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Griffin v. Coghill

United States District Court, D. Massachusetts

March 1, 2018

PATRICK GRIFFIN, Plaintiff,
v.
THOMAS E. COGHILL, JR., THOMAS E. COGHILL, SR., NANCY COGHILL, XTREME FAT BIKES AND COMPONENTS, LLC, and THE TRUSTEE OF THE XTREME FAT TIRE BIKE IRREVOCABLE TRUST, Defendants.

          MEMORANDUM AND ORDER

          Indira Talwan, United States District Judge.

         Plaintiff Patrick Griffin (“Griffin”) brings this action against Defendants Thomas E. Coghill Jr. (“Junior”), his parents Thomas E. Coghill Sr. (“Senior”) and Nancy Coghill (“Mrs. Coghill”) (together, the “Senior Coghills”), Xtreme Fat Bikes and Components, LLC (“Xtreme”), and The Trustee of the Xtreme Fat Tire Bike Irrevocable Trust (“the Trust”). Griffin asserts against all Defendants state law claims of fraud and deceit, fraud in the inducement, negligent misrepresentation, promissory estoppel, breach of fiduciary duty, breach of contract, breach of the covenant of good faith and fair dealing, and money had and received in connection with a purported fat tire bike business. Compl. [#1].

         The Senior Coghills have moved to dismiss for lack of personal jurisdiction. Mot. to Dismiss [#18]. Griffin counters that this court has personal jurisdiction over the Senior Coghills because Junior acted as their agent, and in any event, the Senior Coghills themselves had sufficient minimum contacts. Mem. Law Supp. Pl.'s Opp'n Mot. to Dismiss Filed By Thomas E. Coghill, Sr. & Nancy Coghill (“Pl.'s Opp'n Re Senior Coghills' Mot.”) [#33]. For the reasons that follow, the Senior Coghills' motion is ALLOWED.

         Junior and Xtreme have moved to dismiss the complaint on the ground that all counts against them are barred by the forum-selection clause in a 2016 Purchase and Sale Agreement, requiring suit to be brought in Broward County, Florida. Mot. to Dismiss the Pl.'s Compl. [#13]. They argue further that any non-contract claims are also barred by a mutual general release agreement in an amendment to the 2016 Purchase and Sale Agreement, signed that same day. Id. Griffin contends in response that the 2016 agreement and amendment are voidable as procured by fraud. Mem. Law Supp. Pl.'s Opp'n Mot. to Dismiss Filed By Thomas E. Coghill, Jr. & Xtreme Fat Tire Bikes & Components, LLC (“Pl.'s Opp'n Re Junior & Xtreme's Mot.”) [#27]. For the reasons that follow, Junior and Xtreme's motion is DENIED.

         I. Factual Background[1]

         In approximately November 2014, Griffin made a telephone call from Massachusetts to a Florida-based fat tire bike company. Compl. ¶ 9 [#1]. Junior, an employee of the company, answered Griffin's call. Id. ¶ 10. After Griffin explained that he wanted to learn more about fat tire bikes so that he could rent them out of his shop, Junior told Griffin that in several months, Junior planned to start his own fat tire bike company. Id. ¶¶ 11-12. Junior further stated that his company would sell “much better” bikes than those about which Griffin had called. Id. ¶ 12. Griffin expressed an interest in further discussions. Id. ¶ 13.

         Shortly thereafter, Junior emailed Griffin several pictures of the fat tire bikes he hoped to sell, and directed Griffin to view the fat tire bikes Junior offered for sale on Indiegogo.com. Id. ¶¶ 14-15. Over the next month, Junior and Griffin continued their business discussions, eventually agreeing that Griffin would serve as the exclusive distributor of Xtreme Fat Tire Bikes in the northeastern United States. Id. ¶¶ 16-17. In exchange, Griffin was to wire $25, 000 from Massachusetts to a Florida bank account in the name of Defendant Xtreme, an LLC based in Florida. Id. ¶ 18. Junior and the Senior Coghills were signatories on that bank account. Id. ¶ 19.

         In December 2014, Xtreme's Operating Agreement was amended to reflect that Griffin took a 25% interest in Xtreme. Id. ¶ 101. Senior and Mrs. Coghill signed as “former members” of Xtreme. Pl.'s Opp'n Re Senior Coghills' Mot., Ex. 6, Am. Operating Agreement of Xtreme Fat Bikes & Components, LLC (“2014 Am. Operating Agreement”) [#33-6] at 2. Senior also signed as Trustee for the Trust. Id.

