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Half Moon Ventures, LLC v. Energy Development Partners, LLC

United States District Court, D. Rhode Island

May 20, 2019

HALF MOON VENTURES, LLC, Plaintiff,
v.
ENERGY DEVELOPMENT PARTNERS, LLC, and MAARTEN REIDEL, Defendants.

          MEMORANDUM AND ORDER

          JOHN J. MCCONNELL, JR., UNITED STATES DISTRICT JUDGE.

         Plaintiff Half Moon Ventures ("HMV") and Defendant Energy Development Partners ("EDP") entered into a series of agreements to develop renewable energy production facilities in Rhode Island. On September 15, 2014, the parties signed a master agreement, the Membership Interest Purchase and Sale Agreement ("MIPSA"), intended to supply the scaffolding for further agreements related to specific development projects. Section 7.11 of the MIPSA provides to HMV a right of first refusal to invest in and later purchase development projects from EDP. One such project was the Richmond Project, governed by the MIPSA and two project specific contracts, a Services Agreement ("SA") and a Membership Interest Assignment Agreement (MIAA), both dated March 25, 2015. The SA and the MIAA have provisions by which EDP would reimburse HMV for payments made toward the Richmond Project if certain conditions were met. EDP's repayment obligations were guaranteed by its manager, Co-Defendant Maarten Reidell, who signed a personal guaranty for the Richmond Project in March 2015.

         On April 26, 2017, HMV made $634, 222 in payments to EDP under the SA and MIAA. HMV alleges that it made these payments relying on an oral modification of the SA that the parties discussed from late 2016 into early 2017. HMV shortly thereafter withdrew from the project and contends it is due a reimbursement under the contracts and Mr. Reidell's guaranty either as written or as orally modified. HMV sued EDP for breach of contract, promissory estoppel, and unjust enrichment. EDP moved to dismiss the claims and, for the following reasons, the Court GRANTS the motion in part and DENIES it in part. ECF No. 15.

         I. BACKGROUND

         On September 15, 2014, HMV and EDP entered into the MIPSA with the intent of using it as a framework to be amended by future contracts related to specific development projects. ECF No. 1 at 3, ¶ 10. The future projects were called pipeline projects, some of which were already identified at the time of signing. ECF No. 1-1 at 31. EDP was to offer HMV a right of first refusal to purchase pipeline projects during the Pipeline Period, which ended on December 31, 2016. Id. EDP was also obligated to inform HMV of new pipeline projects on a quarterly basis during the Pipeline Period. Id.

         On March 25, 2015, HMV and EDP signed the SA as HMV intended to invest in a Pipeline Project called the Richmond Project. Id. at 55, 63. The SA has the terms the parties agreed upon to amend and supplement the language of the MIPSA to effectuate the development of the Richmond Project. Id. at 56-57. The SA contemplates that HMV would make development advances to EDP, as necessary. Id. at 57. Section 7(a) of the SA describes repayment obligations undertaken by EDP-'

If as of December 31, 2Ol6:,, . (ii) any Development Services Advances are outstanding; then, in either such case, EDP agrees to repay to HMV such amounts in immediately available funds within two Business Days, or (iii) any purchase price has been paid to EDP or its Affiliate under a purchase agreement, but the applicable project has not, prior to December 31, 2016, satisfied the conditions for the Completion of Development Payment...under such purchase agreement, EDP agrees to repay to HMV such amounts in immediately available funds within two Business Days, whereupon the purchase agreement shall be of no further force or effect.

Id. at 58. The purchase payments referenced in clause (iii) are outlays that the parties contemplated would be made under an MIAA. Id. at 66. Mr. Reidell personally guaranteed EDP's section 7(a) repajmient obligations in a document he signed in March 2015 (Reidell Guarantee). Id. at 78.

         On the same day, HMV and EDP signed an MIAA for the Richmond Project, which called for HMV to make purchase payments to EDP as EDP achieved certain milestones toward Completion of Development. Id. at 63, 66. Section 6(b) of the MIAA describes HMV's right to withdraw from the Richmond Project

In the event that the Buyer provides notice to Seller that it is withdrawing from the Project, in its sole discretion, which the Buyer may provide at airy time prior to the Completion of Development, the Development Services Advances that have been paid to Seller under the Services Agreement, together with any Purchase Price payments made by Buyer under this Agreement prior to the Completion of Development, shall be applied to a future Pipeline Project offered to Buyer by Seller during the Pipeline Period.

Id. at 67. The MIPSA and the SA both have a clause saying, "[n]o amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the parties." Id. at 38, 59. The MIPSA, the SA, and the MIAA all have an integration clause. Id. at 38, 59, 60, 71.

         HMV alleges it was clear to the parties in late 2016 that EDP would not complete development of the Richmond Project by December 31, 2016. ECF No. 1 at, 6, ¶ 20. At that time, HMV had only paid $25, 475 to EDP as a Performance Guarantee Deposit on December 8, 2015. Id. at 7, ¶ 22. HMV asserts, though, that it had invested much time and energy into the Richmond Project and wanted to see it through to completion. Id. at 6-7, ¶ 21. Worried that the repayment obligations in section 7(a) of the SA would expire at the end of 2016, HMV alleges that it began discussions with HMV about extending those obligations as the project continued. Id. HMV claims these discussions led to an understanding between the parties, reached in late 2016 or early 2017, that the repayment obligations and the Reidell Guaranty would continue until EDP completed development of the project, which EDP estimated would occur by early 2017. Id. On April 26, 2017, HMV allegedly made three Purchase Price payments to EDP, totaling $634, 222, relying on the discussions between the parties. Id. at 7, ¶ 22.

         HMV asserts it was convinced by June 2017 that EDP would not be able to bring the Richmond Project to completion. Id. at 7-8, ¶ 23. On July 20, 2017, HMV notified EDP by letter of its intention to withdraw from the project and requested reimbursement of the 2017 Purchase Price payments and the 2015 Performance Guarantee Deposit. Id. EDP did not refund the money. Id. at 8, ¶(24. Instead EDP sent HMV a letter on August 1, 2017 saying the payments had been credited to HMV for future projects. Id. HMV sued for breach of contract, promissory estoppel, and unjust enrichment.

         II. ...


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