McCurtain v. Morrill

• Court: Superior Court of Maine
• Decided: May 2, 2007
• Docket: CUMcv-05-072
• Status: Unpublished

Opinion

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BRADLEY C. McCURTAIN,

Plaintiff DECISION AND ORDER v. ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

JON MORRILL and HOLLY MORRILL DONALD L. GARBRf.;CHT LAW LIBRARY Defendants AUG 02 LUUt I. BEFORE THE COURT

Defendants' motion for summary judgment on all remaining counts:

Count I - Breach of Fiduciary Duty (Jon Morrill) Count II - Intentional Misrepresentation/Deceit (Jon Morrill)

a Count VII - Tortious Interference on Morrill)

Count XII - Tortious Interference (Holly Morrill)

Count XIII - Breach of Implied Covenant of Good Faith and Fair Dealing

Count XIV - Breach of Contract against Jon Morrill

Count XV - Negligent Mlisrepresentation

II. PROCEDURAL HISTORY AND BACKGROUND

All of the counts in the complaint arise from an alleged partnership or joint

venture by McCurtain and Jon Morrill formed for the purposes of buying a thirty-five

acre parcel of land on or near Sebago Lake. McCurtain claims that he and Morrill

intended to purchase the parcel with a third party, retain lake front lots for themselves

and sell or dispose of the rest depending on the third party. McCurtain and Morrill

signed a purchase and sale agreement with the owner of the property. McCurtain and Morrill entered into negotiations with a third party, Leo Blair, to purchase the property.

After that, Morrill and McCurtain's account of what happen differ dramatically. Blair

purchased the entire parcel without McCurtain or Morrill. McCurtain maintains that

Morrill assisted Blair with the purchase and cut McCurtain out of the deal. Morrill

maintains that McCurtain's actions in the course of negotiations caused Blair to back

out of the deal to purchase the property with Morrill and McCurtain. There is some

evidence that Morrill was paid for his assistance to Blair in obtaining the property.

Morrill insists that there was never a partnership or joint venture and that his behavior

violated no duties owed to McCurtain.

Bradley McCurtain filed a sixteen-count complaint against Jon Morrill, Leo Blair,

Philip Libby, Holly Morrill, the Estate of Mildred Morrill, Envision Realty Corp. [Corp.]

and Envision Realty, LLC [LLC]. Libby, Blair, the Corp. and the LLC all filed an

answer. Holly and Jon Morrill filed answers and a counter-claim. All claims, other

than those against Jon and Holly Morrill have since been dismissed.

Jon and Holly Morrill filed a motion for summary judgment on all remaining

counts l accompanied by statements of material fact (DSMF).

III. DISCUSSION

A. Summary Judgment Standard

This court will grant a motion for summary judgment when no genuine issue of

material facts exists and any party is entitled to judgment as a matter of law. Gagnon's

Hardware & Furniture v. Michaud, 1998 ME 265,

A fact is material when it may change the outcome of the case and "a genuine issue

1 Count I, Breach of Fiduciary Duty against Jon Morrill; Count II, Intentional Misrepresentation against Jon Morrill; Count VII, Tortious Interference by Jon Morrill; Count XII, Tortious Interference by Holly Morrill; Count XIII, Breach of Implied Covenant of Good Faith and Fair Dealing; Count XIV, Breach of Contract against Jon Morrill; and Count XV, Negligence.

2 exists when sufficient evidence supports a factual contest to require a fact finder to

choose between competing versions of the truth at trial." Burdzel v. Sobus, 2000 JvIB 84,

1 6, 750 A.2d 573, 575. When"determining whether to grant or deny a motion for a

summary judgment, the trial court is to consider only the portions of the record referred

to, and the material facts set forth in the [statement of material facts]." Corey v. Norman,

Hanson & DeTroy, 1999 ME 196, 18, 742 A. 2d 933,938 (internal quotations and citations

omitted). Finally, the court gives the party opposing a summary judgment the benefit

of any inferences that might reasonably be drawn from the facts presented. Curtis v.

