Opinion ID: 2596761
Heading Depth: 3
Heading Rank: 2

Heading: The district court properly granted summary judgment against LP and LPI's counterclaim for misrepresentation.

Text: LP and LPI argue the district court erred in granting partial summary judgment against their counterclaim for misrepresentation. In ruling on the motion, the district court limited its analysis to oral representations made by Thomas Gold, since Vreeken testified during his deposition that he only relied upon verbal information received from Thomas Gold. The district court went on to determine that LP and LPI had failed to establish that Thomas Gold made any oral misrepresentations, and, more importantly, that any reliance placed on these alleged misrepresentations could not have been justified. LP and LPI, however, argue there is evidence in the record demonstrating the Golds made affirmative misrepresentations to Vreeken concerning LP and LPI's operations, financial solvency, and customer base, and that Vreeken justifiably relied on these misrepresentations. Accordingly, LP and LPI argue genuine issues of material fact remain as to their counterclaim for misrepresentation. Pursuant to section 2(h) of the MOU, the parties agreed to release all claims against each other except for claims grounded in fraud or claims related to the MOU. Since LP and LPI's counterclaim for misrepresentation is grounded in fraud, this claim was not released under the settlement agreement. The MOU provides that all claims allowed under the agreement are governed by Massachusetts law. Thus, we must turn to Massachusetts law on misrepresentation. To sustain a claim for fraudulent or negligent misrepresentation in Massachusetts, the plaintiff must show, at a minimum, that the defendant made a false representation of a material fact with knowledge of its falsity for the purpose of inducing the plaintiff to act thereon, and that the plaintiff reasonably relied upon the representation as true and acted upon it to his damage. Russell v. Cooley Dickinson Hosp., Inc., 437 Mass. 443, 772 N.E.2d 1054, 1066 (2002) (quoting Danca v. Taunton Sav. Bank, 385 Mass. 1, 429 N.E.2d 1129, 1133 (1982)). Such reliance must be justified. Masingill v. EMC Corp., 449 Mass. 532, 870 N.E.2d 81, 88 (2007). On appeal, LP and LPI argue there is evidence in the record showing that the Golds made affirmative misrepresentations to Vreeken concerning LP and LPI's operations, financial solvency, and customer base. In support of their argument, LP and LPI cite to various portions of the record, including correspondence, various documents, as well as excerpts from the deposition testimonies of Jan Vreeken, Melanie Harris, Lorna Schubert, and John Teti, but do not specify what misrepresentations were made. This same evidence was presented before the district court in support of the respondents' motions for summary judgment. Contrary to LP and LPI's assertion, these portions of the record do not address any representations made by the Golds concerning LP and LPI, much less misrepresentations. The only evidence of any misrepresentation is found in Vreeken's blanket assertion that he relied on Thomas Gold's oral representations about LP and LPI. However, Vreeken also testified that he was unable to recall what Thomas Gold said in these oral representations. Because LP and LPI failed to present evidence on this essential element of their claim, summary judgment was proper. Furthermore, even if the Golds had misrepresented facts about LP and LPI, Vreeken could not have justifiably relied on any such representations. There is evidence in the record demonstrating that Vreeken was aware of the accounting issues with LP prior to entering into the MOU. On August 10, 1999, Ceuppens and Schipper sent Vreeken a management letter detailing the significant management and accounting issues with LP. A short time later, Vreeken sent Thomas Gold a memorandum demonstrating that he was fully aware of the accounting problems experienced by LP. In this memorandum, Vreeken stated: [LP's] administrative and financial organization is in shambles. Vreeken also rejected Thomas Gold's valuation of LP in the memorandum, stating it puzzles me how you arrived at the amounts to buy you out. Therefore, we affirm the district court's award of partial summary judgment against LP and LPI's counterclaim for misrepresentation.