Opinion
No. 07-4012.
February, 2008, November 26, 2008.
MEMORANDUM OF DECISION AND ORDER ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
INTRODUCTION
This action presents the plaintiff's effort to enforce a signed, written agreement entered into by the parties to resolve disputes that had arisen in their business relationship. The plaintiff, Eamon O'Marah, contends that the agreement included all material terms, and was therefore binding and enforceable, and that the defendant repudiated the agreement without any justification to do so. The defendant, T. Roderick Walkey, contends that the document the parties signed was merely a draft or offer, not a binding agreement, or that it was subject to a condition that did not occur. Before the Court is the plaintiff's motion for summary judgment. For the reasons that will be explained, the motion will be allowed.
BACKGROUND
The materials submitted in connection with the present motion and opposition provide the following factual background. In May of 2003 the plaintiff Eamon O'Marah formed Blue Chip Properties, LLC ("BCP"), a Massachusetts Limited Liability Company in the real estate development business. Later that year defendant T. Roderick Walkey joined the business and became a member, with a fifty percent ownership interest. The parties entered into an operating agreement, which was later superceded by a second amended operating agreement, dated April 4, 2006. The second amended operating agreement, like its predecessor, provides that any disputes arising under it will be resolved by arbitration.
Most of the facts that are material to the present motion consist of the contents of documents, particularly e-mails and attachments. As to the few material facts that appear by affidavit, this recitation adopts the version most favorable to the defendant, where such version appears to be based on personal knowledge. The Court notes that Walkey's response to O'Marah's statement pursuant to Superior Court Rule 9A(b)(5) purports to dispute a number of O'Marah's factual assertions without citing any evidentiary material establishing the claimed dispute. In many of those instances, the claimed dispute appears to be a matter of interpretation or characterization of a document; in those cases the Court has relied on the contents of the document. In other instances, the claimed dispute relates to the truth of facts stated in an affidavit, but no contrary material is cited. In such instances, the rule provides that the moving party's assertion of fact is deemed admitted. See Sullivan v. Liberty Mut. Ins. Co., 44 Mass. 34, 46 n. 18 (2005); Dziamba v. Warner Stackpole, 56 Mass. App. Ct. 397, 400-401 (2002). The Court notes further that the defendant has not provided "a concise statement of any additional material facts as to which the opposing party contends there is a genuine issue to be tried," with record references, as permitted by Superior Court Rule 9A(b)(5), but has nevertheless submitted affidavits in support of his opposition, and has referred to those affidavits in his memorandum. In the exercise of discretion, despite the failure to comply with the rule, the Court has considered the portions of those affidavits submitted with the motion package that present facts that appear to be within the personal knowledge of the affiant. Some of the material presented in the affidavits does not fit that description, but rather appears to be beyond the personal knowledge of the affiant, or expresses legal conclusions. In this regard the Court notes particularly the assertions in the second affidavit of George Price as to the understandings or state of mind of other individuals, and as to whether the agreement was binding, and certain similarly conclusory statements in the affidavits of Dan Gaquin and of the defendant. The Court disregards such material.
O'Marah's role in BCP has been to serve as manager of day-to-day operations, receiving a salary for those efforts; Walkey's role has been to provide funding. Beginning in early 2005, BCP principally focused on a project in Rhode Island referred to as the "Providence Project." In 2007, various disputes arose between the parties in connection with the operation and management of BCP. On June 8, 2007, O'Marah withdrew as manager of BCP. Thereafter, the parties negotiated in an effort to resolve their disputes. Walkey was represented in these negotiations by Attorneys Peter Biagetti and George Price of Mintz Levin Cohn Ferris Glovsky Popeo. O'Marah did not have his own counsel when these negotiations began; Lorne McDougall, of Edwards Angel Palmer Dodge, who had served as corporate counsel for BPC, "agreed to assist the parties during their settlement discussions," according to his affidavit.
Walkey purports to dispute this point, but provides no citation to any evidentiary material. The Court therefore deems O'Marah's assertion admitted pursuant to Rule 9A(b)(5).
Among the issues in dispute, it appears, were claims made by Walkey that O'Marah was pursuing on his own behalf certain projects that should have been pursued on behalf of BCP, that he had failed to provide Walkey with adequate information, and that O'Marah had mismanaged assets of BCP; and claims made by O'Marah that Walkey had failed to meet his commitments regarding providing financing.
Walkey purports to dispute this statement "to the extent that" it "concludes that Mr. Lorne McDougall's affidavit is entirely accurate, or that Mr. McDougall did not act as Mr. O'Marah's attorney throughout the settlement negotiations." Here again, however, Walkey has failed to cite any evidentiary material establishing a dispute on this point. The Court therefore deems O'Marah's assertion admitted.
Among the issues discussed in the negotiations was the allocation of real estate development projects and opportunities that each party would pursue after the settlement. McDougall's affidavit indicates that prior to August 21, 2007, when O'Marah retained Attorney Christopher Moore of Goodwin Proctor to represent him, and McDougall withdrew from the process, the parties had agreed on certain terms: O'Marah would transfer his interest in BCP to Walkey and would make a cash payment to him; BCP would continue to pursue the Providence Project; O'Marah would be free to pursue another project referred to as the "Ames Hotel"; and the parties would exchange at least limited releases.
Walkey purports to dispute that the parties had agreed on these terms, but here again has provided no citation to any evidentiary material. The Court therefore deems this point admitted.
