Posts tagged "Associates"

Spinazola v. Mass. Environmental Associates, Inc., et al. (Lawyers Weekly No. 12-078-17)

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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
CIVIL ACTION
NO. 0684CV00949BLS1
ROSEMARY SPINAZOLA, as Executrix of the Estate of Clarence Spinazola and as Co-Trustee of the Clarence Spinazola 1994 Revocable Trust
vs.
MASS. ENVIRONMENTAL ASSOCIATES, INC. and PATRICK J. HANNON
MEMORANDUM OF DECISION AND ORDER ON MOTION TO SUBSTITUTE ASSIGNEE, KING ROOT CAPITAL, LLC, AS PLAINTIFF AND REQUEST FOR EXECUTION
This case was filed on March 6, 2006. On March 8, 2007, a Final Judgment by Default Upon Assessment of Damages by the Court entered in favor of the plaintiff, Rosemary Spinazola, as Executrix of the Estate of Clarence Spinazola and as Co-Trustee of the Clarence Spinazola 1994 Revocable Trust (the Judgment)1, in the amount of $ 982,316, with interest from the date of filing. On August 20, 2007, the defendants filed a “Motion to Vacate Judgment by Default for Failure to Produce Discovery and for Failure to Comply with Court Orders.” On September 18, 2007, that motion was denied. Then, nearly ten years later, the motion now before the court was filed. It is styled: “Motion to Substitute Assignee, King Root Capital, LLC, as Plaintiff and Request for Execution” (the Motion). In that motion, King Root Capital, LLC (King Root) alleges that: (1) Spinazola assigned her interest in the Judgment to ABCD Holdings, LLC (ABCD Holdings or, simply, ABCD); (2) ABCD, thereafter, assigned its interest to King Root; (3) after accounting for payments by the defendants and the further accrual of post-
1 It is not clear to the court whether the judgment is in favor of Rosemary Spinazola, individually, or the Estate or a Trust. The court will simply use the term “plaintiff.”
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judgment interest, as of October 18, 2016 the Judgment balance is $ 2,055,540.59, with interest accruing from that date; and (4) the court should “substitute it as the plaintiff in this case and issue an execution in its name [in that amount].”
The defendants appeared by counsel and opposed the motion. The principal grounds for their opposition was that the sole member of ABCD is attorney George A. McLaughlin, III, whose brother is the sole member of King Root. McLaughlin represented defendant Hannon for a number of years, and, in particular, in connection with the negotiation and execution of a Settlement Agreement between the plaintiff and Hannon pursuant to which the Judgment would be satisfied in full by payment to plaintiff of $ 400,000 according to a payment schedule (the Agreement).2 The defendants also alleged that McLaughlin diverted funds available to pay the balance of the $ 400,000 due under the Settlement Agreement to other entities.3 Based on these allegations, the defendants assert that the assignments “are void against public policy, fatally infected by McLaughlin’s misuse of confidential client information and self-dealing.”4
At an initial hearing on the Motion, the court ruled that an evidentiary hearing was necessary to consider the defendants’ public policy arguments and scheduled an evidentiary hearing for May 1, 2017. A hearing was convened on that day. Three witnesses testified: the plaintiff’s lawyer, McLaughlin, and his brother; 23 exhibits were entered in evidence.
2 It appears undisputed that Hannon did not fulfill his obligations under the Agreement.
3 The defendants also generally assert questions concerning the validity of the terms of the assignment.
4 McLaughlin’s numerous disputes with Hannon over the last five years are recounted in at least three written decisions: Hannon v ABCD Holdings, LLC, First Circuit Court of Appeals, No. 15-2269 (Oct. 7, 2016) (the “Bankruptcy Case,” in which the First Circuit affirmed the dismissal of Hannon’s bankruptcy petition and denial of discharge based on his making false statements in financial reports filed in the bankruptcy court); ABCD Holdings, LLC v. ABC&D Recycling, Inc., Hampshire Sup. Ct. No. 12-0171 (Jan. 9, 2013) (“the Loan and Warrants Case,” in which the Superior Court (Carey, J.) found that loans to Hannon controlled entities from McLaughlin controlled entities were enforceable because Hannon was represented by competent, independent counsel when the loans were made and warrants which were issued in connection with the loans properly exercised); and ABCD Holdings, LLC v. Patrick J. Hannon, Suffolk Sup.Ct. No. 16-1840 (June 24, 2016) (the “Collection Case,” in which the Superior Court (Salinger, J.) found that ABCD was likely to succeed in obtaining a judgment on Hannon’s guarantees of loans to entities he controlled, but denying preliminary injunctive relief freezing Hannon’s assets because the relief requested could only be granted to a judgment creditor).
