Joyal v. Daviduk

Filing 24

///ORDER granting in part and denying in part 15 Motion for Summary Judgment. So Ordered by Magistrate Judge Andrea K. Johnstone.(vln)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Gary F. Joyal
v.

Civil No. 16-cv-230-AJ
Opinion No. 2017 DNH 130

Aminda Daviduk
MEMORANDUM AND ORDER
The plaintiff, Gary Joyal, brings this action seeking the
enforcement of four promissory notes executed by the defendant,
Aminda Daviduk, in 2010 and 2011.

Doc. no. 1.

Daviduk brings

counterclaims against Joyal for fraud and negligent
misrepresentation.

Doc. no. 6.

Joyal moves for summary

judgment (doc. no. 15), and Daviduk objects (doc. no. 19).
court held a hearing on June 12, 2017.

The

For the reasons that

follow, Joyal’s motion is granted as to Daviduk’s counterclaims
and granted in part and denied in part as to his own claim.
Summary Judgment Standard
Summary judgment is appropriate where “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); see also

Xiaoyan Tang v. Citizens Bank, N.A., 821 F.3d 206, 215 (1st Cir.
2016).

“An issue is ‘genuine' if it can be resolved in favor of

either party, and a fact is ‘material' if it has the potential
of affecting the outcome of the case.”

Xiaoyan Tang, 821 F.3d

at 215 (internal quotation marks and citations omitted).

At the

summary judgment stage, the court “view[s] the facts in the
light most favorable to the non-moving party” and “draw[s] all
reasonable inferences in the nonmovant's favor . . . .”

Garmon

v. Nat’l R.R. Passenger Corp., 844 F.3d 307, 312 (1st Cir. 2016)
(citation and quotation marks omitted).

The court will not,

however, credit “conclusory allegations, improbable inferences,
and unsupported speculation.”

Fanning v. Fed. Trade Comm’n, 821

F.3d 164, 170 (1st Cir. 2016) (citation and quotation marks
omitted) cert. denied, 137 S. Ct. 627 (2017).
“A party moving for summary judgment must identify for the
district court the portions of the record that show the absence
of any genuine issue of material fact.”
Inc., 817 F.3d 849, 853 (1st Cir. 2016).

Flovac, Inc. v. Airvac,
Once the moving party

makes the required showing, “‘the burden shifts to the nonmoving
party, who must, with respect to each issue on which [it] would
bear the burden of proof at trial, demonstrate that a trier of
fact could reasonably resolve that issue in [its] favor.'”
(citation omitted).

Id.

“This demonstration must be accomplished by

reference to materials of evidentiary quality, and that evidence
must be more than ‘merely colorable.'”

Id. (citations omitted).

The nonmoving party’s failure to make the requisite showing
2

“entitles the moving party to summary judgment.”

Id.

Background
The relevant facts, when viewed in the light most favorable
to Daviduk, are as follows.
Between November 2010 and March 2011, Daviduk executed four
promissory notes payable to Joyal.

The first two notes were

executed on November 12 and November 30, 2010, and totaled
$40,886.20 (“November 2010 notes”).
15-3.

See doc. no. 15-2; doc. no.

The remaining two notes were executed on March 15 and

March 17, 2011, and totaled $40,000.00 (“March 2011 notes”).
See doc. no. 15-4; doc. no. 15-5.
Other than the amounts, the notes were identical and
contained, in relevant part, the following terms:
. . . [The] principal and interest shall be paid on demand.
Notwithstanding the forgoing, Maker is required to repay in
full the entire outstanding Loan Balance upon the earlier
of either thirty (30) days, or upon restructure of the
debt.
. . .
Maker further agrees to pay all costs of collection,
including a reasonable attorney’s fee, including attorney’s
fees in event of appeal, in case the principal of this Note
or any interest thereon is not paid on demand.
. . .
This Note may not be changed orally, but only by agreement
in writing, signed by the party against whom enforcement of
any waiver, charge, modification or discharge is sought.

3

See, e.g., Doc. no. 15-2.1

The notes also contained two

provisions concerning interest, the first stating that
outstanding principal would be subject to an interest rate of
ten percent compounded annually, and the second stating that the
note would bear an annual interest rate of ten percent
commencing five business days after Daviduk received notice of a
demand of payment.

