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Joyal v. Daviduk

United States District Court, D. New Hampshire

June 30, 2017

Gary F. Joyal
Aminda Daviduk Opinion No. 2017 DNH 130


          Andrea K. Johnstone United States Magistrate Judge.

         The plaintiff, Gary Joyal, brings this action seeking the enforcement of four promissory notes executed by the defendant, Aminda Daviduk, in 2010 and 2011. Doc. no. 1. Daviduk brings counterclaims against Joyal for fraud and negligent misrepresentation. Doc. no. 6. Joyal moves for summary judgment (doc. no. 15), and Daviduk objects (doc. no. 19). The court held a hearing on June 12, 2017. For the reasons that follow, Joyal's motion is granted as to Daviduk's counterclaims and granted in part and denied in part as to his own claim.

         Summary Judgment Standard

         Summary judgment is appropriate where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see also Xiaoyan Tang v. Citizens Bank, N.A., 821 F.3d 206, 215 (1st Cir. 2016). "An issue is 'genuine' if it can be resolved in favor of either party, and a fact is 'material' if it has the potential of affecting the outcome of the case." Xiaoyan Tang, 821 F.3d at 215 (internal quotation marks and citations omitted). At the summary judgment stage, the court "view[s] the facts in the light most favorable to the non-moving party" and "draw[s] all reasonable inferences in the nonmovant's favor . . . ." Garmon v. Nat'l R.R. Passenger Corp., 844 F.3d 307, 312 (1st Cir. 2016) (citation and quotation marks omitted). The court will not, however, credit "conclusory allegations, improbable inferences, and unsupported speculation." Fanning v. Fed. Trade Comm'n, 821 F.3d 164, 170 (1st Cir. 2016) (citation and quotation marks omitted) cert, denied, 137 S.Ct. 627 (2017).

         "A party moving for summary judgment must identify for the district court the portions of the record that show the absence of any genuine issue of material fact." Flovac, Inc. v. Airvac, Inc., 817 F.3d 849, 853 (1st Cir. 2016) . Once the moving party makes the required showing, "'the burden shifts to the nonmoving party, who must, with respect to each issue on which [it] would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in [its] favor.'" Id. (citation omitted). "This demonstration must be accomplished by reference to materials of evidentiary quality, and that evidence must be more than 'merely colorable.'" Id. (citations omitted). The nonmoving party's failure to make the requisite showing "entitles the moving party to summary judgment." Id.


         The relevant facts, when viewed in the light most favorable to Daviduk, are as follows.

         Between November 2010 and March 2011, Daviduk executed four promissory notes payable to Joyal. The first two notes were executed on November 12 and November 30, 2010, and totaled $40, 886.20 ("November 2010 notes"). See doc. no. 15-2; doc. no. 15-3. The remaining two notes were executed on March 15 and March 17, 2011, and totaled $40, 000.00 ("March 2011 notes"). See doc. no. 15-4; doc. no. 15-5.

         Other than the amounts, the notes were identical and contained, in relevant part, the following terms:

. . . [The] principal and interest shall be paid on demand. Notwithstanding the forgoing, Maker is required to repay in full the entire outstanding Loan Balance upon the earlier of either thirty (30) days, or upon restructure of the debt.
Maker further agrees to pay all costs of collection, including a reasonable attorney's fee, including attorney's fees in event of appeal, in case the principal of this Note or any interest thereon is not paid on demand.
This Note may not be changed orally, but only by agreement in writing, signed by the party against whom enforcement of any waiver, charge, modification or discharge is sought.

See, e.g., Doc. no. 15-2.[1] The notes also contained two provisions concerning interest, the first stating that outstanding principal would be subject to an interest rate of ten percent compounded annually, and the second stating that the note would bear an annual interest rate of ten percent commencing five business days after Daviduk received notice of a demand of payment. Id. The notes stated that they were to be "construed and enforced according to the laws of the State of Massachusetts." Id.