On August 22, 2007, Biagetti sent a draft settlement agreement by e-mail to Moore. The draft provided that O'Marah would pay Walkey $70,000 and "convey his ownership interest in BCP to Walkey in exchange for Walkey's release of claims against O'Marah as specified below." The draft set a schedule for payment of the money, and provided for execution of a yet to be drafted Conveyance Agreement. It also set out the terms of mutual releases, phrased very broadly, to include all claims "whether known or unknown, of whatever kind and nature," with the exception of claims brought by third parties in relation to BCP, as well as claims of breach of the settlement agreement. The draft made no reference to any proposed exhibits, and did not include or reference any lists of real estate development projects. Biagetti's cover e-mail referred to the attachment as a "discussion draft," and acknowledged that the "Conveyance Agreement" had yet to be drafted, but noted that "we both intend for that to be very straightforward." He asked for confirmation by the end of the day "that the principles outlined here are acceptable to Eamon," and represented that he would do the same with Walkey. He went on, "[i]f we accomplish that, our colleagues can draft the Conveyance Agreement, and you and I should be able to finalize any wording changes by noon tomorrow."
Moore responded by e-mail the same day, saying that he would probably "suggest some additions" on specified points, and that "I also want the K to make clear that the parties are fully aware and advised of each party's ongoing and prospective business endeavors that may have their genesis during the brief term of this ill-fated marriage, and I will be proposing additions to the recitals and some further release language to that effect. I don't expect any of these additions will cause you or your client any heartburn." The next morning, Moore sent Biagetti an e-mail with proposed revised release language, which added reference to claims "concealed or hidden," and to claims "arising from, based upon, relating in any way to any current or pre-existing affiliation, business relation, association, partnership, joint venture, indebtedness, liability, economic interest, or any other relationship of any nature whatsoever, including without limitation . . . the real estate development projects and business opportunities listed on Exhibit B and Exhibit C." The prospect of exhibits listing projects was thus introduced into the negotiation by Moore, on behalf of O'Marah, to specify projects included in Walkey's release of O'Marah.
On Friday, August 24, 2007, at 4:26 p.m., Moore sent Biagetti an e-mail attaching a marked-up draft of the agreement, showing changes proposed from Biagetti's draft of August 22, 2007. This version made references to exhibits A, B, and C, in the following context. The third recital paragraph stated: "Whereas, Walkey and O'Marah have various disagreements and disputes with regard to their respective rights and obligations as Members of BCP and their respective rights and obligations with respect to the real estate development projects and business opportunities listed on Exhibit A (the `Projects')." The fourth and fifth recital paragraphs expressed the parties' intention to "terminate their current business relationships arising out of their status as members in BCP and the Projects," and their desire to release each other "in respect of . . . BCP and the Projects." The sixth recital paragraph stated: "Whereas Walkey wishes and intends to continue as a Member of BCP and to pursue through BCP real estate development projects and business opportunities, including those projects and opportunities listed on Exhibit B (the `BCP Projects')." The seventh recital paragraph stated: "Whereas O'Marah wishes and intends to terminate his relationship with BCP and Walkey and to continue pursuing real estate development projects and business opportunities through his own efforts and those of other entities, including those projects and opportunities listed on Exhibit C (the `O'Marah Projects')."
Succeeding recitals stated that O'Marah wished to release any interest he had in the BCP Projects, and that BCP and Walkey wished to release any interest they may have in the O'Marah Projects. There followed broad mutual release language, including "any unknown claim, whether concealed or hidden," arising from "any current or pre-existing affiliation . . . or any other relationship of any nature whatsoever, including without limitation BCP . . . and the real estate development projects and business opportunities listed on Exhibit A," with the exception of claims based on claims brought by third parties. Paragraph 6 provided that O'Marah transfers to Walkey his interest in BCP, and that the parties "shall execute all documents necessary to effectuate the transfer of the transferred interests, with such documents to be identified on Exhibit D hereto." Paragraphs 8 and 9 provided that "BCP's and Walkey's ongoing involvement in the BCP projects does not constitute or give rise to a breach of any duty owned to O'Marah," and that "O'Marah's ongoing involvement in the O'Marah Projects does not constitute or give rise to a breach of any duty owed to BCP and/or Walkey."
Moore and Biagetti exchanged other e-mails as well during this period. Those communications focused on whether Mintz Levin could properly represent BCP in connection with the settlement agreement, and on language relating to indemnification of each party in connection with third party claims. An e-mail from Moore to Biagetti at 3:18 p.m. on the afternoon of August 24, 2007, set forth a list of liabilities of BCP, and offered "[w]e'd be happy to put these into some sort of schedule as an exhibit to the agreement if you'd like." Other than that statement, the communications made no reference to exhibits to the agreement, and none of the communications referenced any need to compile lists of projects. Later the same afternoon, Moore sent the draft described supra.
Moore's disclosure of liabilities did not sit well with Biagetti, who responded that "this latest ambush by Eamon will not simply scuttle settlement, it will bring Rod's claims on with a fury." A series of e-mails ensued regarding allocation of the liabilities and indemnification from third party claims, without agreement. At 5:57 p.m. on August 24th, Biagetti announced that "[w]e'll file our arbitration demand on Monday, with a lawsuit for security in aid of arbitration to follow." Later that evening, after further exchanges that did not reference any issues regarding exhibits or lists of projects, Biagetti retreated, saying: "This should have been — and perhaps still could be — a clean and simple agreement, with one admitted wrinkle" relating to indemnification for third party claims. He went on to state: "Before filing on Monday, I'll parse your proposed language and see how much of it we can make work, but as I've tried to be candid about before, the cash demand will likely be higher." Moore responded the next day, Saturday, elaborating on his views regarding indemnification and contribution for third party claims, offering to accept service of an arbitration demand if settlement could not be reached, and noting that he would be on vacation the following week, but available by telephone and e-mail.
The following Tuesday, August 28, 2007, Moore sent an e-mail to Biagetti saying that he was "checking in . . . to see whether we're going to continue our settlement efforts." Biagetti responded "looks like we'll be filing the demand, . . . but also providing you with a mark-up of your last draft." later the same day, Biagetti sent Moore a revised draft agreement, with a cover e-mail saying "this counter is contingent on reaching final agreement on all wording in this draft and in the transfer document still to be negotiated. . . . If Eamon will accept these terms, you and I and our corporate colleagues should continue to work on what I think would be only a few remaining issues." He went on to say that "I am about to serve the arbitration demand on Eamon via hand-delivery to your office."
