Masi v. Keeley Crane Serv.

• Court: Superior Court of Maine
• Decided: July 21, 2011
• Docket: YORcv-08-303
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT CIVIL ACTION YORK, ss. DOCKET NO. CV-08-303 ( _ "\-' "/, ~ ~ _ , 7 '-1_1>--- , - ,) ~_S>!/Q ,: I ,

,:~ , c'~ D / '

NICHOLAS MASI, III and DONNAMASI, Plaintiffs

v.

KEELEY CRANE SERVICE and KEELEY CONSTRUCTION COMPANY, INC., Defendants ORDER

KEELEY CRANE SERVICE,

Defendant I Third-Party Plaintiff

MASI BUILDERS, INC.,

Third-Party Defendant

Plaintiffs Nicholas Masi III and Donna Masi brought this action against Keeley

Crane Service and Keeley Construction Company after Mr. Masi suffered catastrophic

injuries in a construction accident allegedly caused by a Keeley Crane Service

employee's negligence. Keeley Crane filed a third-party action against Mr. Masi's

company, Masi Builders, Inc., seeking indemnity due to Mr. Masi's own negligence in

the event that it is found liable to the Masis personally.

Third-party defendant Masi Builders, Inc. has moved for summary judgment

against Keeley Crane on the basis of a written release. This motion remains pending,

but may be moot. The Masis, Keeley Crane, and Masi Builders, Inc., have jointly filed a

motion to dismiss their claims among and against each other pursuant to a Pierringer release. The Masis move for partial summary judgment declaring that Keeley Crane

Service and Keeley Construction Company are a single functional enterprise in equity,

and that Keeley Construction may be liable for Keeley Crane's employee. Keeley

Construction cross-moves for summary judgment on this same issue.

Keeley Construction has filed a second motion for summary judgment on the

grounds that any potential liability it has in this action is wholly derivative of Keeley

Crane's liability. The release of Keeley Crane should therefore operate as a release of

Keeley Construction by operation of law. Keeley Construction has moved to amend its

complaint to assert a cross-claim against Keeley Crane for contribution. The parties

request that the court stay action on Keeley Construction's second motion for summary

judgment and motion to assert a cross-claim until the other pending motions have been

resolved.

BACKGROUND In the summer of 2007, Masi Builders, Inc., contracted to frame and roof a

building on the property of Pit Stop Fuels along Route 25 in Standish, Maine. (Masi

Builders Supp. S.M.F. err 1.) The building was to be constructed using pre-assembled

attic trusses in the roof. (Masi Builders Supp. S.M.F. err 2.) Masi Builders retained the

services of Keeley Crane, who provided a crane and crane operator Dale Blackstone to

lift the trusses onto the framed walls. (Masi Builders Supp. S.M.F. errerr 3-5.) Once a truss

was raised into position, Nick Masi and his assistant would secure it in place. (Keeley

Crane Opp. S.M.F. err 5.) During the process of raising and setting the trusses, the trusses

collapsed and Mr. Masi was injured. (Masi Builders Supp. S.M.F. err 6.) Mr. Masi claims

that Mr. Blackstone negligently operated the crane, causing the collapse.

2 DISCUSSION

1. Nicholas Masi III and Donna Masi's Motion for Partial Summary Judgment Against Keeley Construction Company; Keeley Construction Company's Cross­ Motion for Summary Judgment

The Masis move for summary judgment declaring that Keeley Construction and

Keeley Crane were operated as though they were a single enterprise without material

regard to their separate corporate existences. They should thus be liable in equity as a

unitary business and the sole employer of Dale Blackstone.

Keeley Construction Company and Keeley Crane Service are listed as separate

corporations with Maine's Secretary of State. (Def.'s Add'l S.M.F.

wholly owned by James F. Keeley, Jr. (Pl.'s Supp. S.M.F.

president of both companies, but during his deposition he could only recall being paid

by Keeley Construction. (Pl.'s Supp. S.M.F.

same location and share the same mailing address. (Pl.'s Supp. S.M.F.

