Tutor Perini Corporation v. Banc of America Securities LLC et al
Filing
242
Judge Nathaniel M. Gorton: MEMORANDUM & ORDER entered granting 206 Motion for Summary Judgment; denying as moot 207 Motion for Partial Summary Judgment (Danieli, Chris)
United States District Court
District of Massachusetts
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)
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Plaintiff,
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v.
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BANC OF AMERICA SECURITIES LLC, )
now known as Merrill Lynch,
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Pierce, Fenner & Smith Inc.,
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successor by merger, and
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BANK OF AMERICA, N.A.,
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Defendants.
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TUTOR PERINI CORPORATION,
Civil Action No.
11-10895-NMG
MEMORANDUM & ORDER
GORTON, J.
This case arises out of unsuccessful investments made by
defendant Banc of America Securities LLC (“BAS”), allegedly with
the knowledge and acquiescence of co-defendant Bank of America,
N.A. (“BANA”), on behalf of plaintiff Tutor Perini Corporation
(“Tutor Perini”) in a kind of security known as auction rate
securities (“ARS”).
Pending before the Court are defendants’ motion for summary
judgment and plaintiff’s motion for partial summary judgment.
For the reasons that follow, defendants’ motion will be allowed
and plaintiff’s motion will be denied.
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I.
Background
A.
The parties
Tutor Perini is a building construction company
incorporated in Massachusetts and headquartered in California.
It opened a non-discretionary, investment-brokerage account with
defendant BAS in 2004.
Between May, 2007 and February, 2008,
plaintiff was a Qualified Institutional Buyer under the
Securities Act of 1933 because it owned or invested at least
$100 million on a discretionary basis.
Defendant BANA is a bank registered in Delaware with a
principal place of business in North Carolina.
It is a wholly-
owned subsidiary of Bank of America Corporation, a major global
banking institution.
Defendant BAS, now known as Merrill Lynch, Pierce, Fenner &
Smith, Incorporated, is also a wholly-owned subsidiary of Bank
of America Corporation and was, at all relevant times, an
investment banking company registered as a broker-dealer with
the Securities and Exchange Commission.
B.
Auction rate securities
ARS are a form of bond that have long-term maturity periods
of up to 40 years.
They pay interest at rates that are reset at
regular intervals of, typically, 7, 28 or 35 days.
That enables
issuers to access long-term financing at short-term rates.
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Interest rates for ARS are set by a “Dutch auction,”
wherein prospective purchasers submit bids through their brokerdealer to an auction agent.
Each bid consists of the par value
of the securities that the buyer wishes to purchase and the
minimum interest rate that the buyer is willing to accept.
Successively higher bids are then accepted until all the ARS for
sale are covered.
The interest rate of the highest bid
necessary to cover all of the sell orders is known as the
clearing rate.
Each ARS is subject to a cap on the highest possible
clearing rate, also known as a maximum rate, which is either a
fixed number or determined by a formula based upon indices such
as the London Interbank Offered Rate (“LIBOR”).
The ARS at
issue in this case are student loan ARS (“SLARS”) which did not
have fixed maximum rates but rather maximum rates determined by
a formula.
An auction is considered successful if there are sufficient
bids below the maximum rate so as to allow for the sale of all
of the outstanding securities.
In contrast, a failed auction
occurs when the number of bids below the maximum rate cannot
guarantee the sale of all of the securities offered for sale.
In such an event, holders of ARS who have offered to sell their
shares must continue to hold those securities until the next
successful auction.
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Authorized broker-dealers have, however, the discretion to
place “support bids,” which are bids to purchase ARS for their
own accounts to prevent auctions from failing.
When auctions
fail, holders of ARS continue to collect interest at the maximum
rate.
C.
Plaintiff’s entry into the ARS market and BAS’s
disclosures
In 2004, Tutor Perini opened a non-discretionary BAS
investment-brokerage account.
Plaintiff’s Treasurer Susan
Mellace (“Ms. Mellace”) made daily investment decisions under
the oversight of its President Robert Band and CFO Kenneth Burk.
Lois McGrath (“Ms. McGrath”) was the BAS account representative
assigned to plaintiff’s account.
In May, 2006, BAS published general ARS disclosures on its
public website which 1) warned that auctions could fail, 2)
explained that BAS “routinely” bids in auctions to prevent
auction failures even though it is not obligated to do so and
“[i]nvestors should not assume that BAS will place a bid...or
that Failed Auctions...will not occur” and 3) described the
maximum-rate feature resulting from an auction failure.
