JOHN P. FLYNN,
Defendant
The Plaintiffs Daniel G. Lilley Law Office, P.A. and Daniel G. Lilley ("Lilley"), have
moved for summary judgment against the Defendant, John Flynn ("Flynn") on his counterclaims.
Flynn's Answer asserted seven counterclaims: Count I is for breach of contract; Count II is for
fraud in the inducement; Count III is for tortious interference with a prospective economic
advantage; Count IV is for breach and invasion of right to privacy; Count V is for intentional
infliction of emotional distress; Count VI is for quantum meruit; and Count VII is for unjust
enrichment.
Defendant John Flynn, in turn, has cross-moved for a summary judgment finding that the
Original Cases section of the parties' Memorandum of Understanding is an enforceable contract
between Flynn and Lilley concerning the cases Flynn brought from Troubh Heisler to Lilley's
firm. Flynn wants the court to fmd the original cases section of the MOU to be severable and
enforceable.
Broadly speaking, this case arises from an employment relationship that went entirely
awry. It involves a dispute between Attorneys Lilley and Flynn regarding Flynn's ownership of transferred cases and Flynn's compensation while he was employed by Lilley at Daniel G. Lilley
Law Office, P.A., as well as Flynn's compensation and case ownership after leaving Lilley's law
firm, and Lilley's treatment of Flynn and his clients.
I. FACTUAL BACKGROUND:
Flynn worked at Lilley's firm from February 2009 to June 2011. Prior to joining Lilley's
law firm in February 2009, Flynn was an attorney at Troubh Heisler, P.A. He applied to Lilley's
firm after seeing a blind ad for an attorney paying a six-figure salary plus bonuses. Flynn brought
cases with him from his former firm ("Flynn cases"). Before beginning at Lilley's firm, Flynn
drafted a Memorandum of Understanding (MOU) that discussed the employment terms between
Lilley and Flynn. The MOU provided that Flynn was to be paid a salary of $115,000.00 per year.
The MOU also provided that Flynn was to be paid bonuses "based upon results generated", the
amount of which were up to Lilley's discretion, and that some portion of the fees payable to
Flynn from the Flynn cases would be payable to Lilley to compensate him for the resources that
he provided. The MOU was executed by Lilley and Flynn on January 17,2009.
During his employment with Lilley, after Lilley relayed news of the firm's financial
distress, Flynn offered to reduce his salary from $115,000.00 to $100,000. The parties disagree
regarding whether this salary reduction was supposed to be temporary. and compensated for, or
whether the salary reduction was permanent.
While Flynn was still employed by Lilley, a disagreement developed over their differing
interpretations of the MOU and the actual implementation of the MOU. More specifically, the
parties disagreed regarding the original cases section of the MOU, which dealt with cases Flynn
brought with him from Troubh Heisler. In one Flynn case, Paige, Lilley issued Flynn a payment
for $50,000.00 to settle their dispute. The parties have differing interpretations regarding the
2 purpose and effect of that payment. The parties also strongly contest how Flynn should be
compensated for his win in Estate of Braley v. Easterm Maine Medical Center, a medical mal-
practice matter that secured a judgment of over 2 million dollars. After a series of contentious
emails, including a profanity-laden email from Lilley, Flynn announced that he was resigning
from Lilley's firm on May 12, 2011. Flymi and Lilley disagree regarding Lilley's behavior and
intentions with respect to the case in light of Lilley's decision to obtain a new fee agreement for
the case. When Flynn resigned from Lilley's practice, Lilley purportedly decided that a new fee
agreement was necessary, because the original fee agreement was not witnessed. The agreement
was also changed by Lilley to state that compensation was for the Daniel G. Lilley Law Offices,
P.A., rather than simply for counsel.
Flynn states that shortly before he left the firm he was hospitalized due to stress induced
conditions. Lilley allegedly told a number of people that Flynn was hospitalized as a result of a
heart attack.
When Flynn left Lilley's firm on July 1, 2011, some of Flynn's clients followed him.
Lilley responded by sending out attorney's fee lien letters.