Id.

The notes stated that they were to be

“construed and enforced according to the laws of the State of
Massachusetts.”

Id.

All four notes were executed contemporaneously with the
negotiation and execution of several other, related transactions
involving Joyal and Daviduk.

In mid-to-late 2010, Daviduk was

in the process of divorcing her husband.
2.

See doc. no. 15-11 at

Daviduk and her husband jointly owned five Dunkin’ Donuts

franchises.

Affidavit of Aminda Daviduk (doc. no. 19-2) ¶ 2.

Daviduk agreed to purchase her husband’s share of all five
franchises in exchange for a fifteen year annuity, payable to
her husband in the amount of $78,000.00 per year in gross annual
income.

Doc. no. 15-13 at 1, 2.

It is plain from the record

that Joyal, through his company Joyal Capital Management
(“JCM”), was involved in that transaction, though the specific

To the extent the contract language is the same across all
four promissory notes, the court will only cite to one of the
notes.
4
1

nature of his involvement is unclear.

See doc. no. 15-11; doc.

no. 15-12.
In order to fund the annuity, Joyal suggested that Daviduk
sell one of the five Dunkin’ Donuts franchises.
1, 5.

Daviduk Aff. ¶

Joyal stated that the sale proceeds would cover the

annuity and leave Daviduk approximately $100,000.00 that she
could put toward overhead for the remaining four franchises.
Id. ¶ 5.

On January 14, 2011, Daviduk entered into a purchase

and sale agreement to sell one of the franchises for
$1,240,000.00.

Doc. no. 15-14 at 1, 3.

orchestrated” this sale.

Joyal “organized and

Daviduk Aff. ¶ 8.

The sale of the franchise closed on March 15, 2011.
no. 15-9.

Doc.

On that date, Daviduk discovered that she would not

receive any net proceeds from the sale, and would in fact have
to pay approximately $10,000.00.

Daviduk Aff. ¶ 10.

She

further learned that Joyal would receive a considerable amount
in disbursements and commissions as part of the transaction.
Id. ¶ 11.

Daviduk threatened to walk away from the closing, but

Joyal and his associates assured her that the transaction “would
all work out” and promised that they would “take care of any
shortfalls.”

Id. ¶ 12.

As of the date of the closing, Daviduk and Joyal had
already executed the November 2010 notes.
doc. no. 15-3.

See doc. no. 15-2;

Joyal promised at the closing that proceeds
5

received from the sale of the franchise would pay off the
November 2010 notes.

Daviduck Aff. ¶ 13.

The March 2011 notes

were executed on the day of the closing, see doc. no. 15-4, and
two days later, see doc. no. 15-5.

Joyal assured Daviduk at the

time those notes were executed that they were only being
presented as promissory notes for tax purposes, that they were
intended to “help make things right,” and that he would only
need a “payment or two” to satisfy any tax concerns.

Id.

Following the closing, Joyal, through JCM, secured
Daviduk’s husband an annuity through the Guardian Insurance &
Annuity Company, Inc. (“Guardian”), see doc. no. 15-16, and a
life insurance policy through Allianz Life Insurance Company of
North America (“Allianz”), see doc. no. 15-17.

Joyal attached a

copy of the application for the Guardian annuity to his motion
for summary judgment.

See doc. no. 15-15.

At the end of this

attachment is a single-page document captioned “Aminda Daviduk;
Northern Loan Request; Sources/Uses of Funds; Dec-10”
(hereinafter the “Dec-10 document”).

Id. at 13 (formatting

altered; semicolons indicate new line in original).

The top of

this document reads “keep 4 stores, sell 1 location,” and
appears to contemplate a $2,200,000.00 loan.

Id.

The document

includes several line items seemingly related to how that loan
money would be used.

Id.

One of the line items is for “JCM-

funds owed regarding Morgan Stanley payments made on Minda's
6

behalf” with an amount entry of “(41,000).”

Id.

A separate

entry reads “Net Cash from 2 store sale to Cafua” with an amount
entry of “$1,200,000.”

Id.

Though the Dec-10 document was

apparently in Joyal’s possession, neither party can explain its
provenance.
Daviduk made four payments toward the promissory notes:
$2,000 in April 2011, $1,500 in July 2014, $2,500 in August
2014, and $1,000 in September 2014.