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FINDINGS OF FACT
Based on the testimony of the witnesses, the exhibits, decisions entered in other cases, and reasonable inferences drawn therefrom, the court makes the following findings of fact, by a preponderance of the evidence.
McLaughlin has been a member of the bar of the Massachusetts Supreme Judicial Court since 1985. He is a principal in the firm, McLaughlin Brothers P.C. He represented Hannon and various businesses that Hannon controlled on a variety of matters from 2006 until 2012, but did not represent the defendants in this case (Hannon and Mass. Environmental Associates, Inc. (MEA)) prior to the time judgment entered against them. However, he did represent them in the negotiation of the Settlement Agreement with the plaintiff’s counsel, Peter Sutton, a partner in the Boston firm, Reimer & Braunstein. The Agreement was executed on November 16, 2007. As relevant to this case, it provided that if Hannon made periodic payments (in the aggregate $ 400,000) according to a schedule set out in the Agreement (the last of which was due on November 1, 2008), he and MEA would be released from any claims under the Judgment. If he breached the Agreement, the plaintiff would be entitled to enforce the Judgment, and the defendants would be credited with any payments made pursuant the Agreement.
McLaughlin also represented Hannon in connection with another substantial judgment that had been entered against him. He was similarly able to negotiate with that judgment creditor an arrangement in which the total amount of the judgment would be reduced if periodic payments were made on an agreed schedule. Apparently, for reasons not explained at the hearing, Hannon was due payments from an entity called: Casella Waste Systems (Casella). This judgment creditor required that these Casella payments be made to McLaughlin, who would then
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be responsible for paying the creditor. McLaughlin described the arrangement, pursuant to which he received all payments due Hannon from Casella and then made distributions to creditors, Hannon and McLaughlin’s own law firm for legal fees, as an escrow agreement. There is, however, no evidence that a written escrow agreement was ever prepared. A schedule showing receipts from Casella and payments made to various payees, over the period January 21, 2010 to March 20, 2012, was offered in evidence. It reflects approximately $ 572,000 in receipts from Casella and 570,500 of payments made to various payees (of which $ 146,502 went to Hannon) over that period. Hannon did not challenge the accuracy of the schedule at the hearing. The court credits McLaughlin’s testimony that he only made payments out of the Casella account after clearing them with Hannon, at least to the point that McLaughlin received notice of Hannon’s bankruptcy petition.
Hannon defaulted on his payments under the Agreement. At some point, McLaughlin negotiated a reinstatement of the Agreement in return for a $ 25,000 payment, not to be counted toward the $ 400,000 settlement amount. In an email from Sutton to McLaughlin dated June 14, 2011, Sutton confirmed that Agreement was “reinstated,” but if Hannon failed to make monthly payments of $ 5,000 “the full amount of the judgment will become due.” According to the email, $ 140,500 then remained outstanding. The Casella account suggests that Hannon stopped making payments to Reimer & Braunstein, for the benefit of the plaintiff, in January, 2012. The court credits McLaughlin’s testimony that he never redirected payments from this account to other creditors that Hannon had instructed him to pay to Reimer & Braunstein.
In July, 2011, through an entity controlled by him (Bright Horizon Finance, LLC), McLaughlin loaned Hannon $ 219,759 to purchase an interest in a company called ABC&D Recycling. The details surrounding the loan and Hannon’s default on it are described in the Loan
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and Warrants Case. See n. 4, supra.
