Anthony Gattineri Lawsuit Against Wynn Resorts Drags On

By  //  May 4, 2023

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To aid in determining the enforceability of a $19 million “handshake” agreement, the Massachusetts SJC was presented with two questions by the First Circuit in a civil appeal.

The appeal concerns a dispute stemming from the sale of a tract of land in Everett and Boston, referred to as the “Parcel,” which was intended for the construction of the Encore Boston Harbor. FBT, a limited liability company owned by Paul Lohnes, The DeNunzio Group LLC (led by Dustin DeNunzio, Manager of FBT), and Appellant Anthony Gattineri were the original owners of the Parcel before the resort and casino were constructed.

Wynn MA, LLC, one of the appellees in this case, is a limited liability company registered in Nevada and fully owned by its sole member, Wynn Resorts, Limited. Wynn Resorts, Limited is a publicly traded corporation based in Nevada. Wynn MA, LLC is the owner of Encore Boston Harbor, and in compliance with state law, it applied for a gaming license with the Commission to operate a resort in Massachusetts under Region A Category 1 in January 2013.

On March 22, 2023, the U.S. Court of Appeals for the First Circuit reviewed the case of Anthony Gattineri vs. Wynn MA, LLC and Wynn Resorts Ltd. In this case, the court analyzed whether a party’s commitment to compensate another party, after a regulatory body, the Massachusetts gaming commission, limited the deal’s value, was legally binding. The case number is 22-1117.

FBT Realty LLC, in which Gattineri held a 46.69% stake, had entered into an agreement to sell land worth $75 million to Wynn MA, LLC. However, the Massachusetts Gaming Commission intervened in the transaction due to concerns about one of the sellers (who was a stakeholder in FBT Realty) having links to organized crime and the need for environmental remediation of the property. As a result of these issues, the Commission limited the sale price to $35 million.

In 2018, Anthony Gattineri filed a lawsuit alleging that he was owed $19 million related to the sale of land in Everett, Massachusetts in 2014, which ultimately led to the development of a hotel and casino project valued at $2.6 billion.

Gattineri made it clear that he would sell to Wynn only if they covered the gap between the original deal of $75 million and the revised price set by the Massachusetts Gaming Commission. He believed that this entitled him to receive 46.69% of the $40 million difference between the two prices, which came to slightly less than $19 million. According to Gattineri, this was a verbal agreement made with a Wynn executive.

For federal diversity cases, the relevant rules of decision are determined by state law, and the parties involved have agreed that Massachusetts law will be applied. This principle was established in the case of Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938), and has been reaffirmed in cases such as Cochran v. Quest Software, Inc., 328 F.3d 1, 6 (1st Cir. 2003), which states that “when the parties have come to a reasonable agreement about which law should be applied, a federal court sitting in diversity jurisdiction can accept that agreement without conducting its own investigation.”

According to the law, summary judgment is appropriate only when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” This is in accordance with Federal Rule of Civil Procedure 56(a). A dispute is considered genuine if it could be resolved in favor of either party by a rational factfinder, and a fact is considered material if it has the potential to impact the outcome of the lawsuit under the relevant law. These principles are stated in Joseph v. Lincare, Inc., 989 F.3d 147, 157 (1st Cir. 2021), which cites both Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990) and Cherkaoui v. City of Quincy, 877 F.3d 14, 23 (1st Cir. 2017).

In order to assert a successful claim for breach of contract under Massachusetts law, Gattineri is required to demonstrate that there was a valid, enforceable contract in place, that the defendant failed to uphold its obligations as outlined in the contract, and that he suffered damages as a result of this breach. This standard is articulated in Brooks v. AIG SunAmerica Life Assurance Co., 480 F.3d 579, 586 (1st Cir. 2007). A contract is deemed valid when all essential terms are clear and unambiguous, such that the parties’ intent, obligations, and rights can be determined.

Under Massachusetts law, in order to establish a claim for common law fraud, the plaintiff must demonstrate that the defendant made a false representation of a material fact, with knowledge of its falsity and the intent to induce the plaintiff to act upon it. Additionally, the plaintiff must have relied on the misrepresentation as true and suffered damages as a result of that reliance. These requirements are articulated in H1 Lincoln, Inc. v. S. Wash. St., LLC, 179 N.E.3d 545, 560 (Mass. 2022) (quoting Rodi v. S. New Eng. Sch. of L., 532 F.3d 11, 15 (1st Cir. 2008)). While the reasonableness of the plaintiff’s reliance is generally a factual issue for a jury to determine, it can be decided as a matter of law if the undisputed facts permit only one conclusion that no rational jury could find reasonable reliance. This was established in Cumis Ins. Soc’y, Inc. v. BJ’s Wholesale Club, Inc., 918 N.E.2d 36, 50 (Mass. 2009).

The defense of in pari delicto is applicable only in cases where (i) the plaintiff shares at least an equal level of responsibility for the harm he seeks to remedy compared to the defendant and (ii) dismissing the lawsuit would not undermine the purposes of the underlying law or otherwise go against the public interest. (Nisselson v. Lernout, 469 F.3d 143, 152 (1st Cir. 2006)). The Supreme Court has also recognized the applicability of this defense in Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299, 310-11 (1985).

On appeal, the First Circuit refrained from answering the question of whether the district court’s summary judgment in favor of Wynn on all counts was erroneous. Instead, the First Circuit opted to submit two questions to the Supreme Judicial Court for certification.

Whether the San Diego Agreement violates Section 21 of the Gaming Act and/or is unenforceable based on public policy considerations of maintaining public confidence in the gaming licensing process and regulatory oversight of gaming establishments are the two questions that the high court will need to address. The resolution of these questions will shed light on the extent to which contracting parties can “contract around” regulatory decisions that may impede their business interests.

This case is among several legal actions that have resulted from the originally planned project.  n 2014, Anthony Gattineri was indicted for concealing the ownership interest of Charles Lightbody, a convicted felon and New England Mafia associate.