Opinion
CV-15-0276
09-24-2018
MARC BAER, Personal Representative of the Estate of Anne P. Baer, Plaintiff, v. JASON REIS, Defendant.
ATTORNEYS FOR PLAINTIFF: THEODORE SMALL, ESQ., SARAH MITCHELL, ESQ, SKELTON TAINTOR & ABBOTT. ATTORNEY FOR DEFENDANT: FREDERICK MOORE, ESQ., ROBINSON KRIGER & MCCAULLUM PA.
ATTORNEYS FOR PLAINTIFF: THEODORE SMALL, ESQ., SARAH MITCHELL, ESQ, SKELTON TAINTOR & ABBOTT.
ATTORNEY FOR DEFENDANT: FREDERICK MOORE, ESQ., ROBINSON KRIGER & MCCAULLUM PA.
ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
Wayne R. Douglas, Justice.
Plaintiff Marc Baer, as Personal Representative of the Estate of Anne P, Baer, filed a one-count complaint seeking to recover funds allegedly owed to the Estate from Jason Reis pursuant to a loan agreement signed on September 29, 2014. Both plaintiff and defendant have moved for summary judgment. For the reasons set out below, the motions are denied.
I. Summary Judgment Factual Record
Plaintiff Marc Baer is the son of Anne P. Baer and the brother of David Baer. {P.S.M.F. ¶¶ 1-2.) Defendant Jason Reis is David's long-term partner. (D.A.S.M.F. ¶ 1.) Jason also helps care for David due to his health problems. (D.A.S.M.F. ¶ 2.)
David and Jason began having financial difficulties in or around 2012 due to the costs of David's medical care. (D.A.S.M.F. ¶ 3.) It is defendant's claim that in order to help pay for David's medical costs, Ms. Baer agreed to give him the sum of $50,000 as a gift. (D.A.S.M.F. ¶ 7.) He claims that in early 2013, Ms. Baer told him (Jason) that she was going to give $50,000 to help pay for David's medical care and that she was gifting the money to him instead of David in order to avoid incurring gift taxes. (D.A.S.M.F. ¶¶ 4-5.) Jason asserts that in telephone conversations before sending the money, Ms. Baer told him that the money was a gift. (D.A.S.M.F. ¶ 7.)
In May of 2013, Jason and David went to Ms. Baer's residence in Connecticut to collect the $50,000. (D.A.S.M.F. ¶ 8.) Upon arrival, Ms. Baer informed them that Marc's son, Sean Baer, had the check and was at Marc's house. {D.A.S.M.F. ¶ 9.) Marc subsequently gave Jason a check drawn on his own (Marc's) personal bank account with the notation, "Loan from Anne P. Baer 5-10-13" on the description line. (D.A.S.M.F. ¶¶ 10-11.) Jason objected to the check's description because he understood the money to be a gift and did not cash the check. (D.A.S.M.F. ¶¶ 12-13.)
After this interaction, Ms. Baer called Jason to apologize for the situation, telling him that she was going to send him a $50,000 check herself. (D.A.S.M.F. ¶ 14.) Jason then received a check from Ms. Baer for $50,000 that made no reference to a loan, (D.A.S.M.F. ¶ 15.) No other documents were sent with the check. (D.A.S.M.F. ¶ 16.)
Jason received another letter in the mail from Ms. Baer after receiving the check, which contained a cover letter and copies of a document titled, "Loan agreement Between Anne P. Baer and Jason Reis" (the "Loan Agreement"). (D.A.S.M.F. ¶ 16.) Marc had signed the Loan Agreement on behalf of his mother as her power of attorney. (P.S.M.F. ¶¶ 8-9.) The Loan Agreement provided:
I, Anne P. Baer of 1217 Thompson Road, Thompson, CT 06277 agree to loan Jason Reis of 22 Sewall Road, South Berwick, ME 03908 the sum of $50,000.OO(Fifty Thousand Dollars).
I sign this of my own free will. (D.A.S.M.F. ¶ 18.)