The attached draft included reference to Exhibits A and B, but rearranged them, so that Exhibit A would be a list of the "BCP Projects," as to which the parties had disagreements, and Exhibit B would be a non-exhaustive list of the "O'Marah Projects," which O'Marah would continue to pursue. The draft recited that O'Marah wished to relinquish all interest in the BCP Projects, and that BCP and Walkey wished to release all interest in the O'Marah projects. It set forth release provisions essentially unchanged from Moore's draft, including unknown, concealed and hidden claims, but removed from the release provision language regarding indemnification and contribution for third-party claims, leaving that to a separate provision. That separate provision acknowledged each party's retention of rights to pursue claims arising from third party claims, as well as claims of breach of the agreement. The draft went on to provide that "O'Marah hereby transfers to Walkey any and all membership interests that he currently holds in BCP," and that "the Parties shall execute all documents necessary to effectuate the transfer . . . with such documents to be identified on Exhibit D hereto." The draft proposed payment by O'Marah of $80,000, instead of the $70,000 previously proposed. Other provisions remained similar to Moore's draft in all respects relevant here.
The draft says that "O'Marah wishes and intends to terminate his relationships with BCP and Walkey and to continue pursuing real estate development projects and business opportunities through his own efforts and those of other entities, including those projects and opportunities listed on Exhibit B." It does not describe Exhibit B as an exhaustive list of the projects O'Marah would pursue.
This draft does not reference any Exhibit C.
Under a cover letter of the same date, August 28, 2007, Biagetti filed with the American Arbitration Association ("AAA"), and served on O'Marah, through Moore, a demand for arbitration of the disputes between Walkey and O'Marah under the operating agreement. Under the rules of the AAA, O'Marah had fifteen days to respond, beginning with his receipt of formal notice from the AAA. Meanwhile, Moore and Biagetti continued to discuss the settlement agreement by telephone and e-mail. On Thursday, August 30, 2007, Moore sent Biagetti a further revised draft. The changes related to indemnification and contribution for third party claims. With respect to the proposed exhibits, the only changes were in labeling; exhibit A was renamed "the Projects"; and Exhibit D was renamed Exhibit C. The cash payment was revised back to $70,000. Biagetti sent back a further revised draft that afternoon, with a cover e-mail stating that "if this counter is not accepted without condition by [O'Marah] by tomorrow at 4 pm, it is withdrawn, and any settlement demand after that will include a money term of at least $90K." Biagetti's changes related, again, primarily to third party claims, and did not affect exhibits. Moore responded soon thereafter, saying that "I think we're fine with your suggestions but will confirm with Eamon," and asking for clarification on certain points, again unrelated to any exhibits.
That evening, Moore sent another e-mail confirming that O'Marah had agreed to the latest version. He reiterated his request for certain clarifications, and stated, "I will assume unless I hear differently from you that the redline reflects your client's firm offer and commitment to conclude a settlement on the terms set forth therein." He added, "Please let me know how you wish to proceed with respect to execution. Eamon has instructed me to let you know that he is willing and able to sign this tomorrow at Mintz without my presence. If that is to occur, I will attempt to arrange for one of my colleagues to accompany him." He went on, "I recall you saying, Peter, that you guys were going to take a run at the transfer docs. Please let me know if that is still the case." Biagetti responded the same evening with the requested clarifications, and said that "We will indeed provide a draft of the transfer documents, but I'll defer to Dan on timing there. In the meantime, and because I'm in a depo tomorrow, your colleague should coordinate with George [Price] on finalizing and signing the Agreement, subject of course to mutually acceptable transfer documents."
Mintz Levin Attorney Dan Gaquin.
Early the next morning, Friday, August 31, 2007, Biagetti sent another e-mail, saying, "If we do get to a final and accepted settlement agreement today (subject of course to an acceptable transfer agreement), can you confirm for George and me that Eamon will physically have vacated the Providence office, and will have left behind BCP's fixtures, furniture, equipment and any other asets, by Monday afternoon?" Moore responded, confirming that O'Marah would do so, and added to George Price, "should I expect to receive drafts of the transfer docs from you today? I don't think we need to hold off signing a Settlement Agreement until the transfer docs are finalized but you guys may have a different view." Biagetti responded, "Agreed, though we may also need to make everything contingent on acceptable exhibits."
Later that morning, George Price wrote to Moore, "I would like to get [O'Marah]'s signature today at our office. To that same end, I would ask that you take a first stab at drafting Exhibits A and B to the settlement agreement. Today's signed agreement, as noted by Peter below, would be contingent upon us reaching agreement on the exhibits." He added that Dan Gaquin would draft the transfer documents, "which may, or may not be sent to you by the end of the day today." The same morning, Price sent Moore "a draft Assignment of Membership Interest in BCP," which referenced three exhibits that Price proposed Moore draft. Soon thereafter, Price sent Moore what he described as "the final changes which should finalize the draft settlement agreement, subject to mutually agreeable exhibits to the settlement agreement. Please let me know you approve of these and when we can expect to meet with [O'Marah] for signature."
The exhibits were described as a "Current BCP Balance Sheet," "Current Assets of BCP and 110 Providence," and "Leases, Contracts and Liabilities of BCP and 110 Providence." In an affidavit submitted in opposition to the present motion, but not referenced in the response to the statement pursuant to Superior Court Rule 9A(b)(5), Attorney Gaquin, who prepared the draft but was not involved in the negotiations, explains that he contemplated that O'Marah would provide the three exhibits because Gaquin understood them as representations by O'Marah as to "the current financial condition of Blue Chip as the basis for the consideration to be agreed upon."
