Jones Lang LaSalle New England, LLC v. 350 Waltham Associates, LLC et al
Filing
76
Judge Indira Talwani: ORDER entered. MEMORANDUM AND ORDER. Defendants' Motion to Amend Answer to Assert Counterclaims 32 , Motion For Leave to Bring Third Party Complaint 39 , and Motion for Summary Judgment 42 are DENIED. Please see attached Memorandum and Order. (Kelly, Danielle)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
JONES LANG LASALLE
NEW ENGLAND, LLC,
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Plaintiff,
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v.
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350 WALTHAM ASSOCIATES, LLC,
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and 358 WALTHAM ASSOCIATES, LLC, *
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Defendants.
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Civil Action No. 1:17-cv-11784-IT
MEMORANDUM AND ORDER
January 27, 2020
TALWANI, D.J.
Plaintiff Jones Lang LaSalle New England, LLC (“Jones Lang”), a broker, brought suit
seeking a brokerage commission in connection with amendments to a commercial lease between
Defendants 350 Waltham Associates, LLC, and 358 Waltham Associates, LLC (collectively,
“Waltham Associates”), as landlord, and non-party Foster-Miller, Inc. d/b/a QinetiQ North
America (“QinetiQ”), the tenant. Pending before the court are Defendants’ Motion to Amend
Answer to Assert Counterclaims [#32], Motion for Leave to Bring Third Party Complaint [#39]
against QinetiQ, and Motion for Summary Judgment [#42], in which Defendants assert that the
lease amendments’ terms as to the brokerage commission are not valid and binding because they
were procured by fraud or because there was no meeting of the minds. For the following reasons,
Defendants’ motions are DENIED.
I.
Procedural History
Defendants removed this action from state court in September 2017, Notice of Removal
[#1], and filed their Answer [#10] in October 2017. The court adopted the parties’ proposed fact
discovery deadline of September 28, 2018. Joint Statement [#13]; Elec. Clerk’s Notes [#16];
Am. Scheduling Order [#24]. The court subsequently allowed the parties’ joint motion to extend
fact discovery to November 5, 2018, Elec. Order [#26], and expert discovery to March 11, 2019.
Elec. Clerk’s Notes [#29]; Joint Mot. for Extension of Time [#30]; Elec. Order [#31].
Beginning well after the close of fact discovery and three days before the close of expert
discovery, Defendants filed the pending motions.1 Plaintiff opposes all pending motions, and
QinetiQ opposes the motion seeking leave to file a third-party complaint.
II.
Factual Background
The following facts are drawn from the summary judgment record.
In 2007, QinetiQ entered into a ten-year lease agreement with Defendants to rent
buildings located at 350 Second Avenue and 358 Second Avenue in Waltham, Massachusetts.
Pl.’s SOF ¶ 1 [#60]; Defs.’ Ex. 4 - 2007 Lease Agreement [#44-4]. The brokers who worked on
the agreement were paid a commission of 2% of the total rent, evenly split. Pl.’s SOF ¶ 1 [#60].
In 2015, brokers for Defendants and QinetiQ began negotiating lease renewal. Id. ¶¶ 2-3
[#60]; Defs.’ Ex. 6 - Oct. 28, 2015 Email [#44-6]. Arthur Amadei of RW Holmes acted on behalf
of Defendants and William Bailey of Jones Lang acted on behalf of QinetiQ. Pl.’s SOF ¶¶ 2-3
[#60].
On March 30, 2016, Jones Lang sent a draft Request for Proposal (“March RFP”) to
QinetiQ for approval. Pl.’s SOF ¶ 4 [#60]; Defs.’ Ex. 7 - March RFP [#44-7]. The RFP included
a section titled “Brokerage” that read:
1
Defendants also filed a Motion for Leave to Bring Third Party Complaint [#33] against QinetiQ
on March 8, 2019. The court denied the motion without prejudice for failing to certify advance
notice to QinetiQ as required by Local Rule 15.1(b). Elec. Order [#34]. Defendants refiled the
motion with the required certification two weeks later.
2
[QinetiQ] is exclusively represented by Jones Lang LaSalle Real Estate Services,
Inc., (‘Broker’). [QinetiQ] requires Landlord to enter into a separate agreement
with Broker, under which Landlord agrees to pay a real estate commission equal
to a $1.00 per square foot per year of lease term, or partial year, at the time of
Lease execution for all premises.”