See doc. no. 15-6.

All

four payments were applied toward the November 12, 2010 note.
See id.

Between October 3, 2014, and September 8, 2015, Becky

Green, a controller at JCM, reached out to Daviduk repeatedly in
an attempt to coordinate additional payments toward the notes.
See doc. no. 15-10.

On April 27, 2016, Joyal, through his

present counsel, sent Daviduk a demand letter for the
outstanding balances on the notes, plus interest.
15-7.

Joyal filed this action on June 3, 2016.

See doc. no.
See doc. no. 1.

Discussion
Joyal seeks to enforce the promissory notes, alleging he is
entitled to the outstanding principal and interest under the
notes, plus statutory post-judgment interest and the costs of
collection, including attorney’s fees.

Daviduk counterclaims,

alleging that the notes are unenforceable due to negligent
misrepresentations and fraud on the part of Joyal.
7

Joyal moves

for summary judgment on both his own claim and Daviduk’s
counterclaims.
I.

Daviduk’s Counterclaims
The court turns first to Daviduk’s counterclaims.

Joyal

argues, among other things, that these claims are barred by New
Hampshire’s three-year statute of limitations.

See N.H. Rev.

Stat. Ann. (“RSA”) § 508:4, I.
“Pursuant to RSA 508:4, ‘all personal actions, except
actions for slander or libel, may be brought only within 3 years
of the act or omission complained of' unless the discovery rule
exception applies.”

Perez v. Pike Industries, Inc., 153 N.H.

158, 160 (2005) (quoting RSA 508:4, I).

“[O]nce the defendant

establishes that the cause of action was not brought within
three years of the alleged act, the burden shifts to the
plaintiff to raise and prove the applicability of the discovery
rule exception.”

Id. at 160.

As Joyal notes in his motion, all alleged acts underlying
Daviduk’s counterclaims occurred during the spring of 2011, well
more than three years prior to the date on which the
counterclaims were alleged.

The burden therefore shifts to

Daviduk to demonstrate that the discovery rule tolled the
limitations period such that these claims are timely.
not done so here.

She has

Daviduk does not address the limitations

period, let alone the discovery rule, at all in her objection.
8

At the hearing, her counsel conceded that her counterclaims were
likely susceptible to dismissal on limitations grounds and did
not argue that the discovery rule applied.2

Daviduk has

therefore failed to sustain her burden, and her counterclaims
are time-barred.
Joyal’s motion for summary judgment is accordingly granted
as to Daviduk’s counterclaims.
II.

Joyal’s Action
Though he spends much of his motion anticipating and

addressing Daviduk’s potential defenses, Joyal’s central
argument in favor of summary judgment is that the promissory
notes are enforceable by their plain terms.
satisfies Joyal’s initial burden.

This argument

There is no dispute that

Daviduk did not repay the notes when Joyal demanded that she do
so.

There similarly does not appear to be a dispute that the

notes were never modified in writing.

Limited to these facts,

Joyal would be entitled to recover the outstanding principal and
interest, as well as the costs of collection, under the plain
terms of the notes.

Thus, the burden shifts to Daviduk to point

Daviduk’s counsel stated at the hearing that he included
the counterclaims in order to preserve fraud and negligent
misrepresentation as defenses to Joyal’s enforcement action.
Though not included as an affirmative defense, the court
concludes that Daviduk may nonetheless raise fraud as a defense
to the enforcement of the March 2010 notes, as discussed in
greater detail below. See infra pp. 13–14.
2

9

to evidence in the record from which a trier of fact could
reasonably conclude that her failure to pay was nevertheless
excusable.
Daviduk argues that she was not obligated to pay under the
promissory notes because the notes themselves are not
enforceable.

She raises two arguments to this effect, one as to

the November 2010 notes and another as to the March 2011 notes.3
The court considers each argument in turn.
A.

November 2010 Notes

Daviduk contends that there is evidence in the record
suggesting that the November 2010 notes were satisfied by
proceeds from the March 15, 2011 sale of the Dunkin’ Donuts
franchise.

She makes two arguments to this end, one general and

one specific.

Neither is persuasive.