In May, 2012, Hannon and his wife filed a bankruptcy petition under Chapter 11 of the Bankruptcy Code (later converted to a Chapter 7 petition). McLaughlin and ABCD Holdings filed proofs of claim in the bankruptcy proceeding, as did the plaintiff. Sutton, as attorney for the plaintiff, examined Hannon concerning the Judgment, Agreement and his assets in the course of those proceeding. McLaughlin caused ABCD Holdings and other companies he then controlled to file an adversary complaint challenging Hannon’s right to a discharge in the bankruptcy proceeding based upon allegedly false income statements filed with the Bankruptcy Court. The Bankruptcy Court found for ABCD Holdings and dismissed the petition, denying Hannon a discharge. This ruling was affirmed by the District Court and by the First Circuit Court of Appeals in the Bankruptcy Case.
On June 10, 2016, McLaughlin caused ABCD Holdings, Inc. and another entity he controlled to file the Collection Case in the Suffolk Superior Court against Hannon and a number of other individuals and entities (some of which were reach and apply defendants); it was assigned to BLS 2. ABCD Holdings moved for a preliminary injunction against Hannon enjoining him from encumbering or disposing of any of his assets or income, except to satisfy ordinary living or business expenses. In a written opinion dated June 24, 2016, the court (Salinger, J.) denied ABCD Holdings’ motion finding that: “Since Plaintiffs are not yet judgment creditors of Hannon, the Court may not exercise its general equity jurisdiction to temporarily grant injunctive relief in the nature of a creditors’ bill attachment.”
Sutton read an article describing the June 24th decision in the July 8, 2016 edition of Lawyers Weekly. He telephoned McLaughlin offering to sell him the Judgment entered in this case. On July 11, 2016, McLaughlin emailed Sutton: “Hi Peter-Please send me the Assignment
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of the Spinazola matter for collection or whatever you were going to send, as I want to spend some time this summer trying to get some money out of Mr. Hannon.” Thereafter, Sutton and McLaughlin negotiated over the terms of the assignment of the Judgment. Sutton demanded $ 10,000 plus 50% of whatever McLaughlin recovered, after McLaughlin was reimbursed the $ 10,000 and costs of collection, and McLaughlin agreed. McLaughlin sent Sutton drafts of the documents to memorialize their agreement. Dissatisfied with his draft, Sutton had a member of his firm prepare the transactional documents. They consisted of an “Agreement Pursuant to a Non-Recourse Assignment of Judgment and Indemnification Dated as of the 14th Day of September, 2016” and a “Non-Recourse Assignment of Judgment and Indemnification Agreement” also dated as of September 14, 2016. Under these documents, the plaintiff assigned to ABCD Holdings her rights under the Judgment. On September 15, 2015, another entity controlled by McLaughlin (Rising Tides LLC) provided Reimer & Braunstein with a check for $ 10,000.
On December 8, 2016, ABCD Holdings sold the Assignment of Judgment to King Root under exactly the same terms as ABCH Holdings purchased it from the plaintiff. In fact, McLaughlin appears to have used the same two transactional documents drafted by Reimer & Braunstein that Sutton used to sell him the Assignment, just changing the names of the parties and the dates. King Root attempted to pay ABCH Holdings for the Judgment on December 8, 2016, but that check was returned for insufficient funds as King Root then had only $ 751.14 in its checking account. Thereafter, $ 10,000 was deposited in the King Root account, and another check issued to ABCD Holdings on December 15, 2016. Also on December 15, 2016, King Root’s attorney served Hannon with the motion now before the court.
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RULINGS OF LAW
Mass.R.Civ.P. 25(c) provides: “In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party.” The court has found no Massachusetts case, nor any reference in the Massachusetts Practice Series, addressing the right of an assignee of a judgment to bring a motion, long after the entry of final judgment, seeking to be substituted as the party plaintiff and then to have an execution issued in its name. There are, however, federal cases in which a court has done this under the federal version of Rule 25(c), although it appears that this generally occurs when a corporate judgment creditor becomes the successor to another corporate entity by merger or other acquisition. See Vision Bank v. Algernon Land Co., L.L.C., 2012 WL 827011 (S.D. Al., March 12, 2012) and cases collected there. Whether Massachusetts would follow the federal approach, especially when a judgment is sold ten years after its entry, is not clear. However, as neither party has addressed this issue, the court will assume that it has this authority.
