CRR LLP [Note 1] v. BRIDGES CAPITAL MANAGEMENT COMPANY [Note 2] and others [Note 3]

SPRING, J. CRR LLP ("plaintiff") appeals the motion judge's allowance of Bridges Capital Management Company's ("defendant") motion to dismiss the plaintiff's complaint. For the following reasons, the decision of the motion judge is affirmed.

1. Facts. The facts of the underlying lawsuit are not in dispute. The defendant had an ownership interest in Springboard Education Holdings LLC ("Springboard"). Springboard hired the plaintiff to perform an audit. Several months into the audit, the plaintiff became concerned that Springboard would not be able to pay the plaintiff's fees for the public accounting services it was rendering to Springboard. In response to this concern, and over the course of the audit, the defendant provided three comfort letters to the plaintiff stating that the defendant may fund, if needed, "critical operating expenses and working capital needs of Springboard Education Holdings, LLC. . . that may incur through. . ." diverse dates over the three letters.

Springboard did not pay the plaintiff's accounting bills, and the plaintiff thereafter sued Springboard and the defendant alleging claims of breach of contract, third party beneficiary, promissory estoppel, detrimental reliance, and breach of guarantee. The defendant filed a motion to dismiss under Mass. R. Civ. P. 12(b)(6), which was granted. The plaintiff now appeals.

2. Discussion. In evaluating the defendant's motion to dismiss, we accept the factual allegations in the complaint as true, but not legal conclusions that are presented in the form of factual allegations. Sandman v. Quincy Mut. Fire Ins. Co., 81 Mass. App. Ct. 188, 189 (2012). "We review the grant of a motion to dismiss de novo, accepting as true all well-pleaded facts alleged in the complaint, drawing all reasonable inferences therefrom in the plaintiff's favor, and determining whether the allegations plausibly suggest that the plaintiff is entitled to relief." Lanier v. President & Fellows of Harvard College, 490 Mass. 37, 43 (2022). In undertaking this review, we also consider the comfort letters, which the plaintiff did not attach to the complaint, but which were first submitted as an attachment to the defendant's motion to dismiss. See Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43, 45 n.4 (2004) (because "the plaintiff had notice of these documents and relied on them in framing the

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complaint, the attachment of such documents to a motion to dismiss does not convert the motion to one for summary judgment, as required by Mass. R. Civ. P. 12(b)(6), 365 Mass. 754 (1974)."). [Note 4]

A. The late filing. The defendant first argues that the plaintiff's appeal should be dismissed because the plaintiff filed its brief one day late, on November 12, 2021. "For appeals under Rule 8C, the appellant shall serve and file his or her brief within thirty days after notice from the Appellate Division of receipt of the appeal from the trial court." Dist./Mun. Cts. R. A. D. A. 19(a). Pursuant to that rule, the appellant's brief was due within thirty days of the sending of the notice from the Appellate Division. In this case, that date was November 11, 2021. While the plaintiff did file one day late, the filing deadline of November 11, 2021, was a national holiday and the courts were closed. "In computing any period of time prescribed by these rules . . ., [t]he last day of the period shall be included, unless it is a Saturday, Sunday or a legal holiday, in which event the period shall extend until the end of the next day which is not . . . a legal holiday. . . . As used in this rule 'legal holiday' means those days specified in G.L. c. 4, § 7 and any other day appointed as a holiday by the President or the Congress of the United States or so designated by the laws of the Commonwealth." Rule 14(a). November 11th is a date enumerated in G.L. c. 4, § 7.

B. The contract and third-party beneficiary. The plaintiff conceded at oral argument that the plaintiff and the defendant never entered into a contract. The contract existed between the plaintiff and Springboard for the plaintiff's accounting services. In its suit against the defendant, the plaintiff relies on three comfort letters as the mechanism to establish a contractual relationship between the plaintiff and the defendant. While comfort letters may form the basis of an agreement between parties that could constitute a contract, the particular comfort letters in this case do not form the contractual relationship upon which the plaintiff relies. All three comfort letters at issue were written in a conditional manner indicating that the defendant "may" provide "if needed" "critical operating expenses and working capital" to Springboard. There is nothing in the comfort letters specifically stating that the defendant will pay the plaintiff's bills if Springboard fails to do so. The plaintiff asks this Appellate Division to find that the bills for the audit were "critical operating expenses," but there is no evidence of that. To establish a third-party beneficiary claim, the plaintiff must prove that it was the intended beneficiary of the contract between the two contracting parties. Spinner v. Nutt, 417 Mass. 549, 555 (1994). The plaintiff can make no such showing here. The original contract was between the plaintiff and Springboard. The defendant was not the intended beneficiary of that contract. The comfort letters do not establish offer, acceptance, or consideration between the plaintiff and the

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defendant. The comfort letters make a conditional offer by the defendant to Springboard (not to the plaintiff) to provide "if needed" "critical operating expenses." "A promise creates no duty to a beneficiary unless a contract is formed between the promisor and the promise . . . ." Licata v. GGNSC Malden Dexter LLC, 466 Mass. 793, 803 (2014), quoting Restatement (Second) of Contracts § 309(1) (1981).

C. The comfort letters & reliance. The plaintiff next argues that the comfort letters were a guarantee of payment from the defendant to the plaintiff. This argument fails for the same reason that the comfort letters do not constitute a contract between the plaintiff and the defendant. Springboard is the entity that owes the plaintiff the fees, not the defendant. The language of the comfort letters does not contain language giving rise to a guarantee. The comfort letters state that the defendant may provide funding to Springboard. They say nothing about the plaintiff.

In order to prevail on a claim of reliance for the purposes of promissory estoppel, the plaintiff must provide facts to prove that: (1) there was a promise in the comfort letters; (2) that the plaintiff reasonably relied on that promise; and (3) that the plaintiff suffered a detriment as a result of that reliance. "All of the elements of estoppel must be present and the party asserting the estoppel theory 'has a heavy burden to prove that all [three] elements are present.'" Clickner v. City of Lowell, 422 Mass. 539, 544 (1996), quoting Harrington v. Fall River Hous. Auth., 27 Mass. App. Ct. 301, 309 (1989). Once again, the comfort letters do not constitute a promise between the plaintiff and the defendant. If any promise can be gleaned from the language of the comfort letters, it is a promise from the defendant to Springboard, but that promise was conditional and for an amorphous and undefined purpose in the form of "critical operating expenses and working capital needs." The plaintiff may have relied on this language to its detriment, but the language does not create a promise between the defendant and the plaintiff. Therefore, the plaintiff has failed to meet its burden regarding promissory estoppel and reliance.

For the reasons stated above, the judgment of dismissal is affirmed.