II. STANDARD OF REVIEW:
"Summary judgment is appropriate when the record reveals no issues of material fact in
dispute. A fact is material if it has the potential to affect the outcome of the case." Lepage v. Bath
Iron Works Corp., 2006 ME 130, ~ 9, 909 A.2d 629 (citations omitted).
The Law Court has held that "[s]ummary judgment is properly granted if the facts are not
in dispute or, if the defendant has moved for summary judgment, the evidence favoring the
plaintiff is insufficient to support a verdict for the plaintiff as a matter of law." Curtis v. Porter,
2001 ME 158, ~ 7, 784 A.2d 18; see also Houde v. Millett, 2001 ME 183, ~ 11,787 A.2d757. If
3 "a defendant moves for summary judgment, the plaintiff 'must establish a prima facie case for
each element of her cause of action' that is properly challenged in the defendant's motion."
Curtis, 2001 ME 158, ~ 8, 784 A.2d 18 (quoting Champagne v. Mid-Maine Med. Ctr., 1998 ME
87, ~ 9, 711 A.2d 842); see also Corey v. Norman, Hanson & DeTroy, 1999 ME 196, ~ 9, 742
A.2d 933.
III. DISCUSSION:
a. Breach of contract and cross-motion
In order to demonstrate breach of contract, the party bringing the claim must demonstrate
that there has been a "(1) breach of a material contract term; (2) causation; and (3) damages."
Maine Energy Recovery Co. v. United Steel Structures, Inc., 1999 ME 31, ~ 7, 724 A.2d 1248.
Flynn has alleged that the MOU was a contract that was breached by Lilley in three different
ways: Lilley breached the contract due to his failure to compensate Flynn for his salary
reduction; Lilley breached the contract by retaining Flynn's fees on the Flynn cases; and Lilley
breached the contract by failing to pay Flynn bonuses on cases that originated at the Lilley Law
Office.
The court finds that there are genuine issues of material fact that preclude summary
judgment regarding both Flynn's breach of contract claim, and Flynn's cross-claim for summary
judgment that the Original Cases section of the MOU is severable and enforceable.
1. Salary reduction
Waiver is defmed as "a voluntary or intentional relinquishment of a known right and may
be inferred from the acts of the waiving party." Blue Star Corp. v. CKF Properties, LLC, 2009
ME 101, ~ 26, 980 A.2d 1270 (quoting Interstatelndus. Unif. Rental Serv., Inc. v. Couri Pontiac,
Inc., 355 A.2d 913,919 (Me. 1976)); see also Dep't of Health & Human Servs. v. Pelletier, 2009
4 ME 11, ~ 16, 964 A.2d 630 (quotation omitted) ("Waiver is the voluntary and knowing
relinquishment of a right and may be shown by 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.") To prevent a party from enforcing a supposedly waived
right, the party who is relying on the waiver, must show that they believed that the party planned
to voluntarily give up the party's right. Blue Star Corp., 2009 ME 101, 126, 980 A.2d 1270. In
addition, while the Plaintiff contends that a wavier does not have to be permanent, the Law Court
has held that "[f]or waiver to apply, there must be a voluntary or intentional decision to
permanently relinquish a known right." Chalet Susse Int'l, Inc. v. Mobil Oil Corp., 597 A.2d
1350, 1352 (Me. 1991).
The parties dispute whether or not Flynn waived his right to his salary of$115,000.00
when he volunteered to take a salary cut to $100,000.00 for the economic benefit of the firm.
Flynn argues that the salary reduction was a temporary arrangement, brought on by Lilley's
claims of fmancial distress, whereunder Flynn was entitled to be compensated for his salary
reduction and reinstated to his original salary. Lilley argues that Flynn waived his right to the
salary under the MOU. The Law Court has determined that waiver is an iss~e of fact. Interstate
Indus. Unif. Rental Serv., Inc. v. Couri Pontiac, Inc., 355 A.2d 913, 919 (Me. 1976). In this
instance, the parties are presenting cont:mdicting factual aecounts regarding the salary reduction.
The parties have presented enough information to show that there is a genuine issue of
material fact regarding whether or not Flynn waived his right to his salary of $115,000.00, and
whether he is entitled to back-payments for the months during which he was paid $15,000.00
less.
