The opinion of the court was delivered by: John Gleeson, United States District Judge
FOR ONLINE PUBLICATION ONLY
Jeffrey Colle and Marc Goldman joined forces in 1999 to purchase a large parcel of oceanfront property in Sagaponack, New York. Perhaps because they were then friends, Colle and Goldman failed to set forth the nature and terms of their business relationship in a signed writing. When the property, which they bought for $14.4 million, skyrocketed in value, a dispute naturally arose, resulting in this diversity action. Colle seeks (a) a declaration that the parties had a legally enforceable joint venture agreement; (b) damages for breach of (i) contract, (ii) fiduciary duty, and (iii) the duty of good faith and fair dealing; and (c) relief in quantum meruit (i.e., restitution).*fn1 On January 6, 2006, I denied Goldman's motion to dismiss Colle's amended complaint, and directed Colle to file a second amended complaint, which he did. Discovery having concluded, Goldman now moves for summary judgment. As discussed below, the motion is denied.
This controversy arises out of 62 choice acres of undeveloped oceanfront property in Sagaponack, New York.*fn2 In the summer of 1999, Colle entered into negotiations with Lehman Brothers (not a party to this action), to purchase, subdivide, develop, and resell the property. The parties dispute the anticipated corporate form of that venture. Goldman, citing certain testimony by Colle, claims that Lehman and Colle intended to form a limited liability company ("LLC"). See Colle Dep. 70 ("If it had gone to a deal, it would have been placed in an LLC."). Colle, citing certain testimony by Lehman representative Charlie Schoenherr, claims they contemplated a joint venture. See Schoenherr Dep. 15, 18 (referring to negotiations with Colle over terms of a "joint venture"). According to Schoenherr, Lehman proposed to be the "financial partner" in the enterprise, with Colle as the "general manager, general partner," receiving "50 percent of the profits" for his "sweat equity" in the daily management of the purchase, development, and resale of the Sagaponack property. See id. at 29.
As negotiations proceeded between Lehman and Colle, Colle began to discuss the property with Goldman too. There is conflicting evidence about the precise circumstances under which Lehman dropped out of the deal. Schoenherr testified that Lehman backed out because Colle would not contribute 10 percent of the capital, a condition Lehman required. See id. at 33. A later declaration by Schoenherr states that this testimony was not accurate, and that Lehman actually offered to finance the full purchase price at a preferred rate of return of 18 percent. See Schoenherr Decl. ¶ 2. The parties appear to agree, however, that Colle ultimately went with Goldman because Goldman offered to finance the full purchase price at a lower preferred return of eight percent. Colle Dep. 98; see also Marc Goldman's Memorandum of Law in Support of His Motion for Summary Judgment ("Def. Br.") 6.
At some point in the Colle-Goldman negotiations, Goldman proposed that Colle contribute $1.5 million toward the purchase price of the property, in the form of a lien against his house. In the end, though, Goldman bought 43.5 acres of the 62-acre parcel for $14.4 million, entirely with his own capital. Colle testified that he "would have purchased the whole 62 acres," but since he "was [Goldman's] partner," he "wanted to do the right thing." Colle Dep. 109-10. Goldman (and not Colle) signed the land contract on November 2, 1999. A rider to that contract contained an assignment provision allowing Goldman to "assign [the] contract to a limited liability company of which Marc Goldman is a member." Posa Decl. Ex. 15 (PX 2) at MG 00471. In December 1999, the contract was assigned to Sagaponack Ventures LLC pursuant to that provision. The deal closed in April 2000.
