CHRIS ESSLER v. CURALEAF HOLDINGS, INC. & Others.

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule
23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28,
as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties
and, therefore, may not fully address the facts of the case or the panel's
decisional rationale. Moreover, such decisions are not circulated to the entire
court and, therefore, represent only the views of the panel that decided the case.
A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25,
2008, may be cited for its persuasive value but, because of the limitations noted
above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260
n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

24-P-644

CHRIS ESSLER

vs.

CURALEAF HOLDINGS, INC. & others.1

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

The plaintiff, Chris Essler, appeals from a summary

judgment entered in Superior Court in favor of the defendant,

Curaleaf Holdings, Inc. (Curaleaf), on his claims for breach of

contract, breach of the implied covenant of good faith and fair

dealing, breach of fiduciary duty, negligence, and negligent

misrepresentation.2 We affirm.

Background. Essler worked as the vice president of sales

for Select, a cannabis company owned by Cura Partners, Inc.

1Unknown agents of Curaleaf identified in the complaint as
"Doe's 1-3."

2Essler also sought equitable relief in the form of an
accounting and an injunction, but he does not appeal from the
dismissal of those claims.
(Cura). In October 2019, Cura entered into a merger agreement

with Curaleaf, which provided that Curaleaf would acquire

Select's operations. Essler's employment ended at the time of

the merger, around February 1, 2020.

On February 5, 2020, Essler and Curaleaf entered into an

option rollover and award agreement (option rollover agreement)

that converted Essler's stock options from Cura into 265,403

fully vested replacement Curaleaf stock options. The option

rollover agreement allowed Essler to exercise these options by

completing and delivering a form titled "schedule A," along with

full payment of the $9.98 per option exercise price, before July

30, 2022. In October 2020, Curaleaf sent an e-mail message to

its stock option holders, including Essler, inviting them to

activate a "personal account on the Curaleaf Equity Gateway with

Global Shares," an online brokerage platform. One purpose of

the Global Shares platform was to allow holders to exercise

options in a "cashless" manner, whereby a holder could receive a

net payout without having to pay the exercise price upfront. In

2022, Essler brought suit against Curaleaf, alleging that it

prevented him from exercising his stock options through the

Global Shares platform at a financially advantageous time.

Curaleaf moved for summary judgment on all of Essler's claims,

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and the judge allowed the motion in a written memorandum of

decision.

Discussion. "We review a decision to grant summary

judgment de novo." Shea v. Cameron, 92 Mass. App. Ct. 731, 734

(2018). "The moving party is entitled to summary judgment if,

viewing the evidence in the light most favorable to the

nonmoving party, 'there is no material issue of fact in dispute

and the moving party is entitled to judgment as a matter of

law.'" Huang v. Ma, 491 Mass. 235, 239 (2023), quoting HSBC

Bank U.S.A., N.A. v. Morris, 490 Mass. 322, 329 (2022). See

Mass. R. Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002).

1. Breach of contract and the implied covenant of good

faith and fair dealing. Essler contends that Curaleaf breached

its contractual duties as well as the implied covenant of good

faith and fair dealing by preventing him from exercising his

options on the Global Shares platform. Essler's option rollover

agreement with Curaleaf did not mention the Global Shares

platform, and in fact stated that no cashless exercise option

was available at that time. Nevertheless, Essler claims that a

unilateral contract was created when Curaleaf subsequently

invited Essler to activate a personal account on the Global

Shares platform. In the alternative, he claims that the

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invitation to join the platform gave rise to a bilateral

contract.

We agree with the judge that Essler failed to show a breach

of contract. "With respect to an offer for a unilateral

contract, the offeree must perform an act to form a binding

contract, and the act operates as the manifestation of mutual

assent and consideration." Boston Capital Funding, LLC v. BEK

Winchester Winning Farm LLC, 103 Mass. App. Ct. 573, 577 (2023),

citing 2 R.A. Lord, Williston on Contracts § 6.2 (4th ed. 2023).

Nothing in the record established that Curaleaf manifested an

intention to be bound to a legal obligation when it invited

option holders to activate personal accounts on the Global

Shares platform. Furthermore, as the judge concluded, there was

no consideration to support the formation of a contract under

either theory. See Bulwer v. Mount Auburn Hosp., 473 Mass. 672,

690 (2016) (plaintiff claiming breach of contract must show

agreement between parties supported by consideration); Miller v.

Cotter, 448 Mass. 671, 684 n.16 (2007) ("reciprocal exchange of

benefit and detriment constitutes consideration"). Essler

neither provided a benefit to Curaleaf nor incurred a detriment

by registering for access to the Global Shares platform. See

Congregation Kadimah Toras-Moshe v. DeLeo, 405 Mass. 365, 366

(1989). That both Curaleaf and option holders may have derived

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some general benefit from option holders' use of the platform is

insufficient to establish that Curaleaf and Essler entered into

a "typical bargain" supported by consideration. See Loranger

Constr. Corp. v. E.F. Hauserman Co., 376 Mass. 757, 763 (1978).

