NATIONWIDE BOOK INDUSTRIES LLC v. A&S BOOKSELLERS, INC

Filing 30

Magistrate Judge Judith G. Dein: ORDER entered. MEMORANDUM OF DECISION AND ORDER denying Defendant Andrew Weiss's Motion for Summary Judgment. (Dambrosio, Jolyne)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

NATIONWIDE BOOK INDUSTRIES, LLC,
Plaintiff,
v.
A&S BOOKSELLERS, INC., et al.,
Defendants.

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CIVIL ACTION
NO. 11-12195-JGD

MEMORANDUM OF DECISION AND
ORDER ON DEFENDANT ANDREW WEISS’S
MOTION FOR SUMMARY JUDGMENT
May 22, 2013
DEIN, U.S.M.J.
I. INTRODUCTION
This action arises out of a series of purchase orders under which the plaintiff,
Nationwide Book Industries, LLC (“Nationwide”), agreed to sell more than 216,000
books to the defendant, A&S Booksellers, Inc. (“A&S”).1 Nationwide claims that it
continued to fill orders and ship books to A&S based on repeated assurances from A&S’
principal, defendant Andrew Weiss (“Weiss”), that A&S’ business was prospering and
that payment to Nationwide would be made in full. It further claims that Weiss’s
representations were false, and were made only as a pretense to obtain additional books
from the plaintiff without paying for them. By its Complaint, Nationwide has asserted
1

A&S Booksellers, Inc. is also known as “A&S Bargain Books,” “A+S Booksellers,”
“A+S Crown Books,” “Crown Books,” and “Century City/Crown Books.” Nationwide has
named each of A&S’s “a/k/a” variants as a defendant in this case.

claims against A&S for breach of contract (Count I) and unfair business practices (Count
II). It has also asserted a claim against Weiss for fraudulent pretense and deception, by
which A&S is seeking to hold Weiss liable under Mass. Gen. Laws ch. 93A (“Chapter
93A”) (Count III). On January 13, 2012, A&S filed for Chapter 11 bankruptcy.
Accordingly, Nationwide’s claims against that defendant are currently stayed.
The matter is presently before the court on “Defendant Andrew Weiss’s Motion
for Summary Judgment” (Docket No. 23), by which Weiss is seeking summary judgment,
pursuant to Fed. R. Civ. P. 56, on Nationwide’s claim against him under Chapter 93A.
The plaintiff opposes the motion and urges the court to grant summary judgment in its
favor, even absent a motion, pursuant to Fed. R. Civ. P. 56(f)(1). For the reasons that
follow, this court finds that there are genuine issues of material fact which preclude
summary judgment in favor of either party. Accordingly, Weiss’s motion for summary
judgment is DENIED, and this court declines to grant summary judgment in favor of the
non-moving party under Rule 56(f)(1).
II. DISCUSSION
A.

Summary Judgment Standard of Review

Summary judgment is appropriate when the moving party shows, based on the
discovery and disclosure materials on file, and any affidavits, “that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). “[A]n issue is ‘genuine’ if it ‘may reasonably be resolved in favor
of either party.’” Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir. 2008) (quoting
2

Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir. 1990)). “A fact is material only if it
possesses the capacity to sway the outcome of the litigation under the applicable law.”
Id. (quotations, punctuation and citations omitted).
The moving party bears the initial burden of establishing that there is no genuine
issue of material fact. See Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st
Cir. 2010). If that burden is met, the opposing party can avoid summary judgment only
by providing properly supported evidence of disputed material facts that would require
trial. LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir. 1993). Accordingly, “the
nonmoving party ‘may not rest upon mere allegation or denials of his pleading,’” but
must set forth specific facts showing that there is a genuine issue for trial. Id. (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S. Ct. 2505, 2514, 91 L. Ed. 2d
202 (1986)). The court must view the record in the light most favorable to the nonmoving party and indulge all reasonable inferences in that party’s favor. See Vineberg,
548 F.3d at 56. “If, after viewing the record in the non-moving party’s favor, the Court
determines that no genuine issue of material fact exists and the moving party is entitled to
judgment as a matter of law, summary judgment is appropriate.” Walsh v. Town of
Lakeville, 431 F. Supp. 2d 134, 143 (D. Mass. 2006).
Federal Rule of Civil Procedure 56(f)(1) permits the court to “grant summary
judgment for a nonmovant[.]” “Thus, the law in the First Circuit is ‘well established’ that
a party that moves for summary judgment runs the risk that ‘the court may grant summary
judgment sua sponte against the movant.’” Banco do Brasil, S.A. v. 275 Washington St.
3

