Beninati, et al. v. Borghi, et al. (and a companion case) (Lawyers Weekly No. 11-155-16)
NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.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 15-P-953 Appeals Court ELIZABETH BENINATI & another[1] vs. STEVEN BORGHI & others[2] (and a consolidated case[3]). No. 15-P-953. Suffolk. May 16, 2016. – October 24, 2016. Present: Agnes, Massing, & Kinder, JJ. Contract, Construction of contract, Modification. Consumer Protection Act, Availability of remedy. Practice, Civil, Attorney’s fees. Damages, Attorney’s fees. Civil actions commenced in the Superior Court Department on May 24, 2012, and May 14, 2013. After consolidation, the case was heard by Janet L. Sanders, J.; a motion for attorney’s fees and costs was heard by her; and entry of final judgment was ordered by her. John W. Moran (Michael T. Grant with him) for Elizabeth Beninati. Charles R. Bennett, Jr., for Steven Borghi. Max D. Stern for Harold Dixon & others. Michael S. Marino, for Joseph Masotta & others, was present but did not argue. MASSING, J. The plaintiffs, Elizabeth Beninati and Joseph Masotta, together with defendants Steven Borghi and Linda Borghi, owned and operated a chain of fitness clubs licensing the “Work Out World” (WOW) trade name (collectively, WOW New England).[4] While actively involved in the management of WOW New England, Steven, working with an outside partner, defendant Harold Dixon, and using WOW New England’s inside information and resources, formed Blast Fitness Group, LLC (Blast), and opened a chain of similar clubs in the same geographic area, some using the WOW name, others using the name “Blast Fitness.” (We refer to the defendant clubs that Dixon and Steven controlled as the Blast clubs or, together with Blast, as the Blast defendants). After a jury-waived trial on two consolidated complaints,[5] a Superior Court judge found the Borghis and Dixon liable to Elizabeth, Masotta, and the other WOW New England owners for breach of fiduciary duty on the plaintiffs’ derivative claims and awarded approximately $ 4 million in damages. The judge held as a matter of law, however, that Dixon and the Blast defendants could not be liable for unfair competition under G. L. c. 93A because their misconduct involved only aiding and abetting Steven in the breach of his fiduciary duties. The judge also upheld corporate votes of the WOW New England companies removing the Borghis from management, and awarded attorney’s fees to Elizabeth under G. L. c. 156C, § 57, but not Masotta. On Elizabeth and Masotta’s appeal from the judge’s […]