Nancy Mills, Justice, Superior Court.
On March 20, 2014, the court granted plaintiff's motion for summary judgment on count I, fraud, of plaintiff's complaint. Judgment was entered in favor of plaintiff and against defendant in the amount of $240, 734.44, plus interest and costs.
Jury-waived trial on count II, punitive damages, of plaintiff's complaint was held on April 24, 2014. For the following reasons, judgment is entered in favor of defendant and against plaintiff on count II of plaintiff's complaint.
Thomas Manning is a member and the manager of plaintiff, a Maine limited liability company in good standing. Plaintiff owned and operated Diggers and Liquid Blue Pub, a restaurant and bar in the Old Port. In 2007, the pub's liquor license was not renewed by the city. Mr. Manning appealed the nonrenewal.
Plaintiff had a restaurant across the street from Diggers and Liquid Blue Pub called Cake Restaurant, which was an upscale space. A broker brought defendant to see this restaurant. Defendant understood plaintiff had the business across the street, which was not for sale on the open market but was subject to private negotiations.
According to Mr. Manning, defendant stated he had a construction company with many contracts. He stated he worked with wealthy individuals who supported his operation. He stated he intended to buy Old Port businesses and could " cut a check" for the business that day because that was " chump change" to him. According to Mr. Manning, when he questioned defendant's financial ability, defendant interrupted and discussed his bank accounts and income flow. (Pl.'s Ex. H1, pp. 1-2.)
A purchase and sale agreement for Diggers and Liquid Blue Pub with owner financing and a purchase and sale agreement for Cake Restaurant for cash to be paid within a few months were signed by entities involving Mr. Manning and defendant. (Pl.'s Exs. F, G.) According to Mr. Manning, defendant lured Mr. Manning into financing the entire operation, which he agreed to because he believed defendant knew the industry and had support. It appears no investigation or due diligence was performed with regard to defendant's financial status or other representations prior to these agreements.
Plaintiff received $25, 000.00 at the closing for Diggers and Liquid Blue Pub and nothing more of the $115, 000.00 price. With regard to the purchase of Cake Restaurant, defendant failed to pay the second installment of $12, 500.00 and paid nothing thereafter. (Pl.'s Exs. F, G, HI, p. 5.)
When defendant did not pay the debts, Mr. Manning obtained a judgment on the two notes. Plaintiff's attorney began disclosure proceedings and a hearing was scheduled for June 19, 2008. On June 18, 2008, defendant filed for bankruptcy and the disclosure hearing did not take place. During the bankruptcy proceedings, defendant advertised a new venture with partner Forrest Bradbury. (Pl.'s Ex. I.) Mr. Bradbury eventually received a temporary order for protection from harassment against defendant. (Pl.'s Ex. J.) Defendant stated Mr. Bradbury's allegations were false but he " got what he wanted" by obtaining a temporary order. Mr. Bradbury failed to appear at the final hearing and the protection order was terminated. The advertised restaurant never opened.
Another disclosure hearing was scheduled for June 21, 2013. Defendant filed for bankruptcy again on June 19, 2013. Plaintiff filed a motion for relief from stay. The bankruptcy case was dismissed because defendant had filed too soon. (Pl.'s Ex. T.) Defendant had been working on the filing for months but could not afford the filing fee.
Mr. Manning contends defendant's statements under oath at the disclosure hearing were inaccurate, particularly regarding vehicles he owns. Mr. Manning has traveled to defendant's residence several times during 2013 and hired a private investigator. Defendant lives in a very nice development of large, well-maintained homes that sell for $400, 000.00 to $600, 000.00. The house is owned by a wealthy friend of the defendant, who rents the house to defendant on a monthly basis. The Corvette in the driveway is owned by the owner of the house.
A District Court judge ordered $2, 500.00 to be turned over to plaintiff. The funds were unavailable when the trustee summons was served. (Pl.'s Ex. T.)
At the time of the purchase and sale agreements, Mr. Manning was 40 years old and hoped to get married and make a career change. He needed operating capital to start his own business. He expected the monthly payments from the sale of Diggers and Liquid Blue Pub and the funds from the sale of Cake Restaurant would provide that capital. Based on his previous work in the IT industry, Mr. Manning testified he could have earned $100, 00.00 to $150, 000.00 per year, based on an hourly rate of $100.00 to $150.00 per hour for 50 to 60 hours per week. According to Mr. Manning, he lost these opportunities because he received no installment ...