Generally, Daviduk argues that it is reasonable to conclude
that the November 2010 notes were satisfied based solely on the
amount Joyal and/or JCM purportedly received as part of the sale
of the Dunkin’ Donuts franchise.

Daviduk has not, however,

provided any evidentiary support for this conclusion.

Instead,

she asks the court to infer, purely from the amount Joyal

In her objection, Daviduk raises a third argument related
to the interest rate provisions in the promissory notes. As
this argument goes to damages rather than liability, the court
addresses it in section III below.
3

10

received as part of the transaction (according to Daviduk, at
least $272,884.00), that some of this money must have been used
to satisfy the November 2010 notes.

This argument is

unavailing, as it is based upon pure speculation, and
speculation alone is not enough to defeat summary judgment.

See

Fanning, 821 F. 3d at 170.
Daviduk also contends that the Dec-10 document indicates
that the November 2010 notes were satisfied.

She specifically

points to the line item for “JCM-funds owed regarding Morgan
Stanley payments made on Minda's behalf” in the amount of
“(41,000).”

See doc. no. 15-15 at 13.

Daviduk contends that

this line item corresponds with the $40,668.20 owed under the
November 2010 notes.

In Daviduk’s view, the existence of a

document with that line item in the record creates a triable
issue of fact as to whether the November 2010 notes were
satisfied.
The court is unpersuaded by this argument.

Daviduk has

identified no evidentiary basis to conclude that the Dec-10
document in any way reflects the actual state of affairs in this
case.

Indeed, the Dec-10 document contains several entries that

are either unsupported anywhere in the record or directly
refuted by the undisputed facts.

For instance, there is no

indication in the record that Daviduk ever actually pursued, let
alone secured, a $2,200,000.00 loan.
11

Yet this loan amount is

referenced in the Dec-10 document and appears directly related
to the amounts of the line items in the document, including the
line item relied upon by Daviduk.

Additionally, while the Dec-

10 document contemplates a “2 store sale to Cafua,” id., it is
undisputed that Daviduk only sold one of the five Dunkin’ Donuts
franchises.

In light of these facts, the court concludes that

the Dec-10 document reflects, at most, a hypothetical
transaction that did not come to pass.

As such, no trier of

fact could reasonably conclude, solely from its existence in the
record, that the November 2010 notes were actually paid off.4
In sum, neither of Daviduk’s arguments persuades the court
that the November 2010 notes were satisfied.

Joyal’s motion for

summary judgment is accordingly granted as to Daviduk’s
liability under the November 2010 notes.
B.

March 2011 Notes

Daviduk argues that the March 2011 notes are unenforceable
because they were the product of fraud on the part of Joyal.

In her affidavit, Daviduk asserts that Joyal promised at
the March 15, 2011 closing that any proceeds he received from
that transaction would satisfy the November 2010 notes. Daviduk
Aff. ¶ 13. Though she reiterates this assertion in the fact
section of her memorandum in opposition to summary judgment, see
doc. no. 19-1 at 4, she does rely upon it as a basis for
avoiding summary judgment on the November 2010 notes. This is
perhaps unsurprising, given that each of the notes contained
express language stating that they could not be changed orally,
see, e.g., doc. no. 15-2, and there is nothing in the record to
suggest that this purported promise was ever memorialized in
writing.
12
4

She specifically contends that Joyal assured her at the time the
notes were executed that they were only being presented as
promissory notes for tax purposes, that they were intended to
“help make things right,” and that Joyal would only need a
“payment or two” to satisfy any tax concerns.

Joyal disputes

that he ever made such statements, but argues that even if he
did it was unreasonable as a matter of law for Daviduk to rely
on them because the statements were inconsistent with the
express terms of the March 2011 notes themselves.
Before reaching the merits of these arguments, the court
must address a preliminary issue: whether Daviduk may rely on a
fraud defense now when fraud was solely alleged in her answer as
a counterclaim, and not as an affirmative defense.

“As a

general matter, unpleaded affirmative defenses are deemed
waived.”

Shervin v. Partners Healthcare Sys., Inc., 804 F.3d

23, 52 (1st Cir. 2015) (citation omitted).

A court may,

however, “relax the raise-or-waive rule when equity so dictates
and there is no unfair prejudice to any opposing party.”

Id.

(citation omitted).
Here, equity dictates that Daviduk be allowed to proceed
with her fraud defense.