Pl.’s SOF ¶ 4 [#60]. On March 31, 2016, Jones Lang, with the approval of QinetiQ, sent the
same RFP to Amadei. Id. ¶ 6; Affidavit of Daniel Barton (“Barton Aff.”) ¶ 5 [#62]. Amadei
requested a meeting in response. Pl.’s SOF ¶ 7 [#60].
Amadei, Bailey, and corporate representatives from Defendants and QinetiQ met on May
9, 2016. Id. ¶ 10; Defs.’ Ex. 13 – Defs.’ Answer to Pl.’s First Set of Interrogs. ¶ 7 [#44-13].
Defendants’ representative, William Achenbaum, rejected the March RFP and stated that
Defendants would not pay the proposed commission to Jones Lang. Pl.’s SOF ¶ 10 [#60].
Around the same time, Jones Lang negotiated a Services and Compensation Agreement
(“Services Agreement”) with QinetiQ. Id. ¶¶ 9, 12-14. In the Services Agreement, Jones Lang
and QinetiQ agreed that Defendants would be responsible for any commission to Jones Lang if
QinetiQ renewed its leases, but if Defendants refused to pay a commission, QinetiQ would pay a
fee of $326,589 to Jones Lang. Id. ¶ 15. Jones Lang and QinetiQ executed the Services
Agreement on July 14, 2016. Id. ¶ 16; Pl.’s Ex. C - Services and Compensation Agreement ¶ 4
[#61-3].
On July 22, 2016, Jones Lang emailed Amadei a new RFP (“July RFP”) which included
the following language in the “Brokerage” section:
[QinetiQ] is exclusively represented by Jones Lang LaSalle Real Estate Services,
Inc., (“Broker”). Please clearly state the Landlord’s position on the payment of a
real estate commission equal to a $1.00 per square foot per year of lease term or
partial year, at the time of Lease document execution for all premises to Broker.
Said commission shall not be added as separate and incremental cost to the
tenant.
3
Pl.’s SOF ¶ 17 [#60]; Defs.’ Ex. 24 - July RFP [#44-24]. Amadei responded on August 3, 2016,
with a proposal to split a brokerage fee of $1,000,000 between Amadei’s company and Jones
Lang. Pl.’s SOF ¶ 21; Defs.’ Ex. 25- Aug. 3, 2016 Proposal [#44-25].
QinetiQ began to negotiate directly with Defendants on August 18, 2016, without
including the brokers. Pl.’s SOF ¶ 22 [#60]; Defs.’ Ex. 1 – Dep. of William Bailey 98:2-98:23
[#44-1]. The negotiations continued throughout August and September. Pl.’s SOF ¶¶ 23, 26-27
[#60].
Defendants sent Jones Lang a proposal on September 21, 2016, which stated that
the brokerage commission “shall be paid to [Jones Lang] and RW Holmes (Arthur
Amadei) as per the standard for the Waltham/Boston area for renewals.” Pl.’s SOF ¶ 30
[#60]; Defs.’ Ex. 32 – Sept. 21, 2016 Proposal [#44-32]. Jones Lang did not accept the
agreement. Pl.’s SOF ¶ 31 [#60].
On September 28, 2016, Defendants sent to QinetiQ draft Lease Amendments that
stated in the “Brokerage” section:
The parties agree that [Jones Lang] and RW Holmes (Arthur Amadei) are the
sole brokers which brought about this transaction and shall be paid as per the
standard for a renewal of a lease in the Waltham/Boston area.
Id. ¶ 33-34; Defs,’ Ex. 37 – Sept 28, 2016 Proposal [#44-37]. QinetiQ countered with an
additional sentence that “[t]he Landlord agrees to pay said brokers all commissions due
to them.” Pl.’s SOF ¶ 35 [#60]; Defs.’ Ex. 41 – Sept. 29, 2016 Proposal [#44-41].
Defendants and QinetiQ executed the Lease Amendments on September 29, 2016. Pl.’s
SOF ¶ 62 [#60]; Pl.’s Ex. K - First Amendment to Lease, 350 Second Ave. [#61-11]; Pl.’s Ex. L
- First Amendment to Lease, 358 Second Ave. [#61-12]. Each Lease Amendment included
brokerage commission language stating that the commission would be “paid as per the standard
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for a renewal of a lease in the Waltham/Boston Area,” and that Defendants agreed to pay the
brokers all commissions due to them. Pl.’s Ex. K - First Amendment to Lease, 350 Second Ave.
