Infosecurus, Inc. v. Glenn Peterson, & Canuvo, Inc.

INFOSECURUS, INC., VINCENT SHELZI,andJOSEPH SHELZI, Plaintiffs, v. GLENN PETERSON,andCANUVO, INC., formerly SAFE HARBOR MAINE, INC., Defendants.

SUPERIOR COURT Civil Action DOCKET NO. CV-16-0203

Superior Court of Maine

ENTERED ON THE DOCKET ON: May 17, 2018

May 16, 2018

STATE OF MAINE

YORK, ss.

ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

I. BACKGROUND

This case is an employment discrimination action brought by plaintiffs Infosecurus, Inc. ("Infosecurus"), Vincent Shelzi ("Vincent"), and Joseph Shelzi ("Joseph") (collectively, the "Shelzis") against defendants Glenn Peterson ("Glenn" or "Peterson") and Canuvo, Inc. ("Canuvo"), formerly Safe Harbor Maine, Inc. Plaintiffs seek to enforce the terms of an oral contract for submission of an application for a license to operate a medical marijuana dispensary, and, if the application was granted, an ongoing business relationship for the operation of the dispensary.

Vincent is the President and sole owner of Infosecurus, which provides consulting services in the information security industry. (Supp.'g S.M.F. ¶¶ 1-2.) Joseph is Vincent's brother but is not an owner, officer, or employee of Infosecurus. (Supp.'g S.M.F. ¶¶ 3-4.)

Defendant Peterson is the President of Canuvo, a nonprofit corporation organized under the Maine Nonprofit Corporation Act, Title 13-B M.R.S.A., for the operation of a registered dispensary under the Medical Use of Marijuana Act, 22 M.R.S.A. §§ 2421 - 2430-B (Supp.'g S.M.F. ¶¶ 5-7.)

The parties first met in 2009 at an attorney's office in August, Maine. (Supp.'g S.M.F. ¶ 9.) At this meeting, the parties did not discuss going into business together. (Supp.'g S.M.F. ¶ 10.) The parties next met at the Expo Center in Los Angeles, California at the "THC Expo" and had dinner that evening. (Supp.'g S.M.F. ¶¶ 11, 13.) During this interaction, the parties again did not discuss doing business together, but generally "discussed the industry." (Supp.'g S.M.F. ¶¶ 12-14.)

Around this time, the State of Maine was accepting applications for licenses to operate medical marijuana dispensaries pursuant to the newly enacted Medical Use of Marijuana Act. (Supp.'g S.M.F. ¶ 15.) The first deadline for applications was June 20, 2010. (Supp.'g S.M.F. ¶ 15.) Peterson submitted an application on behalf of Canuvo, then named Safe Harbor Maine, prior to the deadline, only assisted by his wife, Sage Peterson. (Supp.'g S.M.F. ¶¶ 15-16.) Additionally, Infosecurus aided another company, First Sun Patients Group, submit another application for a license. (Supp.'g S.M.F. ¶ 17.) Both applications failed to receive a passing score and were rejected. (Supp.'g S.M.F. ¶¶ 18-19.)

After the first round of applications, the Shelzis approached Peterson to discuss jointly submitting an application to the second round of applications. (Supp.'g S.M.F. ¶ 20.) The partiesmet on the July 18, 2010 at the Porthole Restaurant in Portland, Maine to discuss potential collaboration. (Supp.'g S.M.F. ¶ 21.)

Plaintiffs contend that at this meeting, the parties reached an oral agreement (the "Agreement") to jointly submit an application and to enter into business together if the application is approved. (Supp.'g S.M.F. ¶ 22.) Vincent testified that pursuant to this Agreement, the Shelzis would secure a lease or purchase a location for the dispensary, hire Infosecurus to provide consulting services, and pay the license fee. (Supp.'g S.M.F. ¶ 23.) Although Vincent originally testified that at this meeting, the parties agreed that the Shelzis would engage and pay a professional writer to draft the application, Joseph testified that this provision was not agreed upon until after the meeting and Vincent later testified that he could not remember when the parties agreed to hire the writer. (Supp.'g S.M.F. ¶ 30.)

In exchange, the Shelzis would be able to appoint some of the members of Canuvo's board of directions (the "Board").¹ (Supp.'g S.M.F. ¶ 24.) The basic terms of the Agreement, however, were to be memorialized in a later writing. (Supp.'g S.M.F. ¶ 25.) As Joseph stated, "[T]he meeting at the Porthole was not real specific. So we agreed to the spirit of the arrangement, agreement, contract; and then, as time moved forward, we began filling in the details." (Supp.'g S.M.F. ¶ 29.)

After the Porthole meeting, the parties and their attorneys began drafting proposed written contracts to be signed once the parties agreed on the specific provisions. (Supp.'g S.M.F. ¶ 33.) Plaintiffs contend that these contracts were only to "memorialize" the oral Agreement.² (Opp.S.M.F. ¶ 33.) The first draft was sent from plaintiffs' attorney to the defendant's attorney on August 10, 2010. (Supp.'g S.M.F. ¶ 38.) The second draft was sent from plaintiffs' attorney to defendants' attorney on August 12, 2010. (Supp.'g S.M.F. ¶ 47.) Peterson then sent another draft contract to the Shelzis later on the evening of August 12. (Supp.'g S.M.F. ¶ 51.) On August 17, 2010, plaintiffs' attorney sent another draft to defendants' attorney. (Supp.'g S.M.F. ¶ 53.) Finally, defendants' attorney sent the last draft of the contract to plaintiffs' attorney on August 18, 2010. (Supp.'g S.M.F. ¶ 59.)