Daviduk raised fraud as a counterclaim

in the same pleading in which she could have included it as an
affirmative defense.

There was accordingly no delay in

informing Joyal of the factual predicate for this defense.
13

Additionally, Joyal anticipated this defense and addressed it
head on in his motion for summary judgment, suggesting that he
does not object to the manner in which it was raised.

There

therefore does not appear to be any prejudice to Joyal in
allowing Daviduk to raise this defense now.

As such, the court

will address Daviduk’s fraud defense on its merits.
The parties’ arguments with respect to the fraud defense
lie at the intersection of two well-established precepts of
Massachusetts law.

On the one hand, “[s]tatements of present

intention as to future conduct may be the basis for a fraud
action, if the statements misrepresent the actual intention of
the speaker and were relied upon by the recipient to his
damage.” Starr v. Fordham, 187, 648 N.E.2d 1261, 1267 (Mass.
1995) (citations and internal quotation marks omitted).

Yet

courts have repeatedly stated that “[i]t is unreasonable as a
matter of law to rely on prior oral representations that are (as
a matter of fact) specifically contradicted by the terms of a
written contract.”

Masingill v. EMC Corp., 870 N.E.2d 81, 89

(Mass. 2007).
As relevant here, there are two leading cases that examine
this issue: Turner v. Johnson & Johnson, 809 F.2d 90 (1st Cir.
1986) and McEvoy Travel Bureau, Inc. v. Norton Company, 563
N.E.2d 188 (Mass. 1990).

As the facts of these cases inform the

present analysis, the court briefly summarizes each.
14

In Turner, the plaintiffs sold their electronic thermometer
business to the defendant in exchange for, among other things,
royalties based on future sales of the plaintiffs’ thermometers.
809 F.2d at 93.

The final contract between the parties stated

that the defendant was under no obligation to market the
thermometers.

Id.

When the defendant ceased doing so after the

sale, the plaintiffs sued, alleging that the defendant
fraudulently stated during the course of negotiations that it
would market the thermometers.

Id. at 94.

The First Circuit concluded that the plaintiffs’ fraud
argument failed as a matter of law.

Id. at 97.

The court held

that “where both parties were experienced in business and the
contract was fully negotiated and voluntarily signed, plaintiffs
may not raise as fraudulent any prior oral assertion
inconsistent with the contract provision that specifically
addressed the particular point at issue.”

Id. at 97.

In

reaching this conclusion, the court noted that “if a jury is
allowed to ignore contract provisions directly at odds with oral
representations allegedly made during negotiations, the language
of a contract simply would not matter anymore.”

Id. at 96.

Thus, the court stated, “a knowledgeable buyer should not sign a
contract that conflicts with his or her understanding of the
agreement.”

Id. at 97–98.

The Massachusetts Supreme Judicial

Court (“SJC”) has reaffirmed this holding.
15

See, e.g., Starr,

648 N.E.2d at 1268.
In McEvoy, the plaintiff was a small travel agency which
had for decades provided air travel services to the defendant, a
large Worcester-based conglomerate.

McEvoy, 563 N.E.2d at 191.

In 1980, the parties negotiated and orally entered into a “longterm” agreement in which the plaintiff agreed to make
considerable logistical upgrades in exchange for increased
business from the defendant.

Id.

After the plaintiff had

started performing under the agreement, the defendant forwarded
the plaintiff a written contract.

Id.

To the plaintiff’s

surprise, this contract included a sixty-day termination clause
and contemplated a one-year, renewable term.

Id.

The plaintiff

expressed concerns about these terms to the defendant, but
ultimately executed the contract based on the defendant’s
assurances that the agreement would continue to be a long-term
arrangement and that the termination clause was “inoperative”
and “meaningless.”

Id. at 191–92.

Three years later, the

defendant entered into an arrangement with a different travel
agency and invoked the termination clause.

Id. at 192.

The plaintiff sued, alleging, inter alia, that the
defendant fraudulently induced it to enter into the agreement.
Id.

Relying on Turner, the defendant argued that the alleged

misrepresentations “contradict a specific and unambiguous
provision in the contract” — namely, the termination clause.
16

Id.

The SJC sided with the plaintiff, concluding that Turner

was distinguishable in at least two respects.

