DeLeo v. Jones

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MICHAEL JAMES DELEO, Plaintiff, v. MIRANDA S. JONES, ESQ. and O'REILLY, GROSSO, GROSS & JONES, P.C. Defendants.

No. 2:21-cv-00226-JAW

United States District Court, D. Maine

March 25, 2024

ORDER DENYING MOTION FOR SUMMARY JUDGMENT

JOHN A. WOODCOCK, JR. UNITED STATES DISTRICT JUDGE

Defendants a lawyer and a law firm, move the Court for summary judgment on a claim which alleges that they were negligent in their representation of the Plaintiff in an underlying suit because they believe the Plaintiff has not put forth sufficient facts to prove causation. The Court denies the motion because the Plaintiff has provided enough evidence to allow a factfinder to decide in his favor, thereby precluding judgment as a matter of law.

I. PROCEDURAL AND FACTUAL BACKGROUND

A. Factual Background of the Underlying Suit

Sometime in the year 2000, after knowing Plaintiff Michael James DeLeo for many years, Anthony Vegnani joined Mass. Medical Services, Inc. (Mass Medical) as a full-time employee. Joint Stipulated Statement of Material Facts ¶ 3 (ECF No. 31) (JSMF); Defs.' Statement of Material Facts ¶ 1 (ECF No. 32) (DSMF); Pl.'s Resp. to Statement of Material Facts ¶ 1 (ECF No. 35) (PRDSMF). Mass. Medical is a Massachusetts corporation, and Mr. DeLeo was its President at the time Mr. Vegnani joined. JSMF ¶ 3; DSMF ¶ 1; PRDSMF ¶ 1.

In 2004, Mr. DeLeo and Mr. Vegnani both signed a document titled “Employment Agreement Between Michael DeLeo and Anthony Vegnani,” JSMF ¶ 8, which did not name Mass. Medical as a party.^[1] DSMF ¶ 3; PRDSMF ¶ 3. The agreement, among other things, outlined Mr. Vegnani's role at Mass. Medical as its new CEO, the compensation structure and equity accrual, and the terms regarding the voluntary and involuntary dismissal of either Mr. Vegnani or Mr. DeLeo, who remained Mass. Medical's President.^[2] DSMF ¶ 4; PRDSMF ¶ 4. Defendants Miranda S. Jones, Esq. and O'Reilly, Grosso, Gross, & Jones, P.C. (Jones Defendants) believe that Mr. DeLeo and Mr. Vegnani signed the employment agreement in their individual capacities.^[3] DSMF ¶ 2; PRDSMF ¶ 2. Mr. DeLeo disagrees; he believes he signed as a representative of Mass. Medical. See Resp. in Opp'n (ECF No. 34) (Pl.'s Opp'n) at 8.

After Mr. DeLeo and Mr. Vegnani signed this document, Mr. DeLeo shared the agreement with Mass. Medical Services' corporate counsel, Robert Russell. JSMF ¶ 9. Mr. Russell then reviewed the agreement and suggested creating a more formal agreement for the parties. JSMF ¶ 10. Mr. Russell drafted corporate documents for Mr. DeLeo, Mr. Vegnani, and Mass. Medical Services, which were provided to Mr. DeLeo and Mr. Vegnani in October 2006, but were never signed or executed. JSMF ¶¶ 11, 12.

Throughout this time, Mass. Medical, not Mr. DeLeo, employed Mr. Vegnani. Pl.'s Statement of Additional Material Facts ¶¶ 8, 9 (ECF No. 35) (PSAMF); Defs.' Reply to Additional Statement of Material Facts ¶¶ 8, 9 (ECF No. 36) (DRPSAMF). Mr. DeLeo never issued a W-2 IRS form to Mr. Vegnani. PSAMF ¶ 10; DRPSAMF ¶ 10.

In time, Mr. Vegnani filed a claim for unemployment benefits with the Commonwealth of Massachusetts and a notice of his unemployment claim was sent to his employer, Mass. Medical, not Mr. DeLeo personally. PSAMF ¶ 11; DRPSAMF ¶ 11.

In 2015, Mr. Vegnani filed a lawsuit based on the aforementioned employment agreement, against his employer Mass. Medical in the Plymouth County Superior Court in the Commonwealth of Massachusetts. JSMF ¶¶ 4, 6, 8; PSAMF ¶ 1; DRPSAMF ¶ 1. Mr. Vegnani's original Verified Complaint named only Mass. Medical as a defendant, and it alleged, among other things, that he had entered a contract, styled as an Employment Agreement, with Mass. Medical.^[4] PSAMF ¶ 2; DRPSAMF ¶ 2. Mr. Vegnani's original Verified Complaint further alleged that Mass. Medical breached the Employment Agreement by failing to pay him severance when his employment was terminated. PSAMF ¶ 3; DRPSAMF ¶ 3.

Thereafter, Mr. Vegnani filed an Amended Complaint that named Michael DeLeo as an additional defendant, PSAMF ¶ 4; DRPSAMF ¶ 4; JSMF ¶ 17, and alleged that there were three parties to the Employment Agreement: Mr. Vegnani, Mass. Medical and Mr. DeLeo.^[5] PSAMF ¶ 5; DRPSAMF ¶ 3. The amended complaint alleged three counts against Mass. Medical and Mr. DeLeo: 1) breach of contract, 2) violations of the Massachusetts Wage Act, and 3) unfair and deceptive conduct. JSMF ¶ 6.

Mr. DeLeo retained Attorney Robert Goulet to represent Mass. Medical's interests in the lawsuit. JSMF ¶ 7. Prior to filing an answer, Attorney Goulet filed a motion to dismiss all three counts of the complaint. JSMF ¶ 13.