Construction pays 75% of the rent, and Keeley Crane the remaining 25%. (Pl.' s Supp.

S.M.F.

each company pays, how and when he sees fit. (Pl.'s Supp. S.M.F.

Keeley Construction once filed a statement of intention to do business under the

name Keeley Crane Service, prior to Keeley Crane's incorporation as a separate entity.

(Pl.' s Supp. S.M.F.

share a single Federal Employer Identification Number, and Mr. Keeley testified that

Keeley Construction and Keeley Crane file a single tax return. 1 (Pl.'s Supp. S.M.F.

7; Pl.' s Ex. B.) Mr. Keeley has given Keeley Construction standing authority to guaranty

Following his deposition, Mr. Keeley filed an affidavit stating that Keeley Construction and Keeley Crane file separate tax returns. Parties cannot create or avoid issues of fact to defeat summary judgment by submitting affidavits disputing their own prior deposition testimony. See Zip Lube, Inc. v. Coastal Sav. Bank, 1998 ME 81,

3 loans taken by Keeley Crane, and Keeley Construction has acted as Keeley Crane's

guarantor. (Pl.'s Supp. S.M.F. <[ 8; Keeley Dep. Ex. 30.) Keeley Crane has likewise acted

as guarantor for Keeley Construction. (Pl.'s Supp. S.M.F. <[ 9.)

Keeley Construction and Keeley Crane are covered by a single workers'

compensation insurance policy.2 (Pl.'s Supp. S.M.F. <[ 6; Keeley Dep. Ex. 27; Pl.'s Ex. E.)

Keeley Crane currently has an annual sales volume of approximately $6 million with

forty employees, and carries a general liability insurance policy with $1 million of

coverage. (Pl.'s Supp. S.M.F. <[<[ 21, 24.) In comparison, Keeley Construction currently

has an annual sales volume of $2 million with six employees, and carries a general

liability insurance policy with $2 million of coverage. (Pl.'s Supp. S.M.F. <[<[ 22, 25.)

Keeley Construction also carries a $3 million umbrella insurance policy that expressly

includes Keeley Crane's underlying Employers' Liability coverage. (Pl.'s Supp. S.M.F.

<[<[ 25-26; Keeley Dep. Ex. 26.)

Keeley Crane has no separate employee handbook, policies, or forms. 3 (Pl.'s

Supp. S.M.F. <[ 11.) Instead, it uses Keeley Construction's forms and human resources

materials. (Pl.'s Supp. S.M.F. <[ 10.) One person employed by Keeley Construction

administered payrOll operations for both companies. (Pl.'s Supp. S.M.F. <[ 15.)

Employees of Keeley Construction could be promoted, demoted, or otherwise moved to

2 Keeley Construction objects arguing that all evidence concerning the defendants' insurance coverage is irrelevant, materially prejudicial, and inadmissible. The evidence is relevant to show that Mr. Keeley effectively treated the companies as a single corporation. It is also relevant to the allegation that Mr. Keeley purposefully shifted assets from the entity with more exposure to liability, Keeley Crane, to the entity with reduced exposure, Keeley Construction. Finally, Mr. Keeley's affidavit states that the companies are covered by different insurance policies. The affidavit does not specify whether it is referring to the workers' compensation policy, which is alleged to provide joint coverage, or the general liability policies that are admittedly separate.

3 Keeley Construction objects to the admissibility of employment materials on grounds of relevance and prejudice. The same considerations that apply to the insurance materials apply to the employment materials, and the objections should be overruled.

4 Keeley Crane, and VIce-versa. (PI.'s Supp. S.M.F. <[ 13.) Mr. Keeley would decide

whether such a move could be made. (PI.'s Supp. S.M.F. <[<[ 13-14.) If an employee did

move between companies, his or her paycheck would reflect the difference. (PI.'s Supp.

S.M.F. <[<[ 13-14.)