Id. at 193.

First, the SJC noted that unlike in Turner, “the
misrepresentations were not part of the negotiations but were
made immediately prior to the signing of the initial contract.”
Id.

To this end, the SJC noted that in Turner there was no

allegation that the defendant, “in order to induce the
plaintiffs to sign, pointed to a particular provision of the
final contract and fraudulently promised that it would not
invoke the provision.”

Id.

Additionally, the SJC noted that

the contract in Turner “was fully negotiated,” whereas “the
termination provision in the [McEvoy] contract was not mentioned
during negotiations but rather had been inserted unilaterally by
[the defendant].”

Id. at 194.

Thus, according to the SJC,

“[t]he jury reasonably could have concluded that it was [the
plaintiff's] acceptance of [the defendant's] fraudulent
assurances that constituted their agreement on the issue, and
not the contradictory written provision in the contract.”

Id.

at 193–94.
In the court’s view, the facts of this case more closely
align with McEvoy than they do with Turner.

For one, there is

no indication that the parties ever negotiated any of the terms
of the March 2011 notes, let alone those relating to the
enforceability of the notes themselves.
17

Thus, there is no

indication that the enforcement provisions were “fully
negotiated” or that the alleged misrepresentations occurred
during the course of the negotiations.

As noted, this is one of

the primary ways in which the SJC differentiated the facts in
McEvoy from those in Turner.
Additionally, there are facts in the record from which a
jury could reasonably conclude that Joyal fraudulently induced
Daviduk to enter into both the March 2011 promissory notes and
the March 15, 2011 sale of the Dunkin’ Donuts franchise.
Daviduk alleges in her affidavit — which must be credited at
this stage — that Joyal specifically stated on or around March
15, 2011, that the money provided in the March 2011 notes was to
help “make things right” and that Daviduk would only need to
make a payment or two under the promissory notes for tax
purposes.

Based on these facts, a jury could reasonably

conclude that Joyal, in order to induce Daviduk to both sign the
March 2011 notes and to close on the sale of the franchise,
pointed to a particular provision in the notes — the enforcement
language — and fraudulently promised that he would not invoke
that provision.

These are the precise circumstances present in

McEvoy, circumstances the SJC specifically noted were absent in
Turner.
Each of Joyal’s arguments to the contrary is unavailing.
In his motion, Joyal argues that Daviduk cannot use prior or
18

contemporaneous conversations to avoid payment on the notes
because they are barred by parol evidence rule.

This argument

fails, as it is “well-established in Massachusetts that the
parol evidence rule does not apply when the complaining party
alleges fraud in the inducement.”

Indigo Am., Inc. v. Big

Impressions, LLC, 597 F.3d 1, 5 (1st Cir. 2010) (brackets,
internal quotations, and citations omitted).
Relatedly, Joyal argues that any prior statements are
irrelevant as a matter of law because the promissory notes were
fully integrated agreements.

“An integration clause in a

contract does not insulate automatically a party from liability
where he induced another person to enter into a contract by
misrepresentation.”
omitted).

Starr, 648 N.E.2d at 1268 (citation

And, as noted, there is no evidence that the parties

actually negotiated the terms of the March 2011 notes.

Thus, a

jury could reasonably conclude here, as in McEvoy, that it was
Daviduk’s acceptance of Joyal’s fraudulent assurances, and not
the contrary language in the contract, that constituted their
agreement on the issue of enforceability.
At the hearing, Joyal’s counsel argued for the first time
that it was unreasonable for Daviduk to rely on Joyal’s
statements because Daviduk was represented by counsel at the
time the promissory notes were executed.

Joyal did not raise

this argument in his motion or reply, and has not pointed the
19

court to any authority in support of this proposition.
court’s own research has revealed none.

The

The SJC has, however,

stated that a plaintiff’s sophistication does not relieve a
defendant of his obligation to deal with the plaintiff in an
honest manner.

See, e.g., Starr, 648 N.E.2d at 1268.

The court

therefore declines to rule now, as a matter of law, that
Daviduk’s reliance on Joyal’s statements was unreasonable simply
because she was represented at the time the statements were
made.
In his supplemental memorandum,5 Joyal argues that this case
should be governed by Turner and not McEvoy.