Telephone conversations led to further changes in the agreement, as well as a plan for O'Marah to appear at the offices of Mintz Levin at 2:00 p.m. that day to sign. In an e-mail at 1:27 p.m., Price told Moore, "As we discussed, you have also agreed to draft the first round of exhibits A and B to this Agreement, and exhibits A, B, and C, to the Transfer Agreement, which you will provide early next week. We also agreed that this Settlement Agreement is contingent upon the parties agreeing upon the attached exhibits to this Settlement Agreement which have yet to be drafted, and finalizing the Transfer Agreement and it[s] exhibits."
At approximately 2:00 that afternoon, O'Marah came to the office of Mintz Levin, accompanied by his recently engaged litigation counsel, Douglas Brooks. George Price presented O'Marah with five copies of the settlement agreement for signature, and O'Marah signed each one. In the course of the meeting, according to the affidavit of Attorney Price, both Brooks and O'Marah acknowledged that the agreement "was contingent upon the parties reaching agreement on the exhibits to the `settlement agreement' and the Transfer Agreement and its exhibits," and agreed to work on preparation of those documents "in the early days of the following week." Also, according to the affidavit of Attorney Price, O'Marah asked whether the arbitration proceeding would be stayed or dismissed; Price responded that it would not until the exhibits had been drafted and agreed upon.
On the next business day, Tuesday, September 4, 2007, Walkey signed the five original copies of the agreement, each twice, once for himself and once for BCP. In an affidavit submitted in opposition to the present motion, but not referenced in his response to O'Marah's statement pursuant to Superior Court Rule 9A(b)(5), Walkey asserts that "On September 4, 2007, when I signed [the agreement] . . . I never intended or believed that the document I was signing was a lawfully binding contract or that Mr. O'Marah and I had reached a `meeting of the minds' on any agreement because Mr. O'Marah had still not fully disclosed information I believed to be an essential basis for any agreement to binding terms, namely, the business opportunities he had diverted from BCP, as well as the current assets and liabilities of BCP. . . . Further, at the time I signed [the agreement] . . . I was willing to accept a $70,000 payment from Mr. O'Marah only if Mr. O'Marah proved to me and my attorneys that he had not diverted any other projects and/or assets of BCP beyond what I already had discovered. . . ."
The signed agreement is dated August 31, 2007, and identifies that date as its "Effective Date." It recites the background, including that the parties "have various disagreements and disputes with regard to their respective rights and obligations as Members of BCP and their respective rights and obligations with respect to the real estate development projects and business opportunities listed on Exhibit A (the `Projects')"; that the parties wish "to terminate their current business relationships arising out of their status as members in BCP and the Projects"; that they wish to release each other "in respect of the formation, development, ownership . . . of BCP and the Projects"; that Walkey "intends to pursue through BCP and his own efforts various real estate development projects and business opportunities"; that O'Marah "intends to terminate his relationships with BCP and Walkey and to continue pursuing real estate development projects and business opportunities through his own efforts and those of other entitites, including those projects and opportunities listed on Exhibit B (the `O'Marah Projects')"; that O'Marah "wishes to release . . . any and all membership interests he has in BCP and any interests he has or may have in the Projects," with the specified exception of BCP's continuing obligations to O'Marah under the operating agreement "including without limitation the indemnification obligations owed to O'Marah as set forth in Article IX of the Operating Agreement"; that BCP acknowledges those obligations to O'Marah; and that BCP and Walkey "each desire to release and relinquish for all time any and all interests each of them has or may have in any of the O'Marah Projects."
The signed agreement then goes on to set forth mutual releases, each subject to an explicit exception for indemnification for third party claims. Subject to that exception, BCP and Walkey release O'Marah "with respect to each and every action, suit, claim, demand . . . of every nature and description whatsoever, whether known or unknown, including without limitation any unknown claim, whether concealed or hidden, whether direct or derivative . . . that BCP, Walkey, or either of them in the past had or now has . . . including without limitation any Claim arising from . . . any current or pre-existing affiliation . . . or any other relationship of any nature whatsoever, including without limitation BCP . . . and the real estate development projects and business opportunities listed on Exhibit B." Subject to the same exception, O'Marah releases BCP and Walkey from a similarly all-encompassing list of possible claims, know or unknown, concealed or hidden, "including without limitation any Claim arising from . . . any current or pre-existing affiliation . . . including without limitation BCP and the agreements organizing and governing BCP . . . and the real estate development projects and business opportunities of BCP." The release of BCP and Walkey makes no reference to any exhibit.
The agreement then sets forth provisions regarding third party claims; shifting of attorneys fees and costs in case of suits on such claims or for breach of the agreement; cooperation; covenants not to sue; transfer of interests; consideration of $70,000 to be paid by O'Marah to Walkey "on the Transfer date"; non-disparagement; confidentiality; liquidated damages in case of breach of certain provisions; and so-called "miscellaneous provisions." The transfer of interests provision, paragraph 8, provides that "O'Marah hereby transfers to Walkey any and all membership interests that he currently holds in BCP . . . with the effective date of such transfers being September ___, 2007. . . . On or about the Transfer Date, the Parties shall execute all documents necessary to effectuate the transfer of the Transferred Interests, with such documents to be identified on Exhibit C hereto and to become part of this Agreement. Until the Transfer Date, O'Marah will preserve and leave in place all furniture, fixtures, equipment and other tangible assets of BCP."
