Amann Burnett argues before the B.A.P., In re Rowley Solar, LLC, MABK No. 19-12419-JEB, 1st Cir. BAP No. 22-016

January 23, 2023

Public Advisory Concerning January 2023 Oral Argument at the First Circuit Bankruptcy Appellate Panel
The U.S. Bankruptcy Appellate Panel for the First Circuit (“BAP”) will conduct oral arguments by video conference on Tuesday, January 24, 2023. Given the continued public health restrictions and limits on public access to the courthouse, the court will provide live audio access to such arguments.  Public access to live audio of the BAP’s January 24, 2023 oral arguments will be available at: Appellee Brief

The Appellants, Bonni and Barbara Berkowitz (hereinafter collectively singularly or jointly “Berkowitz”) and the Appellee, Invaleon Technologies Corporation (hereinafter “ITC”),
entered into a Stipulation [App at 427-434] through which they intended to resolve all of the numerous disputes that had arisen between them related to various pre-petition and post-petition matters. The Appellants allege that they had entered into an oral agreement with Tom Wu, ITC’s principal, that ITC was to never set foot on the property owned by Maven Trust where ITC had been constructing a solar field after a sale contemplated by the Stipulation.  The Stipulation is silent as to any alleged agreement and only contains terms that ITC would not be permitted to bid at the sale [App at 429] and that the parties would agree to hire a third-party manager in the event that ITC became the owner by default [App at 432].  Berkowitz testified at an extensive evidentiary hearing, among other things, as to the alleged existence of this oral agreement [App at 965, 1083] and further testified that she relied on ITC’s alleged representations that it would never again enter upon the property [App at 965].  After the hearing, the Bankruptcy Court issued an Order in which it found, inter alia, that no such agreement had been made and that Berkowitz could not have reasonably relied on any representations from ITC, if any representations had been made [App at 690-709].  The Appellants now ask this Court to find that the Bankruptcy Court’s findings as to the existence of the oral agreement and Berkowitz’s reliance are clearly erroneous.

The Bankruptcy Court (Bailey, J.) did not err in making its finding that there was no agreement or requirement that ITC not be present on the property after the closing of the contemplated sale.  Although it is clear from the record that Berkowitz and ITC suffered a significant breakdown of their professional relationship, there are no express terms included in the
Stipulation that evidence either an agreement or requirement that ITC would never set foot on the Property.  The Stipulation merely mentions that ITC and Berkowitz would agree upon a third-party manager to handle the operation of the solar farm on a going forward basis and is silent as to the alleged agreement or that this manager would be operate the solar field at ITC’s complete exclusion. Logic requires an inference that in the context of a sale to ITC, there are circumstances under which ITC, the owner in that scenario, would need to be present on the Property; and to infer that ITC, who would ultimately be responsible for the operation of the solar field as the owner, would agree to never set foot on the Property is illogical at best, if not completely unbelievable.
The record is also devoid of evidence that any such agreement was implicit in the Stipulation other than Berkowitz’s own testimony as to the existence of an alleged agreement. Significantly, the alleged agreement was never raised by counsel at the evidentiary hearing that gave rise to the Order from which this appeal was taken.  Even if the Bankruptcy Court had found there to be some evidence of such an agreement, Berkowitz, who was at all times represented by counsel, did not see fit to include an express term in the Stipulation that clearly set forth the terms of that agreement and evidence of an alleged material term that was not included in a written contract is barred by the parol evidence rule.
The Bankruptcy Court did not err in finding that Berkowitz did not reasonably rely on ITC’s representations for precisely the reason the Bankruptcy Court stated in its Opinion –
specifically, that the lack of trust Berkowitz had in ITC cuts against any inference that Berkowitz relied on an alleged representation by ITC, especially when the alleged representation was,
according to Berkowitz, such an integral and material term of the agreement, but was never expressly included in the Stipulation.

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