A.J. Properties, LLC v. Stanley Black & Decker, Inc., 972 F. Supp. 2d 68

Background

An $800,000 performance bond issued for environmental remediation on the 149 Washington Street site in Worcester is at issue, with A.J. Properties, LLC asserting rights to bond proceeds assigned from Stanley Black & Decker, Inc. via Wyman-Gordon and related instruments.
Stanley settled a claim against the surety United Capitol Insurance Company for $659,000 in 2010 after United Capitol was liquidated, and Stanley received the payment from the receiver.
A.J. Properties acquired interests via a chain of assignments: 2002 Settlement Agreement and 2003 Wyman-Gordon Assignment transferred rights to Wyman-Gordon, who later assigned to A.J. Properties under a 2007 Mortgage/Assignment following an option agreement.
The 1997 Mortgage and Security Agreement encumbered the 149 property, defining “the property” to include certain contracts and warranties, and to secure obligations related to remediation and related documents.
The 1997 performance bond was an obligation of Vargo Corp. and United Capitol jointly and severally, arising under the Environmental Compliance and Indemnity Agreement, and was not clearly a direct benefit to the land itself.
By 2007, A.J. Properties held the mortgage and the claims secured thereby, including the obligations under the Environmental Compliance and Indemnity Agreement, as transferred by the 2007 Assignment.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether AJ Properties has rights to the bond proceeds as assignee	AJ Properties contends the bond and related obligations were among the Assigned Documents secured by the Mortgage and thus transferred.	Stanley contends the bond proceeds were not within the property or the secured obligations transferred to AJ Properties.	AJ Properties held rights to the bond proceeds under the assignments; however, conversion judgment not granted on record.
Whether Stanley’s receipt of bond proceeds constitutes conversion	Plaintiff asserts possession of proceeds by Stanley violated its ownership rights.	Stanley contends it acted within its rights under the bond and related instruments.	Summary judgment denied on the conversion claim; genuine issues of intent remain.
Whether contract claims fail due to lack of privity/assignment scope	AJ Properties argues the assignment agreements authorized recovery of the bond proceeds.	Stanley maintains no contract between the parties bound it regarding AJ’s asserted rights.	Contract claims granted for Stanley; summary judgment in favor of defendant on Counts 5 and 6.
Whether equitable claims are permissible where legal remedies exist	Equitable claims (unjust enrichment, money had and received, constructive trust) should lie given the misappropriation of funds.	Equitable claims are inappropriate where there is an adequate legal remedy.	Equitable claims denied as to granting relief, given the contract/other claims context, but recorded as unresolved for declaratory relief considerations.
Whether declaratory relief is appropriate at this stage	AJ Properties seeks declarations regarding its assignee status and rights to bond proceeds.	Declaratory relief should be reserved where other claims will resolve rights and obligations.	Declaratory relief denied at this stage; issues will be resolved through other claims, though not all necessary claims are entirely resolved in this order.

Key Cases Cited

Evergreen Marine Corp. v. Six Consignments of Frozen Scallops, 4 F.3d 90 (1st Cir. 1993) (elements of conversion require ownership and wrongful control, with lack of reasonable dispute on intent)
Park Drive Towing, Inc. v. City of Revere, 442 Mass. 80 (Mass. 2004) (93A claim interplay with contract requires actual contract; not always necessary for 93A)
Guckenberger v. Boston Univ., 957 F. Supp. 306 (D. Mass. 1997) (contract breach elements and damages in university contracts context)
Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376 (Mass. 2004) (implied covenant of good faith and fair dealing in contracts)