Corp., 889 F. Supp. 2d 178, 187 (D. Mass. 2012) (quoting Rothschild v. Cree, Inc., 711
F. Supp. 2d 173, 195 (D. Mass. 2010)). However, in the instant case, this court finds that
disputed issues of material fact preclude summary judgment in favor of either party on
Count III of Nationwide’s complaint.
B.

Weiss’s Motion for Summary Judgment

By its claim against Weiss, Nationwide is seeking to hold Weiss liable under
Chapter 93A based on a series of representations in which the defendant allegedly stated,
in essence, that A&S’ business was good and prospering, and that A&S would make full
payment for books that it had ordered from the plaintiff. According to Nationwide,
Weiss’s statements were false because Weiss knew but did not disclose that A&S was in
financial distress and was unable to pay for the orders. (See Bredmehl Decl., Ex. 1 at pp.
1-4).2 Under Massachusetts law, common law claims for deceit or fraudulent misrepresentation “often can form the basis for a Chapter 93A claim.” Rodi v. S. New England
Sch. of Law, 389 F.3d 5, 20 (1st Cir. 2004). See also Datacomm Interface, Inc. v.
Computerworld, Inc., 396 Mass. 760, 778, 489 N.E.2d 185, 197 (1986) (“it is clear that
common law actions for fraud and deceit are within the contemplation of an ‘unfair act’
under [Chapter 93A]”). The fundamental issue raised by Weiss’s motion for summary
judgment is whether Nationwide has presented sufficient evidence to support its underlying claim of fraudulent misrepresentation.

2

The Declaration of Erez Bredmehl (“Bredmehl Decl.”) is attached to Nationwide’s
Opposition to Defendant’s Motion for Summary Judgement (Docket No. 26).
4

To prevail on a claim for fraudulent misrepresentation, the plaintiff “must establish
that the defendant ‘made a false representation of a material fact with knowledge of its
falsity for the purpose of inducing the plaintiff to act thereon, and that the plaintiff
reasonably relied upon the representation as true and acted upon it to his damage.’”
Russell v. Cooley Dickinson Hosp., Inc., 437 Mass. 443, 458, 772 N.E.2d 1054, 1066
(2002) (quoting Danca v. Taunton Sav. Bank, 385 Mass. 1, 8, 429 N.E.2d 1129 (1982))
(additional citation omitted). This court finds that when the record is viewed in favor of
the plaintiff, it supports a claim for fraudulent misrepresentation. Accordingly, Weiss is
not entitled to judgment as a matter of law.
i.

Weiss’s Challenge to Alleged Non-Disclosures

Weiss argues, as an initial matter, that Nationwide cannot prevail on its claim to
the extent it is based on Weiss’s failure to disclose facts regarding the financial condition
of A&S because Weiss had no duty to disclose such information to the plaintiff. (Def.
Mem. (Docket No. 24) at 8-9). A claim of “nondisclosure can be actionable only where
there is a ‘duty’ to disclose, and a duty arises only in a number of discrete situations[.]”
Greenery Rehab. Group, Inc. v. Antaramian, 36 Mass. App. Ct. 73, 78, 628 N.E.2d 1291,
1294 (1994). Significantly, no such duty arises where the parties are represented by
“sophisticated businessmen, [who are] active and experienced in the area, [and are]
dealing at arm’s length without any fiduciary or confidential relationships or expectations.” Lily Transp. Corp. v. Royal Institutional Servs., Inc., 64 Mass. App. Ct. 179, 202,
832 N.E.2d 666, 684 (2005) (Lawrence, J., concurring in part and dissenting in part). See
5

