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Devona v. Zeitels

United States District Court, D. Massachusetts

October 27, 2014

DENNIS R. DEVONA, Plaintiff,
v.
STEVEN M. ZEITELS, Defendant.

MEMORANDUM AND ORDER

INDIRA TALWANI, District Judge.

I. Introduction

In this case, Plaintiff Dennis R. DeVona claims that he entered into an oral partnership agreement with Defendant Steven M. Zeitels to design and manufacture surgical tools. Before the court is Zeitels' motion for summary judgment on the ground that a later written agreement controls the parties' contractual relationship and the parol-evidence rule bars DeVona from introducing evidence of the alleged oral agreement. See Def.'s Mot. Summ. J. Pl.'s Partnership Claims [#51] [hereinafter Def.'s Mot. Summ. J.]; Mem. Supp. Def.'s Mot. Summ. J. Pl.'s Partnership Claims, 10 [#52] [hereinafter Def.'s Mem.].[1] Because the alleged oral agreement and the later written contract are between distinct parties, Zeitels' motion is DENIED.

II. Background

A. DeVona's Allegations of an Oral Partnership Agreement

In this action, DeVona contends that in 1997 he and Zeitels formed a partnership to design and market glottiscopes, a surgical instrument used in laryngeal surgery. Compl. ¶ 21. The men allegedly entered into an oral agreement providing that DeVona would recieve 40% and Zeitels would 60% of the partnership profits. Id.[2]

B. The Endocraft Sales Agreement

On April 21, 1999, Zeitels incorporated Endocraft, LLC ("Endocraft"), a Rhode Island limited liability company, and named himself as Endocraft's sole member. Def.'s Statement Undisputed Material Facts Supp. Def.'s Mot. Summ. J. ¶ 3 [#53] [hereinafter Def.'s Facts]; Pl.'s Am. Resp. Statement Undisputed Material Supp. Def.'s Mot. Summ. J. ¶ 3 [#69] [hereinafter Pl.'s Facts].

DeVona signed an Independent Sales Representative Agreement (the "Sales Agreement") with Endocraft. See Def.'s Facts ¶ 4; Pl.'s Facts ¶¶ 5-6; Independent Sales Representative Agreement [#17-3] [hereinafter Sales Agreement]. The Sales Agreement stated that "[n]othing contained in this Agreement shall be construed to constitute [DeVona] as a partner, employee, or agent of [Endocraft]... [DeVona] shall be an independent contractor at will." Sales Agreement ¶ 12. The Sales Agreement also included an integration clause, which stated that "[t]his agreement contains the entire understanding of the parties; there are no other agreements or representations not set forth herein." Id . ¶ 13.

III. Discussion

Under Rhode Island law, the parol-evidence rule "prohibits introduction of extrinsic evidence to change, vary, or alter the written terms of an agreement, unless the evidence is offered to show fraud, mistake, or a condition precedent." Lisi v. Marra , 424 A.2d 1052, 1055 (R.I. 1981). "The basis of the rule is that a complete written agreement merges and integrates all the pertinent negotiations made prior to or at the time of execution of the contract." Fram Corp. v. Davis , 401 A.2d 1269, 1272 (R.I. 1979). Accordingly, "when parties to a contract have adopted a written agreement as the final expression of their intention... all other expressions of intention that have occurred prior to or contemporaneous with the making of the agreement are immaterial in ascertaining the terms of the transaction." Id.

The parties do not dispute that the Sales Agreement is an integrated and unambiguous expression of the contractual relationship between DeVona and Endocraft. They disagree as to whether the parol-evidence rule bars evidence of the alleged oral agreement, however, given that the alleged oral agreement was between DeVona and Zeitels while the Sales Agreement is between DeVona and Endocraft. See Pl.'s Opp'n Def.'s Mot. Summ. J. Pl.'s Partnership Claims, 13-14 [#68] [hereinafter, Pl.'s Opp'n]. In support of his motion for summary judgment, Zeitels argues that: (1) a nominal distinction in the identity of contracting parties does not preclude application of the parol-evidence rule where the different parties are an individual and a corporation owned by that individual, and (2) DeVona has admitted in his Complaint that Endocraft was intended to replace any prior partnership existing between DeVona and Zeitels. See Reply Br. Supp. Def.'s Mot. Summ. J. Pl.'s Partnership Claims, 2-6 [#72].

A. Requirement of Common Identity of Parties

Zeitels argues that this case is controlled by Filippi v. Filippi , 818 A.2d 608 (R.I. 2003). In Filippi, a partnership contracted with a real-estate corporation to sell a plot of land; this agreement was formalized in a written purchase and sales agreement. Id. at 613, 619-20. The Filippi plaintiffs, who owned the partnership, alleged that they had formed a prior oral agreement with their father, who controlled the real-estate corporation, with terms of sale that contradicted those of the purchase and sales agreement. Id. at 619-20. According to the Filippi plaintiffs, this oral agreement was entered into in their individual capacities, not on behalf of the partnership. See id. Because the oral agreement and the subsequent written contract were between distinct parties, the Filippi plaintiffs argued ...


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