Plaintiff purchased its first SLARS in September, 2007
after which Ms. Mellace received 1) an email attaching
“Important Auction Rate Securities Disclosures,” 2) a trade
confirmation noting that the SLARS have a 2036 maturity date and
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3) a spreadsheet reflecting the specific maximum-rate formulas
for various SLARS.
In December and January, 2007, after liquidating more than
$100 million of ARS, plaintiff purchased the eight SLARS at
issue in this case (“the eight SLARS”).
The collateral
underlying six of them was backed by the federal government
while the other two were insured by Ambac, a monoline bond
insurer (“Ambac-Wrapped SLARS”).
The prospectuses of the eight
SLARS warned that auction failures are especially likely
if an issuer’s credit were to deteriorate, a market
disruption were to occur or if, for any reason, the
broker-dealers were unable or unwilling to bid.
D.
Collapse of the ARS market
In the fall of 2007, interest rates for ARS increased due
to reduced investor demand.
At the same time, major indices
upon which the maximum rates were based for the ARS at issue
were trending downward.
Because auction failure was more likely
when maximum rates fell below market rates, many issuers
implemented waivers to raise temporarily the maximum rates on
their ARS.
BAS and other broker-dealers also began placing
support bids with increasing frequency.
In early 2008, Ms. McGrath alerted plaintiff to adverse
Ambac-related news, such as the downgrade of Ambac’s credit
rating from AAA to AA and a report that the company had a
likelihood of going bankrupt.
Tutor Perini nevertheless placed
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hold orders for the Ambac-Wrapped SLARS on January 17 and
February 5, 2008.
On February 6, 2008, certain executives at BAS prepared a
memorandum seeking permission from management to increase ARS
inventory levels in order to relieve some balance sheet
pressure.
BAS management assented to that request.
Between February 7 and February 12, 2008, however, seven
prominent broker-dealers decided to withhold supporting bids in
all SLARS auctions and allowed them to fail.
On February 13,
2008, BAS followed suit and withdrew its support for SLARS as
well.
At the time of the market collapse, Tutor Perini held in
its account at BAS ARS with a face value of nearly $200 million.
During the succeeding four years, plaintiff struggled to
liquidate more than one half of its ARS portfolio at par value.
It subsequently resorted to selling the eight SLARS on the
secondary market for an average of 95% of par value for the six
backed by the federal government and 37% of par value for the
two Ambac-Wrapped SLARS.
E.
Alleged misconduct by BAS
Tutor Perini alleges that between September, 2007 and
February, 2008, defendants made misrepresentations and material
omissions with respect to, inter alia, 1) the state of the ARS
market, 2) the frequency BAS obtained ARS maximum rate waivers
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and 3) the increased submissions of auction-support bids by BAS
that led to a tripling of its ARS inventory by the end of 2007.
Plaintiff contends that it was not properly informed of all
material facts relating to the ARS market and was therefore
misled about the risk of investing in SLARS during that time
period.
II.
Procedural History
Plaintiff initiated this lawsuit in May, 2011 asserting
claims against defendants for 1) securities fraud, in violation
of Section 10(b) of the Securities and Exchange Act of 1934, 15
U.S.C. § 78j(b) (“the Exchange Act”) and Rule 10b-5 promulgated
thereunder (Count I), 2) intentional misrepresentation (Count
II), 3) fraudulent concealment (Count III), 4) negligent
misrepresentation (Count IV), 5) violation of M.G.L c. 93A
(“Chapter 93A”) (Count V), 6) civil conspiracy (Counts VI-VII),
7) violation of the Massachusetts Uniform Securities Act
(“MUSA”), M.G.L. c. 110A (Count VIII), 8) breach of contract
(Count IX) and 9) conversion (Count X).
In November, 2011, defendants moved to compel arbitration.
That motion was referred to Magistrate Judge Judith G. Dein and
in June, 2012, she denied defendants’ motion.
In August, 2012, defendants filed a motion to dismiss which
was referred to Magistrate Judge Dein for a Report &
Recommendation (“R&R”).
In July, 2013, Magistrate Judge Dein
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entered an R&R recommending the allowance of defendants’ motion
to dismiss with respect to Counts VI, VII, IX and X of
plaintiff’s complaint.
The Court accepted and adopted the R&R
in September, 2013.
Following comprehensive discovery, the parties filed their
motions for summary judgment in May, 2015.