also Greenery Rehab. Group, Inc., 36 Mass. App. Ct. at 78, 628 N.E.2d at 1294 (no duty
to disclose where parties to agreement were sophisticated businessmen active in real
estate transactions). Because there is no dispute that Weiss and his counterpart at
Nationwide, Erez Bredmehl (“Bredmehl”), were sophisticated business people who were
dealing at arm’s length during the course of their communications concerning the book
orders at issue in this case (see generally Bredmehl Decl.), Weiss had no duty to disclose
A&S’ deteriorating financial condition. See Berkshire-Westwood Graphics Group, Inc.
v. Davidson, 73 Mass. App. Ct. 1128, 903 N.E.2d 605, 2009 WL 735074, at *1 (Mar. 23,
2009) (unpub. op.) (“Given that the parties were sophisticated business people involved
in an adversarial business relationship, [the defendant] had no duty to disclose the full
extent of [his company’s] deteriorating financial condition”). Therefore, as Nationwide
tacitly conceded, its claim cannot be based on any alleged non-disclosures about A&S’
financial circumstances. (See Pl. Opp. Mem. (Docket No. 26) at 7).
Nevertheless, Nationwide argues that its claim against Weiss is based on the
defendant’s affirmative statements regarding the growth and prosperity of his company,
as well as his affirmative assurances that Nationwide would receive payment for A&S’
book orders. (Id.). While Weiss raises a number of arguments in support of his contention that Nationwide has failed to state a claim, for the reasons that follow, Weiss has not
shown that he is entitled to summary judgment with respect to these claims.
ii.

Weiss’s Challenge to the Alleged Affirmative Statements

6

There is evidence in the record that during the time period between April 2011 and
October 2011, Weiss repeatedly assured Bredmehl that A&S’ business was good and that
payment to Nationwide would be forthcoming. For example but without limitation, there
is evidence that during his conversations with Bredmehl, Weiss made the following
representations:
•

In April 2011, while placing a book order with Bredmehl, Weiss
insisted that his business was prospering and growing, and that
payment was not even a question. Additionally, Weiss told
Bredmehl that he wanted to place a substantial order to help stock
A&S’ new stores, and he specifically promised to make full payment
within 90 days.

•

In mid-June 2011, when Weiss placed some additional orders with
Nationwide, Weiss told Bredmehl that payment was forthcoming on
his outstanding invoices. In particular, he informed Bredmehl that
A&S’ business was good, and that payment on the outstanding
invoices would be made within one month.

•

In July 2011, when Nationwide asked Weiss to make a substantial
payment for A&S’ outstanding orders, Weiss repeatedly assured
Bredmehl that all was well with his company, and that his cash flow
was slowed due to store expansion. He also declined Bredmehl’s
offer of a payment plan, and promised repeatedly to bring A&S’
account current.

•

On October 7, 2011, Bredmehl spoke to Weiss about A&S’
outstanding balance of over $248,000. Weiss again declined
Bredmehl’s offer of a payment plan, and told Bredmehl repeatedly
that Halloween sales in A&S’ stores were robust. Weiss also
assured Bredmehl that A&S’ entire account would be paid before the
end of the year.

(Bredmehl Decl. ¶¶ 3, 5-9; see also Bredmehl Decl., Ex. 1 at 2-4). Nationwide asserts
that these and other similar statements were false and deceitful because Weiss knew at

