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Lawson v. Morse

Superior Court of Maine, Lincoln

July 29, 2019

GREGORY LAWSON and ANGELA LAWSON, Plaintiffs,
v.
ROBERT MORSE, JR. and ATLANTIC LABORATORIES, INC., Defendants.

          ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

          Daniel I. Billings, Justice Maine Superior Court.

         This matter is before the court on the Defendants' Motion for Summary Judgment.

         BACKGROUND

         The following facts are undisputed unless otherwise noted. On December 15, 2015, Gregory Lawson, a commercial seaweed harvester, and his wife, Angela Lawson (collectively Plaintiffs), visited Gregory Morse in his office at Atlantic Laboratories, Inc. (ALI) (collectively Defendants). Defendants' Statement of Material Facts (DSMF) ¶¶ 1-2, 6. ALI is a seaweed processor that buys harvested seaweed from independent contractors. DSMF ¶ 3. ALI was familiar with Gregory as he had previously used another independent contractor's boat to harvest seaweed which was sold to ALL DSMF 3. The parties discussed an arrangement (the Agreement) where ALI, or Morse, [1] would pay for the construction of a seaweed harvesting boat (Vessel) at their plant. DSMF ¶ 6. The Plaintiffs, or their business, Perry's Pride II & Son, LTD (Perry's Pride) would use the Vessel to harvest all the seaweed they could, and the value of one-third of each harvest would go towards the Vessel's construction costs, in anticipation of the Plaintiffs eventual ownership of it. DSMF ¶ 6. Gregory was to facilitate the building of the Vessel, and then later use it to harvest seaweed.[2] DSMF 1 8.

         Once the total construction cost of the Vessel was paid off through the one-third value of each of Gregory's seaweed harvests that he sold to ALL including three percent interest, the Vessel would become the Plaintiffs' property. DSMF ¶¶ 6, 10, Plaintiffs' Response to ¶ 6.[3] Gregory, using subcontractors when needed, worked for four months at ALI's plant to build the Vessel. DSMF ¶¶ 16, 18. ALI purchased the hull and all the materials necessary for its construction, paid the subcontractors, and owned the Vessel once construction was complete. DSMF ¶¶ 14-15, ALI paid Gregory $15.00 per hour for his labor on the Vessel, and he is not claiming that he is owed any additional money based on his labor. DSMF ¶¶ 17-18. Angela voluntarily assisted with the Vessel's construction and was not paid. DSMF ¶ 19. The Vessel was finished on April 30, 2016. DSMF ¶ 20.

         Gregory used the Vessel to harvest seaweed from May 2, 2016 through July 25, 2016. DSMF ¶ 13. Because of an intense disagreement between Gregory and Morse about where to harvest seaweed, Gregory stopped harvesting after July 25, and therefore did not pay the amount due for the Vessel under the Agreement. DSMF ¶¶ 22, 52, Pl.'s Response ¶ 22, Gregory did not speak with Morse again after this argument. DSMF 1 49. Up to that point, the Plaintiffs had provided 60, 000 pounds of seaweed to ALI. DSMF ¶ 44. After the argument, the Plaintiffs asked Morse for a lump sum payoff price for the Vessel, but he never provided it. Pl.'s Response ¶ 22. Sometime in August, Gregory called ALI and told the business that he needed the Vessel taken out of the water to change its oil, in anticipation of resuming harvesting. Pl.'s Resp. ¶ 22. On August 16, 2016, an ALI employee took the Vessel out of the water, and after doing so, told the Plaintiffs that Morse wanted the Vessel back, and took it with him. Pl.'s Resp. ¶ 22.

         The Plaintiffs sued Morse individually because he is an employee of ALI, and they assume he is its owner, but they do not actually know if ALI or Morse is the proper Defendant. DSMF ¶ 56. All of the documentation that came about as a result of the Agreement shows that the seaweed was purchased solely by ALI, ALI purchased the hull to the Vessel, and it is registered to ALI alone. DSMF 57. Morse does not appear on any of the documentation in his individual capacity. The rest of the DSMFs allege that there were missing terms in the Agreement, such as an amount of seaweed necessary to repay the loan, quotas, price terms, and whether the loan was to be repaid by seaweed or check. See DSMF ¶¶ 26-36. The Plaintiffs dispute some of these facts, but as discussed below, these facts are not material. Plaintiffs agree there was no weekly quota, and that Gregory set the price for the seaweed.

         The Plaintiffs filed their three-count complaint on July 6, 2018, alleging breach of contract, fraudulent misrepresentation, and conversion. After the Plaintiffs agreed to dismiss their conversion claim, the Defendants moved for summary judgment on May 2, 2019. The Plaintiffs timely responded, but did not strictly comply with M.R. Civ. P. 56. The Defendants contend that they are entitled to summary judgment based on that procedural defect, but also on the merits of the Plaintiffs' claims. They additionally maintain that Morse is individually entitled to summary judgment.

         DISCUSSION

         Summary judgment is appropriate if, reviewing the evidence in the statements of fact and record references in the light most favorable to the non-moving party, 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(a), (c); Platz Assocs. v. Finley, 2009 ME 55, ¶ 10, 973 A.2d 743. A fact is material if "it has the potential to affect the outcome of the suit." Id. "A genuine issue of material fact exists when the fact finder must choose between competing versions of the truth," Id., To withstand a motion for summary judgment, the non-moving party must present sufficient admissible evidence to establish a prima facie case for each element of the claim or defense. Watt v. UniFirst Corp., 2009 ME. 47, ¶ 21, 969 A.2d 897. "If a plaintiff presents insufficient evidence on an essential element of a cause of action, such that the defendant would be entitled to judgment as a matter of law on that state of the evidence at a trial, the defendant is entitled to a summary judgment." Estate of Barron v. Shapiro & Morley, LLC, 2017 ME 51, ¶13, 157 A.3d 769.