After receiving the Loan Agreement, Ms. Baer reportedly told Jason in a telephone conversation that she wanted him to sign the Loan Document so that she could avoid tax consequences; the money was still a gift and that she did not expect repayment; and her will contained a provision that all loans would be forgiven on her death, which Jason understood to also reinforce that Ms. Baer would not expect repayment after her death. {D.A.S.M.F, ¶¶ 19-21.) Jason signed the Loan Agreement and returned it to Ms. Baer; however, he continued to consider the money a gift and not a loan. (D.A.S.M.F. ¶¶ 22, 23, 28.) He maintains he would not have accepted the money if he thought that Ms. Baer expected repayment. (D.A.S.M.F, ¶ 24, }
Plaintiff disputes this characterization of Ms. Baer's intent, and instead claims that he had conversations with Ms. Baer where she indicated that she intended to loan the $50,000 to Jason. (PL's Repl. S.M.F. ¶¶ 4, 11, 14.) Marc further claims that Jason signed the Loan Agreement while at Marc's house in Connecticut, not after receiving it in the mail from Ms. Baer, and that Jason did not take issue with the Agreement when he signed it. (PL's Repl. S.M.F. ¶¶ 11-12, 15, 26.)
Anne Baer passed away on June 6, 2015. (P.S.M.F. ¶¶ 1-3.) Marc was appointed executor of her estate (the "Estate") by order of the State of Connecticut Court of Probate ("Connecticut Probate Court") on August 25, 2015. (P.S.M.F. ¶ 4.) On behalf of the Estate, Marc filed an "Initial Inventory" document dated December 1, 2015 to the Connecticut Probate Court, listing five assets of the Estate: a checking account valued at $4,580.71; a "Personal Loan to Jason Reis" valued at $50,000.00; and three properties collectively worth $99,900. (D.S.M.F. ¶¶ 4-5.)
Plaintiff filed the instant action in December of 2015 on behalf of the Estate to recover the $50,000 pursuant to the Loan Agreement.
On May 31, 2017, Marc signed and submitted a Financial Report to the Connecticut Probate Court in lieu of a final account of the Estate, (D.S.M.F, ¶ 7.) This Report represented that the only distributions of the Estate were to the Anne Baer Revocable Trust Dated March 8, 2011: (1) cash in the amount of $0.00; and (2) Real Estate valued at $99,900. (D.S.M.F. ¶ 11.)
In a Decree dated June 5, 2017, the presiding judge of the Connecticut Probate Court approved the Financial Report and ordered Marc to submit an Affidavit of Closing. (D.S.M.F. ¶ 15.) Plaintiff then filed a signed Affidavit of Closing dated July 7, 2017, which provided, "The subscriber, fiduciary of the estate, hereby makes return under penalty of false statement . . . that so far as the fiduciary has any knowledge, the estate is now fully administered and settled." (D.S.M.F. ¶¶ 16-18.) Plaintiff states he filed the Financial Report and Affidavit of Closing "rather than wait an indefinite period of time for an uncertain outcome in this case before distributing any Estate assets." (P.A.S.M.F. ¶ 3; MarcBaerAff. ¶ 2.)
On January 5, 2018, Marc made a demand through counsel for payment from Jason pursuant to the Loan Agreement. (P, S.M.F. ¶ 10.)
The parties have filed cross-motions for summary judgment.
II. Standard of Review
Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. M.R. Civ. P. 56(c); Dyer v. Dep't of Transp,, 2008 ME 106, ¶ 14, 951 A.2d 821. A material fact is "one that can affect the outcome of the case;" a genuine issue of material fact exists "when the fact finder must choose between competing versions of the truth." Dyer, 2008 ME 106, ¶ 14, 951 A.2d 821 (internal citation and quotation marks omitted). When deciding a motion for summary judgment, the court reviews the evidence in the light most favorable to the non-moving party. Id. In order to survive defendants' motion for summary judgment, plaintiff must set forth a prima facie case of each element of her cause of action. Bonin v. Crepeau, 2005 ME 59, ¶ 8, 873 A.2d 346 (citation omitted).
III. Discussion
A. Plaintiffs Motion for Summary Judgment
Plaintiff seeks summary judgment on the ground that the signed Loan Agreement constitutes an enforceable contract; the agreement unambiguously obligates defendant to repay the loan; and defendant is in default on this obligation. The motion is denied because there are material facts in dispute relating to the formation of the contract.