5 2. Flynn cases
A contract is ambiguous if it can reasonably be interpreted in different ways. Am. Prot.
Ins. Co. v. Acadia Ins. Co., 2003 ME 6, ~ 11, 814 A.2d 989. With regard to ambiguous contracts,
the meaning of the contract becomes a question of fact and it is up to the factfinder to interpret
the contract. Id
The Original Cases section of the MOU contains ambiguities regarding fees _from the
Flynn cases, and thereby the court can consider extrinsic evidence. See Pettee v. Young, 2001
ME 15 6, ~ 8, 783 A.2d 63 7. "As a general rule parol evidence of additional terms is admissible
to suppl~ment a partially integrated written agreement if the additional terms are consistent with
the writing." Rogers v. Jackson, 2002 ME 140, ~ 10, 804 A.2d 379. "If a contract leaves open a
key term, the law invokes the standard of reasonableness, and courts will supply the needed
term." Ault v. Pakulski, 520 A.2d 703, 706 (Me. 1987) (Glassman, J., dissenting).
The parties have differing interpretations of the MOU's provisions regarding the Flynn cases,
and whether the Original Cases section of the MOU is enforceable. The Original Cases section
left the fee arrangement between Lilley and Flynn regarding the Flynn cases unresolved.
Provision III of the MOU regarding "Original Cases" contains the following language regarding
fees generated from cases brought over by John Flynn to Lilley's firm: "As compensation for the
assistance, resources, and staff support from Daniel G. Lilley Law Office in the continuing
representation by Mr. Flynn in such cases described above, the parties agree that a percentage of
the attorney's fees payable to Mr. Flynn, shall be payable to the Daniel G. Lilley Law Office."
(Pl.'s Ex. 1.) The MOU fails to state what percentage of the fees will be payable to Lilley and
what percentage of fees will be payable to Flynn. The parties also have starkly different
interpretations regarding the meaning of the $50,000.00 payment that_Lilley made to Flynn
6 following the Paige case, and whether that payment had some sort of effect upon their
arrangement going forward with respect to Flynn cases.
At this juncture, genuine issues of material fact remain that preclude fmding that the Original
Cases section of the MOU was a severable enforceable contract. Because the MOU fails to
clearly provide how fees will be apportioned for the Flynn cases, this court denies Flynn's cross-
motion for summary judgment. It is important that this court hear additional evidence, and that
the jury have the opportunity to decide upon the meaning of the ambiguities in the Original
Cases section through fact fmding. This denial of Flynn's cross-motion is not a fmding that the
Original Cases section is not contractually binding. "[L]ack of a key term is not necessarily fatal
to the enforcement of a contract, as long as the missing term does not indicate a lack of
contractual intent." Pelletier v. Pelletier, 2012 ME 15, ~ 15, 36 A.3d 903.
Flynn has demonstrated that he may be able to demonstrate a breach of contract regarding the
Flynn cases. The MOU m,ay be specific enough for the factfinder to be able to decide upon its
meaning and determine the parties' liabilities. See Fitzgerald v. Hutchins, 2009 ME 115, ~ 17,
983 A.2d 3 82. The jury may be capable of supplying the missing material terms in the Original
Cases section of the MOU, and it may fmd that Lilley did or did not breach the contract, and that
he owes Flynn compensation for his cases, including the BraZe/ case.
Regarding the breach of contract claim with regard to the Flynn cases, this dispute should go
to the factfmder to determine the parties' intent regarding this provision, if the missing
percentage terms can be supplied, whether the parties ever amended this provision, and, whether
Lilley breached the contract.
1 The court notes that Flynn's claims regarding the Braley fee are not res judicata, as the Superior Court (Cumberland County, Wheeler J.) in Troubh Heisler v. Lilley, did not make a finding on the merits regarding Flynn's cross-claim against Lilley. 2013 WL 7934424 (Me. Super. July 30, 2013). The Troubh Heisler case is currently up on appeal.