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the time he made them that A&S was insolvent and had no ability to pay for the orders.
(See Pl. Opp. Mem. at 2-5).
Weiss argues that to the extent Nationwide’s claims are based on such affirmative
statements, they are not actionable because they concern matters of opinion, estimate or
judgment. (Def. Mem. at 9-10). “As a general proposition, in Massachusetts ‘only statements of fact are actionable; statements of opinion cannot give rise to a deceit action.’”
NPS LLC v. Ambac Assurance Corp., 706 F. Supp. 2d 162, 171 (D. Mass. 2010) (quoting
Cummings v. HPG Int’l, Inc., 244 F. 3d 16, 21 (1st Cir. 2001)). “Statements of opinion
and belief, however, may be actionable if such an ‘opinion is inconsistent with facts
known at the time they are made.’” Id. (quoting Marram v. Kobrick Offshore Fund, Ltd.,
442 Mass. 43, 809 N.E.2d 1017, 1030 n.24 (2004)). See also Rodi, 389 F.3d at 14
(explaining that “it is an actionable misrepresentation for a car dealer to tell a buyer that
he ‘believes’ a vehicle is in ‘good’ condition when he knows that it has significant
mechanical defects”).
To the extent Weiss’s challenged statements constitute judgments or opinions
about A&S’ financial condition and ability to pay, a factfinder could conclude that those
statements were at odds with facts that were known to Weiss at the time the statements
were made. Significantly, the record contains evidence from A&S’ own records which,
when viewed in the light most favorable to Nationwide, shows that at the time Weiss
made the alleged statements, his business was heavily in debt and was failing. In
particular, evidence contained in A&S’ bankruptcy filings from January 2012 show that
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A&S had unpaid debts going back as far as 2008, when A&S failed to pay over $55,000
to Easter Unlimited, Inc., one of its Halloween goods suppliers. (See Bredmehl Decl.,
Ex. 3 at 17). The bankruptcy records also show that by the end of 2010, A&S’
outstanding debts included but were not limited to, over $210,000 in unpaid sales taxes
owed to the State of California, over $2,000 in back rent owed on property in San Diego,
and over $68,000 owed to Jakks Pacific, Inc., another Halloween goods supplier. (See
Bredmehl Decl., Ex. 3 at 14, 17-18). Furthermore, A&S’ financial records demonstrate
that by year end 2010, A&S had unpaid loans of over $1 million and negative assets
approaching $450,000. (See Bredmehl Decl.¶ 18; Weiss Aff., Ex. A at 2, 8).3 They
further show that between 2009 and the end of 2010, A&S had experienced a significant
drop in its per store revenue, from $247,766 in 2009 to $174,931 in 2010. (See Bredmehl
Decl. ¶ 22; Weiss Aff., Ex. A at 4). These facts are inconsistent with Weiss’s assurances
that his business was good and was prospering, and that A&S had the ability to pay
Nationwide in full. Moreover, as the President of A&S, Weiss would have been familiar
with the company’s financial records. (See Weiss Aff. ¶ 1). Therefore, Weiss has not
shown that his statements are not actionable as a matter of law.
Weiss also argues that statements about future intentions cannot support a
misrepresentation claim, and that therefore, his promises of future payment are not
actionable. (See Def. Mem. at 9, 11). The general rule in Massachusetts is “that

3

The Affidavit of Andrew Weiss (“Weiss Aff.”) is attached to Defendant Andrew Weiss’s
Motion for Summary Judgment (Docket No. 23).
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statements promissory in nature and statements of conditions to exist in the future are not
actionable.” Bolen v. Paragon Plastics, Inc., 754 F. Supp. 221, 226 (D. Mass. 1990).
“There is an important exception made to this rule, however, if at the time the defendant
made the statement, he or she did not intend to carry out the promise.” Id. That is
because “[u]nder Massachusetts law, lack of present intent constitutes a misrepresentation
of a material fact.” Id. This court finds that there is evidence in the present case to
support Nationwide’s claim that Weiss did not intend to pay at the time he made the
alleged statements.
Weiss argues that Nationwide cannot rely on the fact of A&S’ 2012 bankruptcy to
demonstrate that Weiss had an intent to defraud at the time he made the alleged promises
of payment in 2011. (Def. Mem. at 13-14). Relying on Watson v. Silsby, 166 Mass. 57,
43 N.E. 1117 (1896), Weiss argues that “mere insolvency of the buyer, with a probability
that he will not be able to pay for the property, although known to him and not disclosed
to the seller, will not defeat the contract, if the purchase is made with a hope to be able to
pay, and with an intention to pay, if possible.” (Id. (quoting Watson, 166 Mass. at 58, 43
N.E. at 1117)). However, Watson does not support Weiss’s motion for summary judgment. Rather, it supports a conclusion that the issue of fraudulent intent must be resolved
at trial.
In Watson, the Supreme Judicial Court reversed the trial court’s decision to direct
a verdict for the defendant on the ground that there was no evidence to support the plaintiff’s claim that the defendant had purchased goods with an intent not to pay. Id. at 61,
10