[#61-11]; Pl.’s Ex. L - First Amendment to Lease, 358 Second Ave. [#61-12].
Once the lease amendments were signed, Jones Lang submitted an invoice to Defendants
for $880,689.60, representing a brokerage fee of $1.20 per square foot, and stating that Jones
Lang believed this to be the standard market commission. Id. ¶ 38; Defs.’ Ex. 47 - Invoice [#4447]. Defendants did not pay the invoice, and instead offered to pay a commission of $170,303.15
to Jones Lang, which was half of 2.5% of the annual lease rent. Pl.’s SOF ¶ 66 [#60]; Pl.’s Ex. Q
- Oct. 27, 2016 Email from Amadei to Bailey [#61-17]. Jones Lang rejected Defendants’ offer.
Pl.’s SOF ¶ 67 [#60]; Pl.’s Ex. R - Oct. 27, 2016 Email from Bailey to Amadei [#61-18].
III.
Analysis
A. Motion to Amend Answer
Under Fed. R. Civ. P. 15(a), leave of court is required to amend an answer more than 21
days after service. While leave shall be given freely “when justice so requires,” Fed. R. Civ. P.
15(a)(2), the court will not “mindlessly grant every request.” Aponte-Torres v. Univ. of P.R., 445
F.3d 50, 58 (1st Cir. 2006). The court must consider factors such as “undue delay, bad faith,
dilatory motive of the requesting party, repeated failure to cure deficiencies, and futility of
amendment.” Hagerty ex rel. United States v. Cyberonics, Inc., 844 F.3d 26, 34 (1st Cir. 2016).
As a case progresses, the burden on the party seeking to amend a pleading “becomes more
exacting.” Steir v. Girl Scouts of the USA, 383 F.3d 7, 12 (1st Cir. 2004). The movant has the
burden to of showing a valid reason for delay. Hayes v. New England Millwork Distribs., Inc.,
602 F.2d 15, 19-20 (1st Cir. 1979).
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Defendants seek to amend their answer for two purposes: 1) to add an affirmative defense
of fraud; and 2) to bring counterclaims against Plaintiff alleging fraud. Defs. Mot. to Amend 13
[#32]. Defendants state that they did not learn of the facts that they contend give rise to their
additional claims and defense until November 1, 2018.
Accepting for the purposes of this motion that Defendants did not learn the facts on
which they rely until November 1, 2018, the motion is still untimely. Despite fact discovery
closing on November 5, 2018, Defendants acted with no haste. Defendants did not raise the issue
at the December 2018 status conference. When the parties moved jointly on February 5, 2019, to
extend expert witness depositions until March 11, 2019, see Joint Motion [#30], Defendants
again made no mention of the new claims and defense. Instead, Defendants waited four months
before filing this motion. Under Rule 15, the untimeliness of this motion is sufficient to deny the
motion. Hagerty, 844 F.3d at 34.
Even if Defendants’ motion had been timely, the amendment is futile. Defendants allege
that Jones Lang committed fraud by misrepresenting in the March RFP provided to Defendants
that QinetiQ “required Landlord to enter into a separate agreement with Broker, under which
Landlord agrees to pay a real estate commission equal to a $1.00 per square foot per year of lease
term, or partial year, at the time of Lease execution for all premises,” when QinetiQ had no such
requirement. Defendants assert further that having made this misrepresentation, Jones Lang had a
duty to disclose its subsequent Services Agreement with QinetiQ, and QinetiQ’s statement to
Jones Lang that lease renewal was not a “commissionable event.” Mot. to Amend Answer to
Assert Counterclaims 14-15 [#32].
In order to establish fraud in the inducement of a contract, however, a party must show
that the allegedly false statement was material to its decision to execute the contract. Turner v.
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Johnson & Johnson, 809 F.2d 90, 95 (1st Cir. 1986). Here, Defendants did not agree to the
March RFP, and instead unequivocally rejected it. Pl.’s SOF ¶ 10 [#60]; Defs.’ Ex. 13 – Defs.’