Among the "Miscellaneous Provisions" are the following. Paragraph 16 recites that the parties have fully discussed the agreement with counsel, understand its terms, and enter into it "voluntarily because they believe those terms to be fair and reasonable." Paragraph 17 recites that "All of the exhibits attached hereto are hereby incorporated by reference as though fully set forth herein." Paragraph 18 recites that the parties "intend the Settlement to be a final and complete resolution of all the Settled and Released Claims," and that its terms were negotiated at arms' length in good faith and after consultation with counsel." Paragraph 22 recites that "This Agreement and its exhibits constitute the entire agreement among the Parties concerning the settlement," and that each party represents that he or it has relied on no other statement. It goes on, "Each party also represents that the decision to enter into the settlement was made without regard to any future prospect, business opportunity, or value arising out of, relating to, or consisting of the business of BCP or any of the O'Marah Release Parties that has not been expressly set forth herein, and each party further represents that no information concerning such future prospects, opportunity, or value not expressly set forth herein would have influenced the decision to enter into the settlement."
Soon after Walkey signed the agreement, Price sent an e-mail to Moore and Brooks informing them that Walkey had signed, and adding, "Please let me know if you would like a signed original and which counsel it should be sent to." Moore responded, "you can send it to me," and added, "I'm at a client today but will be back in the office tomorrow and will turn to the exhibits and the transfer documents." Minutes later, Price sent another e-mail, saying that "We are trying (right at this moment) to get into the sales center for BCP in downtown Providence. Can you tell us where [O'Marah] has left the key to this office." A few minutes later, he added "please understand that we need office access today to verify Eamon's compliance with the Settlement Agreement." Brooks responded with instructions for Walkey to get access to the office, and Walkey did so.
On the afternoon of September 5, 2007, Price sent Moore a scanned copy of the agreement as signed by O'Marah, with a cover e-mail asking "when we can expect to receive drafts of the exhibits and your redline of the transfer agreement along with draft exhibits. Time is obviously of the essence as this settlement remains contingent upon reaching agreement on these remaining items." Later that afternoon, Price sent Moore a scanned copy if the agreement as signed by Walkey, along with a cover e-mail reiterating that the document "is being provided with the agreed upon understanding that the settlement has been, and remains contingent upon, the parties agreeing upon and finalizing mutually acceptable exhibits to this settlement agreement, a mutually acceptable transfer agreement, and mutually acceptable exhibits to the transfer agreement."
On the afternoon of September 5, 2007, Moore sent Biagetti an e-mail providing information obtained from O'Marah regarding assets and liabilities of BCP, and listing the projects that he proposed to include on Exhibits A and B. The list for Exhibit A consisted of the Providence project, a project called "Nashua Street," and "Any project or opportunity explored or pursued by Walkey, either directly or indirectly, independently of his membership in BCP" pursuant to a specified provision of the operating agreement. The list for Exhibit B consisted of the Ames Hotel, a project called the "lobby job," and "Any project or opportunity explored or pursued by O'Marah . . . independently of O'Marah's membership in BCP and following O'Marah's resignation as Manager on June 8, 2007," pursuant to the same provision.
Biagetti responded that evening, saying "Just left you a voice mail. Please call when you can." According to the affidavit of Douglas Moore, Biagetti's voice mail, which Moore listed to, related to an entity known as Eastat Realty Capital, LLC, which had been founded on August 1, 2007. Walkey had learned of O'Marah's involvement in that entity sometime on that day or the previous day. Biagetti's voice mail requested disclosure of it on Exhibit B, and also requested disclosure of whether O'Marah was drawing income from it in addition to income he received from the Ames Hotel project.
Walkey's response to O'Marah's statement pursuant to Superior Court Rule 9A(b)(5) does not purport to dispute this summary of the voicemail.
Sometime the next day, Moore and Price spoke by telephone. According to Price's account of the conversation, as set forth in his second affidavit, he demanded that Exhibit B include all projects O'Marah was currently involved in that flowed from his work with BCP; Moore indicated he would advise O'Marah not to disclose that information, proposing instead that O'Marah provide a representation that none of his projects was the product of his work at BCP; and Price indicated that he would discuss the matter with his client.
Price's affidavit refers to the conversation as between Moore and "Mr. Walkey's counsel," leaving unclear whether the conversation was with Price or Biagetti, and thus whether Price has personal knowledge of it, as required by M. R. Civ. P. 56(e). Because Moore's subsequent e-mail to Biagetti refers to a telephone conversation with Price, the Court infers that it was Price who had the conversation he describes, and the Court has therefore considered his account.
E-mail exchanges resumed on the morning of September 7, 2007, with an inquiry from Biagetti to Moore for "any update here?" Moore responded that "I was waiting to hear from you guys re Exhibit B, following my conversation yesterday with George." Price responded soon thereafter, saying "I told you I would talk to our client about your email suggesting what exhibit B might contain, but at the end of our call I asked for, and you promised me exhibits, the transfer agreement and its exhibits by the end of the day yesterday. . . . If you can send drafts of all the exhibits and the transfer agreement with exhibits ASAP, we will review them immediately and get back to you."
The next communication, as far as the record discloses, was from Biagetti, at 1:14 p.m. that day, as follows: "As we discussed, given, among other things, the information uncovered this week and the unacceptable state of the agreement and exhibit drafting, my client's most recent offer of settlement is withdrawn." Moore responded that the agreement was binding, that the exhibits either had been or could be finalized, that O'Marah was willing to make a representation that none of his current projects "is or ever was an opportunity available to BCP," that he was prepared to provide comments on the draft transfer documents, and that "the only issue your client is raising now concerns the cash consideration to be paid by Eamon," which "was a term of the settlement fully and finally concluded by the written and executed Settlement Agreement." Accordingly, he concluded, "I see no foundation for your client's position that his `offer of settlement is withdrawn.'"
O'Marah initiated this litigation on September 12, 2007. The complaint alleges that Walkey has breached the settlement agreement and the implied covenant of good faith and fair dealing by failing to cooperate to effectuate the terms of the agreement, and by continuing to proceed with his arbitration demand. The complaint seeks a declaration that Walkey is obligated to comply with the terms of the settlement agreement, an order staying the arbitration, and an order "enforcing the Settlement agreement, compelling Walkey to cooperate in the finalization of the transfer documents and compelling Walkey to dismiss the arbitration proceeding." Walkey responded, on September 24, 2007, by filing an answer and multi-count counterclaim, asserting the various claims for which he had previously demanded arbitration, along with a claim for declaratory judgment that the settlement agreement is void, a claim for abuse of process, and a claim to rescind the settlement agreement on the ground of fraud in the inducement.