43 N.E. at 1118. Significantly, although the Court found that a defendant’s insolvency
alone would not be sufficient to prove fraud, it noted that “a purchase of property without
any reasonable expectation of paying for it may be evidence of an intention to obtain it
without paying for it at any time[,]” and that “[a] purchase with such a preconceived
intention is a fraudulent act.” Id. at 59, 43 N.E. at 1117. Given the fact that the
defendant in that case had been insolvent for a long time, and that questions of intent are
“ordinarily to be inferred from conduct and circumstances[,]” the Court determined that
the question of fraud should have been submitted to the jury. Id. at 59-61, 43 N.E. at
1118.
Here, as in Watson, the record contains evidence from which a factfinder could
conclude that Weiss purchased goods from Nationwide without any reasonable expectation of paying for them. In particular, the record includes facts showing that A&S filed
for bankruptcy within less than three months after placing its last order with Nationwide
in October 2011. (See Bredmehl Decl. ¶ 10; Weiss Aff. ¶ 13). Moreover, evidence from
A&S’ bankruptcy records and financial statements indicates that the A&S had been in
debt for years, that its sales were plunging, and that by the end of 2010, it had negative
assets approaching $450,000. (See Bredmehl Decl. ¶¶ 17-18, 22). Such facts support
Nationwide’s assertion that Weiss intentionally misled the plaintiff about the status of his
business so that he could obtain books for which A&S could not afford to pay. Accordingly, Weiss’s alleged promises of payment to Nationwide are actionable.

11

Weiss nevertheless insists that it is unreasonable for the plaintiff to assert that he
was acting with a specific intent to defraud. (Def. Mem. at 15). Specifically, Weiss
points to evidence showing that even in 2011, when A&S’ per store revenues dropped to
$145,015, the company’s stores produced a total income stream of $3.5 million. (Id.).
He also points to evidence showing that A&S made six payments to Nationwide, totaling
tens of thousands of dollars, and contends that such evidence belies any assertion that
Weiss had no intent to pay at the time he placed the orders. (Id.).
Again this court finds that Weiss’s arguments are insufficient to support judgment
as a matter of law in his favor. “[T]he First Circuit has advised caution when disposing
of the state of mind issue on summary judgment.” Bolen, 754 F. Supp. at 226. Although
evidence that A&S was able to generate significant income and make certain payments to
Nationwide supports Weiss’s assertion that he acted without any fraudulent intent, in
light of the evidence concerning the extent of A&S’ troubled financial condition, this
court finds that the issue of Weiss’s intent involves a question of fact that cannot be
resolved on summary judgment.
iv.

Reasonable Reliance

The defendant also contends that Nationwide cannot maintain a claim based on
fraudulent misrepresentation because it cannot establish that it reasonably relied on
Weiss’s statements. (Def. Mem. at 12-13). “Under Massachusetts law, the reasonableness of a party’s reliance ordinarily constitutes a question of fact for the [factfinder].”
Rodi, 389 F.3d at 16. The record in this case does not compel an alternative conclusion.
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Weiss argues, as an initial matter, that the general nature of his alleged statements,
such as his statements that “business was good” and that his business was “prospering
and growing and payment was not even a question” rendered any reliance on them
unreasonable. (Def. Mem. at 12). This court disagrees. The record shows that Bredmehl
had known Weiss and had done business with him for many years prior to 2011.
(Bredmehl Decl. ¶ 2). According to Bredmehl, Weiss had frequently been slow to pay
for goods, but he had always conducted himself in a straightforward manner and had
always made payment in full in the past. (Id.). Accordingly, at the time Weiss made the
alleged statements to Bredmehl in 2011, Bredmehl trusted Weiss and considered his
representations to be honest and reliable. (Id.). Under such circumstances, this court
cannot conclude that Bredmehl’s reliance on Weiss’s general statements as to the
financial soundness and growth of his business, and his repeated assurances that payment
would be made, was unreasonable as a matter of law.
The defendant also asserts that it was not reasonable for a sophisticated commercial entity like Nationwide to rely on Weiss’s statements in light of A&S’ failure to make
any significant payments for its orders. (Def. Mem. at 13). However, when the evidence
of A&S’ payment history is viewed in the context of the record as a whole, a factfinder
could conclude that Nationwide’s reliance on Weiss’s representations was reasonable.
The undisputed facts show that in early April 2011, Weiss placed two orders from
Nationwide totaling $118,901, and in mid-June 2011 Weiss placed two additional orders
totaling $102,086. (Bredmehl Decl. ¶¶ 4-5). The record also shows that despite Weiss’s
13

