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Fortress, Inc. v. Massachusetts Emergency Management Agency

Superior Court of Massachusetts, Suffolk

October 13, 2017

Fortress, Inc.
Massachusetts Emergency Management Agency

          Filed October 16, 2017


          Edward P. Leibensperger, Justice

         The sole theory of defendant's motion for summary judgment is that plaintiff, Fortress, Inc., did not qualify for special consideration of its bid for a contract because its principal place of business was not in Massachusetts. If Fortress did not qualify for special consideration, its claim for breach of contract against defendant, Massachusetts Emergency Management Agency (" MEMA" ), based on losing the bid, fails.

         Whether Fortress's principal place of business was in Massachusetts is the subject of approximately 25 numbered paragraphs of the parties' Joint Statement of Undisputed Facts (" JSUF" ). Notwithstanding the title of the JSUF suggesting that the facts are undisputed, at least 15 of those paragraphs are expressly disputed, either by MEMA or by Fortress. Thus, the issues before the court are (a) whether the disputed paragraphs of the JSUF are properly supported as required under Superior Court Rule 9A, and (b) whether the existence of the dispute is material such that summary judgment must be denied.

         This case arises out of a dispute between Fortress and MEMA regarding a Request for Responses (" RFR" ) issued by MEMA in May 2014. The RFR solicited bids to provide Standard Operating Procedure manuals for the Commonwealth's emergency operations centers. The RFR indicated that it was targeted to solicit bids from small businesses participating in the Commonwealth's Small Business Purchasing Program (" SBPP" ). The RFR stated that MEMA intended " to evaluate bid responses from and to award a contract to a SBPP-participating business(es) who submit a bid that meets or exceeds the solicitation criteria only." If no SBPP qualified vendors submitted a responsive bid, MEMA reserved the right to award the contract to a non-SBPP business.

         Fortress submitted a bid to the RFR as a SBPP qualified vendor. Fortress had previously registered as a SBPP qualified vendor through an online form on the website of the Commonwealth's Operational Services Division (" OSD" ). MEMA, however, awarded the contract to a different vendor who was not qualified as a SBPP vendor. MEMA determined that Fortress was not qualified as a SBPP vendor because its principal place of business was not in Massachusetts. When Fortress's bid was evaluated as a non-SBPP bid, it scored lower than the winning bid of a different non-SBPP vendor.

         MEMA moves for summary judgment on the single ground that Fortress did not qualify as a SBPP vendor. Absent such qualification, MEMA argues that Fortress's claim fails. The reason Fortress does not qualify, according to MEMA, is because Fortress's principal place of business was not in Massachusetts.

         The SBPP was established in 2010 by Executive Order No. 523. According to the Executive Order, the purpose of the SBPP is " to support the existence and growth of small businesses which meet the [SBPP]'s eligibility requirements by providing them with special consideration within the Commonwealth's procurement process for goods and services required by state agencies." The Executive Order authorized OSD to adopt and enforce policies to define the parameters of the SBPP, including qualifying guidelines and definitions. OSD published criteria for qualification that included, among other things, that the business have " its principal place of business in Massachusetts." According to testimony offered by MEMA, in May 2014, OSD published a glossary of terms that defined " principal place of business" as " the location of the head office of a business where the books are kept and/or management works." MEMA, however, did not provide for the record the publication in which the glossary allegedly appears. Fortress disputes that OSD's definition was published or in effect when Fortress applied for and was listed as a SBPP vendor. According to the testimony of the CEO of Fortress, when Fortress applied for SBPP certification he understood that the term " principal place of business" meant " where the corporation's books and records were kept or where the major decisions, business decisions are made."

         While the definition of principal place of business is in dispute, the dispute is not material. Both definitions are stated in the disjunctive. That is, both definitions reference where the books of the company are kept or where either " management works" or " where the major decisions are made." Thus, if the jury concludes that Fortress's management works in Massachusetts or makes major decisions here, it would be justified to conclude that in 2014, at the time of the bid, the principal place of business of Fortress was in Massachusetts.

         MEMA concedes that the CEO of Fortress, Mr. Samano, testified that in 2014, approximately 95% of Fortress's business was in Massachusetts. JSUF ¶ 41. Yet MEMA disputes JSUF ¶ 46,--the statement by Fortress that " Ninety-five percent of Fortress' business takes place in Massachusetts or concerns Massachusetts-based clients." MEMA disputes that statement because " [t]he phrases " business takes place" or " concerns Massachusetts-based clients" are vague characterizations, not fact." Upon review, I find that JSUF ¶ 46 reflects precisely the testimony of Mr. Samano regarding the facts of his business in 2014. MEMA offers no evidence to the contrary.

         It is true, as MEMA points out, that in 2014, Fortress was a Texas corporation with a corporate headquarters in Mr. Samano's home in Round Rock, Texas. The officers of Fortress, Mr. Samano and his wife, lived in Texas. Fortress's bank account was established through a Texas address. But it is also true that in 2014, Fortress had an office in Massachusetts in an employee's home. Fortress had employees in Massachusetts and paid Massachusetts payroll taxes. All of Fortress's clients, with the exception of one, were Massachusetts state or local agencies or private companies. Perhaps most relevant to the conclusion that a dispute exists with respect to a material fact is the testimony by Mr. Samano. He testified that as the manager of Fortress he worked in Massachusetts and made the major business decisions of the company in Massachusetts. MEMA offers no testimony to the contrary.

         In sum, there exists a genuine issue in dispute over the key factual question of MEMA's motion: Was Fortress's principal place of business in Massachusetts, as defined or understood by the parties? ...

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