Hannon’s first argument in opposition to the Motion is factual. Hannon notes that in February and March of 2012, $ 131,667.02 was paid from the Casella account to McLaughlin’s company, Bright Horizon, in partial repayment of its loan to Hannon’s companies. According to Hannon, this money should have been used to pay the Judgment. However, as noted above, the court credited McLaughlin’s testimony that he did not make any payments from the Casella account that Hannon had not cleared. Additionally, on January 26, 2012, $ 55,000 was paid from the Casella account to Hannon, who apparently chose not to pay any of that sum to the plaintiff.5
5 The court notes that Hannon did not testify at the hearing and did not offer any evidence to rebut McLaughlin’s assertion that he pre-cleared payments from the account or to explain why Hannon did not make monthly payments to Reimer & Braunstein when he received such a substantial payment himself.
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Hannon next argues that the assignment is void because it violates public policy. In support of this proposition he cites New Hampshire Ins. Co., Inc. v. McCann, 429 Mass. 202 (1999) in which the Supreme Judicial Court stated: “We think the [legal malpractice] claim should be assignable unless some clear rule of law of professional responsibility, or some matter of public policy, necessitates that the assignment should not be enforced.” Id. at 210. In seeking to establish that a clear rule of professional responsibility is violated by the assignment in this case, Hannon directs the court to Otis v. Arbella Mut. Ins. Co., No. CA 99-2907-F, 2003 WL 21385792 (Mass. Super. Apr. 18, 2003), aff’d 443 Mass. 634. Otis, however, is another case involving the assignment of a legal malpractice claim (not a judgment), and the assignment there at issue bears no resemblance to the assignment in this case.
In Otis, the plaintiff/assignee of a legal malpractice claim was also the plaintiff in a personal injury case in which the defendant sought to avoid liability by asserting that Otis was comparatively negligent. When a judgment far in excess of the limits of the defendant’s policy entered after trial, Otis obtained an assignment of the defendant’s putative legal malpractice claim against his defense counsel, premised on the theory that defense counsel had done an inadequate job of proving that Otis’ own negligence caused the accident. Otis, using the same trial counsel that prevailed in the personal injury action, now as the assignee of the legal malpractice claim, intended to prove that he was the principal cause of his own injuries and the assignor’s defense lawyers were negligent. The Superior Court properly concluded that under these circumstances, Otis and his lawyer were both engaging in “disreputable public role reversal” that should not be permitted.
In this case, McLaughlin did not represent Hannon until after a judgment of default
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entered against him. Moreover, and more importantly, McLaughlin (as de facto assignee)6 does not have to prove anything. He is not the assignee of a claim against Hannon, he is the assignee of a final judgment. In particular, McLaughlin does not have to prove facts contrary to those proved to obtain the judgment, and, therefore, there is no “public role reversal.”
Next Hannon argues that under the Massachusetts Rules of Professional Conduct, the assignment is void as a matter of public policy. Hannon first directs the court to Rule 19(c) which states, as relevant to this case:
A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:
(1) Use confidential information relating to the representation to the disadvantage of the former client or for the lawyer’s advantage or the advantage of a third person . . . .
“Confidential information” is not specifically defined in the Rules, but Comment 3A to the Editor’s Notes to Rule 16 explains, as relevant to this case:
“Confidential information” consists of information gained during or relating to the representation of a client, whatever its source, that is . . . (b) likely to be embarrassing or detrimental to the client if disclosed, or (c) information that the lawyer has agreed to keep confidential. “Confidential information” does not ordinarily include . . . (ii) information that is generally known in the local community or in the trade, field or profession to which the information relates. . . . Information that is “generally known in the local community or in the trade, field or profession to which the information relates” includes information that is widely known. Information about a client contained in a public record that has received widespread publicity would fall within this category. On the other hand, a client’s disclosure of conviction of a crime in a different state a long time ago or disclosure of a secret marriage would be protected even if a matter of public record because such information was not “generally known in the local community.”
