Superior Court of Massachusetts, Suffolk, Business Litigation Session
June 8, 2017
MEMORANDUM OF DECISION AND ORDER ON DEFENDANT'S
MOTION TO DISMISS FBT EVERETT, LLC'S COMPLAINT PURSUANT
TO MASS.R.CIV.P. 12(b)(1) AND 12(b)(6)
Mitchell H. Kaplan, Justice.
FBT Everett Realty, LLC (FBT) entered into an Option
Agreement with Wynn MA, LLC (Wynn), an affiliate of Wynn
Resorts, pursuant to which Wynn acquired the option to
purchase a parcel of land in Everett, Massachusetts owned by
FBT (the Everett Parcel), if Wynn was awarded a casino
license by the defendant Massachusetts Gaming Commission (the
Commission). In this action, FTP alleges that it suffered
losses as result of the Commission's tortious
interference with that Option Agreement. Its Complaint pleads
a single count of intentional interference with contract in
which it claims that, as a result of unlawful pressure
exerted on Wynn by the Commission, Wynn insisted that FBT
renegotiate the purchase price of the Everett Parcel,
reducing that purchase price from $75 million to $35 million.
The case is now before the court on the Commission's
motion to dismiss FBI's complaint pursuant to
Mass.R.Civ.P. 12(b)(1) and 12(b)(6). In particular, the
Commission contends that it is a " public employer"
under § 1 of the Massachusetts Tort Claims Act (G.L.c.
258, § § 1 et seq., the MTCA), and, therefore,
under § 10(c) it is immune from suits for intentional
torts, including intentional interference with contractual
relations. For the reasons that follow, the motion is
following facts are drawn from the allegations in the
Complaint (assumed to be true for the purposes of this
motion), the Gaming Act, the regulations promulgated pursuant
thereto, and the materials attached to the Complaint.
Gaming Act and its Regulations
November 2011, the Legislature enacted the Gaming Act. which
is codified at G.L.c. 23K. The Gaming Act permits casino
gambling in the Commonwealth and establishes a system for
regulating it. The Act establishes the Commission as the
agency to implement casino gambling pursuant to the Act's
terms and regulate it. G.L.c. 23K, § § 3(a) and 5.
Among other things, the Act empowers the Commission to award
a license to operate a casino with gaming tables and slot
machines (the Category 1 Licenses) in each of three regions
of the Commonwealth (Regions A, B, and C). Id. at
Gaming Act and the regulations promulgated by the Commission
pursuant to its authority establish a two-phase application
process for Category 1 Licenses. Id. at § 12;
205 Code Mass. Regs. § 110.01. The first phase is known
as the " Request for Application Phase 1" (RFA-1).
205 Code Mass. Regs. § 110.01(1). In this phase, an
applicant submits a Phase I application to the Commission in
which it is required to make a number of disclosures about
itself and its personnel that pertain to an applicant's
" suitability." Id. at § 111.00 et
seq. The Investigations and Enforcement Bureau (IEB), a law
enforcement agency established within the Commission, then
conducts an investigation of the applicant and submits a
written report to the Commission containing findings and
recommendations pertaining to the suitability of the
applicant for a gaming license. G.L.c. 23K, § 12(a); 205
Code Mass. Regs. § 115.03. After the IEB submits its
report, the Commission holds either a public hearing or an
adjudicatory proceeding, and then issues a written
determination of " negative" or "
positive" suitability. 205 Code Mass. Regs. §
115.04-05. Only applicants who have received a "
positive suitability determination" may proceed to the
second phase of the application process, known as the "
Request for Applications Phase 2" (RFA-2). Id.
at § 110.01(2). In RFA-2, the applicant submits an
application that focuses on the site, design, operation and
other attributes of the gaming establishment, including the
mitigation of adverse impacts. In this second phase of the
application process, the Commission considers the merits of
Agreement with FBT
the Gaming Act passed, Wynn determined that it would apply
for a license to build the Region A resort casino on the
Everett Parcel, which was the site of a former Monsanto
Chemical plant in Everett, now owned by FBT, a Massachusetts
limited liability company. To that end, in December 2012, FBT
and Wynn entered into the Option Agreement pursuant to which
Wynn agreed to pay FBT $100, 000 per month for the right to
purchase the parcel for $75 million, in the event Wynn was
awarded a Category 1 license for Region A. At the time the
Option Agreement was executed, FBI's members were Paul
Lohnes, Anthony Gattineri, and Dustin DeNunzio.
January 2013, Wynn filed its RFA-1 application and the IEB
began its suitability investigation. During the
investigation, the IEB learned of a series of phone calls
between Charles Lightbody and Darin Bufalino, then an inmate
in state prison, that were recorded by state and federal law
enforcement personnel who were monitoring these
conversations. The IEB believed that Lightbody was a person
who should not be involved in gaming because this would
discredit the licensing process. According to the IEB, during
these recorded conversations Lightbody made statements
suggesting that he retained some manner of ownership interest
in FBT and would therefore benefit from the sale of the
Everett Parcel. The recordings prompted the IEB to initiate
an investigation into the transaction between Wynn and FBT.
The Wynn application only referenced FBT as the owner of the
Everett Parcel on which it held an option to purchase, not as
a party that would have any ongoing role in the proposed
casino. Before these jail house conversations surfaced, no
one associated with FBT had been the focus of the
of the investigation, the IEB interviewed Lightbody, Lohnes,
Gattineri, and DeNunzio. The IEB also sought to interview
Gary DeCicco, another former member of FBT, but he refused to
speak with the IEB. During the interviews, Lohnes, Gattineri,
and DeNunzio each maintained that Lightbody no longer had any
ownership interest in FBT. The IEB, however, did not believe
them. It concluded, mistakenly, that Lohnes, Gattineri, and
DeNunzio were attempting to conceal Lightbody's ownership
interest in FBT.
told Wynn about its conclusions and warned that the perceived
untruthfulness of the FBT members regarding Lightbody's
relationship to FBT created a real risk that the IEB would
find Wynn unsuitable to receive a casino license. As a means
of solving this potential problem, the IEB recommended that
Wynn force FBT to accept a dramatically reduced price for the
Everett Parcel, one that would remove any so-called "
casino-related premium" from the purchase price.
response to the IEB's recommendation, Wynn obtained an
appraisal of the Parcel that assumed the land was free of
environmental contamination, but could not be used for a
casino resort. The appraisal valued the parcel at $35
million. Wynn then informed FBT that the purchase price must
be reduced to $35 million because otherwise the Commission
would not grant Wynn a license. Wynn also told FBT that if