Dale Blackstone, the crane operator, applied for his position on forms bearing

Keeley Construction's name at the top. (PI.'s Supp. S.NLF. <[ 12.) He was officially

employed by Keeley Crane. (Def.'s Add'l S.M.F. <[<[ 9-10.) Mr. Blackstone reported to

Ben Keeley, Mr. Keeley's son. (PI.'s Supp. S.M.F. <[ 20.) Ben Keeley is employed by both

Keeley Construction and Keeley Crane, but is only paid by Keeley Construction. (PI.'s

Supp. S.M.F. <[ 19.) Mr. Blackstone did not know Ben Keeley's official title, instead

referring to his position as "owner's son." (PI.'s Supp. S.M.F. <[ 20.)

Mr. Keeley states that Keeley Crane and Keeley Construction were individually

solvent and adequately capitalized at the time of the incident. (Def.'s Add'l S.M.F.

<[<[ 16, 19.) The plaintiffs oppose this characterization of Keeley Crane's finances with

evidence that multiple V.e.e. filings and I.R.S. liens were in place against that

company. (PI.'s Resp. S.M.F. <[ 16.) Mr. Keeley states that Keeley Crane and Keeley

Construction maintained separate corporate records and that each business's corporate

officers fulfilled their functions. (Def.'s Add'l S.M.F. <[<[ 18, 21.) The companies

provided separate and distinct services to their customers. (Def.' s Add'l S.M.F. <[ 23.)

In their amended complaint, the Masis assert that Keeley Construction should be

liable for Mr. Blackstone's negligence because they "are interrelated companies with

interrelated operations, common management, centralized control of labor operations

and common ownership," and should thus be treated as a single employer. (Pl.'s

Compi. <[ 16.) The Masis also contend that Keeley Crane and Keeley Construction's

separate corporate personalities have "merged so that one corporation is a mere adjunct

5 of the other or the two companies form a single enterprise." (PI.'s CompI.

broad statements ultimately distill into similar but distinct legal theories.

The plaintiffs first advance the 1/ single employer" or "integrated employer"

doctrine. This theory was developed under the National Labor Relations Act "to

determine if 'interrelated companies should be treated as one entity'" subject to the

Act's provisions. Batchelder v. Realty Res. Hospitality, LLC, 2007 ME 17,

1116, 1120 (quoting Romano v. U-Haul Int'l, 233 F.3d 655, 662 (1st Cir. 2000)). The theory

has since been applied to employers subject to liability under Title VII of the Civil

Rights Act of 1964. Torres-Negron v. Merck & Co., 488 F.3d 34, 39-41 (lst Cir. 2007). It

stems from the United States Supreme Court's 1965 ruling that "several nominally

separate business entities" might be considered a single employer subject to the

National Labor Relations Act "where they comprise an integrated enterprise ...." Radio

Union v. Broadcast Service ofMobile, Inc., 380 U.s. 255, 256 (1965). "The controlling criteria

... are interrelation of operations, common management, centralized control of labor

relations and common ownership." Id.

This test was recited by the First Circuit in Romano v. U-Haul International, 233

F.3d 655, 662 (1st Cir. 2000), a case brought under Title VII of the Civil Rights Act of

1964. Maine's Superior Court then drew on Romano to instruct a jury on the "integrated

enterprise" theory in a case brought by an employee under the Maine Human Rights

Act and Maine Whistleblower's Protection Act. Batchelder, 2007 ME 17,

A.2d at 1118-20. The jury found for the plaintiff and determined that eighteen separate

business entities were jointly liable because they constituted a single integrated

enterprise. Id.

integrated enterprise instruction on appeal, but declined to formally adopt the theory or

its formulation in Maine. Id.