In this case, the court finds that McLaughlin did not use confidential information gained through his representation of Hannon to obtain an assignment of the Judgment. One can imagine
6 The court recognizes that the actual assignee was ABCD Holdings, which then transferred the assignment to McLaughlin’s brother’s firm, King Root. For reasons that are discussed, infra, the court disregards these corporate entities in addressing the validity of the assignment.
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a set of circumstances in which a lawyer who previously represented a client in negotiating an agreement with a judgement creditor, like the one at issue here, would violate Rule 9(c) by purchasing the judgment. For example, if, as a result of a prior representation, the lawyer knew that the full amount of the judgment was still outstanding because the former client/debtor had breached the payment agreement and then sought out the judgment creditor some time later for purpose of purchasing it, this might well constitute a misuse of confidential client information. That is not what happened in this case.
Here, Hannon first accepted the possibility that his lawyer could become his creditor in 2011, when he borrowed money from McLaughlin7. In 2012, he unavoidably and permanently altered his relationship with McLaughlin when he filed for bankruptcy, defaulted on the loans, and thereby caused McLaughlin to be adverse to him in the bankruptcy proceedings. Indeed, McLaughlin was forced to pay Hannon’s bankruptcy estate some of the loan repayments because they were held to be preferences. The Judgment, the Agreement, and the McLaughlin loans all became a matter of public record in this community when they became the subject of the bankruptcy proceedings. Sutton even examined Hannon with respect to the Judgment and the Agreement during those proceedings. Finally, McLaughlin did not use confidential information to seek out the holder of the Judgment. It was Sutton who believed that he might be able to recover something for his client when he read the decision in the Collection Case which specifically explained that McLaughlin could not obtain a freeze order against Hannon’s assets because he was not yet a judgment creditor.
Hannon also argues that McLaughlin would have learned confidential information concerning Hannon’s assets when he represented him in negotiating deals with Hannon’s
7 Again, the court recognizes that the loans went from McLaughlin controlled entities to Hannon controlled entities, but, for purposes of this professional responsibility analysis the court disregards the LLCs.
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creditors. The court finds no evidence that McLaughlin presently has any confidential information concerning Hannon’s assets. In denying, McLaughlin preliminary relief in the Collection Case, Judge Salinger specifically pointed-out that McLaughlin’s allegations concerning Hannon’s assets were based on “information and belief.” Moreover, McLaughlin has already engaged in litigation adverse to Hannon concerning Hannon’s assets—not only in the Collection Case, but also in the adversary proceeding which McLaughlin filed against Hannon in the Bankruptcy Case.
Hannon also bases his public policy arguments on Rule of Professional Conduct 19(a) which states:
A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.
Hannon argues that the enforcement of the Judgment is a matter substantially related to the negotiation of the Agreement ten years ago. Perhaps, although Hannon stopped making payments under the Agreement many years ago, and it is obviously no longer in force. In any event, McLaughlin is not representing any party adverse to Hannon. Rather, in purchasing the Judgment, he was acting as a principal not an attorney or agent. The Rule does not address this circumstance. Rather, under many situations, McLaughlin’s actions would run afoul of Rule 19(c). In this case, for the reasons discussed above, they do not. McLaughlin was already a creditor of Hannon and adverse to him in many actions when he purchased the Judgment.
In the end, the court finds that there is something unseemly about McLaughlin purchasing a judgment against Hannon where he previously represented Hannon in negotiating an arrangement for its payment with the original judgment creditor. Furthermore, the court finds
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that the transfer of the assignment from ABCD Holdings to King Root did not ameliorate the optics of the situation, it made them worse. ABCD Holdings is a limited liability company with one member and manager—McLaughlin. King Root is a limited liability company with one member and manager—McLaughlin’s brother. The transaction between ABCD Holdings and King Root was not an arm’s length commercial sale. ABCD Holdings simply transferred the Judgment to King Root on exactly the same terms as ABCD Holdings purchased it from the plaintiff. In fact, McLaughlin used the transactional documents prepared by Reimer & Braunstein; he just changed the names and date. If the assignment was void as against public policy when held by McLaughlin’s LLC, it was also void when owned by his brother’s LLC.