7 3. Lilley cases bonuses
The compensation section ofthe MOU provides:
In addition to the base salary, Mr. Flynn shall also be entitled to payment of bonuses based upon results generated. Such bonu~s shall be payable at the conclusion of the case after funds are distributed and the amount of said bonuses shall be at the sole discretion of Daniel G. Lilley Law Offic~. (Def.'s Ex. C).
The use of the words "shall also be entitled" would suggest an obligation for Lilley to pay
bonuses to Flynn under circumstances described as "results generated." While the amount of the
bonuses was left up to Lilley, this does not necessarily mean that Lilley can award a bonus of
zero when Flynn was entitled to a bonus.
There is a genuine factual dispute regarding whether the bonuses were entjrely up to his
Lilley's discretion, or whether Lilley_ was under a good faith obligation to award bonuses under
certain conditions. Lilley advertised the position as one where compensation would take the form
of a base salary as well as bonuses. Lilley's December 4, 2008 email with Flynn also suggested
bonuses would be paid on a discretionary basis. Additional information is necessary to determine
what "upon results generated" means in the context of the MOU, and to determine whether
bonuses should have been awarded to Flynn on the Lilley cases.
It is clear that there is a genuine issue of material fact regarding the amount of l?onuses
that Flynn was due from cases he worked on for Lilley.
Lastly, while the breach of contract count survives for trial, the court notes that Flynn
cannot recover emotional distress damages for his breach of contract claim. The Law Court has
noted that emotional distress damages are not usually available for a breach of contract, except in
some limited circumstances other courts and ·the Restatement (Second) of Contracts have allowed
such damages (for example, cases with contracts involving death or innkeepers and their guests).
See McAfee v. Wright, 651 A.2d 371, 372-73 (Me. 1994) (Finding "[t]he common thread
8 ! - between these exceptions is that mental distress is a particularly likely result of a breach.")
Accordingly, Flynn cannot advance his claim for emotional distress damages resulting from
breach of contract.
b. Fraud in the inducement
From reading Flynn's memoranda, it's unclear whether he is truly advancing a claim for
fraudulent inducement or another variation of fraud. In either case, a party can be found
'liable for fraud or deceit if he (1) makes a false representation (2) of a material fact (3) with knowledge of its falsity or in reckless disregard of whether it is true or false (4) for the purpose of inducing another to act or to refrain from acting in reliance upon it, and ( 5) the plaintiff justifiably relies upon the representation as true and acts upon it to [her] damage .... Reliance is unjustified only if the plaintiffknows the representation is false or its falsity is obvious to [her].'
Francis v. Stinson, 2000 ME 173, ~ 38, 760 A.2d 209 (quoting Letellier v. Small, 400 A.2d 371, 376 (Me.1979))(alterations in the original). Fraud must be proven by clear and convincing evidence. See Petit v. Key bank, 688 A.2d 427, 431 (Me. 1996). Regardless of the type of fraud claim Flynn plans to assert at trial, Flynn has failed to
present a prima facie case of fraud in his Statement of Material Facts. Primarily, Flynn has not
demonstrated that Lilley knowingly made false representations to Flynn. While Flynn has
demonstrated that he did not receive bonuses on the Lilley cases, and that the compensation that
he is owed on the Flynn cases is heavily disputed, he has not proven that when the MOU was
drafted and signed Lilley knowingly intended to falsely represent material facts to him.
Accordingly, Lilley is granted summary judgment on Flynn's fraudulent inducement claim.
c. Tortious interference with a prospective economic advantage
To demonstrate tortious interference with a prospective economic advantage (TIPEA) a
party must show "(1) that a valid contract or prospective economic advantage existed; (2) that
the defendant interfered with that contract or advantage through fraud or intimidation; and (3)
that such interference proximately caused damages." Rutlandv. Mullen, 2002 ME 98, ~ 13, 798
9 A.2d 1104. The Law Court has held that when a party is asserting what it believes to be a legal
right, or when a party is asserting a property right, and that legal or property right turns out to be
invalid, those assertions do not constitute fraud or intimidation. Id at 15-16.