Trial is currently
scheduled to commence on September 14, 2015.
III. Motions for Summary Judgment
A.
Summary Judgment Standard
The role of summary judgment is “to pierce the pleadings
and to assess the proof in order to see whether there is a
genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d
816, 822 (1st Cir. 1991) (quoting Garside v. Osco Drug, Inc.,
895 F.2d 46, 50 (1st Cir. 1990)).
The burden is on the moving
party to show, through the pleadings, discovery and affidavits,
“that there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(c).
A fact is material if it “might affect the outcome of the
suit under the governing law.” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986).
A genuine issue of material fact
exists where the evidence with respect to the material fact in
dispute “is such that a reasonable jury could return a verdict
for the nonmoving party.” Id.
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If the moving party satisfies its burden, the burden shifts
to the non-moving party to set forth specific facts showing that
there is a genuine, triable issue. Celotex Corp. v. Catrett, 477
U.S. 317, 324 (1986).
The Court must view the entire record in
the light most favorable to the non-moving party and make all
reasonable inferences in that party's favor. O'Connor v.
Steeves, 994 F.2d 905, 907 (1st Cir. 1993).
Summary judgment is
appropriate if, after viewing the record in the non-moving
party's favor, the Court determines that no genuine issue of
material fact exists and that the moving party is entitled to
judgment as a matter of law.
B.
Defendants’ motion for summary judgment
1.
Claims against BANA
Defendants contend that BANA is entitled to summary
judgment on every claim because all of the activity at issue
occurred at BAS and plaintiff has failed to identify any
misconduct by BANA.
The Court agrees.
Although plaintiff asserts in its opposition to defendants’
motion for summary judgment that BANA is liable as a controlling
person, it has not made that claim in its pleadings.
Tutor
Perini may not “raise new claims for the first time in
submissions in opposition to summary judgment.” Bonnie & Co.
Fashions v. Bankers Trust Co., 170 F.R.D. 111, 119 (S.D.N.Y.
1997).
Moreover, although plaintiff lists four people involved
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in analyzing maximum rate waivers and liquidity risks who were
employed by BANA or jointly employed by both BANA and BAS, it
has failed to provide any facts indicating that BANA exercises
control over BAS. See Aldridge v. A.T. Cross Corp., 284 F.3d 72,
85 (1st Cir. 2002) (noting that “the alleged controlling person
must not only have the general power to control the company, but
must also actually exercise control over the company”).
Accordingly, defendants’ motion for summary judgment with
respect to plaintiff’s claims against BANA will be allowed.
2.
Misrepresentation (Counts II and IV)
Tutor Perini claims that BAS misrepresented 1) the longterm nature of ARS, 2) the effect of auction failures in August,
2007 on SLARS, 3) the reason that it sold ARS at a discount in
late 2007 and 4) that it would continue to submit auctionsupport bids.
Plaintiff’s opposition to defendants’ motion for summary
judgment does not, however, respond to defendants’ arguments
refuting the allegations of misrepresentation. See Evans v.
Holder, 618 F. Supp. 2d 1, 13 (D.D.C. 2009) (“where a non-moving
party fails to oppose arguments set forth in a motion for
summary judgment, courts may treat such arguments as conceded”).
Plaintiff does not appear to dispute defendants’ contentions
that
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1) BAS made ARS disclosures that ARS auctions could
fail and that the eight SLARS had maturities of
between 30 and 40 years,
2) with respect to the August, 2007 auction failures
for several ARS with exposure to subprime-mortgage
assets, there is no evidence that Ms. McGrath told
Ms. Mellace anything about their potential effect on
SLARS liquidity or that those auction failures had
any effect on the eight SLARS,
3) Ms. McGrath accurately informed Ms. Mellace that BAS
sold certain ARS at a discount when it “wanted to
get rid of” them, and
4) the alleged assurances made by BAS in September,
2007 and on February 12, 2008 that it would continue
to place SLARS support bids is not actionable
because BAS continued to support the auctions until
several other major broker-dealers decided to
withdraw their bids in mid-February, 2008 and Tutor
Perini understood that BAS could withdraw support
bidding at any point.
Plaintiff also fails to identify any false statements made
by BAS, see Amorim Holding Financeria, S.G.P.S., S.A. v. C.P.
