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Boston Segway Tours, Inc. v. Danley

Superior Court of Massachusetts, Suffolk, Business Litigation Session

November 6, 2018

BOSTON SEGWAY TOURS, INC. et al.
v.
Allan DANLEY et al.

          FINDINGS OF FACT AND ORDER ON DEFENDANT ALLAN DANLEY’S REQUEST FOR ASSESSMENT OF DAMAGES ON HIS AMENDED COUNTERCLAIMS

          Janet L. Sanders, Justice of the Superior Court

         This case began as a dispute over ownership interests in a company, Boston Segway Tours, Inc. (BST), that offers Boston tours by the use of Segways. After a hearing, this Court on January 12, 2016 determined that plaintiff Ian Meyer was the owner of BST (the January 2016 Decision). In rendering that Decision, this Court found that the defendant Allan Danley and Meyer had entered into an oral agreement (the Agreement) at the time that BST was formed whereby Danley would assist Meyer in setting up the new company and also allow Meyer to use his fleet of Segways together with other equipment. In return, Meyer would pay Danley $240, 000 for the first year of BST’s operations. Danley also extended a loan to Meyer in the amount of $73, 200 to cover startup costs. In their Amended Complaint plaintiffs had acknowledged the existence of this Agreement, and Meyer conceded at the hearing leading to the January 2016 Decision that he had not paid amounts he owed pursuant to it. The Agreement did not allocate what amount was for consulting fees and what amount was for equipment, including the Segways.

         On November 16, 2016, both Danley and codefendant Eastera Phou filed Amended Counterclaims alleging that Meyer had not fully repaid the loan and had paid nothing toward the $240, 000. Phou, Danley’s then girlfriend and now his wife, claimed that she was entitled to receive some portion of the amount that Meyer had agreed to pay because her parents were the sources of the funds used for the loan as well as for the purchase of the Segways. She is also the 80 percent owner of the predecessor company Boston by Segway; the Segways and the equipment that Meyer was given belonged to that company. Whether Phou was entitled to receive some portion of the amounts that Meyer owed on the loan and on the $240, 000 was not an issue before the Court at the hearing leading to the January 2016 Decision.

         In December 2017, Danley (who had since filed for bankruptcy and whose claims were being pursued by the bankruptcy trustee), filed a Motion for Partial Summary Judgment on Counts I through III of his Amended Counterclaim.[1] Those counts-for breach of contract, money owed, and unjust enrichment- all relate to the Agreement described above. This Court allowed that motion, since Meyer conceded that some amount of the loan was still owing and that he had not paid anything for the consulting services and equipment. As to Danley’s damages on these counts, that matter was the subject of a hearing on November 5, 2018. Because this Court had already ruled that there was an Agreement and that Meyer had breached that Agreement, the only disputes remaining to be decided at that hearing were: a) how much Meyer owed as a consequence of his breach of the Agreement; and b) how much Danley (as opposed to Phou) should receive-that is, how the amounts that Meyer owed were to be apportioned between the two defendants.

         Based on the evidence and testimony presented at that hearing, this Court finds and concludes that, although Danley (not Phou) was the person who assisted Meyer in setting up the new business, Meyer’s agreement to pay $240, 000 was also because BST receive valuable assets, including approximately 54 Segways, from the old company. This Court also finds and concludes that Phou as 80 percent owner of Boston by Segway is entitled to a substantial share of what Meyer is obligated to pay, thus reducing what Danley personally receives. Specifically, tax documents show that Danley (through another company that he owned, Destination Fund), held a 10 percent ownership interest in Boston by Segway. He is therefore entitled to 10 percent of the $240, 000 that Meyer agreed to pay for assets and consulting services. As to the loan, that was an agreement between Danley and Meyer and did not involve Phou, even though her parents were the sources of funds for that loan.

          Accordingly, this Court assesses damages on Danley’s counterclaim in the amount of $38, 000-$24, 000 representing Danley’s share of the $240, 000, plus an additional $14, 000 owed on the personal loan that Danley extended to Meyer. Defendants agreed to waive any claim for prejudgment interest. As to Phou’s counterclaims based on this same Agreement, she is to file a motion for summary judgment, which shall be heard on December 6, 2018.

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Notes:

[1] At the same time, Danley voluntarily dismissed his remaining ...


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