Copley Place Associates, LLC v. Tellez-Bortoni

Citation: Not availableDocket: AC 16-P-165

Court: Massachusetts Appeals Court; March 16, 2017; Massachusetts; State Appellate Court

Original Court Document: View Document

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

All slip opinions and orders are subject to formal revision, superseded by official reports. The case involves an appeal by Carlos Téllez-Bortoni against a judgment in favor of Copley Place Associates, LLC for fraud and violation of G. L. c. 93A. Téllez-Bortoni challenges the Superior Court's partial summary judgment on liability, asserting that Copley did not prove it relied on his false representations. The case originated from a failed restaurant venture where Téllez-Bortoni signed a lease on behalf of Irish Pub Group, Inc. (IPG). A specific lease provision required that the signatory must be an officer of the corporation, duly authorized. Following the lease signing, Téllez-Bortoni misrepresented Raymond Houle's involvement with IPG, leading Copley to allow Houle to negotiate a check intended for IPG. However, the restaurant never opened, and IPG defaulted on its obligations, prompting Copley to sue multiple parties, including Téllez-Bortoni. The court awarded Copley partial summary judgment based on Téllez-Bortoni's alleged false claims regarding his authority and Houle's role. After a trial on damages, the jury awarded Copley over $865,000, with additional attorney's fees. Téllez-Bortoni's appeal challenges the summary judgment ruling, focusing on whether the required elements of deceit were met, particularly regarding the reliance on Téllez-Bortoni's purported misrepresentations.

Reliance by the plaintiff must be reasonable for it to form the basis of a legal claim. False statements made as if from personal knowledge can lead to an action for deceit without needing to prove intent to deceive. Incomplete statements may also constitute actionable fraud. In the case at hand, the judge ruled that Téllez-Bortoni falsely claimed to be an authorized officer of IPG when executing the lease, leading to Copley leasing premises to IPG and suffering financial losses as a result. However, the summary judgment record failed to show that Copley established detrimental reliance on these misrepresentations. Copley's claim that it would not have signed the lease if it had known of Téllez-Bortoni's lack of authority lacked supporting evidence, and the assertion did not connect to undisputed material facts needed for summary judgment. While Copley may have relied on the representations, the absence of evidence indicating reliance or detriment stemming from the misrepresentations was noted. Copley's principal interest appeared to be the lease itself rather than the authority of the signer. Copley also did not demonstrate suffering any detriment from Téllez-Bortoni's claims, as IPG defaulted on its obligations without contesting the validity of the lease. Lastly, the judge did not base his ruling on Copley’s claim regarding reliance on Téllez-Bortoni’s assertion that Houle was part of IPG, which Copley argued as another ground for summary judgment, but this claim was not persuasive.

Copley issued a check for $452,450 to IPG as part of a 'Landlord's Contribution' for the leased premises' build-out, which Houle attempted to negotiate. Copley's bank and another bank questioned the legitimacy of the transaction. Copley claimed its bank contacted IPG about the issue, although this assertion lacks supporting evidence. Elizabeth Hazan emailed Téllez-Bortoni, asking him to confirm Houle's affiliation with IPG, which he did. This confirmation allowed Copley’s check to be deposited into IPG's account. Copley has not claimed Téllez-Bortoni's statement about Houle was false; rather, it acknowledged Houle was the sole officer and director of IPG. Copley did not demonstrate that it suffered any detriment from relying on Téllez-Bortoni's confirmation. Hazan had indicated to Téllez-Bortoni that she expected funds from Copley, and upon the check's deposit, she lent him $15,000.

Copley argued that Téllez-Bortoni's failure to disclose certain facts about Houle constituted actionable fraud. The legal principle cited states that if a party provides information, they must disclose all material facts. However, the court found that Copley had not established undisputed facts showing Téllez-Bortoni's knowledge of his obligation to inform Copley about Houle. Additionally, the court questioned whether Copley's damages exceeded the $452,460 'Landlord's Contribution' to justify the $865,060.44 jury verdict. Therefore, the determination of whether Téllez-Bortoni's statement constituted fraud requires further fact development. The court vacated the partial summary judgment against Téllez-Bortoni, set aside the jury's damages verdict, and remanded the case for further proceedings. Copley's claims under G. L. c. 93A were also vacated, as their success depended on the fraud claim, which was not substantiated.