         All four notes were executed contemporaneously with the negotiation and execution of several other, related transactions involving Joyal and Daviduk. In mid-to-late 2010, Daviduk was in the process of divorcing her husband. See doc. no. 15-11 at 2. Daviduk and her husband jointly owned five Dunkin' Donuts franchises. Affidavit of Aminda Daviduk (doc. no. 19-2) ¶ 2. Daviduk agreed to purchase her husband's share of all five franchises in exchange for a fifteen year annuity, payable to her husband in the amount of $78, 000.00 per year in gross annual income. Doc. no. 15-13 at 1, 2. It is plain from the record that Joyal, through his company Joyal Capital Management ("JCM"), was involved in that transaction, though the specific nature of his involvement is unclear. See doc. no. 15-11; doc. no. 15-12 .

         In order to fund the annuity, Joyal suggested that Daviduk sell one of the five Dunkin' Donuts franchises. Daviduk Aff. ¶ 1, 5. Joyal stated that the sale proceeds would cover the annuity and leave Daviduk approximately $100, 000.00 that she could put toward overhead for the remaining four franchises. Id. ¶ 5. On January 14, 2011, Daviduk entered into a purchase and sale agreement to sell one of the franchises for $1, 240, 000.00. Doc. no. 15-14 at 1, 3. Joyal "organized and orchestrated" this sale. Daviduk Aff. ¶ 8.

         The sale of the franchise closed on March 15, 2011. Doc. no. 15-9. On that date, Daviduk discovered that she would not receive any net proceeds from the sale, and would in fact have to pay approximately $10, 000.00. Daviduk Aff. ¶ 10. She further learned that Joyal would receive a considerable amount in disbursements and commissions as part of the transaction. Id. ¶ 11. Daviduk threatened to walk away from the closing, but Joyal and his associates assured her that the transaction "would all work out" and promised that they would "take care of any shortfalls." Id. ¶ 12.

         As of the date of the closing, Daviduk and Joyal had already executed the November 2010 notes. See doc. no. 15-2; doc. no. 15-3. Joyal promised at the closing that proceeds received from the sale of the franchise would pay off the November 2010 notes. Daviduck Aff. ¶ 13. The March 2011 notes were executed on the day of the closing, see doc. no. 15-4, and two days later, see doc. no. 15-5. Joyal assured Daviduk at the time those notes were executed that they were only being presented as promissory notes for tax purposes, that they were intended to "help make things right, " and that he would only need a "payment or two" to satisfy any tax concerns. Id.

         Following the closing, Joyal, through JCM, secured Daviduk's husband an annuity through the Guardian Insurance & Annuity Company, Inc. ("Guardian"), see doc. no. 15-16, and a life insurance policy through Allianz Life Insurance Company of North America ("Allianz"), see doc. no. 15-17. Joyal attached a copy of the application for the Guardian annuity to his motion for summary judgment. See doc. no. 15-15. At the end of this attachment is a single-page document captioned "Aminda Daviduk; Northern Loan Request; Sources/Uses of Funds; Dec-10" (hereinafter the "Dec-10 document"). Id. at 13 (formatting altered; semicolons indicate new line in original). The top of this document reads "keep 4 stores, sell 1 location, " and appears to contemplate a $2, 200, 000.00 loan. Id. The document includes several line items seemingly related to how that loan money would be used. Id. One of the line items is for "JCM-funds owed regarding Morgan Stanley payments made on Minda's behalf" with an amount entry of "(41, 000) ." Id. A separate entry reads "Net Cash from 2 store sale to Cafua" with an amount entry of "$1, 200, 000." Id. Though the Dec-10 document was apparently in Joyal's possession, neither party can explain its provenance.

         Daviduk made four payments toward the promissory notes: $2, 000 in April 2011, $1, 500 in July 2014, $2, 500 in August 2014, and $1, 000 in September 2014. See doc. no. 15-6. All four payments were applied toward the November 12, 2010 note. See id. Between October 3, 2014, and September 8, 2015, Becky Green, a controller at JCM, reached out to Daviduk repeatedly in an attempt to coordinate additional payments toward the notes. See doc. no. 15-10. On April 27, 2016, Joyal, through his present counsel, sent Daviduk a ...

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