A flurry of motions followed, including a motion by O'Marah to stay the arbitration; a motion by Walkey for pre-judgment security; a special motion by O'Marah to dismiss the abuse of process count of the counterclaim under the anti-SLAPP statute; and a motion by O'Marah to dismiss the other counts of the counterclaim for failure to state a claim. On October 19, 2007, after a hearing, and having reviewed the agreement and the series of e-mails that preceded its execution, the Court denied Walkey's motion for pre-judgment security and allowed O'Marah's motion to stay the arbitration. After a further hearing, in a memorandum of decision and order dated November 19, 2007, the Court allowed O'Marah's special motion to dismiss the abuse of process claim and his separate motion to dismiss for failure to state a claim with respect to those counts of the counterclaim that were subject to arbitration under the operating agreement. Thus, the claims that remain pending are those of each party for declaratory judgment with respect to the effect of the settlement agreement, O'Marah's claim for enforcement of the agreement, and Walkey's claim for rescission of the agreement based on fraud in the inducement. O'Marah's present motion seeks summary judgment on all his claims, on the ground that the settlement agreement is a binding and enforceable contract, which Walkey repudiated without justification. The outstanding exhibits, he contends, were not material to the agreement. Walkey's response, in substance, is that the agreement, although formally signed by both parties, was merely a draft or offer, with no binding effect until such time as the exhibits were drafted and agreed to; that agreement on the exhibits was a condition precedent; or at least that a genuine dispute of material fact exists on the matter, to be resolved by trial. After careful review of all materials submitted, the Court agrees with O'Marah.
Both sides have included jury claims in their pleadings. The Court doubts that a jury trial would be available on any of the remaining claims. See St. Fleur v. WPI Cable Systems/Mutron, 450 Mass. 345, 353 (2008) ("Typically, there is no right to a jury trial for actions seeking specific performance of a contract or for actions challenging the existence of a contract on the ground of fraudulent inducement").
DISCUSSION
Summary judgment is appropriate when there is no genuine issue of material fact and, viewing the evidence in the light most favorable to the nonmoving party, the moving party is entitled to judgment as a matter of law. See Mass. R. Civ. P. 56(c), 365 Mass. 824 (1974); Brooks v. Peabody Arnold, 71 Mass. App. Ct. 46, 50 (2008); Gray v. Giroux, 49 Mass. App. Ct. 436, 438 (2000). "An issue of fact is `genuine' if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party." Hickson Corp. v. Northern Crossarm Co., 357 F. 3d 1256, 1260 (11th Cir. 2004). A party who seeks to avoid summary judgment based on a claimed factual dispute has the burden to offer evidence of specific facts showing the existence of a genuine dispute. For this purpose, "bare assertions and conclusions regarding a [party's] understandings, beliefs and assumptions" are insufficient. Polaroid Corp. v. Rollins Envtl. Servs. (NJ), Inc., 416 Mass. 684, 696 (1993).
The question presented here is whether the parties entered into a binding contract. That question may be resolved by the Court as a matter of law if "the evidence consists only of writings, or is uncontradicted." Situation Mgmt. Sys., Inc. v. Malouf, Inc., 430 Mass. 875, 879 (2000), quoting Bresky v. Rosenberg, 256 Mass. 66, 75 (1926). Otherwise, it is a question of fact for trial. The evidence offered here consists of the contemporaneous written record of the negotiations between the parties, the signed agreement, and a set of affidavits, as summarized supra. The factual matters addressed in the affidavits consist of (1) comments made in the meeting at which O'Marah signed the agreement; (2) the contents of certain telephone communications between the attorneys after the agreement had been signed, and certain unilateral intentions and understandings on the part of defendant Walkey and Attorneys Price and Gaquin. As to the oral communications, where there is any dispute, the moving party accepts, and the Court has set forth supra, the defendant's version for purposes of this motion. Thus, the only asserted obstacle to resolution of the dispute on summary judgment is the defendant's and his attorneys' assertions of their own intentions and understandings. These assertions do not establish a genuine dispute of material fact.
"It is axiomatic that to create an enforceable contract, there must be agreement between the parties on the material terms of that contract, and the parties must have a present intention to be bound by that agreement." Situation Mgmt. Sys., Inc. v. Malouf, Inc., 430 Mass. at 878; see McCarthy v. Tobin, 429 Mass. 84, 87 (1999). Courts determine the question of present intention to be bound based on mutual objective manifestations of intent, not based on unilateral after-the-fact assertions as to subjective state of mind. See T. F. v. B. L., 442 Mass. 522, 527 (2004) ("The defendant's subjective intent is irrelevant when she knows or has reason to know that her objective actions manifest the existence of an agreement"); Brewster Wallcovering Company v. Blue Mountain Wallcoverings, Inc., 68 Mass. App. Ct. 582, 596 n. 35 (2007) (binding contract arises when "the parties manifested the intent, viewed objectively, to be bound at the time of contract formation, notwithstanding either party's subjective intent"); Community Builders, Inc. v. Indian Motorcycle Associates, Inc., 44 Mass. App. Ct. 537, 548 (1998) (question of parties' intention is one of law for the court, to be decided based on language of agreements); compare Basis Tech. Corp. v. Amazon.com, Inc., 71 Mass. App. Ct. 29, 36 n. 5 (2008) (where trial court had found intent to be bound after evidentiary hearing, Appeals Court reviewed that finding under "clearly erroneous" standard applicable to factual findings because both parties argued for that standard).