For similar reasons, we reject Essler's contention that

Curaleaf violated the implied covenant of good faith and fair

dealing through "a lack of diligence, slacking off, and willful

imperfect performance." Because the option rollover agreement

provided only that Essler could exercise his stock options

through the schedule A form, and no contract existed between the

parties regarding the use of the Global Shares platform, no

breach of the implied covenant arose. See Ayash v. Dana-Farber

Cancer Inst., 443 Mass. 367, 385, cert. denied sub nom. Globe

Newspaper Co. v. Ayash, 546 U.S. 927 (2005) (scope of implied

covenant is "only as broad as the contract that governs the

particular relationship").

2. Breach of fiduciary duty. The judge properly entered

summary judgment on Essler's claim for breach of fiduciary duty.

To establish such a claim, a plaintiff "must show (1) the

existence of a fiduciary duty; (2) breach of that duty;

(3) damages; and (4) a causal connection between breach of the

duty and the damages." Baker v. Wilmer Cutler Pickering Hale &

Dorr LLP, 91 Mass. App. Ct. 835, 842 (2017).

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"Fiduciary duties may arise in two ways: (a) as a matter
of law, where parties to the subject relationship are cast
in archetypal roles, such as trustee and [beneficiary],
guardian and ward, attorney and client; or (b) as
determined by the facts established upon evidence
indicating that one person is in fact dependent on the
another's judgment in business affairs or property matters"
(quotations and citations omitted).

UBS Financial Servs., Inc. v. Aliberti, 483 Mass. 396, 406

(2019). See Doe v. Harbor Sch., Inc., 446 Mass. 245, 253 (2006)

(fiduciary duty exists where one puts "faith, confidence, and

trust" in another's judgment and advice [citation omitted]).

Curaleaf did not owe Essler a fiduciary duty with respect

to his execution of stock options on the Global Shares platform.

There was no relationship of trust and confidence between Essler

and Curaleaf, the company that acquired his former employer.

Nor was Essler dependent on Curaleaf's judgment in business or

property matters. In particular, Curaleaf did not hold any

property for Essler's benefit. Rather, as a holder of

unexercised stock options, Essler had only "a contractual right

to purchase an equitable interest in a corporation at some later

date." McLaughlin v. Cendant Corp., 76 F. Supp. 2d 539, 550

(D.N.J. 1999). See McGoldrick v. Trueposition, Inc., 623 F.

Supp. 2d 619, 626 (E.D. Penn. 2009) ("Under Delaware law, courts

have clearly stated that a fiduciary duty does not arise until

there is an existing property right and that stock options of

employees do not give rise to such an interest"). While Essler

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cites the fiduciary duty standard developed under the Employee

Retirement Income Security Act, 29 U.S.C. § 1001 et seq., that

duty pertains to the exercise of discretionary authority or

control in the management or administration of employer-

sponsored retirement plans. See Barchock v. CVS Health Corp.,

886 F.3d 43, 44 (1st Cir. 2018). No such duty was imposed as

the result of Curaleaf's decision to invite Essler and other

option holders to activate a personal account on the Global

Shares platform.

3. Negligence. Essler claimed that Curaleaf acted

negligently in how it transmitted information about him and his

options into the Global Shares platform. The judge concluded

that this claim is barred by the economic loss doctrine. We

agree.

"[T]he economic loss doctrine bars recovery unless the

plaintiffs can establish that the injuries they suffered due to

the defendants' negligence involved physical harm or property

damage, and not solely economic loss." Cumis Ins. Soc'y, Inc.

v. BJ's Wholesale Club, Inc., 455 Mass. 458, 469 (2009). See

Stop & Shop Cos. v. Fisher, 387 Mass. 889, 893-894 (1983)

(negligence claim barred for "purely economic harm" arising from

bridge closure where no physical damage to property). Here,

Essler alleged only economic loss resulting from Curaleaf's

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alleged negligence. Because there is no evidence of personal

injury or property damage related to his negligence claim,

summary judgment was properly entered on it.

4. Negligent Misrepresentation. Lastly, Essler argues

that the judge erred in granting summary judgment on his claim

for negligent misrepresentation. "An exception to the [economic

loss] doctrine permits recovery for economic losses resulting

from negligent misrepresentation." Nota Constr. v. Keyes

Assocs., 45 Mass. App. Ct. 15, 20 (1998).

"In order to recover for negligent misrepresentation[,] a
plaintiff must prove that the defendant (1) in the course
of his business, (2) supplie[d] false information for the
guidance of others (3) in their business transactions,
(4) causing and resulting in pecuniary loss to those others
(5) by their justifiable reliance upon the information, and
(6) with failure to exercise reasonable care or competence
in obtaining or communicating the information" (citation
omitted).