6 The plaintiffs are asking this court to apply the integrated enterprise test to

determine whether Keeley Construction and Keeley Crane are a single employer,

subjecting Keeley Construction to liability for Mr. Blackstone's actions under the

doctrine of respondeat superior. This argument would have greater weight if this were

a case brought by Mr. Blackstone against his employers. The theory has been widely

adopted and applied in cases brought under the National Labor Relations Act, the Civil

Rights Act of 1964, and their state-law analogs. However, the court could not locate any

cases where it has been applied outside this statutory context. More to the point, no

reported cases are found in which the test has been applied to hold a nominally

independent entity liable for a common law tort claim under the doctrine of respondeat

supenor. The court declines to apply the doctrine in the absence of supporting

precedents.

The plaintiffs' second argument advances the" alter ego" doctrine as articulated

by the courts of California. While both parties treat the "alter ego" doctrine as a

separate and somewhat novel basis for imposing liability on a corporation, the cited line

of cases makes it clear that the doctrine is essentially an application of classic veil-

piercing principles to sister corporations rather than shareholders. As a California Court

of Appeal put it:

Usually, a disregard of the corporate entity is sought in order to fasten liability upon individual stockholders. . .. However, only a difference in wording is used in stating the same concept where the entity sought to be held liable is another corporation instead of an individual. ...

Generally, alter ego liability is reserved for the parent-subsidiary relationship. However, under the single-enterprise rule, liability can be found between sister companies.... "In effect what happens is that the court, for sufficient reason, has determined that though there are two or more personalities, there is but one enterprise; and that this enterprise has been so handled that it should respond, as a whole, for the debts of certain component elements of it."

7 Las Palmas Assocs. v. Las Palmas Ctr. Assocs, 1 Cal. Rptr. 2d 301, 317-18 (Cal. Ct. App.

1991) (quoting 2 Marsh's Cal. Corp. Law (3d ed. 1990) §16.23, p. 1416). To pierce the veil

and reach either a shareholder or a sister corporation requires "unity of interest and

ownership" leading so some inequitable result. Id. at 317.

Applying the principles of veil piercing to sister corporations is not unique to

California, nor is it a particularly recent development. New York's Court of Appeals

discussed the issue in a case involving a taxicab fleet comprised of multiple minimally­

capitalized corporations, each of which owned only two vehicles. Walkovszky v. Carlton,

18 N.Y. 2d 414 (N.Y. 1966). Maine's Law Court has yet to address shared liability

between sister corporations where the corporate form has been abused, but the

potential for such liability is consistent with existing Maine law.

In Maine, courts "will disregard the corporate entity" if a plaintiff establishes:

"(1) some manner of dominating, abusing, or misusing the corporate form; and (2) an

unjust or inequitable result that would arise if the court recognized the separate

corporate existence." Johnson v. Exclusive Props. Unlimited, 1998 ME 244, CJI5, 720 A.2d

568, 571. Nothing in Maine's articulation of the law restricts its application to suits

against a shareholder or parent corporation. The consequences of a decision to

"disregard the corporate entity" are broad and could lead the court to find that two

supposedly independent corporations are in fact a single enterprise subject to liability.

The plaintiffs' attempt to reach Keeley Construction is thus cognizable under

established Maine law.

As noted above, "before a court may pierce the corporate veil, a plaintiff must

establish that: (1) the defendant abused the privilege of a separate corporate identity;

and (2) an unjust or inequitable result would occur if the court recognized the separate

8 corporate existence." Id.

encouraging business development with the policy of protecting those who deal with

the corporation," and its application depends on the totality of the circumstances. Id.

11..2, 720 A.2d at 572 11..2.

Courts consider a number of factors when determining whether the corporate

form has been abused, including:

(1) common ownership; (2) pervasive control; (3) confused intermingling of business activity[,] assets, or management; (4) thin capitalization; (5) nonobservance of corporate formalities; (6) absence of corporate records; (7) no payment of dividends; (8) insolvency at the time of the litigated transaction; (9) siphoning away of corporate assets by the dominant shareholders; (10) nonfunctioning of officers and directors; (11) use of the corporation for transactions of the dominant shareholders; [and] (12) use of the corporation in promoting fraud.

