Backman v. SMIRNOV
2010 U.S. Dist. LEXIS 122079
| D. Mass. | 2010Background
- Backman discovered Smirnov’s MRET water activation concept online and discussed leveraging his MR expertise to promote it.
- Smirnov made oral and written claims that MRET-activated water conferred significant health benefits, including for grave illnesses.
- March 9, 2004, Backman and Smirnov signed a written Non-Circumvention Agreement (NCA) under which Backman would market MRET and GQI would refrain from working with Backman’s contacts without pay.
- Toronto Agreement (Nov. 30, 2004) amended the NCA to sponsor a scientific Toronto Study with Backman contributing two-thirds funding; study data would be used by both parties and Backman would receive a reasonable share of monetary benefits.
- Backman funded and marketed MRET/EMRON efforts, purchased units, and facilitated contacts; after the Toronto Study results were public, GQI revenues surged, a growth Backman attributes to the study data.
- Smirnov later sought to replace the NCA with an amended agreement and, by 2006–2007, relations deteriorated culminating in termination of the NCA in March 2007.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the NCA enforceable under the Massachusetts Statute of Frauds? | NCA is binding; compensation term is definite enough. | NCA is fatally indefinite; not an enforceable agreement. | NCA enforceable; not barred by statute of frauds. |
| Is the Toronto Agreement enforceable despite broad compensation terms? | Compensation is defined by a reasonable portion of monetary benefits. | Compensation terms are too vague to enforce. | Toronto Agreement enforceable; reasonable portion principle guides damages. |
| May Backman recover on quantum meruit if contract is unenforceable? | Backman conferred a benefit and expected compensation; recovery warranted. | There was no clear contract; quantum meruit should be barred. | Quantum meruit may be considered as an alternative theory. |
| Whether 93A health claims fraud claim remains viable after contract analysis? | Health-benefits misrepresentations support 93A liability. | 93A claim tied to contract/health claims is improper or timely-barred. | 93A/health-benefits misrepresentation claim is not viable; 93A deferred. |
| Are the cooperation misrepresentations and health-benefits misrepresentations actionable fraud claims? | Smirnov knowingly misrepresented commitment to the Toronto Study and health benefits to induce contract. | Non-disclosures or post-agreement repudiations do not amount to fraud; some statements not false. | Cooperation misrepresentations granted; health-benefits misrepresentations dismissed. |
Key Cases Cited
- Guckenberger v. Boston Univ., 957 F. Supp. 306 (D. Mass. 1997) (elements of contract breach and damages burden)
- Cantell v. Hill Holliday Connopulos, Inc., 55 Mass. App. Ct. 550 (Mass. App. Ct. 2002) (broker/finder definitions under Massachusetts law)
- Cygan v. Megathlin, 326 Mass. 732 (Mass. 1951) (enforceability of contracts with broad compensation terms)
- Noble v. Joseph Burnett Co., 208 Mass. 75 (Mass. 1911) (right and equitable share of profits as compensation)
- Silver v. Graves, 210 Mass. 26 (Mass. 1911) (right and satisfactory payment concepts in contracts)
- Brennan v. Employers' Liab. Assurance Corp., Ltd., 213 Mass. 365 (Mass. 1913) (paying compensation to employees under contract principles)
- Leverone v. Leverone, 220 Mass. 149 (Mass. 1915) (contractual support and compensation considerations)
- Ferris v. Boston & Maine R.R., 291 Mass. 529 (Mass. 1935) (contractual damages framework)
- Evers v. Gilfoil, 247 Mass. 219 (Mass. 1924) (future-determined services and compensation principles)
- Anisgard v. Bray, 11 Mass. App. Ct. 726 (Mass. App. Ct. 1981) (implied promise to pay for valuable services)
- Calero-Cerezo v. U.S. Dep't of Justice, 355 F.3d 6 (1st Cir. 2004) (summary judgment standard and evidence evaluation)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (genuine disputes on material facts standard for summary judgment)
- Masingill v. EMC Corp., 449 Mass. 532 (Mass. 2007) (quantum meruit/equitable recovery principles)
- Acushnet Fed. Credit Union v. Roderick, 26 Mass. App. Ct. 604 (Mass. App. Ct. 1988) (equitable determinations in 93A context)