FOLLANSBEE AND MCLEOD, LLP

ATTORNEYS AT LAW

536 G RA NITE S TREET , 3 R D F LO OR E A ST B RA INTR EE , M A SSAC H U SETTS 02184

TELEPHONE (781) 848-1500 FACSIMILE (781) 848-2220

March 13, 2012 Leonard Kesten, Esq. Brody, Hardoon, Perkins & Kesten, PC 1 Exeter Plaza, 12th Floor Boston, MA 02116 Re: Johnson Golf Management v. Town of Duxbury et al Middlesex Superior Court, Docket No. 08-04641-B FOR SETTLEMENT PURPOSES ONLY Dear Lenny: As you requested, we are prepared to submit the following as a demand for settlement of the above referenced action. As we responded to Attorney Troy over the weekend, in the event that this case goes to trial we expect that the following facts will be relatively easy to establish: 1. In 2004 Certain individuals including Michael Doolin and Michael Marlborough became dissatisfied with decisions Johnson Golf had made at the North Hill Country Club in Duxbury, Massachusetts. The crux of their disappointment was that they would no longer be automatically allowed to schedule 18 hole tee times at North Hill. North Hill is a 9 hole golf course, and prior to the policy change in 2004, individuals such as Doolin and Marlborough were scheduling 18 hole tee times each weekend morning. The effect of their actions was to prevent other golfers from scheduling tee times during the prime time weekend hours. [Deposition of Michael Marlborough 7/18/2011 pages 17-18]

2.

Doolin and Marlborough took their complaints to the Board of Selectmen and Town Manager in Duxbury. The Towns attorney advised all concerned that the policies implemented by Johnson Golf were entirely appropriate under the contract in effect between Duxbury and Johnson Golf. [Statement of Additional Undisputed Facts Defendants Motion For Summary Judgment filed April 1, 2010]

3.

Subsequently both Michael Doolin and Michael Marlborough, who had complained to the Selectmen, were appointed to the North Hill Advisory Committee. An additional appointee was Anthony Floreano. All three of these individuals work for the same company in Braintree, Massachusetts [Depositions of Marlborough and Doolin and Floreano]

4.

In 2008 the North Hill Advisory Committee ceased issuing minutes of their meetings. It was during this period of time that members of the Committee, together with other Town officials, were drafting a new RFP for the North Hill Golf Course. [Affidavit of Douglas W. Johnson submitted with Statement of Additional Undisputed Facts Defendants Motion for Summary Judgment filed April 1, 2010]

5.

The RFP eventually drafted by the Town of Duxbury referred to comparable business enterprises but town officials could not even tell the bidders what the term meant. [Deposition of Gordon Cushing dated May 11, 2011 p.53-54]

6.

The new RFP in October 2008 included 18 hole tee times and fivesomes - in each instance these are issues that deprive the town of revenue and benefit nobody other than the chosen few such as the committee members. [Statement of Additional Undisputed Facts Defendants Motion for Summary Judgment filed April 1, 2010]

7.

In anticipation of the expiration of the contract, Duxbury issued a Request for Proposals (RFP) in accordance with G.L. c. 30B, 6 to obtain proposals for a new contract for the management of North Hill from January 1, 2009 through December 31, 2013. [Admitted in Answer to Amended Complaint]

8.

The RFP invited applicants to submit sealed proposals that included both a price and non-price proposal. [RFP #1 Dated October, 2008] The RFP required that all proposers comply with the terms and conditions of the RFP, including but not limited to, the Criteria Evaluations Standards that were set forth therein. [RFP #1 Dated October, 2008]

9.

10.

All applicants were required to submit their bids by October 24, 2008. Duxbury received five (5) bids in response to its RFP, including a bid from Johnson Golf. S. [Admitted in Answer to Complaint] Douglas Johnson contacted Gordon Cushing, advising him that the real company that ran Rockland Golf Course was in bankruptcy. Cushing said that he had forwarded information to Richard MacDonald advising MacDonald that the actual company that ran Rockland was in bankruptcy. [Statement of Additional Undisputed Facts Defendants Motion For Summary Judgment filed April 1, 2010]

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12.