Everyone agrees that Colle and Goldman anticipated forming an LLC as part of their agreement at some point, but the parties dispute the ultimate corporate form of the venture. Colle claims the LLC was a subpart of a larger joint venture, to which he would contribute work and Goldman would contribute money. In this regard, Colle makes various references to Goldman as his "partner." See Colle Dep. 86 ("[I]t was always understood that it was a joint venture. 'Partner' meant joint venture, 50/50 partner . . . ."); id. at 97 ("At that time, Marc was putting up the money, I was sweat, I was going to do the work, I was going to manage the subdivision process . . . ."); id. at 199 ("We were partners, Marc was going to put up the money, I was going to do all the work . . . ."). Colle also claims in a response to an interrogatory that, pursuant to the agreement, he "would have been responsible for 50 percent of all expenses incurred by Defendant in connection with the joint venture, [including] liabilities, upon the joint venture's sale of the Properties." Colle Interrog. Resp. 11; see also Colle Dep. 88 ("[W]e split the profits and the losses 50/50."); id. at 98 ("[W]e were going to split the profits and the losses 50/50."). Colle concedes that Goldman had "the final word" in their agreement, but claims that Goldman acknowledged his duties as a joint venturer during the course of their negotiations, saying to Colle, "I'm your partner, I'm not going to screw you. I can't -- I had the fiduciary responsibilities that I have, which is obvious." Id. at 155. And Goldman testified that Colle told him that Colle "was the only one that could buy the property, he was the only one that knew about it, and he was the only one that could buy it." Goldman Dep. 160.
Goldman claims there was no joint venture agreement, and contends that Colle believed that all his dealings with Goldman were entirely governed by the LLC. As evidence, Goldman points to two draft documents setting forth the terms of the contemplated entity. The first, an unsigned draft term sheet, states the purpose of the LLC was "to effect the acquisition of an undeveloped parcel of land in Sagaponic [sic], Long Island and its subdivision into 4 ocean front lots," and provides, inter alia, that Goldman "will be the sole managing member of the Company," having "the full, exclusive and complete right and power exercisable in his sole discretion to operate, manage and control the business affairs of the Company." Posa Decl. Ex. 17 (PX 9) at JC 0001-02. Colle disputes that these provisions characterizing Goldman's role accurately reflected his and Goldman's agreement at the time. See Colle Dep. 141-42 (noting that the terms referencing Goldman were "different" than he and Goldman had discussed). The second document, an unsigned draft LLC operating agreement, states in part that "[t]he parties intend that the Company not be a partnership . . . or joint venture, and that no member be an agent, partner, or joint venturer of any other member." Second Amended Complaint Ex. C ¶ 1.6. Colle objected to certain provisions of this draft, including the requirement that he invest $1.5 million in capital and be responsible for half of any losses, but not the statement of intent.
The parties also disagree about the extent of Colle's responsibility for subdividing the land and selling the plots. Goldman claims Colle merely facilitated the surveyor and subdivision attorney's jobs, subject to Goldman's final word. See, e.g.,Brennan Dep. 46 ("[A]ll along Jeff had to go back to his partner and find out whether this would fly or not."). Colle claims he was heavily involved in the details of the process and had decision-making authority. See, e.g., Smith Dep. 56-57 (one subdivision concept "was rejected by Mr. Colle as caving into the town . . . without getting a reasonable return on the investment"); id. at 75-76 (describing Colle's "concern about the traffic on Peters Pond Lane, [which] he felt . . . would be less desirable than to have access from Daniels Lane."); Asato Dep. 68 ("I discussed payment terms only with Jeffrey Colle . . . .").
In addition, Goldman claims Colle was a merely finder or broker for the purchase and sale of the land, subject to Goldman's final approval. See, e.g.,Colle Dep. 270 (Q. "Mr. Colle, was locating a buyer or buyers for subdivided lots another of the things that you contributed to the joint venture as part of your 'sweat?' A. Attempting to find them, yes."). For example, Goldman cites a meeting between Colle and a local broker in which the broker understood that Colle required Goldman's "approval" on various terms of sale. Brennan Dep. 94-95. Colle claims that that "approval" was just a device to establish leverage in the negotiation, and that his authority was not, in reality, so conditioned. See id. at 83 (describing Colle as the "point person" in charge of the subdivision project).
The central question in this case is whether Colle and Goldman formed a joint venture to purchase, subdivide, and resell the Sagaponack property. Goldman makes two arguments in support of his claim that no such joint venture existed. First, he contends that Colle was, as a matter of law, Goldman's finder or broker, and therefore that any contract between them is void by operation of the statute of frauds. Second, he argues that the record contains ...