Porter, 2001 ME 158, 1 9, 784 A.2d 18, 22.

B. Partnership or Joint VentUl~e Theory

A partnership is "an association of 2 or more persons ... to carryon as co-owners [sic] a

business for profit." 31 M.R.S.A. § 286 (2006). "The right to participate in control of the

business is the essence of co-ownership." Dalton v. Auston, 432 A.2d 774, 777 (Me. 1981).

The determination of whether "'a partnership has been formed is a fact intensive inquiry

in which 'no one factor alone is determinative.' " John Nagle Co. v. Gokey, 2002 ME 101, 1

5, 799 A.2d 1225, 1227 (citation omitted). "Evidence relevant to the existence of a

partnership includes evidence of a voluntary contract between two persons to place

their money, effects, labor, and skill, or some or all of them, in lawful commerce or

business with the understanding that a community of profits will be shared." Dalton,

432 A.2d at 777. Although the sharing of profits is prima facie evidence of a partnership,

31 M.R.S.A. § 287(4) (2006), its absence does not automatically preclude the existence of

a partnership relationship.

"A joint venture is an association between two or more individuals or entities who

agree to pool their efforts and resources to jointly seek profits." Nancy W. Bayley, Inc. v.

Employment Sec. Comm'n, 472 A.2d 1374, 1377 (Me. 1984). "A joint venture can be found

3 'where persons embark on an undertaking without entering on the prosecution of the

business as partners strictly but engage in a common enterprise for their mutual

benefit.' John Nagle Co., 2002 MlE 101

Spinning Co., 128 Me. 22, 29, 145 A. 250, 253-54 (1929). A joint venture is like a

partnership in that its existence is dependant upon the circumstances of the parties'

relationship. John Nagle Co., 2002 ME 1010

more limited in scope and duration' than a partnership. [d. (citation omitted).

All of the plaintiff's claims are predicated on the idea that McCurtain

and Morrill were either partners or part of a joint venture. McCurtain and Morrill both

attempted to find a third party to help them obtain the Bianchi property, with the goal

of retaining portions of the property for themselves and disposing of the rest. DSMF

13, 15-17. McCurtain and Morrill both entered into a purchase and sale agreement

together. DSMF

reasonably determine that the parties entered into a joint venture relationship to buy

the Bianchi property. Since, there is no evidence on the record that the parties were

intending to carryon as co-owners of a business there is no evidence to suggest that the

parties entered a partnership.

C. Count I: Breach of Fiducialy Duty

Parties who enter into a joint venture together owe a fiduciary duty to one

another. Allen v. Kent, 153 Me. 275, 277, 136 A.2d 540, 542 (1957). There is no case law

that defines what fiduciary duties are owed to individuals in a joint venture. In

partnerships, fiduciary duties owed are the duty of loyalty and the duty of care. 31

M.R.S. § 1044 (1)(2006). The lvfaine legislature has adopted sections of the Uniform

Partnership Act in 31 M.R.S. §§ 1001-1105. Given the proximity of a joint venture and

partnership relationships, it is likely that the fiduciary duties owed in a joint venture are

4 similar to the duties owed in at joint venture. The duties, like the relationship itself, are

likely more limited in scope and duration due to the more limited nature of the joint

venture and the fact that the duties are not codified in statute. In partnerships, the duty

of loyalty is limited, but includes a duty to act as a trustee for the partnership of a

partnership opportunity and to refrain from acting with a party who is adverse to the

partnership's interest. 31 M.JR.S. § 1044(2)(A) (2006). The duties also include an

obligation of good faith and fair dealing. 31 M.R.S. § 1044(4)(2006).

The parties' accounts of the circumstances surrounding the sale of the Bianchi

property to Blair differ considerably. There is evidence that Morrill was paid $50,000 to

facilitate the sale to Blair. PASMF

obtain the property with Blair and Morrill had he been aware of these circumstances.

PASMF

fiduciary duty by profiting from the acquisition of the property by Blair, after his

involvement with McCurtain in a joint venture to acquire the same property.