Throughout this exchange of drafts, multiple terms of the contract were added and/or modified. (Supp.'g S.M.F. ¶¶ 49, 52, 54-56, 59.) The first four drafts did not have signature lines. (Supp.'g S.M.F. ¶¶ 43, 50, 52, 57.) The last draft circulated on August 18 had signature lines for Vincent, Joseph, and Glenn, but did not reference Infosecurus or any of Canuvo's former names. (Supp.'g S.M.F. ¶ 60.)

In addition to exchanging draft contracts, the parties agreed to hire a professional writer to prepare the application in compliance with statutory requirements. (Pl.'s Add'l S.M.F. ¶ 29.) The Shelzis advertised the position on craigslist and interviewed applicants, eventually hiring Joseph Mellone, Jr. (Pl.'s Add'l S.M.F. ¶¶ 28-30.) Additionally, plaintiffs claim they acted pursuant to the agreement by meeting with city officials and securing real estate for the dispensary, placing a $500 deposit on a parcel in Biddeford. (Pl.'s Add'l S.M.F. ¶¶ 13-17.)

While preparing the application, Mellone worked closely with the Shelzis and Peterson. (Pl.'s Add'l S.M.F. ¶ 34.) Around August 13, 2010, Mellone received his first payment from Infosecurus in the amount of $1,125. (Pl.'s Add'l S.M.F. ¶ 38.) Peterson, however, also told Mellone that he would pay Mellone $2,600 directly. (Pl.'s Add'l S.M.F. ¶ 38.) Additionally,Peterson instructed Mellone to create a color original and make another six copies for Canuvo's Board members. (Pl.'s Add'l S.M.F. ¶ 44.)

On August 20, the deadline for the second round of applications, the parties met one final time to discuss the application. (Supp.'g S.M.F. ¶¶ 62-63.) The parties and Mellone had worked together late into the night before to complete the application. (Pl.'s Add'l S.M.F. ¶ 42.) Before the meeting, Vincent paid Mellone the remaining balance of his writing fee, $3,050. (Pl.'s Add'l S.M.F. ¶ 45.)

At this meeting, Peterson offered again to allow the Shelzis to collectively appoint one third of the Board members to finalize the contract. (Supp.'g S.M.F. ¶ 64.) Vincent brought a copy of what he considered final draft contract to the meeting, expecting the parties to sign it.³ (Supp.'g S.M.F. ¶ 65.) However, the parties did not sign any version of the contract and both stated that they did not intend to file the application. (Supp.'g S.M.F. ¶¶ 67-68.)

After the meeting, however, Peterson claims he changed his mind and decided to submit the application on his own behalf just prior to the deadline. (Supp.'g S.M.F. ¶ 70-72.) This time, the application was accepted and Canuvo was granted a license. (Pl.'s Add'l S.M.F. ¶ 74.)

Defendants did not learn of the application until several days after its submission.⁴ According to Mellone, Peterson contracted him only a few hours after the meeting, stating that the deal was off and that he would pay Mellone and submit the application himself. (Pl.'s Add'l S.M.F. ¶ 46.) Accordingly, Peterson paid Mellone another $2,575 in cash later in the evening of August 20. (Pl.'s Add'l S.M.F. ¶ 48.) Mellone told the Shelzis of these payments on August 23, 2010, atwhich point Mellone purchased a cashier's check payable to Peterson for the total amount he received from Peterson. (Pl.'s Add'l S.M.F. ¶ 51.)

Ultimately, the Shelzis never purchased or leased property for the dispensary and did not pay the application fee. (Supp.'g S.M.F. ¶¶ 77-78.) However, the Shelzis found and submitted a deposit on a property in Biddeford for the dispensary and also located a secondary property in Arundel. (Opp. S.M.F. ¶ 77.) Further, the Shelzis claim they were ready, willing, and able to submit the application fee. (Opp. S.M.F. ¶ 78.)

On August 15, 2016, the plaintiffs filed the instant Complaint, alleging Fraud and/or Fraudulent Concealment (Count I), Negligent Misrepresentation (Count II), Breach of Contract (Count III), Quantum Meruit (Count IV), Unjust Enrichment (Count V), and Promissory Estoppel (Count VI). On October 20, 2017, defendants moved for summary judgment on all claims.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate if, based on the parties' statements of material fact and the cited record, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. M.R. Civ. P. 56(c); Dyer v. Dep't of Transp., 2008 ME 106, ¶ 14, 951 A.2d 821. "A material fact is one that can affect the outcome of the case. A genuine issue of material fact exists when the fact finder must choose between competing versions of the truth." Dyer, 2008 ME 106, ¶ 14, 951 A.2d 821 (internal citation and quotation marks omitted). When deciding a motion for summary judgment, the court reviews the evidence in the light most favorable to the non-moving party. Id. In order to survive defendants' motion for summary judgment, plaintiff must set forth a prima facie case of each...