Among the objective manifestations to be considered is the extent to which the agreement is complete, addressing all aspects of the matter in dispute, or leaves some issues for further negotiation. For an agreement to be binding, "[i]t is not required that all terms of the agreement be precisely specified, and the presence of undefined or unspecified terms will not necessarily preclude the formation of a binding contract. . . . The parties must, however, have progressed beyond the stage of `imperfect negotiation.'" Situation Mgmt., 430 Mass. at 878, citing Lafayette Place Assocs. v. Boston Redevelopment Auth., 427 Mass. 509, 517-518 n. 9 (1998), cert. denied, 525 U. S. 1117 (1999), and Rosenfield v. United States Trust Co., 290 Mass. 210, 217 (1935).
"While it is true that the parties' intention to execute a final written agreement `justifies a strong inference that the parties do not intend to be bound' until the agreement is executed, it is also true that `if all the material terms . . . have been agreed upon, it may be inferred that the writing to be drafted and delivered is a mere memorial of the contract.'" Situation Mgmt., 430 Mass. at 879-880, quoting Rosenfield, 290 Mass. at 216. Where "`the parties have agreed upon all material terms, it may be inferred that the purpose of a final document which the parties agree to execute is to serve as a polished memorandum of an already binding contract.'" McCarthy v. Tobin, 429 Mass. at 87, quoting Goren v. Royal Invs., Inc., 25 Mass. App. Ct. 137, 140 (1987). This is particularly so where "`norms exist'" for the "`customary resolution'" of the issues left outstanding, or the parties "`specify formulae and procedures that, although contingent on future events, provide mechanisms to narrow present uncertainties.'" McCarthy, supra, at 87, quoting Goren, supra, at 141, and Lafayette Place, 427 Mass. at 518.
Here, the parties negotiated at length, through counsel, and reached agreement on the language of a very formal document. Immediately thereafter, at the defendant's insistence, the plaintiff signed five original copies. The defendant did the same on the next business day, and then immediately demanded that the plaintiff perform certain aspects of his obligations under the agreement. These circumstances unequivocally indicate both parties' intent to be bound.
The signed agreement recited the background, as well as the intentions of the parties, in considerable detail. It then set forth, in similar detail, their undertakings to each other, including O'Marah's payment of a specified dollar amount and transfer of all ownership interest in BCP, the exchange of mutual releases in precise terms, and the exception from those releases for claims arising from third party claims, along with very precise provisions regarding such claims. The detailed provisions of the document itself, like the circumstances surrounding its execution, indicate a mutual present intention to be bound.
As the defendant points out, the document called for three exhibits that had not been prepared and were not attached at the time of execution. The parties acknowledged, in both e-mail and in-person oral communications, that the agreement was "contingent on" and "subject to" those exhibits. The agreement itself establishes, however, that the exhibits were not nearly as central to the deal as the defendant contends. Under the terms of the signed agreement, Exhibit A was to set forth a list of the projects that, in addition to BCP itself, were the subject of their disputes, that gave rise to the relationships they wish to terminate, and in which O'Marah wishes to terminate his interests. In that sense, Exhibit A was to be part of the background recitations, not part of the operative terms of the agreement. Indeed, the operative terms — the provisions that set out the obligations of each party — make no reference to Exhibit A. Perhaps most significant, O'Marah's release of Walkey and BCP does not mention Exhibit A or "the Projects" to be listed on it.
Exhibit B was to set forth "the "O'Marah Projects," which O'Marah intends to pursue on his own, and in which Walkey and BCP wish to release any interest. In this respect, it too was to be part of the background recitations. Exhibit B is referenced in one place in the operative provisions, in the release of O'Marah by BCP. Its role there, however, is illustrative rather than limiting or defining; the release encompasses all claims, known or unknown, "whether hidden or concealed," "including without limitation" claims arising from "any current or pre-existing affiliation . . . including without limitation . . . the real estate development projects and business opportunities listed on Exhibit B." Under this language, Walkey's release of claims arising from any particular project or opportunity does not depend on whether it appears on Exhibit B — the release is unlimited, and applies to everything, except the third party claims specifically excepted.
It bears repeating that it was O'Marah's counsel, not Walkey's, who first introduced into the negotiations the idea of listing projects on attachments.
Walkey's affidavit asserts, or at least implies, that he expected Exhibit B to contain O'Marah's disclosure of "the business opportunities he had diverted from BCP," and that he expected O'Marah to "prove to me and my attorneys that he had not diverted any other projects and/or assets of BCP beyond what I already had discovered." The agreement Walkey signed belies that assertion. Nothing in it describes Exhibit B in any such terms, or calls for any such proof. Indeed, the provision of such a list or such proof would be entirely inconsistent with the stated and plainly apparent purpose of the document to resolve and release all claims, including claims of diversion of corporate opportunities or assets, whether such claims were known or unknown, including even claims that were hidden or concealed.
Exhibit C, as described in the agreement, was to be a list of "all documents necessary to effectuate the transfer" to Walkey of O'Marah's interests in BCP. It is referenced in the agreement once, in the provision regarding transfer, which requires the parties to execute the documents listed on it. As the e-mail communications by attorneys on both sides repeatedly acknowledged, preparation of the documents necessary to effectuate such a transfer was a technical task for corporate lawyers, but did not affect the substance of the deal. The substance was plainly stated in the agreement: O'Marah transferred his interest in BCP to Walkey, effective upon a yet-to-be specified transfer date within the month of September.
Walkey's and Gaquin's affidavits assert an understanding that the schedules of assets and liabilities of BCP that had been proposed as exhibits to the transfer agreement were crucial to the deal, because Walkey's willingness to accept the $70,000 payment depended on representations from O'Marah as to BCP's financial condition. Here again, the signed agreement, as well as the e-mail communications between attorneys leading to it, belie these assertions. The attorneys negotiated the $70,000 payment without reference to any representations regarding BCP's financial condition, and Walkey signed the agreement providing for that consideration, knowing full well that no exhibits were yet attached.