D. Count II: Intentional Misrepresentation

To prevail on a claim for intentional misrepresentation,

the plaintiff must prove by clear and convincing evidence: (1) that the defendant made 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 the plaintiff to act in reliance upon it, and, (5) the plaintiff justifiably relied upon the representation as true and acted upon it to the plaintiff's damage.

Rand v. Bath Iron Works Corp., 2003 ME 122,

plaintiff alleges a failure to disclose rising to the level of a misrepresentation, the

plaintiff must prove either (1) active concealment of the truth, or (2) a specific

relationship imposing on the defendant an affirmative duty to disclose."

Fitzgerald v. Gamester, 658 A.2d 1065, 1069 (Me. 1995).

5 The parties did have a special relationship, which may have imposed

upon the defendant a duty to disclose. The failure of such disclosure may have

risen to the level of fraud. There are at least two instances that McCurtain are

claiming created an affirmative duty for Morrill to disclose information to him.

First concerns the amount of money that Morrill could have raised to contribute

to the joint venture, which is in dispute and which McCurtain asserts Morrill

misrepresented the actual figure. McCurtain also asserts that Morrill had an

affirmative duty to inform him that Blair was going to obtain the property and

that Blair desired to revive the contract with Morrill and McCurtain to purchase

the property. McCurtain maintains that Morrill's failure to do so was an

omission that amounted to fraud. 2 McCurtain also states that he relied to his

detriment on Morrill and was injured as a result of Morrill's misrepresentations.

PASMF enen 61-62, 66. There is evidence on the record that a fact finder could

find that Morrill's behavior constituted intentional misrepresentation that arose

to the level of fraud.

E. Counts VII and XII: Tortious Interference

Tortious interference with a prospective economic advantage requires a plaintiff to prove: (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.

Rutland v. Mullen, 2002:ME 98, ~I 13, 798 A.2d 1104, 1110.

There is evidence that: the opportunity to purchase the property was a

prospective economic advantage. PASMF en 66. If McCurtain prevails upon his claim for

2 Morrill also states that an alternative basis to dismiss McCurtain claim is his failure to comply with M.R. Civ. P. 9(e), to plead fraud with particularity. In the amended complaint, McCurtain does allege that Morrill misrepresented the amount of money that he could contribute toward the acquisition of a property, however, he does not allege, in Count II, that Morrill failed to make him aware that Blair attempted to revive the contract, although these facts are incorporated by reference and appl~ar earlier in the complaint.

6 intentional misrepresentation he would be able to prove the existence of fraud.

McCurtain alleges the fraud prevented him from purchasing the property and if proved

he may be able to demonstrate Morrill's misrepresentation proximately caused the

injury he alleges. Therefore, there is evidence on the record that my lead a trier of fact

to determine that Morrill's behavior constituted tortious interference.

In Count XII, McCurtain alleges Holly Morrill also tortiously interfered with

McCurtian's acquisition of the property. However, there is no evidence on the record

that Holly Morrill ever committed fraud or intimidation against McCurtain and,

therefore, McCurtain cannot recover for tortious interference from Holly Morrill.

F. Count XIII: Breach of Implied Covenant of Good Faith and Fair Dealing

McCurtain in his brief acknowledges "that a duty of good faith and fair dealing

does not lie outside of contracts governed by the DCC," but points out that there is a

duty of good faith and fair dealing in a fiduciary relationship. It is unclear if he is

abandoning this claim or if he seeks to combine this count into his prior claim for

breach of fiduciary duty. Since, there is no contractual duty of good faith and fair

dealing this count fails to state claim upon which relief may be granted.

G. Count XIV: Breach of Contract

The trier of fact determines if a contract exists and if that contract has been

breached. See Smile, Inc. v. Moosehead Sanitary Dist., 649 A.2d 1103, 1105 (Me. 1994);

Vanvoorhees, et al. v. Dodge, 679 A.2d 1077,1080 (Me. 1996). "The party seeking to enforce

the alleged contract ha[s] the burden to establish its existence." Smile, 649 A.2d at 1105.