Answer to Pl.’s First Set of Interrogs. ¶ 7 [#44-13]. Having rejected the RFP, Defendants have
no grounds for their claims that the statement was a material misstatement or that Jones Lang
was obligated to provide Defendants with the terms of its subsequent agreement with QinetiQ.
Moreover, the RFP presented by Jones Lang in July made no assertion restating the
objectionable statement from March and instead asked for Defendants’ position on the payment
of a brokerage commission. Pl.’s SOF ¶ 20 [#60]; Defs.’ Ex. 24 - July RFP [#44-24].
Nor can Defendants show how the statement in the March RFP was material to the Lease
Amendments signed by Defendants and QinetiQ in September. The record indicates that the
parties engaged in arms-length negotiations driven by the desire to win cost concessions from the
other side. Over six months of negotiations, Defendants consistently rejected Jones Lang and
QinetiQ’s proposals, and proposed multiple alternatives of their own. See Pl.’s SOF ¶¶ 21, 27,
30, 33, 36 [#60]. In the end, it was Defendants who proposed using the language of a “standard”
commission, Pl.’s SOF ¶¶ 30, 33 [#60]; Defs.’ Ex. 32 – Sept. 21, 2016 Proposal [#44-32]; Defs.’
Ex. 37 – Sept. 28, 2016 Proposal [#44-37], and QinetiQ (not Jones Lang) who insisted to
Defendants that they pay the brokerage commission. Defs.’ Ex. 41 – Sept. 29, 2016 Proposal
[#44-41].2 As such, Defendants’ claims that the September Lease Amendments was entered into
because of fraud in connection with the rejected March RFP is futile.
Defendants’ principal, William Achenbaum, stated in a deposition that he was prepared to pay
a “standard” brokerage commission. Pl.’s Ex. B – Achenbaum Depo. at 243:3-13 [#61-2]. The
statement provides another indication that Defendants did not rely on the March RFP when
drafting the language that ended up in the final agreements.
2
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In sum, Defendants’ Motion to Amend Answer to Assert Counterclaims [#32] is
DENIED as untimely. The proposed amendment is also futile.
B. Motion to Bring Third Party Complaint
Defendants’ Motion for Leave to Bring Third Party Complaint [#39] under Fed. R. Civ.
P. 14 faces even greater problems of untimeliness. Timeliness is a factor that a court must
consider under 14(a)(1). Lehman v. Revolution Portfolio LLC, 166 F.3d 389, 393 (1st Cir.
1999). Defendants seek to bring QinetiQ into this case as a third-party defendant after the close
of fact and expert discovery. Allowing Defendants to proceed against QinetiQ would require
reopening both fact and expert discovery. And as with their Motion to Amend, Defendants did
not act with haste once they learned the facts on which they now rely, waiting instead more than
four months before filing the motion.
Defendants’ assertion that their claims against QinetiQ are “derivative” claims is also
misplaced. A “derivative” claim under Rule 14 must not only be a related claim but must be
“derivatively based on the original plaintiff’s claim.” United States v. One 1977 Mercedes Benz,
708 F.2d 444, 452 (9th Cir. 1983). Therefore, Rule 14 is properly limited to complaints where
the third-party is alleged to be liable, in part or in whole, for the claim that the original plaintiff
brought against the original defendant. 6 C. Wright & Miller, Federal Practice and Procedure
§ 1446 (2019). (“The crucial characteristic of a Rule 14 claim is that defendant is attempting to
transfer to the third-party defendant the liability asserted against the defendant by the original
plaintiff.”). See also Venuti v. Riordan, 702 F.2d 6, 9 (1st Cir. 1983) (considering “what law
made the [third-party defendant] liable to [third-party plaintiff] for all or part of the plaintiff’s
claim against it”) (quoting Fed. R. Civ. P. 14(a)(1)) (quotation marks omitted).
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Here, however, Defendants are not alleging that QinetiQ is potentially liable for the
claims Jones Lang has brought against Defendants. Instead, Defendants are asserting
independent claims of fraud in the inducement of a contract. While the amount of damages at
issue may turn on whether Jones Lang prevails on its claims against Defendants, liability based
on QinetiQ’s alleged fraud is not a derivative claim.