B. Miranda S. Jones and O'Reilly, Grosso, Gross and Jones, P.C.'s Representation of Michael James DeLeo

After Attorney Goulet's motion to dismiss was granted in part, id., Mr. DeLeo and Mass. Medical informed Attorney Goulet that Mr. DeLeo's friend and personal acquaintance, Attorney Miranda S. Jones, would be taking over the representation of Mr. DeLeo and Mass. Medical in the suit moving forward. JSMF ¶¶ 4, 5, 14. On May 4, 2016, Attorney Jones-who is licensed to practice law in the Commonwealth of Massachusetts, has been associated with the law firm O'Reilly, Grosso, Gross and Jones, P.C. since 2013, and became a partner there in 2015-entered her appearance on behalf of Mass. Medical and filed an assented to motion for leave to file answer late. JSMF ¶¶ 1, 2, 15.

Between May and September 2016, Attorney Jones and counsel for Mr. Vegnani engaged in conversations regarding potential mediation and settlement of the matter but the case was not ultimately settled.^[6],^[7] JSMF ¶ 16.

In September 2016, Ms. Jones filed an Answer and Counterclaim to Mr. Vegnani's amended complaint on behalf of Mass. Medical and Mr. DeLeo, including six counts against Mr. Vegnani for his breach of duties owed to Mass. Medical.^[8] DSMF ¶ 7; PRDSMF ¶ 7.

In November 2016, Mr. Vegnani filed a motion for partial summary judgment as to Count I, a breach of contract claim against Mass. Medical, and as to Count II, a breach of contract claim against Mr. DeLeo. JSMF ¶ 18. In opposition, Attorney Jones argued that the parties had not formed a valid contract and chose not to raise any arguments as to Mr. DeLeo's individual liability to Mr. Vegnani. JSMF ¶ 19. On November 9, 2017, the Massachusetts Superior Court granted Mr. Vegnani's motion for partial summary judgment on these two counts. JSMF ¶ 20.

Throughout the entirety of the litigation, Ms. Jones operated under the understanding that Mr. DeLeo could be held personally liable should the court or a factfinder determine that the contract was binding and had been breached.^[9] DSMF ¶ 8; PRDSMF ¶ 8. Ms. Jones believed Mr. DeLeo was bound individually because he signed the contract individually, rather than as a representative of Mass. Medical.^[10]DSMF ¶ 5; PRDSMF ¶ 5. Prior to mediation and trial, Ms. Jones advised Mr. DeLeo of his potential personal liability in this matter, JSMF ¶ 21, and advised him to settle the case prior to trial due to his potential exposure risk, including the risk that he could end up owing Mr. Vegnani $600,000 and a lien could attach to his Maine property. DSMF ¶ 9; PRDSMF ¶ 9.

Mr. DeLeo, in email correspondence with Ms. Jones, wrote, among other things, that “[t]he argument is that I never personally hired Tony. I acted as a rep of [Mass Medical].”^[11] PSAMF ¶ 6; DRPSAMF ¶ 6. In other correspondence with Ms. Jones, Mr. DeLeo wrote, among other things: “Miranda in Tony's original claim he sued [Mass Medical] for wage claim [sic]. If the contract was with me why under his in [sic] admission did he not pursue me for wages . . ., because it was [Mass Medical].”^[12] PSAMF ¶ 7; DRPSAMF ¶ 7 (second, third, and fourth alterations in original). When asked at her deposition whether she believed Mr. Vegnani could have sought unemployment benefits from Mr. DeLeo, Ms. Jones responded “no” and testified, “you would apply through the corporation where you work.” PSAMF ¶ 12; DRPSAMF ¶ 12.

After the Superior Court granted Mr. Vegnani's motion for partial summary judgment, Mr. Vegnani, Mr. DeLeo, and Mass. Medical once again attempted to resolve the dispute through mediation but were unsuccessful. JSMF ¶ 22. Mediation and settlement negotiations did not progress due to the slow exchange of information between the parties regarding the valuation of the business. DSMF ¶ 6; PRDSMF ¶ 6.

In April 2017, the matter went to trial before a jury in the Massachusetts Superior Court. JSMF ¶ 23. At trial, Ms. Jones did not raise any arguments or defenses regarding Mr. DeLeo's personal liability. JSMF ¶ 24. The first question on the special verdict form submitted to the jury was: “Did Mass. Medical, Inc and/or Mr. DeLeo breach the contract with Anthony Vegnani?” JSMF ¶ 25; PSAMF ¶ 13; DRPSAMF ¶ 13. Ms. Jones believed the special verdict form allowed the jury to decide whether or not there was a valid contract between the parties. DSMF¶ 12; PRDSMF ¶ 12. After deliberation, the jury affirmatively found that Mr. DeLeo had breached the contract between himself and Mr. Vegnani. DSMF¶ 13; PSAMF ¶ 13. The jury awarded Mr. Vegnani $464,952 for the breach of contract claims against Mr. DeLeo and Mass. Medical. JSMF ¶ 26. Ms. Jones filed a motion for a new trial on May 4, 2018, which was denied. JSMF ¶ 27.

C. Michael James DeLeo's Appeal and Post-Trial Motions with New Representation

Mr. DeLeo, with new representation, appealed the superior court's judgment and its denial of his post-trial motions for a new trial and to amend the judgment. DSMF ¶ 14; PRDSMF ¶ 14. One of the grounds for this appeal was that Mr. DeLeo could not be held personally liable under Massachusetts law.^[13] DSMF ¶ 14; PRDSMF ¶ 14.

The Appeals Court of...