Id.

129, 149-50 (D. Mass. 1998)).

The first three factors are indisputably present in this case. Mr. Keeley is the sole

owner and president of both Keeley Crane and Keeley Construction. Ownership and

control are united in him. He has ultimate decision-making authority in both

corporations, and evidently intermingles business activity and management between

the two. Both companies employ Mr. Keeley and his son, Ben Keeley, but Ben Keeley is

011.1Y paid by Keeley Construction. Ben Keeley nonetheless exercised direct managerial

control over Keeley Creane employee Dale Blackstone. The companies use a single set

of employment forms with Keeley Construction's name. A single Keeley Construction

employee regularly performed payrOll functions for both companies in the past. In

addition to confused managerial and employment obligations, the companies are to a

degree financially intermingled. They file a single tax return, share a federal employer

9 identification number, and are covered by a single workers' compensation policy. They

guaranty each other's loans.

While the practices recited above blur the line between the entities' business

practices, the plaintiffs have not come forward with evidence showing a gross disregard

for the corporate form per se. There is no evidence that Mr. Keeley did not observe the

requisite legal formalities or that he kept inadequate corporate records. There is no

allegation that he used either corporation for his personal business, and there is no

direct financial information indicating that either corporation was insolvent at the time

of Mr. Masi's injury. The plaintiffs do refer to a number of DCC filings against Keeley

Crane to argue that it was highly leveraged, but this in itself does not show that it was

thinly capitalized.

All of the facts and circumstances, taken together, generate a question of material

fact as to whether Keeley Crane and Keeley Construction have abused their corporate

status. If there was abuse, plaintiffs must also show that this abuse would result in

"injustice or inequitable consequences" unless the court disregards the defendants'

separate corporate existences. Id.

determination to pierce the corporate veil, but are not required. Id.

The plaintiffs have not alleged that the defendants engaged in illegality. The

primary objection to Keeley Construction and Keeley Crane's separateness appears

instead to be rooted in the disparate size of their capitalization and liability insurance

policies. Keeley Construction's liability insurance allegedly provides approximately five

times more coverage than Keeley Crane's. The plaintiffs argue that this disparity

evinces an intent to defund Keeley Crane at the expense of Keeley Crane's clients.

Keeley Crane's business volume is larger than Keeley Construction's, and its exposure

to liability is correspondingly increased. These disparities, coupled with the pervasive

10 intermingling of business and personnel between the companies, are sufficient to

generate a question of material fact as to whether recognition of the corporate form

would work an injustice in this case.

Material facts about Keeley Construction's relationship to Keeley Crane and its

employees remain in dispute. The Masis' and Keeley Construction's motions are

denied.

2. Nicholas Masi III, Donna Masi, Masi Builders, Inc., and Keeley Crane Service's Release and Joint Motion to Dismiss; Keeley Construction Company's Second Motion for Summary Judgment; and Masi Builders, Inc.'s Motion for Summary Judgment

Mr. and Mrs. Masi, Masi Builders, Inc., and Keeley Crane Service have agreed to

settle the claims among and against each other. They acknowledge that claims against

Keeley Construction remain outstanding. (Joint M. <[2.) To this end, they have signed a

release whereby the plaintiffs agree to hold Keeley Construction harmless for any

portion of the plaintiffs' damages attributable to Keeley Crane or Masi Builders. (Joint

M. <[<[3-4.) Keeley Crane agrees to release Masi Builders from any claim for

contribution. (Joint M. <[5.) By its terms, the release does not preclude the Masis from

pursuing Keeley Construction and obtaining recovery out of its assets in the event that

it and Keeley Crane are determined to be a unitary entity. (Joint M. <[2.)