Finally, Defendants are not prejudiced by the denial of their motion. The claims that
Defendants seek to bring – independent claims alleging QinetiQ induced Defendants into
entering a contract through fraud – are not compulsory counterclaims that will be lost if not
asserted here.
Accordingly, Defendants’ Motion for Leave to Bring Third Party Complaint [#39] is
DENIED.
C. Motion for Summary Judgment
1. Standard of Review
Summary judgment is appropriate only if “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). The court
views the evidence in the light most favorable to the non-moving party and resolves any disputes
of material fact in their favor. Prescott v. Higgins, 538 F.3d 32, 39 (1st Cir. 2008). A “genuine
dispute” is one that, based on the evidence submitted at this stage of litigation, “a reasonable jury
could resolve . . . in favor of the non-moving party,” and a “material fact” is one that has “the
potential to affect the outcome of the suit under the applicable law.” Sanchez v. Alvarado, 101
F.3d 223, 227 (1st Cir. 1996) (citations and quotation marks omitted). If further inquiry into the
facts is necessary to apply the relevant law, summary judgment is not appropriate. Mandel v.
Bos. Phoenix, Inc., 456 F.3d 198, 205 (1st Cir. 2006).
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The moving party is responsible for identifying those portions of the record which it
believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). If the moving party shows the absence of a disputed material fact, the
burden shifts to the non-moving party to set forth “specific facts showing there is a genuine issue
for trial.” Anderson v. Liberty Lobby Inc., 477 U.S. 242, 256 (1986).
2. Plaintiff’s Claims
Jones Lang brought seven claims against Defendants: 1) a claim seeking declaratory
judgment that Defendants owed a brokerage commission to Jones Lang at the time of contract
formation (Count I); 2) Breach of Contract (Count II); 3) Breach of Contract to a Third-Party
Beneficiary (Count III); 4) Breach of Covenant of Good Faith and Fair Dealing (Count IV); 5)
Quantum Meruit (Count V); 6) Account Annexed (Count VI); and Violations of M.G.L. c. 93A,
§ 11 (Count VII). Defendants seek summary judgment as to all counts.
The parties do not dispute that, if the brokerage commission clauses in the Lease
Amendments between Defendants and QinetiQ are enforceable, Jones Lang was an intended
third-party beneficiary. Restatement (Second) of Contracts § 302 (“a beneficiary of a promise is
an intended beneficiary if recognition of a right to performance is appropriate to effectuate the
intention and . . . (a) the performance of the promise will satisfy an obligation of the promise to
pay money to the beneficiary”). As an intended third-party beneficiary, Jones Lang has standing
to enforce performance under the contract and to enforce the implied covenant of good faith and
fair dealing. Rae v. Air-Speed, Inc., 386 Mass. 187, 195 (1982) (“when one person, for a
valuable consideration, engages with another, by simple contract, to do some act for the benefit
of a third, the latter, who would enjoy the benefit of the act, may maintain an action for the
breach of such engagement.”) (quoting Brewer v. Dyer, 7 Cush. 337, 340 (Mass. 1851));
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MacKenzie v. Flagstar Bank, FSB, 738 F.3d 486, 491-93 (1st Cir. 2013) (considering whether
plaintiffs were third-party beneficiaries in order to evaluate claim of breach of covenant of good
faith and fair dealing). However, Defendants assert that the contract is not enforceable, alleging
that 1) the contract was induced by fraud; and 2) there was no meeting of the minds as to the
brokerage commission clause.
3. Contract Claims -- Fraud Defense
Defendants argue first that the court should enter summary judgment for Defendants as to
Plaintiff’s contract-based claims because the brokerage commission clause of the lease
amendments were induced by fraud. Defendants base their fraud argument on the same alleged
conduct raised in their Motion to Amend. The court has found Defendants’ attempt to add an
affirmative defense of fraud futile, and for these same reasons, Defendants’ motion for summary
judgment on the grounds of fraud in the inducement is DENIED.
4. Contract Claims - Meeting of the Minds
Defendants next argue that the brokerage commission clause is not binding because there
was no meeting of the minds, or mutual assent, as to the meaning of the clause.
