Opinion ID: 563774
Heading Depth: 2
Heading Rank: 2

Heading: Recovery in Tort.

Text: 70 The jury found that Faneuil and FRG were not joint venturers; that Mongillo did not recognize Faneuil as a principal in the transaction; and that he never intended Faneuil to be a beneficiary of his promise to obtain a bond. See Appendix. Faneuil claims that, despite these findings, the evidence was sufficient to allow it to recover for either negligent or intentional misrepresentation. We think not. 71 1. Negligent Misrepresentation. Faneuil's main thesis prescinds from a line of Massachusetts cases holding that a third party may sometimes recover against a defendant who negligently performs services for another person. See Rae v. Air-Speed, Inc., 386 Mass. 187, 435 N.E.2d 628, 632 (1982); Craig v. Everett M. Brooks Co., 351 Mass. 497, 222 N.E.2d 752, 755 (1967). To invoke the doctrine, the third party must show that the promisor knew that the third party was relying on the prospect that the services would be properly executed. See Page v. Frazier, 388 Mass. 55, 445 N.E.2d 148, 154 (1983); Craig, 222 N.E.2d at 755. Here, the jury specifically found that Mongillo never viewed Faneuil as an intended beneficiary of his promise. In other words, the actor had no reason to know of Faneuil's independent reliance on his promise to perform. Ergo, an indispensable element of the putative cause of action was missing. 72 Moreover, the jury's finding was amply supported. The evidence makes clear that Faneuil was hired by FRG to arrange the deal on its behalf, and that Faneuil interacted with Mongillo in that agentival capacity. Of course, Eller testified that he told Mongillo of Faneuil's plan to become a limited partner--but the jury was under no obligation to believe this quintessentially self-serving statement. Even crediting it, the jury could reasonably have concluded, nevertheless, that Faneuil was primarily a hired consultant with an out-of-the-ordinary compensation arrangement who facilitated a contract between FRG and Mongillo--not a principal. After all, a lawyer who accepts an engagement on a contingent fee basis under which he will share in the anticipated pot of gold at rainbow's end is still his client's agent, not his copartner in a legal sense. Cf. Deshotels v. United States, 450 F.2d 961, 966 (5th Cir.1972) (The contingent fee 'coupled with an interest' is ... language indicative of a special agency relationship and not a transfer of a present possessory interest.) (construing Louisiana law). 73 Whether or not contractual privity was an element of Faneuil's claim, it is apparent that Mongillo had no cogent reason to view Faneuil as a beneficiary of his promise. It is equally apparent that, unlike in Craig, 222 N.E.2d at 755, the services which Faneuil was hired to perform did not necessarily depend for their successful execution on Mongillo's fulfillment of his obligation; Faneuil was free to find the financial guaranty wherever it chose. Under the totality of the demonstrated circumstances, we discern no error in the rejection of this claim. 74 2. Intentional Misrepresentation. Faneuil's fallback position is that it could have recovered under a theory of intentional misrepresentation. Yet, one element of this cause of action requires the plaintiff to show that defendant induced it to act, or to refrain from acting, to its detriment. See Graphic Arts Finishers, Inc. v. Boston Redevelopment Authority, 357 Mass. 40, 255 N.E.2d 793, 796 (1970). Faneuil did not carry its burden in this regard. For one thing, the jury found that Mongillo made no promises to Faneuil; hence, Faneuil cannot plausibly claim to have been intentionally induced. For another thing, Faneuil did not offer any evidence indicating detrimental reliance; there is simply no suggestion of opportunities forgone by Faneuil in order to continue its negotiations with Mongillo. 75 3. No Proof of Damages. Faneuil's tort theories are also deficient in another respect. Faneuil was to become a limited partner upon successful completion of the closing. Its interest would equal 45% of the operating profits and ... cash flow distributions from the Partnership. But, no evidence was introduced regarding either the profits that the partnership might have been expected to reap or the cash that might have been distributed. Indeed, Faneuil presented no economic evidence at all. Expert testimony adduced by FRG established that acquisition of the Veranda Beach property would have conferred an equity bonanza on FRG, but showed nothing about the impact of the transaction on Faneuil (a non-equity participant). What is more, the testimony was unequivocal that a profit-and-loss interest is wholly distinct from an equity interest. 76 We think that the upshot is clear. Economic damages must be based on hard evidence, not on cotton candy composed of conjecture, speculation, and surmise. Here, Faneuil failed to demonstrate that it suffered any recoverable damages. The resultant lacuna was fatal to its claim. Proof of damage is, of course, an essential element of a plaintiff's case in tort. See, e.g., Powers v. Boston Cooper Corp., 926 F.2d 109, 111 (1st Cir.1991) (sustaining dismissal of claim for fraud and misrepresentation under Massachusetts law where plaintiff failed to show that some cognizable harm flowed from the defendant's conduct); Szpiro v. Corkin, 340 Mass. 260, 163 N.E.2d 283, 284 (1960) (per curiam) (similar); see also Poulin Corp. v. Chrysler Corp., 861 F.2d 5, 7 (1st Cir.1988). 77