When the proposals were received by the town of Duxbury Mr. Richard MacDonald appointed three individuals to review the proposals and evaluate them pursuant to the provisions Massachusetts Gen. Laws Chapter 30B.The individuals were Gordon Cushing, Anthony Floreano and Mr. William Dixon. The three individuals were required to rate the proposals in various categories and provide an overall rating of each proposal Mr. Gordon Cushing rated Johnson Golf Management highly advantageous in every category Mr. Anthony Floreano rated Johnson Golf Management highly advantageous in every category Mr. Dixon rated Johnson Golf Management highly advantageous in three out of four categories. Johnson Golf Management thus was rated highly advantageous in 11 out of 12 categories. [RFP #1 October 2008 Deposition Transcripts of Gordon Cushing; Deposition of William Dixon; Deposition of Anthony Floreano]

13.

The evaluation process included review by three (3) independent evaluators. One evaluator, Gordon Cushing, completely complied with the requirements of G.L. c.30B and a second evaluator partially complied with the requirements of G.L. c.30B. As to the third evaluator, based upon his evaluations it could easily be established that his overall evaluation of the proposals would rate Johnson Golf as Highly Advantageous. [Deposition Transcript of Anthony Floreano]

14.

CALM Golf having a total experience of managing one municipal golf course for a period of four months in 2003 could not be fairly graded at anything higher than "not advantageous" in the category of relevant experience. [Deposition of Anthony Floreano - Decision of Judge Herman Smith, Denying Summary Judgment dated November 24, 2010]

15.

According to the RFP issued by Duxbury, no proposer could achieve a rating of "highly advantageous" in the area of Financial Information unless the proposer has provided three years of financial statements which were independently audited by a Certified Public accountant. [Deposition of Anthony Floreano - Decision of Judge Herman Smith, Denying Summary Judgment dated November 24, 2010]

16.

Despite CALM Golfs assertion that it had many previous and present contracts, the unaudited financial statements submitted by CALM Golf in its proposal show that CALM Golf had total assets of $4,411.92 in 2005 and total assets of $1,336.92 in 2006.Furthermore, CALM Golf reported no income whatsoever for the years 2005, 2006 and 2007. [Decision of Judge Herman Smith, denying Summary Judgment dated November 24,

2010]

17.

All evaluators and Duxbury Officials knew that CALM had only four months experience. [Proposals submitted by CALM Golf attached to Affidavit submitted with Plaintiffs application for Preliminary Injunction dated January 27, 2009]

18.

CALM provided no superintendent in proposal #1 in October, 2008 thus the best rating it could achieve was Not- advantageous or Unqualified. That rating coupled with CALMs financial bid of $280,000.00 rendered their proposal completely unacceptable. [RFP #1 and Proposals submitted by CALM Golf attached to Affidavit submitted with Plaintiffs application for Preliminary Injunction dated January 27, 2009]

19.

CALM Golf having a total experience of managing one municipal golf course for a period of four months in 2003 could not be fairly graded at anything higher than "not advantageous" in this category. [RFP #1 and Proposals submitted by CALM Golf attached to Affidavit submitted with Plaintiffs application for Preliminary Injunction dated January 27, 2009]

20.

According to the RFP issued by Duxbury, no proposer could achieve a rating of "highly advantageous" in the area of Financial Information unless the proposer has provided three years of financial statements which were independently audited by a Certified Public accountant. [RFP #1 and RFP #2 attached to Affidavit submitted with Plaintiffs application for Preliminary Injunction dated January 27, 2009]

21.

Despite CALM Golfs assertion that it had many previous and present contracts, the unaudited financial statements submitted by CALM Golf in its proposal show that CALM Golf had total assets of $4,411.92 in 2005 and total assets of $1,336.92 in 2006. Furthermore, CALM Golf reported no income whatsoever for the years 2005, 2006 and 2007. [RFP #1 and Proposals submitted by CALM Golf attached to Affidavit submitted with Plaintiffs application for Preliminary Injunction dated January 27, 2009]

22.

Johnson Golf outbid CALM Golf $420,000.00 to $280,000.00 in the first RFP in October, 2008.