assurances that payment for the April orders would be made within 90 days, and that
payment for the June orders would be made within one month, A&S’ first payment,
which occurred in July 2011, amounted to less than $11,000. (Id. ¶¶ 3-7). In August
2011, A&S made a second payment to Nationwide consisting of only $5,000. (Id. ¶ 8).
Consequently, by the end of August, A&S still had an outstanding balance of over
$205,000. (Id.). Nevertheless, Nationwide allowed Weiss to place an additional order
for over $43,000 worth of books in mid-September 2011. (Id.).
The record further shows that by early October 2011, Bredmehl had become
alarmed by the size of A&S’ receivable, which had grown to $248,880.93. (Id. ¶ 9).
Accordingly, he spoke to Weiss to discuss the outstanding balance. (Id.). During the
conversation, Weiss declined Bredmehl’s offer of a payment plan, and insisted that
Halloween sales in his stores were robust. (Id.). When the parties spoke again on
October 14, 2011, Weiss again represented that A&S was experiencing a successful
Halloween season, and promised to make weekly payments of between $10,000 to
$15,000 through the end of the year in order to reduce A&S’ outstanding balance. (Id.
¶ 10). Based on these assurances, Bredmehl authorized an additional order for over
$30,700 worth of goods. (Id.). However, A&S subsequently made only four payments
totaling $42,086, leaving an unpaid balance of over $237,500. (Id. ¶ 11).
Although these facts could support a finding that Nationwide’s reliance on Weiss’s
assurances was unreasonable, when considered in light of other evidence in the record, a
factfinder could conclude that Bredmehl’s decision to credit Weiss’s statements was
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justified. In particular, as described above, Nationwide has presented evidence showing
that the parties had a long-term business relationship over the course of which A&S had
often been slow to pay for its orders, but had always ended up paying in full. (Id. ¶ 2). It
also has presented evidence showing that throughout the parties’ relationship, Weiss
proved to be an honest and trustworthy businessman. (Id.). Furthermore, the record
contains evidence showing that due to the Halloween-dependent nature of A&S’
business, the company typically earned more than 60 percent of its revenues in the 10
days prior to October 31, and 40 percent of its total season revenues in the last 3 days
prior to October 31. (Weiss Aff. ¶ 5). When viewed in the light most favorable to
Nationwide, these facts could support a finding that Bredmehl had a reasonable basis for
accepting Weiss’s assurances of payment, and that it would have been reasonable for
Bredmehl to believe that A&S would be able to meet its obligations to the plaintiff after
the Halloween season concluded. Therefore, Weiss is not entitled to summary judgment
on the grounds that Nationwide cannot prove the reasonable reliance element of its
fraudulent misrepresentation claim.
v.

Claim Under Chapter 93A

Finally, Weiss argues that he is entitled to judgment as a matter of law because
Nationwide can prove nothing more than a breach of contract on the part of Nationwide,
which is insufficient to support a claim against Weiss under Chapter 93A. (Def. Mem. at
16-18). Weiss is correct that “‘a mere breach of contract,’ without more, does not constitute an unfair or deceptive act or practice” for purposes of a Chapter 93A claim. Incase,
15

Inc. v. Timex Corp., 421 F. Supp. 2d 226, 239 (D. Mass. 2006) (quoting Commercial
Union Ins. Co. v. Seven Provinces Ins. Co., Ltd., 217 F.3d 33, 40 (1st Cir. 2000)), aff’d,
488 F.3d 46 (1st Cir. 2007). However, Nationwide’s claim is based not on a breach of
contract, but on Weiss’s alleged fraudulent misrepresentations. As described above, such
a claim “can form the basis for a Chapter 93A claim.” Rodi, 389 F.3d at 20. Because the
record raises issues of fact which preclude summary judgment for Weiss on Nationwide’s
underlying claim for fraudulent misrepresentation, the defendant is not entitled to
summary judgment on Nationwide’s Chapter 93A claim.

C.