Promissory notes are contracts subject to traditional contract law requirements. QAD Inv'rs, Inc. v. Kelly, 2001 ME 116, ¶ 13, 776 A.2d 1244. For a legally enforceable contract to exist, there must be "a meeting of the minds, consideration, and mutuality of obligations . . .." Dom J. Moreau & Son, Inc. v. Fed. Pac. Elec. Co., 378 A.2d 151, 153 (Me. 1977). The parties need to "have a distinct and common intention which is communicated by each party to the other" in order to create a binding contract. Searles v. Trs. of St. Joseph's Coll, 1997 ME 128, ¶ 13, 695 A.2d 1206, quoting 17A Am. Jur. 2d Contracts § 27 (1991). Whether the elements of an enforceable contract exist is a question of fact. Id., citing June Roberts Agency, Inc. v. Venture Props., Inc., 676 A.2d 46, 48 (Me. 1996).
Defendant maintains that it was neither his nor Ms. Baer's intent that he and David repay $50,000 to her; and that the Loan Agreement was not executed with this intent but rather as a device to allow Ms. Baer to give her son money and avoid potential tax consequences. Although the Loan Agreement itself is unambiguous, there are disputed material facts as to the Ms. Baer's intended characterization of this money. And while the parol evidence rule generally precludes use of extrinsic evidence to "vary, add to, or contradict the terms of an integrated written agreement," Clarke v. Di Pietro, 525 A.2d 623, 625 (Me. 1987), such evidence may be relevant and admissible to establish the intent of the parties to enter into a contract. The relevant extrinsic evidence here-dealings between Jason and Ms. Baer-go directly to their intent in formulating this instrument, and whether or not they intended the instrument to be a loan agreement. Since the material facte surrounding the transaction remain in dispute, plaintiffs motion for summary judgment is denied.
Damora v. Christ-Janer, 184 Conn, 109, 114, 441 A.2d 61, 65 (t98l), citing Calamari & Perillo, Contracts (2d Ed.) § 3-4, p. 111 ("It is well settled that the parol evidence rule does not prevent a party from using contemporaneous or prior negotiations or expressions to show that the writing was never intended to be operative ..."); 3 Corbin, Contracts § 573, p. 360 ("On [the issue of whether the parties have made a contract], no relevant evidence, whether parol or otherwise, is excluded."); Smith v. Dotterweich, 200 N.Y. 299, 305, 93 N.E. 985 (1911) ("When the oral testimony goes directly to the question whether there is a written contract or not, it is always competent . . . .")); see also Restatement (Second) of Contracts, § 214 cmt. c (1981) ("What appears to be a complete and binding integrated agreement may be a forgery, a joke, a sham, or an agreement without consideration, or it may be voidable for fraud, duress, mistake, or the like, or it may be illegal. Such invalidating causes need not and commonly do not appear on the face of the writing. They are not affected even by a 'merger' clause.").
Other defenses raised to the contract claim, however, are less persuasive. The agreement does not fail as a matter of law for failing to (i) include an express promise to repay, Doughty v. Sullivan, 661 A.2d 1112, 1123 {Me. 1995); or (ii) specify a time for repayment or interest rate, id.; 11 M.R.S.A. § 3-1108(l)(b); Conn. Gen. Stat. § 42a-3-108(a)(ii), 42a-3-112(a)(i); or (iii) provide for default provisions, 11 M.R.SA. § 3-1104(1); Conn. Gen. Stat, § 42a-3-104(a). Nor does it fail for Sack of consideration based on the timing of payment. See a Conn. Gen. Stat, § 42a-3-113(a); 11 M.R.S.A. § 3- 1113(a), Finally, the promissory estoppel "defense" is also unavailing. If a contract was established, the equitable remedy of promissory estoppel is unavailable; and if a contract was not established, then defendant has no repayment obligation as a matter of law,
B. Defendant's Motion for Summary Judgment
Defendant seeks summary judgment on the ground that the Estate has been "fully administered and settled" and therefore plaintiff lacks standing to sue in the capacity of personal representative. Defendant further contends plaintiff is barred from bringing the present action in his capacity as personal representative on the grounds of waiver and judicial estoppel. The motion is denied for the following reasons.