[Price Proposals of CALM Golf and Johnson Golf October 2008 Statement of Additional Undisputed Facts Defendants Motion For Summary Judgment filed April 1, 2010] 23. Duxbury exercised its right to reject all bids pursuant to G.L. c. 30B, 9. However no written reasons for Duxburys decision were provided. [Decision of Judge Herman Smith denying Summary Judgment November 24, 2010]

24.

MacDonald rejected the proposals on December 6, 2008 without specifying his reasons for doing so. Assuming MacDonalds reason was that two evaluators had not completed overall ratings of the proposals that could have been remedied in five minutes by having the evaluators add up their scores and provide an overall rating. [Decision of Judge Herman Smith denying Summary Judgment November 24, 2010]

25.

After rejecting all the bids Mr. McDonald and other town officials removed the public records of the town of Duxbury and had the records transported to the office of town counsel, Attorney Robert Troy, whose offices were in Sandwich Massachusetts. Despite the fact that the price and non-price proposals of the respective proposers from the October 2008 RFP process were public records pursuant to General Laws c. 30B, 6 the documents were maintained in secrecy in Attorney Troy's office and when attempts were made by Johnson Golf in December 2008 to review the documents, the records were not made available for public inspection [Letter of December 8, 2008 from Stephen R. Follansbee to Attorney Troy. Statement by Attorney Troy to Judge Herman Smith Transcript of hearing dated December 29, 2008, page 20]

26.

In response to the reissued RFP, Duxbury received five (5) bids, including a bid from Johnson Golf. The Non-Price Proposals were delivered to three new (3) evaluators. When the new RFP was issued, there was one substantive change made in the document. In RFP #1 proposers were told to submit a financial proposal as a flat payment. Out of the original proposers only CALM Golf failed to comply with the flat payment requirement. In the second RFP the expression Flat Payment was removed. In a document totaling 44 pages, this was the only change other than submission dates and it was done to assist CALM Golf to qualify. [Deposition of Gordon Cushing p 81-82] In the second bid CALM claimed that it had many prior and present contracts in an attempt to earn a higher qualitative rating. The claim was not true as can be seen from Mr. Lanzettas deposition testimony. [Deposition of Charles Lanzetta Day 2 p.51 & Exhibit 11 thereto submitted with Statement of Undisputed Facts Motion For Summary Judgment filed April 1, 2010]

27.

28.

In its proposal CALM Golf stated that it had entered into and been awarded many previous and present contracts including a contract at the Rockland Golf Course in Rockland, Massachusetts. Despite CALM Golfs assertion that it had many previous and present contracts, the financial statements submitted by CALM Golf in its proposal show that CALM Golf has not had any income in the years 2005, 2006 and 2007. These were the only years for which CALM Golf provided financial data. Despite CALM Golfs assertion that it had many previous and present contracts, the financial statements submitted by CALM Golf in its proposal show that CALM Golf had total assets of $4,411.92 in 2005 and $1,336.92 in 2006. [CALM Golf Proposal] In its second proposal CALM increased its financial bid by 83% during the worst economic period since the great depression. When asked why he increased his bid Lanzetta repeatedly testified under oath that his attorney, John Geary told him to do it and gave him the number to bid. Attorney Geary was a former member of the North Hill Advisory Committee [Deposition of Charles Lanzetta Day 1, p.106-108] According to Gordon Cushing, he was not instructed to maintain secrecy concerning the price proposals from the first RFP in 2008 and he does not remember if he disclosed the prices to anyone. He was one of three individuals who knew the prices from the first RFP. The others were Richard MacDonald and Attorney Robert Troy. [Deposition of Gordon Cushing, Page 91; Transcript of hearing before Judge Smith, December 29, 2008, p. 11-12] Evaluator Steven Studley gave CALM highly advantageous in every category. An honest evaluation of CALMs proposal would result in the following ratings: Relevant Experience - Not advantageous; Organizational Capability - Not advantageous; Maintenance Equipment/Staff - Not advantageous/Unacceptable; Financial Information Unacceptable. [Deposition of Steven Studley, dated July 2011]

29.