Pursuant to their settlement and release contract, the Masis, Keeley Crane, and

Masi Builders jointly move to dismiss the Masis' claims against Keeley Crane and

Keeley Crane's claims against Masi Builders, with prejudice and without costs. The

parties' proposed order would also declare that the release does not impact the Masis'

ability to pursue Keeley Construction. A copy of the release was not provided to this

court for review. There is no reason to deny the moving parties' request for dismissal

among and between themselves, and the court grants the motion for dismissal to this

11 extent. The court will refrain, however, from providing an advisory opinion on the

future force and effect of the release's terms against parties who are not signatories to

the contract.

The reasons for this are Keeley Construction's pending motions for summary

judgment pursuant to the release, and to add a cross-claim against Keeley Crane for

contribution or indemnity. Both directly challenge the release's claim to be a Pierringer

release authorized by 14 M.R.S.A. §156 (2009).

CONCLUSION

The court finds that there are unresolved issues of material fact as to whether

Keeley Construction and Keeley Crane are a single corporate enterprise. As such, both

the plaintiffs' partial motion for summary judgment and Keeley Construction's cross-

motion for summary judgment are denied.

Plaintiffs Nick and Donna Masi, Keeley Crane, and Masi Builders jointly request

that the court dismiss the claims among and between them. The court Grants this

motion. The Masis' claims against Keeley Crane are dismissed with prejudice and

without costs. Keeley Crane's claims against Masi Builders are likewise dismissed with

prejudice and without costs. Masi Builders' motion for summary judgment is moot.

Nothing in this order should be construed as a decision with respect to Keeley

Constructions pending Motion for Summary Judgment and to add a cross-claim against

Keeley Crane, which will be briefed and argued in the ordinary course.

