v. (2010)

Massachusetts Property Insurance Underwriting Association (MPIUA), as subrogee of its insured, Diane Churchill, brought an action against James C. Georgaklis on May 10, 2006, alleging negligent supervision of a plumbing subcontractor. Georgaklis denied liability and filed a third-party complaint against two alleged joint venturers, Diane Churchill and Richard Nieboer; and two subcontractors, an electrician, George Harrison,³ and a plumber, Charles Rocher. In February, 2008, Georgaklis moved for summary judgment, arguing that he was a member of a joint venture with Churchill, and thus MPIUA, as Churchill's subrogee, was precluded from recovering against him. After hearing, the judge allowed the motion, and MPIUA appeals. For the reasons stated below, we vacate the grant of summary judgment for Georgaklis, and remand for further proceedings.

Background. We recite the background facts in the light most favorable to MPIUA, the nonmoving party. In March, 2003, Churchill purchased property located at 6 Beaver Street in Nantucket (the property). She was the sole named grantee in the deed.⁴ Churchill obtained homeowners insurance on the property from MPIUA, effective March 14, 2003, and she was the sole named insured under that policy.

In May, 2003, a building permit issued for renovations to the property. Churchill's name is the only name listed on the first page of the application for the building permit, under the section entitled “OWNERS NAME.”⁵ The application for the building permit listed Georgaklis as the “Contractor,” and he engaged the various subcontractors for the renovation work. Among those subcontractors were Harrison⁶ and Rocher.

On or about May 12, 2003, the property was damaged by fire. In the fire investigation report issued by the Nantucket fire department, Churchill is the only individual listed under the section entitled “Owner.” Additionally, she is the only signatory to the sworn statement submitted to MPIUA on the claim, and MPIUA paid $489,525.23 directly to Churchill on that claim. Subsequently, MPIUA, as subrogee to Churchill, commenced this action against Georgaklis, alleging that in his capacity as general contractor, he negligently supervised Rocher, the plumbing subcontractor.

In discovery, MPIUA requested a copy of the joint venture agreement which Georgaklis referred to in his answer and in his third-party complaint. The agreement was executed on January 28, 2005, between Georgaklis, Nieboer, and Churchill (collectively, the three). That date was approximately twenty-two months after Churchill's purchase of the property and twenty months after the fire. The agreement does not refer to any joint venture already in existence,⁷ but instead contemplates a future transfer of property from Churchill to Georgaklis and Nieboer.⁸

Discussion. Under familiar principles, we review a grant of summary judgment to determine “whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law.” Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120, 571 N.E.2d 357 (1991). The moving party “has the burden of initially showing that there is an absence of evidence to support the case of the nonmoving party shouldering the burden of proof at trial.” Kourouvacilis v. General Motors Corp., 410 Mass. 706, 714, 575 N.E.2d 734 (1991).

If the three were joint venturers at the time of the fire, then they are subject to the same principles of liability as partners. See Doiron v. Castonguay, 401 Mass. 705, 707 n. 2, 519 N.E.2d 260 (1988). As between partners, there is no liability for “honest mistakes.” Hurter v. Larrabee, 224 Mass. 218, 220, 112 N.E. 613 (1916). See also Shain Inv. Co. v. Cohen, 15 Mass.App.Ct. 4, 12 n. 3, 443 N.E.2d 126 (1982).⁹ MPIUA accepts these principles but argues that summary judgment was inappropriate because there is a genuine dispute of material fact as to whether a joint venture existed at the time of the fire.

1. Treatment of Georgaklis's deposition testimony. While MPIUA had the burden to demonstrate Georgaklis's negligence, Georgaklis had the burden to demonstrate his immunity from liability based upon his joint venture claim. See, e.g., O'Sullivan v. Shaw, 431 Mass. 201, 205, 726 N.E.2d 951 (2000) (defendant bears burden to demonstrate affirmative defenses in negligence actions). “When a party has the burden of proof, it can rarely be ruled as matter of law that the burden has been sustained, especially when the burden-carrying party has relied upon oral testimony or inferences from circumstances.” Brunelle v. W.E. Aubuchon Co., 60 Mass.App.Ct. 626, 630, 804 N.E.2d 955 (2004).¹⁰

In attempting to carry his burden, Georgaklis has relied solely on his own self-serving deposition testimony and his particular view of the documentary evidence.¹¹ We must recognize the possibility that a fact finder would be free to disregard such testimony in deciding whether a party has met his burden, and thus that testimony typically cannot furnish the decisive evidence required to demonstrate the absence of a genuine dispute of material fact.¹² Id. at 630-631, 804 N.E.2d 955. See Lysak v. Seiler Corp., 415 Mass. 625, 627, 614 N.E.2d 991 (1993).

2. Application of joint venture principles. “The key requirement in finding [the] existence [of a joint venture] is an intent to associate.” Gurry v. Cumberland Farms, Inc., 406 Mass. 615, 623, 550 N.E.2d 127 (1990). “[F]actors indicating such an intent include an agreement among the participants for joint profits and a sharing of losses; a contribution of money, assets, talents, etc., to a common undertaking; a joint property interest in the subject matter of the venture; and a right to participate in the control of the venture.” Id. at 623-624, 550 N.E.2d 127. See Shain Inv. Co. v. Cohen, supra at 9, 443 N.E.2d 126.

We first note that while joint venture agreements need not be in writing, see Gurry, supra at 624, 550 N.E.2d 127, the written agreement in this case suggests a future intent to create a joint venture. That document provides that “Georgaklis and Nieboer will be deeded property in Nantucket; Massachusetts ․, which property is currently owned by Dianne Churchill” (emphasis supplied). This suggests that no joint venture existed between the three at the time of the fire.

Additionally, considered in the light most favorable to MPIUA, the evidence leaves unresolved the intent to share in profits. In his deposition testimony, Nieboer stated, “No,” in response to the question, “At any point, was the purpose of the joint venture to generate income for the three of you?”¹³ See Gurry, supra at 623-624, 550 N.E.2d 127 (intent to share profits and losses is important component of joint venture).

Finally, “[w]hen the issue of a party's intent constitutes the essential element of a cause of action or defense, the granting of summary judgment is disfavored.” Id. at 624, 550 N.E.2d 127. This is not a case where the “nonmoving party rests merely upon conclusory allegations, improbable inferences, and unsupported speculation.” Brooks v. Peabody & Arnold, LLP, 71 Mass.App.Ct. 46, 56, 878 N.E.2d 572 (2008), quoting from Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir.1990). Instead, MPIUA has relied on documentary evidence, language from the written joint venture agreement, and Harrison's and Nieboer's deposition testimony to support its claim that no joint venture existed at the time of the fire. We conclude that summary judgment was improperly granted in Georgaklis's favor.

Conclusion. The order allowing summary judgment is vacated, and the case is remanded for further proceedings consistent with this opinion.

So ordered.

MILLS, J.