Walkey argues that agreement on the exhibits was a condition precedent, without which no binding contract existed. "A condition precedent defines an event which must occur before a contract becomes effective or before an obligation to perform arises under the contract. . . . If the condition is not fulfilled, the contract, or the obligations attached to the condition, may not be enforced." Mass. Mun. Wholesale Elec. Co. v. Danvers, 411 Mass. 39, 45 (1991); see Twin Fires Inv., LLC v. Morgan Stanley Dean Witter Co., 445 Mass. 411, 420-421 (2005). Whether a contingency is a condition precedent is a matter of contract interpretation, to be determined based on "the words used by the parties, the agreement taken as a whole, and surrounding facts and circumstances." Mass. Mun. Wholesale Elec., 411 Mass. at 45-46.
Here, the undisputed facts, particularly the provisions of the document itself, as well as the surrounding circumstances, establish that the exhibits were not a condition precedent. The agreement did not contain the sort of "emphatic words" that would indicate a condition precedent, id. at 46, see also McCarthy, 429 Mass. at 88 n. 3, nor did the parties conduct themselves as if they were awaiting performance of a condition before treating the contract as binding. To the contrary, the defendant himself insisted on immediate performance by O'Marah, demanding immediate access to the office of BCP "to verify Eamon's compliance with the settlement agreement."
This is not to say that the references to exhibits had no effect. The agreement called for them, and those requirements, like all other provisions of a contract, must be given effect. See Starr v. Fordham, 420 Mass. 178, 192 (1990). Based on the language of the agreement in the context of the surrounding circumstances, the Court concludes that agreement on the exhibits was not a condition precedent, which would have had to occur before any right or obligation would have arisen under the contract, but rather a condition subsequent, non-occurrence of which would have rendered the agreement voidable after it had taken effect. See McCarthy, 429 Mass. at 88. "`A condition subsequent is a condition which relieves a party of the obligation of further performance' under a valid contract." City of Haverhill v. George Brox, Inc., 47 Mass. App. Ct. 717, 720 (1999), quoting Wood v. Roy Lapidus, Inc., 10 Mass. App. Ct. 761, 764 n. 6 (1980), citing 5 Williston, Contracts § 667 at 145 (3d ed. 1961); see also Restatement (Second) of Contracts, § 230 (1981) (referring to "discharge of obligation"). If a condition subsequent is fulfilled, "the agreement of the parties, rather than then coming into existence, will simply continue to be binding." Hunneman Real Estate Corp. v. Norwood Realty, Inc., 54 Mass. App. Ct. 416, 422 (2002), citing Nigro v. Conti, 319 Mass. 480, 482 (1946); City of Haverhill, 47 Mass. App. Ct. at 719-720. If it is not fulfilled, obligations under it are discharged.
The conclusion that the exhibits were a condition subsequent, failure of which would discharge the parties' obligations, is entirely consistent with Walkey's unwillingness, expressed through his attorneys, to withdraw the arbitration demand until after completion of the exhibits. Although fully intending to be bound as of the time of execution of the agreement, Walkey could nevertheless reasonably anticipate the possibility that an impasse or other obstacle would arise with respect to the exhibits, leading to termination of the agreement and resumption of the dispute. Having paid the filing fee for the arbitration, he could reasonably insist on keeping his demand open pending completion of the exhibits. Such a course was fully in accord with norms for settlement of litigation. See e.g. Basis Tech., 71 Mass. App. Ct. 44; Correia v. DeSimone, 34 Mass. App. Ct. 601, 603-604 (1993).
The undisputed facts establish that Walkey did not exercise a right to void the agreement for failure of the condition subsequent, but rather, that he repudiated the agreement before any such right would have arisen. The parties agreed that O'Marah's counsel would draft Exhibits A and B, and that Walkey's counsel would draft the transfer documents. No time limit was set, beyond the provision for execution on the unspecified September transfer date. The parties' obligation was therefore to complete the process within a reasonable time, not later than the end of September. See Charles River Park, Inc. v. Boston Redevelopment Auth., 28 Mass. App. Ct. 795, 814 (1990). Walkey's counsel (Gaquin) prepared a draft transfer agreement even before the settlement agreement was signed, and called upon O'Marah's counsel to prepare exhibits to it. The day after Walkey signed the agreement, O'Marah's counsel provided Walkey's counsel with his proposed contents of Exhibits A and B and of the exhibits to the transfer agreement. The attorneys discussed the proposals by telephone and e-mail, reaching neither agreement nor impasse, before Walkey, by his counsel's e-mail on the afternoon of September 7th, declared the discussion over. At that point, a mere three days after he had signed the agreement, Walkey suddenly took the position that it was a mere "offer of settlement," which he purported to withdraw.
The agreement was not a mere offer, but was a binding contract. Walkey's purported withdrawal constituted repudiation, which had the legal effect of excusing O'Marah from any further effort to meet the condition of providing acceptable exhibits. See Hastings Assocs., Inc. v. Local 369 Building Fund, Inc., 42 Mass. App. Ct. 162, 171 (1997); Hammond v. T.J. Little Co., Inc., 82 F.3d 1166, 1178 (1996).
The Court concludes, therefore, that the agreement is binding and enforceable, and that O'Marah is entitled to a declaration and order to that effect, unless ground exists for rescission. The ground alleged in Walkey's counterclaim is fraud in the inducement. The present motion does not address that issue, and the parties have not yet conducted discovery relating to it. Accordingly, the Court directs that counsel confer in an effort to reach agreement on a schedule for proceedings with respect to that claim, and contact the clerk to schedule a status conference.
CONCLUSION AND ORDER
For the reasons stated, Plaintiff Eamon O'Marah's Motion for Summary Judgment on Declaratory Judgment and Breach of Contract Counts is ALLOWED.