Nationwide’s Request for Summary Judgment

Although Nationwide has not filed a cross-motion for summary judgment, it
argues that “the case against Mr. Weiss is so substantial, on the basis of his evidence, that
the trial court should consider granting summary judgment to NATIONWIDE under Fed.
R. Civ. P. 56(f)(1)[.]” (Pl. Opp. Mem. at 6, 10). However, this court finds that the
existence of disputed facts regarding A&S’ ability to pay for its orders, Weiss’s intent to
mislead Bredmehl, and the reasonableness of Nationwide’s reliance on Weiss’s
representations preclude summary judgment in favor of the plaintiff.
In support of its argument that summary judgment in its favor would be appropriate, Nationwide points to A&S’ financial records, as well as its bankruptcy filings, to
show that the company had no reasonable prospect of paying the plaintiff for its book
orders. (See id. at 3-4). While those records indicate that A&S was heavily in debt, and
16

had unpaid obligations dating back to 2008, when viewed in the light most favorable to
Weiss, the evidence does not compel the conclusion that A&S was incapable of paying
for its orders or that Weiss had no intent to pay at the time of his conversations with
Bredmehl.
As described above, there is no dispute that prior to 2011, A&S had always
fulfilled its payment obligations to Nationwide, notwithstanding its long-term debts and
uncertain financial condition, and that Bredmehl considered Weiss to be an honest and
straightforward businessman. (See Bredmehl Decl. ¶ 2). Additionally, despite the
company’s indebtedness, A&S’ financial records show that between 2007 and 2011, the
company expanded its stores from 2 to 12, and experienced an increase in its total income
stream from approximately $2.8 million in 2007 to approximately $3.5 million in 2011.
(See Weiss Aff., Ex. A at 4). Thus, the question whether A&S had the ability to pay for
the orders should be resolved at trial.
This court also finds that when the facts are viewed in Weiss’s favor, they support
the defendant’s assertion that his statements were not deceitful. According to Weiss,
Halloween season sales for 2011 ended up falling well below his expectations. (Weiss
Aff. ¶ 7). Moreover, A&S’ 2011 per store revenues ended up being approximately 17
percent lower than they were in any prior year in the company’s history, a result which
defied Weiss’s projections for a significant increase in revenue. (Id. ¶¶ 8, 10). Indeed, if
the per store revenue had been consistent with A&S’ 2009 results, the company would
have ended up with over $1.2 million in additional revenue during October 2011, the
17

month when A&S typically took in the bulk of its annual revenues. (Id. ¶¶ 5, 12). A
factfinder viewing this evidence, as well as the evidence showing that A&S made six
payments to Nationwide during the period from July 2011 through October 2011, could
reasonably conclude that Weiss genuinely believed that A&S’ prospects for the 2011
Halloween season were good, that Weiss fully intended to pay Nationwide for the book
orders at the time he made the alleged statements, and that Weiss’s statements to
Bredmehl, while inaccurate, were not fraudulent.
This court also finds that Nationwide is not entitled to summary judgment because
a reasonable factfinder could conclude that Bredmehl’s reliance on Weiss’s statements
was unreasonable. As described above, the record shows that Bredmehl repeatedly
allowed Weiss to place additional orders with Nationwide based on Weiss’s verbal
assurances, without asking for financial information from A&S and despite his increasing
alarm at the growing size of the A&S receivable. (See Bredmehl Decl. ¶¶ 5, 7-10). Even
after August 2011, when Nationwide saw that A&S had paid only $16,000 on its
outstanding balance of over $200,000, Bredmehl continued to accept orders from Weiss
for over $74,000 worth of goods. (See id. ¶¶ 7-10). When viewed in the light most
favorable to Weiss, such evidence is sufficient to defeat Nationwide’s claim that
Bredmehl’s reliance on the defendant’s allegedly false representations was reasonable.

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Therefore, Nationwide’s request that this court consider granting summary judgment in
its favor is denied.4
III. CONCLUSION
For all the reasons detailed herein, “Defendant Andrew Weiss’s Motion for
Summary Judgment” (Docket No. 23) is DENIED. Additionally, this court declines to
grant summary judgment to Nationwide pursuant to Fed. R. Civ. P. 56(f)(1).
/ s / Judith Gail Dein
Judith Gail Dein
United States Magistrate Judge

4

In light of this court’s conclusion that there are disputed issues of fact which preclude
summary judgment for either party on Nationwide’s claim against Weiss, Nationwide’s argument
that it is entitled to multiple damages under Chapter 93A is premature and must await trial on the
merits.
19