STANLEY v. EATON PEABODY et al

Filing 43

MEMORANDUM DECISION ON DEFENDANTS MOTION FOR RECONSIDERATION denying 40 Motion for Reconsideration By MAGISTRATE JUDGE JOHN H. RICH III. (nrg)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE

PATTY RAE STANLEY,
Plaintiff
v.
EATON PEABODY, DANIEL McKAY,
and SARAH ZMISTOWSKI,
Defendants

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No. 1:10-cv-345-NT

MEMORANDUM DECISION ON DEFENDANTS’ MOTION FOR RECONSIDERATION

The defendants in this attorney malpractice action seek reconsideration of my September
30, 2011, recommended decision on their motion for summary judgment (Docket No. 39).
Specifically, they contend that I failed to address a particular argument that they believe is
dispositive of the case. A motion to reconsider “shall demonstrate that the [ruling] was based on
a manifest error of fact or law[.]” Local Rule 7(g). I deny the motion.
The defendants assert that I “did not rule upon” the first argument presented in their reply
memorandum.

Defendants‟ Motion to Reconsider Recommended Decision on Motion for

Summary Judgment (“Motion”) (Docket No. 40) at 1. That argument contended that the plaintiff
admitted, in an affidavit filed with her opposition to the defendants‟ motion for summary
judgment, that she must have been aware at the time of the transaction in which she was
represented by the defendants that she was not guaranteed any more money than she received in
the transaction‟s first payment. Defendants‟ Reply Memorandum in Support of Motion for
Summary Judgment (Docket No. 37) at 1-2. According to the defendants, that fact means that
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the plaintiff was not damaged, and they are entitled to summary judgment. Id. at 2; Motion at 26.
This argument is based on a “term sheet” sent to the plaintiff on November 23, 2004, by
the potential buyer of her campgrounds. Motion at 3. The term sheet states, inter alia, that the
in Year 5 or 7 of the parties‟ joint venture, the plaintiff can sell her interest to the other joint
venture for “a purchase price based on a 10% cap rate on the previous 12 months Net Operating
income.” Term Sheet (Docket No. 27-11, also identified as Exhibit D 113). The paragraph of
the plaintiff‟s affidavit cited by the defendants is the following, in relevant part: “On November
23, 2004 Marguerite sent along to me a „rough draft of a term sheet‟ which was consistent with
our discussions and my understanding of the deal.” Affidavit of Plaintiff Patty Rae Stanley
(Docket No. 29-2) ¶ 53.
The defendants asserts that these facts mean that the plaintiff “now admits she
independently understood that she was not receiving a guaranteed second payment but decided to
proceed with the deal in the hopes that improvements to the properties would substantially
increase their N[et] O[perating] I[ncome], on which the second payment would be calculated.”
Motion at 4.
The defendants‟ conclusion does not necessarily follow from their premise. They proffer
no evidence that the plaintiff was asked the next, necessary question: And what was your
understanding of the deal after you had reviewed the term sheet? It is certainly conceivable that
the defendants‟ interpretation of the evidence is correct, and that interpretation may well weaken
any testimony to the contrary that the plaintiff might give at trial, but that interpretation is not
necessarily compelled, as a matter of law, so as to entitle the defendants to summary judgment.
It is entirely possible that the plaintiff in fact believed that her expectation of an additional $6.75
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million and the terms of the term sheet were consistent. Indeed, the meaning of “a 10% cap rate
on the previous 12 months Net Operating Income” is not immediately apparent to anyone not
party to the transaction.
The defendants‟ assertion that I “may have misunderstood that Defendants were making
an independent argument on this point[,]” and suggestion that I “decline[d] to consider or rule on
[this] argument[,]” id. at 5, are also incorrect. As the plaintiff notes, Plaintiff‟s Opposition to
Defendants‟ Motion for Reconsideration of Recommended Decision on Motion for Summary
Judgment (Docket No. 41) at 3 n.2, my recommended decision includes the following as an
undisputed fact: “The plaintiff read and understood the term sheet.” Stanley v. Eaton Peabody,
No. 1:10-cv-345-DBH, 2011 WL 4594919, at *2 (D. Me. Sept. 30, 2011). The defendants argue
that this “does not mean that [the plaintiff] agreed [the term sheet‟s terms] were correct,”
Defendants‟ Reply in Support of Their Motion to Reconsider Recommended Decision on Motion
for Summary Judgment (Docket No. 42) at 5, but, contrary to their ensuing argument, paragraph
53 of the plaintiff‟s affidavit does not mean that she agreed that those terms established that she
would not receive another $6.75 million for her remaining interest in the campgrounds. There is
still a missing conclusion, which it is the jury‟s province to determine.
The defendants have not established that the recommended decision contains either a
manifest error of law or fact. Therefore, the motion to reconsider is DENIED.

Dated this 18th day of November, 2011.

/s/ John H. Rich III
John H. Rich III
United States Magistrate Judge
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