Dated: March /&, 2011

~~~~ Ju ce, Superior Court

12 ATTORNEYS FOR PLAINTIFF: SUSAN B DRISCOLL BERGEN & PARKINSON 62 PORTLAND RD KENNEBUNK ME 04043

R TERRANCE DUDDY KELLY REMMEL & ZIMMERMAN PO BOX 597 PORTLAND ME 04112-0597

ATTORNEYS FOR DEFENDANT KEELEY CRANE SERVICE: HAROLD FRIEDMAN MARTHA GAYTHWAITE BLAIR A JONES FRIEDMAN GAYTHWAITE WOLF & LEAVITT PO BOX 4726 PORTLAND ME 04112-4726

ATTORNEY FOR DEFENDANT KEELEY CONSTRUCTION COMPANY INC: THOMAS MARJERISON NORMAN HANSON & DETROY PO BOX 4600 PORTLAND ME 04112-4600

ATTORNEY FOR THIRD PARTY DEFENDANT MASI BUILDERS INC: H PETER DEL BIANCO LAMBERT COFFIN PO BOX 15215 PORTLAND ME 04101-5215 STATE OF MAINE SUPERIOR COURT CIVIL ACTION YORK, ss. DOCKET NO. CV -~~-30~ CF1(i /01~ -?jJ-Ijr9-0I/ NICHOLAS MASI, III and DONNAMASI, Plaintiffs

KEELEY CRANE SERVICE and KEELEY CONSTRUCTION COMPANY, INC., Defendants ORDER KEELEY CRANE SERVICE,

Defendant/Third-Party Plaintiff

MASI BUILDERS, INC., ' Third-Party Defendant

The court has before it Defendant Keeley Construction, Co.'s ("Keeley

Construction") second motion for summary judgment and motion to amend its answer

and file a cross-claim against Keeley Crane Service ("Keeley Crane") for contribution.

Following hearing, the motion is Denied.

BACKGROUND The facts of this case were previously set forth in this court's order dated March

18, 2011. In that order, this court denied the plaintiffs' motion for summary judgment

and Keeley Construction's cross-motion for summary judgment. This court found that

there was an issue of material fact as to whether Keeley Construction and Keeley Crane

are a single enterprise and found that Keeley Construction could be liable to the plaintiff based on an "alter ego" theory. Keeley Construction now moves for summary

judgment on the grounds that a corporation cannot be held liable for the independent

torts of a sister corporation that has been released from liability. 1

There is no dispute that Keeley Crane was released from liability. On March 29,

2010, James Keeley, the common owner and president of both Keeley Crane and Keeley

Construction, was present at a settlement conference with the plaintiffs. Also present

were two different insurance defense attorneys, representing Keeley Crane and Keeley

Construction, respectively. Th~ plaintiffs, Keeley Crane, and Masi Builders, Inc. agreed

to settle. The release between these parties states:

[The Releasors] hereby release and discharge forever, Keeley Crane Service, its agents, representatives, parent companies and I or subsidiaries, successors, assigns, present and former directors, stockholders, officers, owners, employees, insurers and attorneys, except and specifically excluding Keeley Construction Company, Inc .... The parties acknowledge that claims against Keeley Construction Company, Inc. specifically survive this Agreement. Further, the parties acknowledge that the claims against Keeley Coi).slruction Company, Inc. include assertion that Keeley Construction Company, Inc. and Keeley Crane Service are an integrated enterprise and I or the single employer of collective employees. The Release and Indemnification Agreement shall not limit Plaintiffs' right to recovery against Keeley Construction Company, Inc. and shall not limit Plaintiffs' rights regarding any assets deemed to be assets of Keeley Construction Company, Inc.

(Def.'s Ex. A, p. 2 & n. 1.) Notwithstanding this, Keeley Construction asserts that the

release of Keeley Crane necessarily released Keeley Construction or, alternatively, that

the so-called "circle of indemnity" protects it from the plaintiffs' suit. Hill v. Sullivan,

Keeley Construction originally moved for summary judgment on the grounds that a principal cannot be held liable for the independent torts of a released agent. However, this court rejected the plaintiff's assertion that Keeley Construction could be found liable as a single employer. In its opposition to Keeley Construction's second motion for summary judgment, the plaintiff makes clear that its theory of liability is not based on the principal-agent relationship.

2 2008 Me. Super. LEXIS 108, *6-7 (Me. Super. May 21, 2008) (Warren, J.) (citing Nelson v.

Johnson, 599 N.W.2d 246,248-49 (N.D. 1999))_2

DISCUSSION

The release clearly states that the plaintiffs have the right to pursue its claims

against Keeley Construction.

Equitable estoppel "precludes a party from asserting rights which might perhaps have otherwise existed . . . against another person who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right." Dep't of Health & Human Servs. v. Pelletier! 2009 ME 11, 9I 17, 964 A.2d 630, 635 (quotation marks omitted). Equitable estoppel requires a misrepresentation that "may arise through a combination of misleading statements, conduct, or silence." Id. 9I 18, 964 A.2d at 636.

Blue Star Corp. v. CKF Props., LLC, 2009 ME 101, 9I 27, 980 A.2d 1270, 1277.

