United States District Court, D. Massachusetts
ORDER ON DEFENDANTS' MOTION FOR PARTIAL
Dennis Saylor, IV United States District Judge
an action for repayment of a loan. Jurisdiction is based on
diversity of citizenship.
Michael Day loaned defendants Charles and Mark Gracy a total
of $71, 312.67 over the course of about a year to help them
operate their community theater company. Despite the
Gracys' many promises to the contrary, only $11, 000 of
that amount was ever repaid. Day has filed this action
alleging fraud, breach of contract, money had and received,
and violation of Mass. Gen. Laws ch. 93A, among other things.
The Gracys have filed a motion for partial dismissal for
failure to state a claim on which relief can be granted as to
the violation of chapter 93A. For the following reasons, that
motion will be denied.
following facts are set forth as alleged in the complaint.
and Mark Gracy, who are married, owned and operated the
Community Theater Company of Andover, Inc.
(“ACT”) from at least May 1, 2008, through the
summer of 2016. (Compl. ¶¶ 6, 7, 9, 49). Charles
Gracy was the President and Mark Gracy was the Director.
(Id. ¶ 7). ACT was tax exempt under 26 U.S.C.
§ 501(c)(3) from at least 2013 until May 15, 2015.
(Id. ¶ 8).
September 2013, Day told both Gracys that he would be willing
to lend them money for ACT, but that it would need to be paid
back before his children went to college. (Id.
¶¶ 10-11). Charles Gracy promised it would be
repaid much sooner than that. (Id. ¶ 11)
Accordingly, on September 16, 2013, Day loaned the Gracys and
ACT $15, 000 pursuant to a short loan agreement, which stated
Today, September 16, 2013, Michael Day has loaned Charles
Gracy and ACT Theater Company, individually and collectively,
Fifteen Thousand Dollars.* Charles Gracy, individually and on
behalf of ACT Theater Company, agrees to pay as much of the
loan back as possible by November 30, 2013. Any amount not
paid back by said date will be paid back in whatever
increments possible, as soon as possible, but in no event
later than November 30, 2014.
As long as best efforts are made by Charles Gracy to pay back
the loan as noted above, no interest will be charged as long
as the loan is paid back within twelve months of today. Any
amounts remaining outstanding as of that date will be charged
interest at a simple rate of 1% per month from the initial
date of the loan.
* If any additional loans are made then they will follow
these same terms.
(Compl. Ex. 2). The agreement was signed by Day and Charles
December 2013, the Gracys represented to Day that ACT was
having trouble fundraising because they could not show any
funds in its accounts. (Id. ¶ 22). Mark Gracy
stated that he was willing to take money out of his
retirement account to repay Day if the business was
unsuccessful. (Id. ¶ 25). Day loaned them and
ACT an additional $50, 000 on December 31, 2013, “for
the sole purpose of being able to demonstrate the existence
of a capital fund.” (Id. ¶¶ 23, 26).
It was ...