Metal Seal Precision, Ltd.
Sensata Technologies, Inc.
(with first initial, no space for Sullivan, Dorsey, and
Walsh): Davis, Brian A., J.
DECISION AND ORDER REGARDING PLAINTIFF METAL SEAL
PRECISION, LTD.âS MOTION FOR PARTIAL SUMMARY JUDGMENT (DOCKET
ENTRY NO. 82.0)
A. Davis Associate Justice of the Superior Court
action arises from defendant Sensata Technologies, Inc.âs
("Sensata") purported breach of a multi-year
Memorandum of Understanding, as amended (the "2014
MOU"), which allegedly requires Sensata to purchase
certain minimum quantities of particular metal components
that Sensata uses in the production of its automotive sensor
products each year from plaintiff Metal Seal Precision, Ltd.
("Metal Seal"). Metal Seal filed suit in February
2017, and Sensata responded with a series of counterclaims,
the most recent of which were filed in February 2019. See
Second Amended Answer, Counterclaims, and Affirmative
Defenses (the "Answer and Counterclaims," Docket
Entry No. 75.0). Sensata strenuously denies that it ever
agreed to purchase any minimum annual quantities of metal
components from Metal Seal. Sensata also alleges, however, in
the alternative that, if the partiesâ 2014 MOU is found to
include a minimum purchase requirement, then the requirement
is unenforceable because it was obtained through Metal Sealâs
fraud and misrepresentations. See Answer and Counterclaims,
Count III (Violation of G.L.c. 93A), Count IV (Fraud), and
the Eighteenth Affirmative Defense (MOU is "void and
unenforceable" due to Metal Sealâs "material
misrepresentations"). More specifically, Sensata alleges
that Metal Seal,
ma[de] false representations [in negotiations] to induce and
pressure Sensata to enter into the 2014 MOU and each
subsequent amendment by representing that its insurer
required that any contract with Sensata include minimum
volumes and that post-fire expenditures were dependent upon
approval by its bank.
Id., Â¶49. See also id ., Â¶Â¶54-58.
in this case is scheduled to commence on December 3, 2019. In
an effort to reduce the number of issues to be resolved at
trial, Metal Seal has moved for partial summary judgment on
Count III, Count IV, and the Eighteenth Affirmative Defense
of Sensataâs Answer and Counterclaims to the extent they are
based on Metal Sealâs alleged fraud and misrepresentations in
the negotiation of the 2014 MOU. See Plaintiff Metal Seal
Precision, Ltd.âs Motion for Partial Summary Judgment (the
"Summary Judgment Motion," Docket Entry No. 82.0).
In pressing its Summary Judgment Motion, Metal Seal concedes,
for summary judgment purposes only, that it misrepresented to
Sensata the reasons behind Metal Sealâs insistence that the
2014 MOU include a minimum annual purchase requirement. Metal
Seal nonetheless argues that Sensataâs counterclaims and
affirmative defenses based on Metal Sealâs purported fraud
and misrepresentation cannot succeed as a matter of law
because, inter alia, Sensataâs claimed reliance on
Metal Sealâs representations was inherently unreasonable and
Sensata suffered no compensable damages on account of the
representations. Sensata, for its part, opposes Metal Sealâs
Summary Judgment Motion.
Court conducted a hearing on Metal Sealâs Summary Judgment
Motion on October 15, 2019. Both sides appeared and argued.
After oral argument, the Court gave each party the
opportunity to submit a supplemental letter brief addressing
the question of whether Metal Sealâs stated reasons for its
insistence that the 2014 MOU include a minimum annual
purchase requirement constituted a material fact for purposes
of the partiesâ agreement. Upon consideration of the original
and supplemental written submissions of the parties and the
oral arguments of counsel, Metal Sealâs Summary Judgment
Motion is ALLOWED for the reasons discussed,
Massachusetts law provides that,
[t]o recover for fraudulent misrepresentation, a plaintiff
must allege and prove that the defendant made a false
representation of a material fact with knowledge of its
falsity for the purpose of inducing the plaintiff to act
thereon, and that the plaintiff relied upon the
representation as true and acted upon it to [her] damage.
Masingill v. EMC Corp., 449 Mass. 532, 540 (2007)
(internal quotation marks and citation omitted). A
"material fact" is "one to which a reasonable
person would attribute importance for his or her choice of
action in the transaction at issue." Welch v.
Barach, 84 Mass.App.Ct. 113, 120 n.11 (2013). "It
must be one of the principal grounds, but not necessarily the
sole ground, causing the [receiving partyâs] decision."
Sealâs Summary Judgment Motion requires the Court to decide
whether Metal Sealâs misrepresentations to Sensata regarding
the reasons behind the bargaining positions that Metal Seal
took in the course of the partiesâ negotiation of the 2014
MOU constitute "material facts" that are sufficient
to support Sensataâs counterclaims and affirmative defenses
based upon fraud. The Court concludes that they are not.
Although case law on the issue is somewhat sparse, the better
reasoning appears to be that a partyâs statement of the
reasons or motives underlying its bargaining position
generally are not considered to be "material."
example, in Goldman v. Town of Plainfield, 171 Vt.
575, 762 A.2d 854 (2000) ("Goldman "), the
Supreme Court of Vermont considered whether the trial court
properly granted summary judgment to the Town of Plainfield,
Vermont (the "Town") in a suit that accused the
Town of having lied about its ability to supply town water to
a particular condominium development project (the
"Project") in order to extract additional contract
concessions from the developer. 171 Vt. at 575, 762 A.2d at
855. The developer later sued the Town alleging that the Town
had fraudulently and negligently misrepresented its alleged
inability to supply water to the Project to the
developerâs detriment. 171 Vt. at 575, 762 A.2d at
855-56. The trial court ruled that the Townâs
misrepresentations "went only to the motive for the
Townâs bargaining position and were not material to the
agreement," and the developer appealed. 171 Vt. at 575,
762 A.2d at 856.
Supreme Court of Vermont unanimously affirmed the decision of
the trial court. In doing so, the Supreme Court quoted
extensively from one of its earlier decisions, Stone &
Wellington v. Robie, 66 Vt. 245, 29 A. 257 (1894). It
said that, in order to be actionable for fraud, a partyâs
must relate distinctly and directly to the contract, must
affect its very essence and substance, and must be material
to the contract. If the representations relate to other
matters, or to the contract in a trivial and unimportant
respect only, or are ...