30.

31.

32.

Richard MacDonalds decision to make an award to CALM Golf relied upon the following facts in justifying an award of the contract to CALM - ( a ) CALM operating Rockland Golf Course ( b ) CALM in business since 1978 ( c ) CALM has all equipment (d ) CALM Golf is currently managing a golf course (e ) CALMs experience at Rockland confirms its ability to run North Hill (f ) CALM has sufficient financial information to be considered the most advantageous proposer for the Town ( g ) Financial data provided must give the Town confidence that the Proposer could administer a significant business such as North Hill. [Award Letter of Richard MacDonald Exhibit U to Statement of Undisputed Facts submitted with Defendants Motion For Summary Judgment, filed April 1, 2010] The President of CALM admitted under oath that each and every fact relied upon by Mr. Richard MacDonald was untrue. For example (a) CALM never operated Rockland (b) CALM was established in May 2003 ( c) CALM owned no equipment (d) CALM

33.

not managing any course golf course and in its entire corporate history CALM managed only one course for four months in 2003 (e) CALM never ran Rockland (f) CALM had total assets of $169.00 and no income at all. CALM provided no evidence to the Town that it ever had any income or assets (g) CALM had total assets of $169.00 and no income at all. [Deposition of Charles Lanzetta Day 2 & Exhibit 11 thereto submitted with Statement of Undisputed Facts Motion For Summary Judgment filed April 1, 2010]

34.

Attorney Troy made material misrepresentations to the Court in the hopes of preventing a judicial award of the contract to Johnson Golf. In his argument to Judge Smith on January 27, 2009 Attorney Troy stated: we hired an outside consultant and the consultant recommended the expression comparable business enterprise. [Transcript of hearing before Judge Herman Smith dated January 27, 2009, p. 22]

35.

According to the subsequent deposition testimony of Gordon Cushing there was no consultant and the words comparable business enterprise were authored by Attorney Troy himself. [Deposition of Gordon Cushing, May 11, 2011, p.52-53] Attorney Troy again stated in writing that Duxbury had utilized a consultant to draft the RFP. [Paragraph 22 of the Additional Undisputed Facts Defendants Motion For Summary Judgment filed April 1, 2010] Attorney Troy repeated his assertion that there was a consultant again before the Duxbury selectmen on October 4, 2010 when he stated: We actually went outside Town Hall. It was decided that this matter was so specialized that we hired a procurement company. I know theyre in PlymouthThe honest answer is that Town Hall had nothing to do with the entire procurement document. It was sent out to a vendor who had expertise as we understood it, in the field of golf course procurements. That company designed the RFP completely. There was no input here at Town Hall." [Transcript of Hearing before Duxbury Selectmen dated October 4, 2010 P. 64-65]

36.

37.

38.

The Town of Duxbury never hired a consultant to draft the RFP [Deposition of Gordon Cushing p.55, 83-84] Attorney Troy removed public records from the Duxbury Town Hall and refused to allow examination of the records by the plaintiff or its counsel, despite the fact that such records are public records pursuant to G.L.c.30B, 6 upon the completion of the evaluations. [Affidavit of Douglas W. Johnson dated December 26, 2008, submitted with Plaintiffs Motion for Preliminary Injunction; G.L.c.30B Sec. 6C]

39.

40.

