Posts tagged "1109617"

Silverwood Partners, LLC v. Wellness Partners, LLC (Lawyers Weekly No. 11-096-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us   16-P-1174                                       Appeals Court   SILVERWOOD PARTNERS, LLC  vs.  WELLNESS PARTNERS, LLC.[1]     No. 16-P-1174.   Middlesex.     May 9, 2017. – July 25, 2017.   Present:  Agnes, Massing, & Lemire, JJ.     Financial Institution.  Arbitration, Stay of judicial proceedings.  Contract, Arbitration.  Practice, Civil, Motion to dismiss.  Estoppel.  Securities, Registration of broker-dealer.       Civil action commenced in the Superior Court Department on November 4, 2015.   A motion to dismiss was heard by Elizabeth M. Fahey, J.     Michael Paris for the plaintiff. Christopher Robertson for the defendant.     MASSING, J.  In this appeal we consider whether the doctrine of equitable estoppel bars the plaintiff corporation, which agreed to arbitrate its claims against the two principals of the defendant corporation, from litigating nearly identical claims against the defendant corporation itself.  In the circumstances of this case, we hold that it does. Background.  The plaintiff, Silverwood Partners, LLC (Silverwood), initiated this lawsuit alleging that its former employees, Nicolas McCoy and Michael Burgmaier, breached their contractual and fiduciary duties by secretly creating a competing firm — the defendant Wellness Partners, LLC, doing business as Whipstitch Capital (Whipstitch) — stealing Silverwood’s clients, converting Silverwood’s property, and diverting Silverwood’s business opportunities to Whipstitch. Silverwood, a broker-dealer registered with the Securities and Exchange Commission (SEC), is a member of the Financial Industry Regulatory Authority, Inc. (FINRA).  McCoy and Burgmaier are registered with FINRA and, as senior executives with Silverwood, had the status of FINRA “associated persons.”  Whipstitch is not a member of FINRA.  Silverwood’s original complaint named McCoy, Burgmaier, and Whipstitch as defendants.[2]  The three codefendants filed a motion to dismiss, or in the alternative to stay the proceedings, on the ground that Silverwood’s claims fell within the scope of FINRA’s mandatory arbitration provision, which governed McCoy’s and Burgmaier’s relationship with Silverwood.  In response, Silverwood filed a first amended complaint in which it dropped McCoy and Burgmaier as parties, leaving Whipstitch as the sole defendant.[3]  Whipstitch filed a renewed motion to dismiss or stay, maintaining that Silverwood was equitably estopped from proceeding against Whipstitch outside of arbitration.  A Superior Court judge allowed Whipstitch’s motion to dismiss on the ground that “the entire matter is required to be arbitrated.”[4] According to the allegations in Silverwood’s amended complaint, McCoy’s and Burgmaier’s employment relationship with Silverwood was governed by Silverwood’s “Supervisory Procedures and Compliance Manual,” […]

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Posted by Massachusetts Legal Resources - July 25, 2017 at 4:28 pm

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