Baker & Co., 53 F. Supp. 3d 279, 300 (D. Mass. 2014) (noting
that “for a misrepresentation to be actionable, it must have, in
fact, been false”), and instead emphasizes that the crux of this
case “relate[s] to BAS’s failure to disclose current material
facts” with respect to the heightened risk of SLARS auction
failures.
Summary judgment in favor of defendants with respect to
Counts II and IV will therefore be allowed.
Furthermore,
summary judgment in favor of defendants as to plaintiff’s
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securities fraud claims in Counts I and VIII will be allowed to
the extent they rely on a BAS misrepresentation.
3.
Securities fraud (Count I)
Section 10(b) of the Securities Exchange Act and Rule 10b–5
make it unlawful for any person 1) to employ any device, scheme
or artifice to defraud, 2) to make any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements made not misleading or 3) to engage
in any act, practice or course of business which operates or
would operate as a fraud or deceit upon any person, in
connection with the purchase or sale of any security. 17 C.F.R.
§ 240.10b-5.
a.
Omissions
In order to prevail under Section 10(b) and Rule 10b-5
based on misrepresentations and omissions, plaintiff must prove
1) a material misrepresentation or omission, 2) scienter, 3) a
connection with the purchase or sale of a security, 4) reliance,
5) economic loss and 6) loss causation. Dura Pharm., Inc. v.
Broudo, 544 U.S. 336, 341-42 (2005).
Plaintiff does not appear to pursue its misrepresentation
argument and its omission claim is essentially that BAS
materially omitted to disclose a number of facts relating to the
ARS market that rendered plaintiff unable fully too appreciate
the heightened risk of ARS auction failure.
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Tutor Perini
contends that BAS concealed 1) the frequency of auction-support
bids, 2) its rising ARS inventory, 3) the maximum rates of the
eight SLARS and the difference between those rates and the
securities’ clearing rates, 4) that SLARS issuers obtained
maximum-rate waivers, 5) other ARS auction failures between
August, 2007 and February, 2008 and 6) its alleged mid-December,
2007 contingency plan to allow auctions to fail selectively.
The Court concludes that the alleged omissions were, in
fact, disclosed to the plaintiff and/or in publicly available
documents.
“It is indisputable that there can be no omission
where the allegedly omitted facts are disclosed.” In re JP
Morgan Auction Rate Sec. (ARS) Mktg. Litig., 2014 WL 4953554, at
*17 (S.D.N.Y. Sept. 30, 2014).
At the motion to dismiss stage,
the Court accepted and adopted Magistrate Judge Dein’s
recommendation to exclude BAS’s ARS disclosures from
consideration.
The Court will now, however, consider all
materials in the record in deciding the motions for summary
judgment. Fed. R. Civ. P. 56(c)(1).
With respect to the support bidding, it is undisputed that
BAS disclosed that 1) it “routinely” placed bids that “may be
designed to prevent a Failed Auction” and 2) it “may discontinue
trading in the securities without notice for any reason at any
time.”
Plaintiff also had access to information relative to the
extent of BAS’s ARS inventory levels and to the maximum rates
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and clearing rates of the eight SLARS through an online-banking
platform and spreadsheets sent to plaintiff reflecting the par
amount of all ARS in BAS’s inventory.
Although it might have
been difficult to calculate the fluctuating maximum rates,
federal securities laws require
nothing more than the disclosure of basic facts so that
outsiders may draw upon their own evaluative expertise
in reaching their own investment decisions[.]
Sec. & Exch. Comm'n v. Texas Gulf Sulphur Co., 401 F.2d 833, 849
(2d Cir. 1968).
Furthermore, BAS has demonstrated that various
news outlets reported on and plaintiff received information from
BAS about various failed auctions between August, 2007 and
February, 2008.
The allegedly concealed waivers were also
disclosed in multiple public news articles.
Plaintiff’s federal claim for securities fraud fails for
the additional reason that plaintiff cannot prove reasonable
reliance.
Contrary to plaintiff’s assertion, there is no
presumption of reliance with respect to an omission of a
material fact in absence of a duty to disclose. Stoneridge Inv.
Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148, 159
(2008).
Although a party “who discloses partial information
that may be misleading has a duty to reveal all the material
facts” to avoid deceiving the other party, plaintiff does not
contend that BAS’s disclosures themselves were misleading.
V.S.H. Realty, Inc. v. Texaco, Inc., 757 F.2d 411, 414 (1st Cir.
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1985).
Instead, it avers that additional market information
suggesting heightened risk of auction failure should have been
disclosed.