While too much should not be read into the SJC’s decision in New Hampshire Ins. Co., Inc. v. McCann, which was case in which the SJC was addressing the broad question of whether legal malpractice claims should be assignable, there the Court stated: “We think the claim should be assignable unless some clear rule of law of professional responsibility, or some matter of public policy, necessitates that the assignment should not be enforced.” As discussed above this is not a case in which a clear rule of law or professional responsibility prevents assignment. With respect to the public policy concern raised by this assignment, McLaughlin and Hannon have been adverse to one another in a number of cases over the last five years. McLaughlin’s testimony at the evidentiary hearing suggested that their animosity has spilled-over into personal matters that have been addressed in District Courts. Under these unique circumstances, the court finds that there are no prevailing public policy reasons that prevent McLaughlin from purchasing the right to enforce an unsatisfied judgment entered ten years ago in a case in which he did not represent Hannon.
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ORDER
For the foregoing reasons, King Root’s motion to substitute it as the plaintiff in this action and for the issuance of an execution pursuant to G.L. c. 235, § 19 is ALLOWED. King Root shall however submit a sworn statement calculating the amount of the execution that the clerk shall issue. This statement shall credit Hannon with all payments made to plaintiff, including the $ 25,000 paid to reinstate the Agreement.
___________________
Mitchell H. Kaplan
Justice of the Superior Court
Dated: May 9, 2017 read more

Posted by Stephen Sandberg - June 30, 2017 at 10:33 pm

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Rauhaus Freedenfeld & Associates LLP v. Prince (Lawyers Weekly No. 12-075-17)

COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT.
1684CV02016-BLS2
____________________
RAUHAUS FREEDENFELD & ASSOCIATES LLP
v.
TODD PRINCE
____________________
MEMORANDUM AND ORDER ON PLAINTIFFS’ MOTION TO DISMISS COUNTERCLAIMS
Rauhaus Freedenfeld & Associates LLP is an architectural firm based in Boston, Massachusetts, that specializes in designing animal hospitals. It is suing Todd Prince for not paying Plaintiff in full for designing renovations for an animal hospital owned by Prince in Deerfield, Illinois. Prince asserts various counterclaims.
Plaintiff has moved to dismiss four of the five the counterclaims; it does not seek dismissal of the counterclaim for breach of contract (Count I). The Court will allow the motion in part and deny it in part. Specifically, it will dismiss the claim for negligent misrepresentation but otherwise deny the motion to dismiss.
1. Fraud Claim. Plaintiff argues that the counterclaim for fraud (Count II) is not pleaded with the particularity required by Mass. R. Civ. P. 9(b). Under this rule, a claimant must “at a minimum” support their claim for fraud by specifically alleging “the identity of the person(s) making the” allegedly fraudulent “representation, the contents of the misrepresentation, and where and when it took place,” and must also “specify the materiality of the misrepresentation, [his] reliance thereon, and resulting harm.” Equipment & Systems for Industry, Inc. v. NorthMeadows Constr. Co., Inc., 59 Mass. App. Ct. 931, 931-932 (2003) (rescript).
Prince has stated his fraud claim with sufficient particularity. The allegations in the counterclaim plausibly suggest that Plaintiff’s agent made specific and false statements of fact to Prince at a meeting in September 2015, Plaintiff made specific and false promises in the parties’ contract that Plaintiff never intended to perform, Plaintiff made these false statements and promises to induce Prince to sign the contract, Prince did so to his detriment, and as a result Prince was damaged in that he paid $ 126,098.56 for draft drawings that he cannot use. These allegations state a claim for fraud. See Masingill v. EMC Corp., 449 Mass. 532, 540 (2007) (elements of
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fraud); McCarthy v. Brockton Natl. Bank, 314 Mass. 318, 325 (1943) (“A principal is liable for the fraud committed by his agent or servant acting within the scope of his employment.”); Cumis Ins. Society v. BJ’s Wholesale Club, Inc., 455 Mass. 458, 474 (2009) (fraud claim may be based on false promise if “the promisor had no intention to perform the promise at the time it was made”) (quoting Yerid v. Mason, 341 Mass. 527, 530 (1960)).