O'Connor v. Merrimack Mut. Fire Ins. Co., 73 Mass. App. Ct. 205,

213 (2008).

Essler identified three statements by Curaleaf or its

agents as bases for his negligent misrepresentation claim:

(1) Curaleaf's October 2020 e-mail message inviting stock option

holders to activate a personal account on the Global Shares

platform; (2) an e-mail message from Curaleaf's investor

relations associate Victoria Roseman on January 26, 2021,

acknowledging an error on Essler's Global Shares account and

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stating, "I followed up earlier asking for this to be complete

tomorrow"; and (3) another e-mail message from Roseman dated

February 11, 2021, stating that "[i]t came to my attention that

Select optionees must sign the Form of Lock-Up per the option

agreement prior to exercising shares."3 None of these statements

is actionable.

First, Curaleaf's October 2020 invitation to join the

Global Shares platform did not even mention a cashless exercise

option, much less supply false information regarding how such

transactions could be carried out. Further, as the judge

pointed out, the "record shows that Essler (and other employees)

indeed had an option to exercise their options in a cashless

transaction using Global Shares; the fact that Essler was unable

to do so for several weeks while errors in his account were

fixed does not render" any statement by Curaleaf false.

Second, Essler contends that Roseman's January 2021 e-mail

message amounted to a representation "that the supposed fix

would be 'complete tomorrow.'" Roseman did not actually say

that in her message, but rather simply reported that she had

3 We do not consider other alleged statements and omissions
by Curaleaf employees that Essler mentions in conclusory fashion
in his brief but did not identify as a basis for his claim in
his opposition to Curaleaf's summary judgment's motion. See
Donovan v. Gardner, 50 Mass. App. Ct. 595, 602 (2000)
(conclusory statements in brief do not rise to level of
appellate argument).

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asked for the error to be fixed by "tomorrow" and would "revert

then." In any event, even if the e-mail message were to be

interpreted as a commitment that the error would be fixed the

next day, we agree with the judge that it was a promise of

future performance that did not give rise to a claim for

negligent misrepresentation. See Cumis Ins. Soc'y, Inc., 455

Mass. at 474 ("promises to perform an act cannot sustain a claim

for negligence representation . . . unless the promisor had no

intention to perform the promise at the time it was made").

There is no evidence that Roseman did not ask for the error to

be fixed; to the contrary, the evidence shows that she opened up

a "ticket" with Global Shares so that Essler would be able to

exercise his options on the platform.

Lastly, Roseman's February 2021 e-mail message about the

lock-up agreement cannot support a claim for negligent

misrepresentation. The judge concluded that this statement

could be considered to have supplied "false information" because

Global Shares did not know about the lock-up agreement

requirement and Essler's failure to execute such an agreement

was not the reason for his inability to exercise shares on the

platform at that time. We are less certain; the option rollover

agreement did in fact require Essler to execute a lock-up

agreement before exercising his options, and the record does not

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show that Roseman expressly told Essler that his failure to

execute that agreement prevented him from using the Global

Shares platform. Even assuming the falsity of this statement,

we agree with the judge that Essler cannot prove that any

reliance on it caused him pecuniary loss. See Twin Fires Inv.,

LLC v. Morgan Stanley Dean Witter & Co., 445 Mass. 411, 426

(2005) (limiting recovery to reliance damages, not "benefit of

the bargain" damages, where misrepresentation resulted in

plaintiff losing "only the opportunity to make a considerable

profit on securities it did not own"). It is undisputed that,

at all relevant times, Essler had the ability to exercise his

options by completing the schedule A form, as provided in the

option rollover agreement, but never attempted to do so. In

addition, Essler did not attempt to exercise his stock options

on the Global Shares platform after the errors with his account

were resolved and he signed the lock-up agreement on March 10,

2021.4 At his deposition, Essler testified that he did not

recall trying to exercise his options on the Global Shares

4 Essler incorrectly states that Curaleaf's stock plan
administrator, Chadwick Nelson, testified at his deposition that
Essler's options were "canceled on the Global Shares platform"
as of February 2021 and "not corrected until February 2022." In
fact, Nelson testified that Essler's options were canceled for
only an eight or nine-day period when Essler was not trying to
exercise his options, and that Nelson could tell from a
screenshot that Essler sent him months earlier that Essler's
Global Services account was working at that time.

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platform at any time between March and October 2021. Essler

would have made a profit had he exercised his options during

that period, either through the schedule A form or the Global

Shares platform. Given these facts, we agree with the judge

that Essler did not suffer any pecuniary loss resulting from

justifiable reliance on any false information supplied by

Curaleaf.

Judgment affirmed.

By the Court (Henry, Smyth &
Toone, JJ.5),

Clerk

Entered: April 18, 2025.

5 The panelists are listed in order of seniority.

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