In order for a contract to be legally binding, there must be evidence that the parties
reached a “meeting of the minds” as to the essential terms at issue. I & R Mech., Inc. v. Hazelton
Mfg. Co., 62 Mass. App. Ct. 452, 455 (2004). Generally, the agreed-upon terms must be
sufficiently definite to ascertain the meaning of the contract. Hastings Assocs., Inc. v. Local 369
Bldg. Fund, Inc., 42 Mass. App. Ct. 162, 170 (1997) (internal citation omitted). However, if the
agreement contains guidelines to allow the factfinder to determine the meaning of an indefinite
term, the question is answered by considering the facts of the case. See Simons v. Am. Dry
Ginger Ale Co., 335 Mass. 521, 523 (1957) (“[A] contract is not to be held unenforceable if,
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when applied to the transaction and construed in the light of the attending circumstances, the
meaning can be ascertained with reasonable certainty”) (quotation marks omitted); Cataldo v.
Zuckerman, 20 Mass. App. Ct. 731, 737 (1985) (considering whether the parties signed the
contract showing an intention to be bound by the provisions, even though a provision were left
for later clarification).
Defendants point to Plaintiff’s own statements, near the end of the negotiation period,
seeking more clarity as to what the “standard” commission was for the Waltham/Boston area.
Defs.’ Mot. for Summary Judgment 14 (citing Ex. 39 - Emails from William Bailey [#44-39] and
Ex. 44 - Further Emails from William Bailey [#44-44]). The question, however, is not whether
there was a meeting of the minds between Defendants and Plaintiff, who is neither a party to the
lease amendments nor the party that negotiated the final language, but between Defendants and
QinetiQ.
Defendants argue further that there is in fact no standard commission rate for
Boston/Waltham and offer their expert’s report to show the lack of such a standard. Pl.’s SOF
¶ 39 [#60]; Nahigian Aff. [#45].
In response, Plaintiff contends that there is a standard for the Boston/Waltham area and
offers its own expert’s report stating that the standard rate for the chosen area is $1.20 per square
foot per year of the lease. Pl.’s SOF ¶ 39 [#60] (citing Defs.’ Ex. 47 - Invoice [#44-47], Pl.’s Ex.
O – Webster Collins Deposition [#61-17], and Pl.’s Ex. P – Plaintiff’s Expert Report [#61-18]).
The court need not proceed further as Defendants have not met their burden under Fed.
R. Civ. P. 56(a). Whether there is a standard rate for the Boston/Waltham area is a disputed
question of fact for the jury.
Accordingly, Plaintiff’s contract claims move forward.
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4. Plaintiff’s Remaining Claims
Plaintiff’s remaining claims also all rely on a threshold determination about the validity
of the brokerage commission clause, and so summary judgment is not appropriate at this time.
First, Plaintiff has alleged in Count VII that Defendants engaged in unfair practices in
violation of M. G. L. c. 93A, § 11A. In order to prevail on a claim under M. G. L. c. 93A, a
plaintiff must show (1) that the defendant engaged in an unfair method of competition or
committed an unfair or deceptive act or practice, as defined by M. G. L. c. 93A, § 2, or the
regulations promulgated thereunder; (2) a loss of money or property suffered as a result; and (3)
a causal connection between the loss suffered and the defendant's unfair or deceptive method,
act, or practice. Auto Flat Car Crushers, Inc. v. Hanover Ins. Co., 469 Mass. 813, 820 (2014).
Misrepresentations of intent to pay can be a violation of the statute. Arthur D. Little, Inc. v.
Dooyang Corp., 147 F.3d 47, 51 (1st Cir. 1998).
Defendants argue that there was no deceptive practices as it consistently rejected Jones
Lang’s brokerage commission proposals and that Jones Lang and QinetiQ were responsible for
the delay in resolving the commission issue. Defs.’ Mem. in Support of Mot. for Summary
Judgment 15-16 [#43].
However, Defendants drafted the language in question, proposing a brokerage
commission based on a “standard” rate. Defs.’ Ex. 37 – Sept. 28, 2016 Proposal [#44-37]; Pl.’s
SOF ¶ 33 [#60]. If a jury finds that there is a “standard” rate, it is unlikely that Plaintiff will have
any further basis for proceeding on the 93A claim. But if the jury agrees with Defendants that
there is no “standard” rate, and finds further that Defendants sought to reach an agreement on the
lease amendment without paying the brokerage commission by proposing a term that Defendants
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viewed as unenforceable, there may be a violation of § 93A. Again, there are material disputes of
fact, and Defendants are not entitled to summary judgment as to this claim.