He relies, as he

did in his motion, on the HSBC Realty Credit Corporation (USA)
v. O’Neill, 745 F.3d 564 (2014) (“HSBC”).
In HSBC, the First Circuit addressed both McEvoy and Turner
and elected to follow the latter.

See 745 F.3d at 570–74.

The

SJC conducted a similar analysis in the case Masingill v. EMC
Corporation.

See 870 N.E.2d at 88–90.

Both of these cases

differentiated McEvoy on its facts, see HSBC, 745 F.3d at 573;
Masingill, 870 N.E.2d at 89, and both can reasonably be read to
suggest that McEvoy stands as a limited exception to the general

At the hearing, the court directed the parties to provide
additional briefing on the applicability of two cases that the
parties did not address in their initial filings. One of these
cases was McEvoy.
5

20

rule announced in Turner.

The court declines, however, to read

either case as limiting McEvoy solely to the unique
circumstances presented in that case.

Indeed, both the First

Circuit and the SJC ultimately relied upon the same fundamental
difference between those cases and McEvoy: that the alleged
misrepresentations occurred during negotiations and were not, as
they were in McEvoy, specific fraudulent statements that a
provision or provisions of the written contract would not be
enforced.
90.

HSBC, 745 F.3d at 573; Masingill, 870 N.E.2d at 89–

As discussed above, the facts in the record here, when

viewed in the light most favorable to Daviduk, fall on the
McEvoy side of this dichotomy.

The court cannot read HSBC or

Masingill as compelling a different conclusion as a matter of
law.
In sum, there is a triable issue as to whether Joyal
fraudulently induced Daviduk to execute the March 2011 notes.
Joyal is accordingly not entitled to summary judgment as to
those notes.

The court emphasizes, however, that it reaches

this conclusion without making any determination as to Daviduk’s
credibility.

Such determinations are beyond the scope of the

court’s review at the summary judgment stage, and are left for
the jury at trial.

See, e.g., Hicks v. Johnson, 755 F.3d 738,

743 (1st Cir. 2014) (when determining whether summary judgment
is appropriate, a court “may neither evaluate the credibility of
21

witnesses nor weigh the evidence”).
In sum, Joyal’s motion for summary judgment is denied as to
the March 2011 notes.
III. Damages
Finally, the court will briefly touch upon damages.

Joyal

contends that he is entitled to damages including, among other
things, the outstanding principal and interest under the notes.
In her objection, Daviduk argues that even if Joyal ultimately
prevails in this action, the amount of interest owed under the
notes is unclear because the interest provisions are ambiguous.
The court agrees.
As mentioned above, each note contains two provisions
concerning interest.

The first states that “[t]he principal

balance outstanding from time to time hereunder shall bear
interest at a rate equal to TEN PERCENT (10%), compounded
annually.”

See, e.g., doc. no. 15-2.

The second states that

“[c]ommencing five (5) business days after notice of demand is
received by Maker, this Note shall bear interest at the annual
rate of TEN PERCENT (10%), from such date until paid.”
id.

See, e.g.,

While both of these provisions contemplate the same

interest rate, they appear to differ as to when interest will
begin to accrue: the first may be fairly read to suggest that
interest will begin accruing at the time of execution, whereas
the second expressly contemplates interest beginning to accrue
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five days after notice of demand is received by Daviduk.
Depending on the date Joyal demanded repayment under the notes,
this difference could have a significant impact on the damages
to which Joyal would be entitled in this case.

As the parties

have not briefed this issue, and Joyal is not entitled to
summary judgment on all four notes, the court leaves it for
another day.
Conclusion
In sum, Joyal’s motion for summary judgment (Doc. no. 15)
is granted in part and denied in part.

The motion is granted as

to Daviduk’s counterclaims and Joyal’s claim as it relates to
Daviduk’s liability under the November 2010 notes.

It is denied

as to Joyal’s claim as it relates to Daviduk’s liability under
the March 2011 notes and as to Joyal’s entitlement to damages
under any of the notes.
SO ORDERED.

__________________________
Andrea K. Johnstone
United States Magistrate Judge

June 30, 2017
cc:

John Daniel Prendergast, Esq.
Steven J. Bolotin, Esq.
Ralph Suozzo, Esq.
Anthony S. Augeri, Esq.
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