James Clouier, Esq.
Martica Douglas, Esq.
ORDER ON DENFENDANTS' MOTION FOR SUMMARY
E. WALKER, JUSTICE
the court is Defendants Jewell & Boutin, P.A. and Thomas
Jewell, Esq.'s motion for summary judgment on Plaintiff
Alder Street Properties, LLC's claims for legal
malpractice. Based on the following, Defendants' motion
for summary judgment is denied.
Alder Street Properties, LLC is owed and operated by David
O'Donnell and Rudy Ferrante. (Defs. Supp. S.M.F. ¶
1; Pl. Opp. S.M.F. ¶ 1.) O'Donnell and Ferrante are
real estate developers who acquire real estate through
limited liability companies. (Id. ¶ 2.)
O'Donnell and Ferrante had previously acquired real
estate through "bond for deed" transactions.
(Id. ¶ 3.)
2007, an agent of William Simpson, an owner and operator of
commercial real estate, offered to sell O'Donnell certain
rental real estate in Portland's Bayside neighborhood
controlled by an entity owed by Simpson (the "Alder
Street Properties"). (Am. Compl. ¶ 10.) Under the
terms of the proposed transaction, Simpson required a $350,
000.00 down payment. (Defs. Add'l S.M.F. ¶ 11; Pl.
Resp. S.M.F. ¶ 11.) At the suggestion of Ferrante,
O'Donnell contacted Kevin Smith at Lender's Network,
Inc. to help finance the transaction. (Am. Compl. ¶ 13.)
Smith prepared personal financial statements concerning
O'Donnell's finances, which Smith then submitted to
Thomas Toye for the purpose of inducing Toye to finance
Plaintiffs acquisition of the Alder Street Properties.
(Id. ¶ 14.) Toye agreed to extend Plaintiff a
"bridge loan" to finance the down payment, which
O'Donnell and Ferrante personally guarantied. (Defs.
Add'l S.M.F. ¶ 13.)
the parties dispute the actual details, at some time in late
2007, O'Donnell, Ferrante, and/or Simpson asked Defendant
Thomas Jewell, Esq. to draft the necessary documents to
transfer the Alder Street Properties through a "bond of
deed" transactions. (Defs. Supp. S.M.F. ¶¶
8-10; PL Opp. S.M.F. ¶¶ 8-10.) Jewell had
previously represented Simpson in a "bond for deed"
transaction with another entity owned by O'Donnell and
Ferrante. (Id. ¶¶ 4-5.) Jewell had also
represented a third entity owned by O'Donnell and
Ferrante in another real estate transaction. (Id.
¶ 7.) Despite the conflict of interest, Jewell agreed to
prepare the documents for the "bond of deed"
transaction. (Id. ¶ 9.) The closing for the
transaction occurred on January 3, 2008.
filed for bankruptcy in 2009. (Defs. Add'l S.M.F. ¶
17; Pl. Resp. S.M.F. ¶ 17.) The bankruptcy court held
that "bond for deed" and "lease to
purchase" contracts governing the Alder Street
Properties transaction were "executory contracts, "
subject to termination at the election of the bankruptcy
trustee. (Id. ¶ 18.) Accordingly, the
bankruptcy trustee terminated Plaintiffs right to the Alder
Street Properties. (Id. ¶ 19.)
was unable to obtain refinancing in order to pay-off the
"bridge loan" from Toye, and Plaintiff defaulted on
the loan. (Id. ¶¶ 14-16.) Toye sued
O'Donnell on his personal guaranty of the "bridge
loan" and obtained a judgment of $417, 974.00. In re
O'Donnell, 728 F.3d 41, 44 (1st Cir. 2013).
O'Donnell and Ferrante subsequently filed for bankruptcy.
(Defs. Add'l S.M.F. ¶ 20; Pl. Resp. S.M.F. ¶
20.) The bankruptcy court determined that O'Donnell's
debt to Toye was non-dischargeable because
O'Donnell's personal financial statements contained
material misrepresentations. (Id. ¶¶
December 30, 2013, Plaintiff filed a complaint against
Lender's Network, Inc., Kevin Smith, Thomas Jewell, Esq.,
Jewell's firm, Jewell & Boutin, P.A., and
Jewell's partner in the firm, Daniel Boutin, Esq.
Plaintiff amended its complaint on March 9, 2014. Plaintiffs
amended complaint asserted counts of negligence, liability
for professional conduct, negligent misrepresent and/or
failure to disclose material facts, and breach of contract
against all defendants. (Am. Compl. ¶¶ 23-33.) The
amended complaint also asserted counts of failure to disclose
a conflict of interest, failure to withdraw representation
due to irreconcilable conflict, and breach of professional
and fiduciary duty against Jewell, Boutin, and their firm.
(Id. ¶¶ 34-44.) Lender's Network,
Inc., Smith, and Boutin were subsequently dismissed from this
action. Jewell and Jewell & Boutin, P.A. are the only
and Jewell & Boutin, P.A. initially filed this motion for
summary judgment on September 2, 2014. After an extension of
time, Plaintiff filed its initial opposition to the motion on
October 10, 2014. This action was stayed in June 2015 because
of a family medical situation involving Plaintiffs counsel. A
November 2015 hearing on the motion for summary judgment was
also continued because Plaintiffs counsel had been
hospitalized. A hearing on the motion for summary judgment
was held in January 2016. On February 2, 2016, for good cause
shown, the court permitted the parties to amend and
supplement their filings regarding the pending motion for
summary judgment. Plaintiff filed an amended opposition, an
amended opposing statement of material facts, and supporting
documents on February 12, 2016. Defendants filed a supplemental
brief, a response to Plaintiffs additional statements of
facts, and it own additional statement of material facts on
March 14, 2016. Plaintiff filed a reply memorandum of law and
a responsive statement of material facts on March 21,
STANDARD OF REVIEW
judgment is appropriate if, based on the parties'
statements of material fact and the cited record, there is no
genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. M.R. Civ. P. 56(c);
Dyer v. Dep 't of Tramp.,2008 ME 106, ¶
14, 951 A.2d 821. "A material fact is one that can
affect the outcome of the case. A genuine issue of material
fact exists when the fact finder must choose between
competing versions of the truth." Dyer, 2008 ME
106, ¶ 14, 951 A.2d 821 (internal citation and quotation