         I. Summary Judgment on the Merits

         The Defendants first argue that they are entitled to summary judgment on the breach of contract claim because the Agreement lacked a determinate term, and therefore was terminable at will by either party. They allege that the Agreement was terminated when Gregory stopped harvesting seaweed in late July through early August after the heated disagreement with Morse, or alternatively, when the Defendants took the Vessel. They further argue that even if the Agreement was not terminable at will, that the Agreement is not a binding contract because of the absence of material, essential terms necessary to make it binding and enforceable, or to allow the court to allocate liabilities to the parties. As to the Plaintiffs' fraudulent misrepresentation claim, the Defendants mainly contend that summary judgment is warranted because the Lawsons do not establish a prima facie case of all the required elements, namely that they do not show that the Defendants' statements were knowingly false when made.[4] Finally, they argue that the Plaintiffs have failed to establish a prima facie case for individual liability against Morse because they have not shown that he was a party to the agreement, and therefore summary judgment should be entered for him individually on both counts.

         A. Count I: Breach of Contract

         For an agreement to be binding under Maine law, it must be "sufficiently definite" to allow a court to determine its meaning and to assign the legal liabilities of the parties. Fitzgerald v. Hutchins, 2009 ME 115, ¶ 18, 983 A.2d 382. Indefiniteness may relate to miscellaneous or key terms of the agreement, including price, timing of performance, or the exact work to be completed. Id. ¶ 19. But, even if a contract is lacking an essential term, courts will supply the necessary term using the standard of reasonableness. Id., Sometimes, however, missing or indefinite terms "preclude a reasonably calculable remedy or indicate a lack of contractual intent so as to render an agreement unenforceable.. .." Id. The Fitzgerald Court cited to Toione v. Larson, which observed that courts should be "reluctant to construe a contract so as to render it unenforceable if that result can be avoided." 142 Me. 301, 305, 51 A.2d 51, 53 (1947). Finally, "[u]nder Maine law, 'a reservation to either party of an unlimited right to determine the nature and extent of his performance renders his obligation too indefinite for legal enforcement, making it, as it is termed, merely illusory.'" Millien v. Colby Coll, 2005 ME 66, ¶ 9, 874 A.2d 397 (quoting Corthell v. Summit Thread Co., 132 Me. 94, 99, 167 A. 79, 81 (1933)).

         i. Is the Agreement Unenforceable for Lack of Material Terms?

         The Defendants argue that the Agreement is unenforceable because "essential, material terms, such as price, quantity, location, and payment, were never concluded, making it impossible for the court to fix any legal liabilities of the parties."

         The court is not convinced by the caselaw that the Defendants cite. First, Millieii involved a student handbook with a reservation clause that expressly gave the college "the right to unilaterally alter the terms of the handbook without notice to the students." 2005 ME 66, ¶ 3, 874 A.2d 397. All the cases that cite to Millien for the proposition put forth by the Defendants involve detailed, written contracts that contained explicit reservation clauses. None involve the present circumstances of this case; a handshake deal, where at the time the agreement was made, nothing was stated about whether a party could change the Agreement's terms unilaterally. The Defendants' SMFs focus on the facts that there was no obligation to provide a minimum amount of seaweed, whether it was to be weekly or monthly, or if the Plaintiffs had to harvest any seaweed at all. OT 29-34. However, after a review of the deposition testimony, in the light most favorable to the Plaintiffs, the court does not come to the same conclusion.

         First, in their response to the Defendants' SMFs, the Plaintiffs state that "a very specific quantity of seaweed" was necessary under the Agreement, essentially however much it took to pay off the amount due on the Vessel after its construction; $127, 721. However, they do admit that there was no discussion or agreement on the volume of seaweed to sell to ALI, whether weekly or monthly. DSMF ¶ 31. The Plaintiffs' deposition testimony reflects the inherent uncertainties in taking a boat out onto the ocean to harvest seaweed. These uncertainties include the weather, boat breakdowns, poor harvesting at a location, and potential injuries to the boat operator. If any of these incidences occurred, it might mean that the Plaintiffs could not deliver a specific amount of seaweed every week, or every month, The court notes that these are common issues within the fishing industry. Moreover, the Agreement was clear that the Plaintiffs were to provide the Defendants with all the seaweed they harvested, and that they would harvest as much seaweed as they could. Because there was no explicit reservation clause in the Agreement, and the Plaintiffs have shown that a certain amount of seaweed was necessary under the agreement as a whole, the court determines that the quantity term of the Agreement was sufficiently definite to amount to an enforceable contract.

         The Defendants next contend that the price of the seaweed and the repayment terms are not sufficiently definite to allow the court to enforce this Agreement.[5] First, the repayment terms are sufficiently definite. Although the harvests were not on a specific weekly or monthly schedule, how the income from them was to be allocated is clear. The price of each seaweed harvest is less clear. According to the Defendants' SMF, "[t]he price of any seaweed harvested would be whatever Morse set as a price for ALL" ...


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