Additionally, having reviewed the proposals and evaluations in November and December of 2008 Attorney Troy asserted to Judge Smith that the plaintiffs complaint was speculation regarding the allegation that Johnson Golf would have received evaluations of Highly Advantageous. Attorney Troy did this with full knowledge that Johnson Golf was rated highly advantageous in 11/12 possible categories and that Johnson had outbid CALM Golf by more than $140,000.00 [Transcript of Hearing before Judge Smith, Middlesex Superior Court December 29, 2008, Page 23] Mr. Cushing stated in his deposition that he made one change in the RFP document between the RFP process in October 2008 in the RFP in December of 2008. The change was to eliminate one word in a document with 44 pages of text. The word Cushing eliminated was flat on page 2 of the RFP. The word flat described the word payment and instructed the Proposers to submit their price proposals as a flat payment. The only company failing to comply with this mandate was CALM Golf. Cushing was unable to offer any rational explanation as to why he eliminated the word flat describing the payment. [Deposition of Gordon Cushing pgs. 81-84] In late 2010 the Duxbury officials decided to rescind their award to CALM Golf and embark on a new bidding process for the North Hill golf course. The new bid process included the following components 1. Bidders did not need any experience in managing a golf course. 2. Bidders would waive all rights to judicial review of any decisions by the Duxbury officials. 3. All Court proceedings would be in Plymouth County. 4. The Duxbury town manager could terminate the contract at any time for any reason by a 10 day notice to the operator. 5. All decisions by the town officials were to be final and nonreviewable by any entity. [IFBs with respect to 2011 contract to operate North Hill Country Club] At the bid opening in February of 2011 no bids were submitted. At the bid opening Selectman Shawn Dahlen addressed Mr. Emmett Sheehan by name and said Emmett, what happened? Did you get cold feet? Emmett Sheehan replied I could not get a bond. [Affidavit of Jason Laramee] The result of the exchange between Sheehan and Dahlen was that the bid documents were revised to make the bond optional. Not surprisingly Emmett Sheehan formed a new company with no assets no experience and he became the sole bidder for the North Hill Country Club. [Affidavit of Jason Laramee] Emmett Sheehan had been a member of the North Hill Advisory Committee and was involved in the process of formulating the details of the RFP process in 2006 to 2007. Additionally he bid under another corporate name (Eagles Nest Landscaping) in October

41.

42.

43.

44.

45.

2008 and January of 2009 and both of his proposals were characterized by MacDonald as unacceptable. [Award Letter of Richard MacDonald dated January, 2009 Exhibit U Undisputed Facts April 1, 2010 Defendants Motion for Summary Judgment] 46. Duxbury through its Chief Procurement Officer, Richard MacDonald, opined in January 2009 that it was important that the operator of the North Hill Country Club have actual experience currently operating golf courses. The RFPs in October 2008 and January 2009 resulted in Duxbury receiving five proposals each time ranging in price from $280,000.00 to $625,000.00. In 2011 Duxbury abandoned the RFP process and eliminated qualifications and evaluative criteria, issuing two IFBs which resulted in no bids the first time and one bid from a company which was formed one week earlier. Duxbury ostensibly chose to eliminate qualifications in the expectation of increasing competition. [Decision of MacDonald - January 2009 and North Hill IFB Addendum #1 Feb. 15, 2011 - experience in managing golf courses is unreasonably restrictive.]

As you know, we have made multiple overtures to resolve this litigation without any response forthcoming from the Town of Duxbury.1 We have never had the courtesy of a reply. In the event that you are unaware of our previous attempts to resolve this matter short of a trial, I am enclosing herewith my previous settlement correspondence to Attorney Troy and the submission by Mr. Douglas Johnson to the Duxbury Selectmen. The underlying facts of this case and the admission by the Town of Duxbury that it is engaged in the business of operating the North Hill Country Club as a profit making venture combine to suggest that a violation of G.L. c.93A will be established and that at a minimum some punitive damages will be imposed.

The analysis of Johnson Golfs damages is as follows: Lost Profits Claim 5 years @ North Hill as per contract advertised in 2008 Use of Residence at North Hill as per 1999 contract (Residence demolished by Duxbury 2007) 60 months @ $3,000.00 per month Sub Total

$742,155.00

$180,000.00 $922,155.00

We recognize that your involvement in this matter has been of relatively short duration, and we have found you and your office to have been professional and courteous at all times.

Statutory Interest from December 16, 2008 @12% per annum $9,221.00 per month (40 months) Additional Damages as per G.L.c. 93A Total Attorneys Fees - G.L.c. 93A (In consideration of a 5 year contract to be awarded to Johnson Golf Management as per its 2008 Proposal - Duxbury to waive rent for duration of contract.)

$368,862.00 $922,155.00 $2,213,172.00 Waived

Thank you for your attention. Very truly yours,

Stephen R. Follansbee SRF/nb cc: Johnson Golf Management