         Between January 29, 2015, and February 26, 2015, Griffin wired $16, 000 from his Massachusetts bank account to the Xtreme bank account. Compl. ¶¶ 20-22 [#1].

         In approximately March 2015, Griffin and his wife traveled to Florida. Id. ¶ 23. While there, Griffin arranged to and did meet with Junior at the Senior Coghills' home. Id. ¶ 26. Junior showed Griffin and his wife the inventory of two fat tire bikes in the Senior Coghills' garage and asked Griffin to assume a larger role in the business. Id. ¶¶ 26-27. Griffin and his wife then rode the fat tire bikes to and along Deerfield Beach, where they were stopped numerous times by people interested to learn more about the bikes. Id. ¶¶ 28-29. Based on that bike ride and the interest generated, Griffin decided to continue discussing with Junior as to whether Griffin would assume a larger role in the business. Id. ¶ 30.

         On March 17, 2015, the Senior Coghills and Griffin entered into a Membership Purchase and Sale Agreement. Pl.'s Opp'n Re Senior Coghills' Mot., Ex. 7, Membership Interest Purchase & Sale Agreement [#33-7]. Under this agreement, the Senior Coghills transferred their interest in Xtreme to the Trust and Griffin, in exchange for approximately $2, 500 from Griffin. Id. §§ 1-2.

         Later that month, Griffin purchased airline tickets for Junior to fly from Florida to Massachusetts to meet with Griffin and his wife a second time. Compl. ¶ 31 [#1]. Junior then flew up to Boston, staying with Griffin while the two engaged in further business discussions. Id. ¶¶ 32-33. During that visit, Junior asked Griffin to become his business partner and to help grow Xtreme, and Griffin agreed to do so. Id. ¶¶ 34-35. In these discussions, Junior represented that Griffin would also be business partners with the Senior Coghills. Aff. Patrick Griffin Supp. Mem. Law Supp. Pl.'s Opp'n Mot. Dismiss Filed By Thomas E. Coghill, Jr. & Xtreme Fat Tire Bikes & Components, LLC (“Pl.'s Aff. Supp. Opp'n Re Senior Coghills' Mot.”) ¶¶ 19-21 [#33-10]. One condition of the partnership, set at Junior's insistence, was that Griffin not be given access to or control over any Xtreme bank accounts. Compl. ¶ 36 [#1].

         Griffin subsequently leased commercial space in One International Place in Boston, Massachusetts and began working to grow the business. Id. ¶ 37. Griffin also paid Junior an additional $25, 000. Id. ¶¶ 38-39. Throughout April 2015, Griffin and Junior operated the business and continued their business discussions. Id. ¶ 40.

         On April 8, 2015, Junior, on behalf of Xtreme, added Griffin and the Trust, and removed the Senior Coghills, as members in Xtreme. Pl.'s Opp'n Re Senior Coghills' Mot., Ex. 11, Articles of Am. to Articles of Org. of Xtreme Fat Bikes & Components, LLC [#33-11].

         Junior subsequently represented to Griffin that Xtreme had approximately three hundred outstanding orders that could not be fulfilled due to cash-flow difficulties. Compl. ¶¶ 41-42 [#1]. In reliance on this representation, Griffin wired $73, 500 to the Xtreme bank account so that Junior could wire the funds to a company in Korea that manufactured the fat tire bikes they planned to sell. Id. ¶¶ 42-43. Griffin and Junior agreed that Griffin would recoup his $73, 500 payment by November 2015, and that Griffin would become a 25% owner in the business in lieu of charging interest on the $73, 500 loan. Id. ¶ 44.

         Although Junior represented to Griffin that he wired the $73, 500 to the Korean manufacturing company, Junior did not wire the funds, instead sending the money to his own personal bank account in Florida. Id. ¶¶ 46-48. Junior and the Senior Coghills also withdrew money from the Xtreme bank account. Id. ¶¶ 49-50.

         Junior continued representing to Griffin that the company was doing well and receiving numerous new orders, eventually requesting that Griffin wire an additional $90, 000 to fulfill these new orders. Id. ¶¶ 51-52. Griffin then wired $90, 000 from his Massachusetts bank account to the Xtreme bank account in July 2015. Id. ΒΆ 53. Although Junior represented that he wired the $90, 000 to the Korean manufacturer, he did not do so, instead wiring a substantial amount of cash from the Xtreme bank account to his ...


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