Tutor Perini is, however, a sophisticated Qualified
Institutional Buyer that received numerous written disclosures
about the risks of auction failure.
Because that risk was
disclosed accurately, there is no duty to disclose all facts
reflecting the degree of risk. See Hill v. Gozani, 638 F.3d 40,
60 (1st Cir. 2011) (“To the extent that the plaintiff's
complaint is that the precise degree of risk was not stated,
that failure is not sufficient to have rendered the statements
misleading.”); see also Mississippi Pub. Employees' Ret. Sys. v.
Boston Scientific Corp., 649 F.3d 5, 29 (1st Cir. 2011) (“we
shall hesitate to conclude that disclosure is misleading merely
because it did not state that the risk was serious”).
Therefore,
[i]n view of this clear representation, Plaintiff cannot
reasonably rely on an assumption that the market for
[SLARS] would remain liquid regardless of [BAS’s] bids,
or that [BAS] would act as a good Samaritan and secure
auction successes purely for others’ welfare.
Pivot Point Capital Master LP v. Deutsche Bank AG, 2010 WL
9452230, at *5 (S.D.N.Y. Dec. 9, 2010).
Plaintiff attempts to distinguish its case by claiming that
the cases cited by BAS involved only misrepresentations by
defendant rather than material omissions.
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That is incorrect.
For example, in Ashland Inc. v. Morgan Stanley & Co., the Second
Circuit Court of Appeals affirms the district court’s dismissal
of the case “on the ground that [plaintiffs] cannot plead
reasonable reliance” and notes that
[i]n
addition
to
alleging
that
[defendant]
misrepresented the safety and liquidity of the SLARS,
the FAC [first amended complaint] also alleges the
following pertinent omissions. [Defendant] failed to
disclose: (i) how often demand failed to meet supply in
SLARS auctions, and consequently, how often it had to
step in to purchase the SLARS; (ii) that the government
guarantee and non-dischargeability in bankruptcy of the
underlying student debt obligations were unrelated to
the SLARS' liquidity; (iii) the relationship between
fail rates, AAA ratings, and liquidity; and (iv) that it
was not fully committed to ensuring liquidity of the
SLARS.
Ashland Inc. v. Morgan Stanley & Co., 652 F.3d 333, 335-36 (2d
Cir. 2011); see also In re Bank of Am. Corp., 2011 WL 740902, at
*14 (N.D. Cal. Feb. 24, 2011) (“Contrary to Lead Plaintiffs’
conclusory allegations that they could not, with reasonable
diligence, have discovered the information about BAS’ placement
of support bids or the impact BAS could have on the clearing
rate, all of the information described above was in the public
domain and available to Lead Plaintiffs...they fail to allege
facts demonstrating that reliance was justifiable”).
b.
Unsuitability
Plaintiff’s alternative theory for liability under Section
10(b) is that BAS sold securities that were unsuitable to Tutor
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Perini’s conservative investment objectives.
To prove that
claim, plaintiff must show
(1) that the securities purchased were unsuited to the
buyer's needs; (2) that the defendant knew or reasonably
believed the securities were unsuited to the buyer's
needs; (3) that the defendant recommended or purchased
the unsuitable securities for the buyer anyway; (4)
that, with scienter, the defendant made material
misrepresentations (or, owing a duty to the buyer,
failed to disclose material information) relating to the
suitability of the securities; and (5) that the buyer
justifiably relied to its detriment on the defendant's
fraudulent conduct.
Brown v. E.F. Hutton Grp., Inc., 991 F.2d 1020, 1031 (2d Cir.
1993).
As an initial matter, “[s]ophisticated investors have
difficulty establishing suitability claims.” Cremi v. Brown, 955
F. Supp. 499, 518 (D. Md.) aff'd sub nom. Banca Cremi, S.A. v.
Alex. Brown & Sons, Inc., 132 F.3d 1017 (4th Cir. 1997).
Moreover, the suitability claim may be barred because plaintiff
held a non-discretionary brokerage account whereby it directed
all the investments made. See Associated Randall Bank v.
Griffin, Kubik, Stephens & Thompson, Inc., 3 F.3d 208, 212 (7th
Cir. 1993) (“Customer-directed transactions fall outside the
“suitability” requirement—especially if the agent provides the
customer with a prospectus or comparable information.”).