Similarly, as an intended third-party beneficiary, Jones Lang may assert that Defendants
breached the implied covenant of good faith and fair dealing, MacKenzie, 738 F.3d at 491-93,
and the assessment of this claim hinges on an analysis of Defendants’ intentions when it
negotiated and ultimately signed the Lease Amendments. A.L. Prime Energy Consultant, Inc. v.
Mass. Bay Transp. Auth., 479 Mass. 419, 434 (2018) (considering whether a party’s action “will
have the effect of destroying or injuring the right of the other party to receive the fruits of the
contract.”). As with the 93A claim, questions about Defendants’ intentions when proposing the
“standard” brokerage commission rest on material disputes of fact. Therefore, summary
judgment on Count IV is not warranted.
Finally, Plaintiff’s common law tort claims for quantum meruit and account annexed are
alternative grounds requiring Defendants to pay a commission even if there is no binding
contract. Liss v. Studeny, 450 Mass. 473, 480 (2008) (stating quantum meruit “is a claim
independent of an assertion for damages under the contract”); Fraser and Wise, P.C. v. Primarily
Primates, Inc., 966 F.Supp. 63, 77 (D. Mass. 1996) (describing a claim for account annexed as
the violation of an “implied contract to pay the plaintiffs if they did the work according to the
contract”).
Defendants argue that no reasonable jury could find for Jones Lang on the quantum
meruit claim because Jones Lang did not perform any services for Defendants. In order to prove
a quantum meruit claim, a plaintiff must show 1) that it conferred a measurable benefit upon the
defendants; 2) that the claimant reasonably expected compensation from the defendants; and 3)
the defendants accept the benefit with the knowledge of claimant’s reasonable expectations.
14
Finard & Co., LLC v. Sitt Asset Mgmt., 79 Mass. App. Ct. 226, 229 (2011). Here, where
Defendants signed a contract that stated that “[Defendants] agree to pay [brokers Jones Lang and
RW Holmes] all commissions due to them,” a jury may find that Jones Lang reasonably expected
compensation from Defendants and that Defendants had knowledge of Jones Lang’s reasonable
expectations.
This case is similar to Finard, where a tenant’s broker alleged that the landlord owed it a
brokerage commission and the jury held that quantum meruit was appropriate. Id. at 230. The
court found that the jury reasonably determined that the tenant’s broker conferred a benefit on
the landlord, and therefore, when there was no binding contract, quantum meruit necessitated the
payment by the landlord of the commission. Id. Such a finding may be appropriate here. The
salient question for the jury is whether Jones Lang conferred a measurable benefit on
Defendants.
In considering this question, the terms of the lease amendments may be considered. Liss,
450 Mass. at 480 (stating that “[a] court may look to the terms of the underlying contract to help
determine appropriate recovery under quantum meruit.”). Here, the lease amendments state that
“[t]he parties agree that [Jones Lang] and RW Holmes (Arthur Amadei) are the sole brokers
which brought about this transaction . . . . ” Pl.’s Ex. K - First Amendment to Lease, 350 Second
Ave. ¶ 2(e) [#61-11]; Pl.’s Ex. L - First Amendment to Lease, 358 Second Ave. ¶ 2(e) [#61-12]
(emphasis added). Given this language, a jury could find that Jones Lang “brought about” the
renewal of the lease and that the lease renewal conferred a benefit upon Defendants. As such,
Defendants have not demonstrated that summary judgment is warranted.
As to the account annexed claim, Plaintiff needs to show that there was an implied
contract between the parties to pay Plaintiff if it did the work according to the contract. Fraser,
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966 F.Supp. at 77. A jury could find such an implied contract if the jury finds that the explicit
contract is not binding on the parties. In sum, the facts in the summary judgment record do not
establish that Defendants are entitled to judgment on these two quasi-contract claims as a matter
of law, and summary judgment is denied on these claims as well.
Conclusion
Accordingly, for the previously discussed reasons, Defendants’ Motion to Amend
Answer to Assert Counterclaims [#32], Motion For Leave to Bring Third Party Complaint [#39],
and Motion for Summary Judgment [#42] are DENIED.
IT IS SO ORDERED.
Date: January 27, 2020
/s/ Indira Talwani
United States District Judge
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