To establish a legally binding agreement the parties must have mutually assented to be bound by all its material terms; the assent must be manifested in the contract, either expressly or impliedly; and the contract must be sufficiently definite to enable the court to determine its exact meaning and fix exactly the legal liabilities of the parties.

Roy v. Danis, 553 A.2d 663,664 (Me. 1989) (citations omitted).

7 "Preliminary negotiations as to the terms of an agreement do not constitute

a contract." Smile, 649 A.2d at 1105. Statements of intent that are given as

reassurance cannot be construed as a contract because"an intention to do an act is

not an offer to do it ... a mere expression of intention or general willingness to do

something... does not amount to an offer." Searles v. Trustees of St. Joseph's College,

et al., 1997 ME 128, CJ[ 13, 695 A.2d 1206, 1212 (citing 17A Am. JUL 2d Contracts 15

43 (1991)). In order for a contract to be enforceable, the agreement must be

sufficiently definite to allow a court to determine the "exact meaning and fix

exactly the legal liability of the parties." Ault v. Pakulski, 520 A.2d 703, 704 (Me.

1987).

There is evidence that the parties may have entered a joint venture in order

to obtain the Sebago Lake property. Nowhere are the terms of their agreement

memorialized and, by McCurtain's own testimony, the terms of the agreement

were indefinite as to the amount of money to be supplied by each party. DSMF

22-27 and Pl.'s Responses to the DSMF

DSMF

which would allow the court to determine the legal liability of the parties. While

there is evidence of an agreement to pursue the purchase, McCurtain has failed to

raise an issue of material fact concerning the enforceability of a specific agreement

which the parties entered. Indeed, McCurtain's testimony is that the agreement

was to remain flexible dependilng on if and who the third party they joined with

to purchase the property was and how much he or she could have contributed.

Pl.'s Response DSNIF

future point in time does not constitute an enforceable contract.

8 H. Count XV: Negligent Misrepresentation

For negligent misrepresentation claims, the Law Court adopted section 552(1) of

the Restatement (Second) of Torts (1977). Rand v. Bath Iron Works Corp., 2003 ME 122,

13, 832 A.2d 771, 774. Negligent misrepresentation is defined as follows:

One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guIdance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

Restatement (Second) Torts § 552(1). The Law Court has noted that "comment a to

section 552(1) observes that liability for negligent misrepresentation is 'more restricted

than that for fraudulent misrepresentation.'" Rand, 2003 ME 122,

Determining the reasonableness of the defendants conduct is the primary task of the

fact-finder. Id. 823 A.2d at 774-775.

McCurtain's basis for negligent misrepresentation is the same as his basis for

intentional misrepresentation. McCurtain alleges that Morrill's false statements

concerning his ability to contribute money towards the acquisition of the property and

his failure to disclose that Blair had renewed his interest in purchasing the property

provide a basis for recovery under negligent misrepresentation. There is evidence that

Morrill had a pecuniary interest in the transaction because he entered a purchase and

sale agreement and he may ultimately have been paid by Blair. DSMF

PASMF

determine. There remains a genuine issue of material fact concerning whether Morrill

committed negligent misrepresentation.

9 IV. DECISION AND ORDER

The clerk will make the following entries as the Decision and Order of the court.

A. Defendants' Motion for summary judgment is denied on the following counts:

Count I - Breach of Fiduciary Duty as to Jon Morrill; Count II - Intentional Misrepresentation as to Jon Morrill; Count VII - Tortious Interference by Jon Morrill; and, Count XV - Negligent Misrepresentation.

B. Defendants' Motion for summary judgment is granted on the following counts:

Count XII - Tortious Interference as to Holly Morrill; Count XIII - Breach of Implied Covenant of Good Faith and Fair Dealing; and, Count XIV ­ Breach of Contract.

SO ORDERED.

Dated' me., \ c -----­ Thomas E. De anty II Justice, Superior Court

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