In any event, plaintiff cannot prove its unsuitability
claim on the merits because 1) BAS provided prospectuses for the
eight SLARS that specifically cautioned that ARS may be
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unsuitable “if you require a regular or predictable schedule of
payments” and 2) the Court has already concluded, as a matter of
law, that BAS did not make material misrepresentations or breach
a duty to disclose material facts.
Accordingly, defendants’ motion for summary judgment with
respect to Count I will be allowed.
4.
Fraudulent concealment and Chapter 93A (Counts
III and V)
For substantially the same reasons underlying the Court’s
determination to allow summary judgment with respect to Count I,
i.e., the failure to demonstrate the alleged omissions of
material facts, the Court will allow defendants’ motion for
summary judgment as to plaintiff’s claims for fraudulent
concealment (Count III) and violation of Chapter 93A due to
“unfair methods of competition and unfair or deceptive acts or
practices” (Count V).
5.
Massachusetts Uniform Security Act (Count VIII)
Section 410(a)(2) of MUSA imposes civil liability on any
person who offers or sells a security “by means of any untrue
statement of material fact” or statement that is misleading due
to omissions of material facts. M.G.L. c. 110A, § 410(a)(2).
order to prevail under that statute, plaintiff must establish
that
1) the defendant offers or sells a security, 2) in
Massachusetts, 3) by making any untrue statement of
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In
material fact or by omitting to state a material fact,
4) the plaintiff did not know of the untruth or omission
and 5) the defendant knew, or in the exercise of
reasonable care would have known, of the untruth or
omission.
The defrauded purchaser need not prove
scienter, negligence[,] reliance [or loss causation].
In re Access Cardiosystems, Inc., 488 B.R. 1, 8, 10 (D. Mass.
2012) aff'd, 776 F.3d 30 (1st Cir. 2015).
The parties dispute whether MUSA applies to the secondary
market transactions at issue in this case.
Even assuming that
the statute does apply to secondary market transactions,
plaintiff’s MUSA claim cannot survive summary judgment because
plaintiff has failed to offer evidence that BAS made “any untrue
statement of material fact” or omitted a material fact that is
necessary to make a prior statement not misleading.
Massachusetts law adheres to “a long standing rule of
nonliability for bare nondisclosure.” Kannavos v. Annino, 356
Mass. 42, 47 (1969).
A defendant is therefore “not liable for
simple failure to disclose material information.” In re Access
Cardiosystems, Inc., 404 B.R. 593, 643 (Bankr. D. Mass. 2009)
aff'd, 488 B.R. 1 (D. Mass. 2012).
Liability for omissions
arises only 1) where the defendant fails to disclose material
information when it has a legal duty to do so and 2) if the
alleged omission “renders an otherwise accurate statement
misleading.” Id.
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Tutor Perini has not satisfied either prong of liability.
Because the auction failure risk was disclosed accurately, there
is no duty to disclose all facts reflecting the degree of risk.
See Hill, 638 F.3d at 60.
Plaintiff also has not identified any
BAS statements that were rendered misleading by the alleged
omissions.
MUSA does not obligate BAS to disclose all facts
that “would be interesting, market-wise” but rather only facts
“needed so that what was revealed would not be so incomplete as
to mislead.” Backman v. Polaroid Corp., 910 F.2d 10, 16 (1st
Cir. 1990); see also In re Bank of Boston Corp. Sec. Litig., 762
F. Supp. 1525, 1538 (D. Mass. 1991) (acknowledging that omitted
information about the financial condition of a bank perhaps “if
disclosed, would have altered the general picture of the Bank,
but omissions that create a misleading impression...are not
sufficient to constitute the basis of a securities
action...Plaintiffs must be able to identify affirmative
statements that were misleading at the time...or that became
misleading by material omission.”).
Accordingly, defendants’ motion for summary judgment with
respect to Count VIII of plaintiff’s complaint will be allowed.
C.
Plaintiff’s motion for partial summary judgment
Plaintiff has filed a cross motion for summary judgment
with respect to the Massachusetts Uniform Security Act, M.G.L.
c. 110A, § 410(a)(2) (Count VIII) and the Massachusetts Consumer
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Protection Act, M.G.L. c. 93A (Count V).
Because the Court will
allow summary judgment for the defendants on those claims,
plaintiff’s motion will be denied as moot.
ORDER
For the foregoing reasons,
1)
defendants’ motion for summary judgment (Docket No.
206) is ALLOWED; and
2)
plaintiff’s motion for partial summary judgment
(Docket No. 207) is DENIED as moot.
So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated August 12, 2015
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