Mooney, et al. v. Diversified Business Communications, et al. (Lawyers Weekly No. 12-102-17)

COMMONWEALTH OF MASSACHUSETTS   SUFFOLK, ss.                                                                                   SUPERIOR COURT                                                                                                              SUCV2016-3726-BLS2                 JOHN J. MOONEY and MORGAN D. WHEELOCK, Plaintiffs   vs.   DIVERSIFIED BUSINESS COMMUNICATIONS, DBC PRI-MED, LLC, THEODORE WIRTH, KATHY WILLING, and OAKLEY DYER Defendants   MEMORANDUM OF DECISION AND ORDER ON PLAINTIFFS’ MOTION TO COMPEL   This case involves a dispute among members of a limited liability company. Plaintiffs, who own a minority interest in the company, are suing (among others) the entity holding a majority interest.  Also named as a defendant is the company itself.  The case is now before the Court on plaintiffs’ Motion to compel certain discovery.  Part of the motion raises routine issues regarding the relevance of materials sought; this Court’s resolution of those issues is contained in Part One of this opinion.  The motion also raises difficult questions concerning attorney client privilege—specifically, whether a former officer of a company can obtain communications between corporate counsel and the corporation exchanged when he still worked for the company but where he is now adverse to the corporation itself.  This Court concludes that neither plaintiff can claim to be a holder of the privilege so as to gain access to these communications.  The reasons for that conclusion are spelled out in Part Two of this opinion. BACKGROUND   Defendant Pri-Med LLC is a Delaware limited liability company that provides in-person and digital continuing medical education to medical practitioners, in part through the use of electronic health records software and data analytics tools.    The defendant Diversified Business Communications (Diversified) owns approximately 75 percent of Pri-Med.  The individual defendants are Diversified officers and serve on Pri-Med’s Board of Managers.   Plaintiff John Wheelock and John Mooney each hold a five percent interest in Pri-Med.    Up until the end of 2016, both plaintiffs were part of Pri-Med’s senior management: Wheelock was a senior Vice President in charge of Sales and plaintiff John Mooney was Pri-Med’s CEO. At issue in this lawsuit is the plaintiffs’ right to require Diversified to buy out their interest in Pri-Med after January 1, 2017.   That right is laid out in an LLC agreement among the parties.  The amount that Diversified is required to pay is based on the appraised value of Pri-Med as of December 31, 2016.   Plaintiffs contend that, leading up to that date, the defendants took steps to depress Pri-Med’s value so as to decrease the amount that Diversified would have to pay to the minority shareholders in a buy-out of their interests.    One of those steps was a decision by Diversified to sell off one of Pri-Med’s most valuable assets, Amazing Charts (AC), an electronic health records company.    As alleged by plaintiffs, Diversified and its Board had concluded  in […]

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