Flynn has failed to make a prima facie case of TIP EA. While Flynn has alleged that
Lilley sent lien letters to his clients and made a client enter into a new contingent fee agreement,
Lilley has argued that he believed that his lien letters were valid and that contingent fee
agreements must be witnessed. In addition, Flynn has failed to make a prima facie claim that
Lilley's letters, Lilley's disclosures regarding Flynn's health, or the new fee agreement caused
damages. Accordingly, Lilley is granted summary judgment ori Flynn's claim for TIPEA.
d. Breach and invasion of right to privacy
Flynn brought his claim for breach and invasion of right to privacy pursuant to the
Constitution of the State of Maine, the Fourteenth Amendment to the United States Constitution,
and 42 U.S.C. § 1983. As an initial matter, the Law Court has held:
In order to state a claim for relief in an action brought under§ 1983, [plaintiffs] must establish that they were deprived of a right secured by the Constitution ... and that the alleged deprivation was committed under color of state law. Private action, no matter how discriminatory or wrongful, may not be reached through section 1983. !d. The same is true of claims brought directly under the Constitution; most rights secured by the Constitution are protected only against infringement by governments.
Holland v. Sebunya, 2000 ME 160, ~ 11, 759 A.2d 205 (quotations and citations omitted)
(alterations in the original).
As Flynn is asserting a breach of privacy claim pursuant to the Maine and U.S.
Constitutions and§ 1983 against Lilley, a private actor, his claim fails. Even ifthis court were to
consider Flynn's claim to be a common law right to privacy claim, he has failed to meet the
requirement that Lilley's disclosures "would be highly offensive to a reasonable person." Loe v.
10 Town a/Thomaston, 600 A.2d 1090, 1093 (Me. 1991). Lilley is entitled to summary judgment on
this claim.
e. Intentional Infliction of Emotional Distress
Lilley alleges that Flynn's claim for intentional infliction of emotional distress (liED), along
with his claims that request emotional distress damages, are barred by the Worker's
Compensation Act, which provides:
An employer who has secured the payment of compensation in conformity with sections 401 to 407 is exempt from civil actions, either at common law or under sections 901 to 908; Title 14, sections 8101 to 8118; and Title 18-A, section 2-804, involving personal injuries sustained by an employee arising out of and in the course of employment, dr for death resulting from those injuries.
39-A M.R.S.A. § 104. "The exclusivity and immunity provisions of the Workers' Compensation
Act bar employees from pursuing civil litigation against their employers for injuries incurred in
the course of employment." Li v. C.N Brown Co., 645 A.2d 606, 607 (Me. 1994). Flynn disputes
that his injuries were obtained "in the course of employment." It is unnecessary, however, for
the court to even come to the conclusion that Flynn's liED claim is barred, however, as Flynn
has failed to make a prima facie case for liED.
In order to demonstrate liED, a party must show:
(1) the defendant intentionally or recklessly inflicted severe emotional distress or was certain or substantially certain that such distress would result from his conduct, Restatement (Second) of Torts s 46, Comment I; (2) the conduct was so "extreme and outrageous" as to exceed "all possible bounds of decency" and must be regarded as "atrocious, and utterly intolerable in a civilized community," Restatement (Second) of Torts s 46, Comment D; (3) the actions of the defendant caused the plaintiffs emotional distress; and (4) the emotional distress suffered by the plaintiff was "severe" so that "no reasonable man could be expected to endure it." Restatement (Second) of Torts s 46, Comment};
Vicnire v. Ford Motor Credit Co., 401 A.2d 148, ·154 (Me. 1979). While it is clear from the
parties' statements that the work environment between Lilley and Flynn became acrimonious,
that there were and are disputes regarding fees and compensation, that 'Lilley possessed a temper
11 and used strong language, Flynn has not produced evidence that Lilley's behavior rose to the
level of"extreme and outrageous" required to prevail on an liED claim. Thereby, summary
judgment is granted to Lilley on Flynn's liED claim.
