Ex. G.) Additionally, Plaintiff s alleged oral assurances reflect only generalized or aspirational sentiments, rather than a promise or promises regarding repayment of the 2018 Note. In short, because none of these statements amount to a promise, they are insufficient to support Defendants' claim for promissory estoppel. See Sirois v. Frenchville, 441 A.2d 291, 295 (Me. 1982).
Defendants have failed to raise a genuine issue of material fact as to the existence of a promise regarding the 2018 Note. However, as previously discussed, Defendants have established a genuine issue of material fact as to the existence of a promise that the 2016 Note would be repaid primarily out of profit from the T.F. Green Project. For this reason, summary judgment must be granted in part and denied in part on Count IV of Defendants' Counterclaim.
II. Fraudulent Transfer
The remainder of Plaintiff s Motion for Summary Judgment concerns the alleged fraudulent transfer of the parties' York residence to the Donna M. Moulison Revocable Trust. Under Maine's Fraudulent Transfer Act, 14 M.R.S. § 3571 et seq., "[a] transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation . . . [w]ith actual intent to hinder, delay or defraud any creditor of the debtor." 14 M.R.S. § 3575(1)(A). "Because direct proof of fraudulent intent is often unavailable, certain objective indicia of fraud, commonly referred to as 'badges of fraud,' may be shown to support an inference of fraudulent intent." In re Inn at Goose Rocks Ltd. P'ship, No. 89-0056-P, 1990 U.S. Dist. LEXIS 2235, at *7 (D. Me. Feb. 22, 1990). Specifically, in determining actual intent, courts consider factors such as the value of the consideration received by the debtor, the timing of the transfer, whether the transfer was to an insider, whether the debtor subsequently retained possession or control of the property, whether the transfer involved substantially all of the debtor's assets, and whether the transfer or assets were concealed. See 14 M.R.S. § 3575(2)(A)-(K).
In this case, Plaintiff argues the transfer of the York residence to the Trust implicates numerous badges of fraud. They allege, for example, that Donna Moulison, as the Trust's settlor, trustee, and sole beneficiary, was an insider of the Trust; that she retained possession and control of the York residence following the transfer; and that the value of the consideration received ($0.00) was not reasonably equivalent to the value of the York residence ($920,000.00). (S.M.F. ¶¶ 21-24.) Defendants, on the other hand, argue other factors cut in their favor: they note, for example, that the transfer did not involve substantially all of Donna's assets; that the transfer was not concealed, but rather was recorded in the York County Registry of Deeds; and that the asset itself, a piece of real estate, was likewise not concealed. (Add. S.M.F. ¶¶ 78-80.) In light of these competing allegations, a genuine issue of material fact exists as to whether Donna Moulison acted with actual intent to hinder, delay or defraud Plaintiff in transferring the York residence. Summary judgment must therefore be denied.
CONCLUSION
In conclusion, the Court GRANTS IN PART and DENIES IN PART Plaintiffs Motion for Summary Judgment. The Court finds that Defendants have established a genuine issue of material fact as to the existence of an oral condition regarding Defendant Kenneth Moulison's obligation to repay the 2016 Note. Accordingly, summary judgment is denied on Counts I, II, and III of the Complaint, as well as on Counts I, II, and III of Defendants' Counterclaim with respect to the 2016 Note. However, because any terms contradicting the unambiguous written language of the 2018 Note are barred by the parol evidence rule, there is no genuine issue of material fact regarding Kenneth's obligation to repay the 2018 Note and Plaintiff is entitled to judgment as a matter of law. Accordingly, summary judgment is granted to Plaintiff on Count VII of the Complaint, as well as on Counts I, II, and III of Defendants' Counterclaim with respect to the 2018 Note. Judgment in the amount of $442,644.26 is entered for Plaintiff on Count VIL Summary judgment is denied on Counts IV, VIII, and IX of the Complaint. Lastly, summary judgment is granted on Count IV of Defendants' Counterclaim as to the 2018 Note but denied as to the 2016 Note.
SO ORDERED.
The Clerk is specifically directed to enter this Order Granting in Part and Denying in Part Plaintiffs Motion for Summary Judgment by entering it on the civil docket by notation incorporating it by reference pursuant to Rule 79(a) of the Maine Rules of Civil Procedure.