The plaintiffs and Keeley Crane knowingly entered into the release agreement,

explicitly reserving to the plaintiffs the right to pursue claims against Keeley

Constn1ction. The plaintiffs entered into the release relying on Keeley Crane's writ.ten

assertions that they could pursue claims against Keeley Construction, independent of

Keeley Construction's relationship with Keeley Crane. There is no dispute that the

plaintiffs' position is worse if they cannot pursue their claims against Keeley

Construction despite the contractual language stating otherwise.

There is a dispute as to whether Keeley Construction is the alter ego of Keeley

Crane. If the fact finder determines that Keeley Construction is the alter ego of Keeley

Crane, then Keeley Construction explicitly preserved the plaintiffs' right to pursue its

Keeley Construction claims that it should be released from liability because if it is found to be Keeley Crane's alter ego, it will have an action for contribution against Keeley Crane, which would trigger the indemnification provision of the release. (See Def.'s Ex. A§ VIII.) The indemnification provision of the release states that the plaintiffs will indemnify Keeley Crane for all actions against it, including actions for contribution. (Id.) The provision explicitly states that the plaintiffs will indemnify Keeley Crane for claims including those brought by Keeley Co!l-struction. (Id.) Therefore, the plaintiffs would have no additional recovery. See Hill, 2008 Me. Super. LEXIS 108 at *6-7 (quoting Nelson, 599 N.W.2d at 248-49).

3 claims against it and is equitably estopped from asserting otherwise. For the same

reasons, Keeley Construction is estopped from asserting a claim for contribution against

Keeley Crane, thereby defeating the circle of indemnity.

Keeley Construction was not technically a party to the release agreement. For

equitable estoppel to apply, the plaintiffs would have to show that Keeley Construction

misled them in some way. The plaintiffs can do so by establishing that Keeley

Construction was present at the settlement negotiations through its agent, James

Keeley. 3 • "Whether an agency relationship exists is generally a question of fact."

Fitzgerald v. Hutchins, 2009 ME 115, 9I 12, 983 A.2d 382, 387 (quotations omitted). A fact

finder could determine that James Keeley, who is the owner and president of Keeley

Construction and was present at the settlement conference, was also acting as an agent

of Keeley Construction when he explicitly preserved the plaintiffs' right to pursue their

claims against Keeley Construction. See e.g., Advanced Constr. Corp. v. Pilecki, 2006 ME

84, 9I 17, 901 A.2d 189, ' 196 (finding that a corporation's president is the corporation's

agent). Though there are limited facts in the summary judgment record to determine

what type of authority James Keeley had, there are at least some facts to indicate that he

was also acting on behalf of Keeley Construction when he signed the release agreement.

See Libby v. Concord Gen. Mut. Ins. Co., 452 A.2d 979, 981-82 (Me. 1982) (defining express

authority, implied authority and apparent authority).

Accordingly, there remains a dispute as to whether Keeley Construction is

equitably estopped from claiming that the release of Keeley Crane effectively released

Keeley .Construction. For the same reasons, Keeley Construction would be equitably

estopped from asserting a claim for contribution against Keeley Crane thereby defeating

3 Alternatively, Keeley Construction's attorneys were also present and may have been acting as an agent of Keeley Construction. ·

4 the circle of indemnity. Moreover, there is a dispute as to whether James Keeley was

acting as an agent of Keeley Construction when he entered into the release agreement.

Keeley Construction's motion to amend its answer is DENIED. Keeley

Construction's motion for summary judgment is also DENIED because Keeley

Construction may be estopped from asserting any claim under the release.

Dated: July 2.1 , 2011

ATTORNEYS FOR PLAINTIFF: ATTORNEY - - - - -FOR KEELEY CONSTRUCTION COMPM"'Y INC: SUSAl~ B DRISCOLL THOMAS MARJERISON BERGEN & PARKINSON NORMAN HANSON & 0ETRCY 62 PORTLAND RD PO BOX 4600 KENNEBUNK ME 04043 PORTLAND ME 04112-4600

R TERRANCE DUDDY KELLY REMMEL & ZIMMERMAN PO BOX 597 PORTLAND ME 04112-0597

ATTORNEYS FOR DEFENDANT KEELEY CRANE SERVICE: HAROLD FRIEDMAN MARTHA GAYTHWAITE FRIEDMAN GAYTHWAITE WOLF & LEAVITT PO BOX 4726 PORTLAND ME 04112-4726

ATTORNEY FOR DEFENDlU~T PIT STOP FUELS INC AND DANA L&~PRON: JAMES C HUNT ROBINSON KRIGER & MCCALLUM PO BOX 568 PORTLAND ME 04112-0568

ATTORNEY FOR DEFENDANT KEELEY CRANE SERVICE: ATTORNEY ~ FOR 3RD ·---------· ........PARTY ~-~-- - DEFENDANT: BLAIR A JONES H PETER DEL BIA:;!CO GERJVlA..''H MARTEHUCCI RIGGLE & HILL LMiBERT COFFIN 43 DEERING STREET PO BOX 15215 PORTLAND ME 04101 PORTLAND ME 04101-5215