Tucker J. Cianchette v. Peggy A. Cianchette
209 A.3d 745
Me.2019Background
- Tucker, Peggy, and Eric formed PET, LLC to buy and operate a Ford dealership; Peggy and Eric also formed Cianchette Family, LLC to hold the real estate. Peggy was PET’s manager.
- Purchase agreements (membership agreement and real estate agreement) required releases of Peggy and Eric’s personal guarantees and contained seller termination and buyer proof-of-funds provisions.
- Tucker obtained lender and Ford approvals and paid a $150,000 nonrefundable deposit, but Peggy and Eric repeatedly added conditions, sought an operating-agreement amendment to strip Tucker’s rights, and eventually purported to terminate the sale and failed to attend closing.
- Additional alleged misconduct by Peggy and Eric included tripling rent, diverting company funds (including a $600,000 transfer and a $375,000 interest-free loan), forging Tucker’s signature on an account, and attempts to exclude Tucker from distributions.
- Tucker sued for breach of contract, fraudulent misrepresentation, breach of fiduciary duty, and related claims; a jury awarded Tucker damages on multiple claims. The trial court denied defendants’ JML and new-trial motions; the Supreme Judicial Court affirmed.
Issues
| Issue | Plaintiff's Argument (Tucker) | Defendant's Argument (Peggy & Eric) | Held |
|---|---|---|---|
| Whether a promise made without intent to perform can support fraudulent misrepresentation | Promise of future performance was a false representation of fact (their intent) inducing Tucker to contract; actionable fraud | An intention not to perform is not a false representation of material fact (relying on Shine) and thus cannot support deceit | Court adopted Restatement approach: misrepresentation of present intent is a factual, material misrepresentation if intent to not perform existed at contracting; verdict upheld |
| Whether trial court should have instructed jury that Ford Credit draft release was legally insufficient to satisfy §6.2 | Jury could find draft inadequate and that sellers’ termination was improper | Court should have instructed as a matter of law that the draft was insufficient | Court held the given instructions correctly framed §6.2 (requirement of release of potential past and future liabilities) and defendants failed to show prejudice from withholding a more specific instruction |
| Whether Tucker could assert breach of fiduciary duty against PET’s manager while also asserting breach of the operating agreement | Fiduciary-duty claim is a tort independent of contract and survives where duties are not expressly addressed or eliminated by the operating agreement | LLC operating agreement and Maine LLC Act convert such claims into contractual claims only, precluding tort recovery | Court held fiduciary duties under the Act apply by default where the operating agreement does not eliminate or change them; breach of fiduciary duty is a separate tort claim and could proceed; verdict upheld |
| Whether the court erred in denying JML/new-trial based on overlap of claims and damages | Fraud and fiduciary claims are distinct torts even if arising from same transaction; any double recovery can be addressed by reducing awards | Overlap makes tort claims duplicative of contract claims and should be barred | Court confirmed tort and contract claims can coexist; court remedied overlap by reducing duplicative awards; no reversible error |
Key Cases Cited
- Hansen v. Sunday River Skiway Corp., 726 A.2d 220 (Me. 1999) (standard for viewing trial evidence in JML review)
- Drilling & Blasting Rock Specialists, Inc. v. Rheaume, 147 A.3d 824 (Me. 2016) (elements of fraudulent misrepresentation)
- Shine v. Dodge, 157 A. 318 (Me. 1931) (historical rule barring deceit claims for mere promises to act in future)
- Boivin v. Jones & Vining, Inc., 578 A.2d 187 (Me. 1990) (citing Restatement on misrepresentation)
- Arbour v. Hazelton, 534 A.2d 1303 (Me. 1987) (precedent citing Restatement treatment of misrepresentation)
- Letellier v. Small, 400 A.2d 371 (Me. 1979) (recognition of Restatement approach)
- Mariello v. Giguere, 667 A.2d 588 (Me. 1995) (definition of material fact when reasonable person would attach significance)
- Russell v. ExpressJet Airlines, Inc., 32 A.3d 1030 (Me. 2011) (de novo review standard for JML)
- Perry v. Dean, 156 A.3d 742 (Me. 2017) (characterizing fiduciary-duty claims as torts)
- deNourie & Yost Homes, LLC v. Frost, 893 N.W.2d 669 (Neb. 2017) (fraudulent inducement and contract breach can be separate wrongs)