1. Standing
Under Connecticut law the closing of an estate does not terminate a fiduciary's office or necessarily preclude subsequent Litigation. See Settlement of Estates in Conn, § 3.1 (3d ed.) ("official position of the administrator or executor is not ended by the completion of all regular duties and, following the common-law rule, that the office of the executor or administrator does not involuntarily terminate during lifetime unless the fiduciary is removed."). See City Trust Co. v. Bulktey, 151 Conn. 598, 603-04, 201 A, 2d 196, 199 (1964) ("the common-law rule, which still obtains in Connecticut and in at least some other jurisdictions, [is] that the office of an executor or administrator does not terminate during his lifetime unless he is removed."). Cf. Shea v. Loforese, CV 99172617, 2000 Conn. Super. LEXIS 453 (Super. Ct. Feb. 18, 2000) (summary judgment denied in legal malpractice action brought by the executrix of an estate; office does not terminate during lifetime unless removed.) Id. at *2, citing City Trust Co., 15 1 Conn, at 604. Given that the executor's office does not terminate during his or her life unless terminated or removed, it follows that plaintiff has standing to pursue this claim, 2. Waiver
Waiver is the Voluntary and knowing relinquishment of a right," McCarthy v. Goroshin, 2016 ME 98, ¶ 8, 143 A, 3d 138. Waiver may be express or it may be "inferred from the acts of the waiving party," Interstate Indus. Uniform Rental Serv., Inc. v. Couri Pontiac, Inc., Me., 355 A, 2d 913, 919 (1976). The question of whether or not there has been a waiver is one of fact. See Robinson v. Pa. Fire Ins. Co., 90 Me. 385, 389, 38 A. 320, 322 (1897); see also Williams v. Ubaldo, 670 A.2d 913, 916 (Me. 1996); AFSCME, Council 4, Local 704 v. Dep't of Pub. Health, 272 Conn. 617, 622, 866 A.2d 582, 585 (2005).
Connecticut's definition of waiver is consistent with Maine's. See Dinan v. Patten, 317 Conn. 185, 195, 116 A.3d 275, 282 (2015).
Plaintiff filed this action prior to closing of the Estate and has continuously and actively pursued this litigation after the filing of the Closing Affidavit. There is at least a question of material fact concerning whether plaintiff has adopted a "course of conduct signifying a purpose not to stand on a right, and leading, by a reasonable inference, to the conclusion that the right in question will not be insisted upon." McCarthy, 2016 ME 98, ¶ 8, 143 A.3d 138.
3. Judicial Estoppel
The equitable doctrine of judicial estoppel "prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase." HL 1 LLC v. Riverwalk, LLC, 2011 ME 29, ¶ 30, 15 A.3d 725, quoting New Hampshire v. Maine, 532 U.S. 742, 749 (2001). This is considered an "extraordinary remedy" applied only "when a party's inconsistent behavior will otherwise result in a miscarriage of justice." Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 365 (3d Cir. 1996) (citation omitted) (quotation marks omitted); see UNUM Corp. v. United States, 886 F.Supp. 150, 158 (D. Me. 1995).
For judicial estoppel to apply:
(1) the position asserted in the subsequent legal action must be clearly inconsistent with a previous position asserted; (2) the party in the previous action must have successfully convinced the court to accept the inconsistent position; and (3) the party must gain an unfair advantage as a result of their change of position in the subsequent action.HL 1 LLC v. Riverwalk, LLC, 2011 ME 29, ¶ 30, 15 A.3d 725, quoting Me. Educ. Ass'n v. Me. Cmty. College Sys. Bd. of Trs., 2007 ME 70, ¶¶ 17-18, 923 A.2d 914.
In light of the discussion above, the closing of the Estate is not "clearly inconsistent" with plaintiffs pursuit of this claim. Moreover, it does not appear that plaintiff has gained an unfair advantage as a result of closing the estate prior to final resolution of this action. The personal representative's representations to the probate court in the Closing Affidavit, that the Estate's assets had been distributed arid that there were no outstanding liabilities may not extinguish this claim as a matter of law but may nonetheless be relevant facts at trial.
IV. Order
Accordingly, it is hereby ordered and the entry shall be: "Plaintiffs motion for summary judgment is denied. Defendant's motion for summary judgment is denied."
SO ORDERED.