f. Quantum meruit and unjust enrichment claims
Quantum meruit "also sometimes labeled 'contract implied in fact,' involves recovery for
services or materials provided under an implied contract." Paflhausen v. Balano, 1998 ME 47, ~
6, 708 A.2d 269, 271. The parties' actions lead to the inference of a contract. Id The Law Court
in Paflhausen distinguished quantum meruit from unjust enrichment, Id The Law Court defmed
unjust enrichment as "recovery for the value of the benefit retained when there is no contractual
relationship, but when, on the grounds of fairness and justice, the law compels performance of a
legal and moral duty to pay, and the 'damages analysis is hased on principles of equity, not
contract."' Id (quoting Aladdin Elec. Assoc. v. Old Orchard Beach, 645 A.2d 1142, 1145
(Me.1994)). The Law Court explained that in quantum meruit damages are determined by the
value of the services the plaintiff provided, while in unjust enrichment damages are gauged "by
the value of what was inequitably retained." Id at 7. In order to prevail on a claim for quantum
meruit, a party must demonstrate "'that (1) services were rendered to the defendant by the
plaintiff; (2) with the knowledge and consent of the defendant; and (3) under circumstances that
make it reasonable for the plaintiff to expect payment." Id at 8 (quoting Bowden v. Grindle, 651 ,
A.2d 347, 351 (Me.1994)). The performing party must expect to be compensated and the
receiving party must intend to compensate the performing party. Id
To succeed on a claim for unjust enrichment, a party must show that "that it conferred a
benefit on the other party ... that the other party had appreciation or knowledge of the benefit ...
and ... that the acceptance or retention of the benefit was under such circumstances as to make it
12 inequitable for it to retain the benefit without payment of its value." Forrest Associates v.
Passamaquoddy Tribe, 2000 ME 195, ~ 14, 760 A.2d 1041 (quotation marks omitted)
Viewed in the light most sympathetic to Flynn, Flynn has asserted a prima facie case that
he could expect to be compensated for his work on the Flynn and Lilley cases. Flynn has also
made a prima facie case that his work on the Flynn cases benefitted Lilley fmancially, and that
Lilley was obligated to compensate Flynn for his work on the Flynn cases. Genuine issues of
material fact remain regarding whether Lilley intended to compensate Flynn for his work on the
Flynn cases over and above Flynn's salary, and as regards unjust enrichment, whether Lilley
unjustly retained fees and was obligated to compensate Flynn over and above his salary. The
court notes that while Lilley has argued that Flynn cannot succeed on an unjust enrichment claim
if there was a valid contract in place between the two parties, see In re Wage Payment Litig.,
2000 ME 162, 1 19, 759 A.2d 217, Flynn's claim for unjust enrichment can proceed as a claim in
the alternative. The court finds that Flynn's claims for quantum meruit and unjust enrichment
should proceed to trial.
Accordingly, the court ORDERS that Plaintiffs' Motion for Summary Judgment is
GRANTED as to counts II, III, IV, and V of Defendant's counterclaim, and the Motion is
DENIED as to counts I (with the exception of the issue of emotional distress damages, on which
summary judgment is granted to the Plaintiffs), VI, and VII. Defendant's cross-motion for
summary judgment is DENIED.
13 The clerk is directed to incorporate this Order into the docket by reference pursuant to
Maine Rule of Civil Procedure 79(a). ~
Dated: on. land A. Cole JustiJ, Superior Court
14 THE DANIEL G LILLEY LAW OFFICE PA ET AL VS JOHN P FLYNN UTN:AOCSsr -2011-0088954 CASE #:PORSC-CV-2011-00403
01 0000002967 FRANCO MARK ~~~~~~--------------------------~--------------- THREE CANAL PLAZA PO BOX 4630 PORTLAND ME 04112-4630 F JOHN P FLYNN DEF RTND 09/26/2011 THE DANIEL G LILLEY LAW OFFICE PA ET AL VS JOHN P FLYNN UTN:AOCSsr -2011-0088954 CASE #:PORSC-CV-2011-00403
'
03 0000007848 MCKEE WALTER 133 STATE STREET AUGUSTA ME 04330 F THE DANIEL G LILLEY LAW OFFICE PA PL RTND 10/24/2011 F DANIEL G LILLEY PL RTND 10/24/2011