The Court reminds the parties, however, that an “intention not to perform a promise” cannot be inferred merely from later “nonperformance of the promise.” Galotti v. United States Trust Co., 335 Mass. 496, 501 (1957); accord McCartin v. Westlake, 36 Mass. App. Ct. 221, 230 n.11 (1994); see also Backman v. Smirnov, 751 F. Supp. 2d 304, 316 n.13 (D. Mass. 2010) (“Changing one’s mind is not proof that an earlier statement was false.”) (Stearns, J.) (applying Massachusetts law).
2. Chapter 93A Claim. Plaintiffs’ arguments for dismissing the counterclaim under G.L. c. 93A, § 11 (in Count III) are also without merit.
The plausible allegations of intentional fraud suffice to state a claim that Plaintiff engaged in deceptive conduct that violates c. 93A. See, e.g., Brewster Wallcovering Co. v. Blue Mountain Wallcoverings, Inc., 68 Mass. App. Ct. 582, 605 (2007) (“the finding of intentional misrepresentation (or common law fraud or deceit) … is sufficient foundation for a finding of a c. 93A violation in a business context”); The Community Builders, Inc. v. Indian Motorcycle Assocs., Inc., 44 Mass. App. Ct. 537, 557 (1998) (false promise with no intention to perform would violate c. 93A).
And the allegation that Plaintiff is located in Boston, and presumably did most of its work for Prince in its own offices, is sufficient at this stage to suggest that Plaintiffs’ alleged misconduct occurred “primarily and substantially” within Massachusetts, as required by G.L. c. 93A, § 11. Whether the center of gravity of the parties’ interactions and Plaintiff’s alleged fraud is in Illinois rather than Massachusetts is not an issue that can be resolved on a motion to dismiss, at least not in light of the facts alleged by Prince in his counterclaim. See Resolute Management, Inc. v. Transatlantic Reins. Co., 87 Mass. App. Ct. 296, 300-301 (2015).
3. Negligent Misrepresentation Claim. In contrast, the Court is convinced that Prince has not stated a viable claim for negligent misrepresentation in Count IV.
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Prince alleges (in paragraph 38) that Plaintiff failed to do everything it had promised in its contract. Those allegations support the counterclaim for breach of contract in Count I. But a promise is not a tortious misrepresentation unless the promising party never intended to perform, in which case the injured party has a claim for intentional misrepresentation. “[P]romises to perform an act cannot sustain a claim for negligent misrepresentation[.]” Cumis Ins. Society, 455 Mass. at 474.
4. Negligence Claim. Finally, the Court will deny Plaintiff’s request to dismiss Prince’s counterclaim for professional malpractice or negligence. Prince alleges that Plaintiff had a duty to ensure that its design met local zoning requirements and that it negligently breached that duty. Plaintiff contends that this claim should be dismissed because it had no duty to ensure compliance with zoning requirements absent a contractual agreement to do so. 1
Whether the standard of care that a reasonably competent architect should follow in this country includes a duty to ensure compliance with zoning requirements is a mixed question of law and fact that cannot be resolved on a motion to dismiss.
“Whether a duty of care exists” at all “is a question of law” and is therefore often “an appropriate subject of a motion to dismiss pursuant to rule 12(b)(6).” Leavitt v. Brockton Hosp., Inc., 454 Mass. 37, 40 (2009) (affirming dismissal of negligence claim because defendant owed no duty of care to plaintiff as a matter of law); accord O’Meara v. New England Life Flight, Inc., 65 Mass. App. Ct. 543, 544 (2006) (same).
1 Plaintiff does not argue that the counterclaim for negligence is barred by the “economic loss doctrine,” which generally provides that “purely economic losses are unrecoverable in tort and strict liability actions in the absence of personal injury or property damage.” Aldrich v. ADD Inc., 437 Mass. 213, 222 (2002), quoting FMR Corp. v. Boston Edison Co., 415 Mass. 393, 395 (1993). This rule “was developed in part to prevent the progression of tort concepts from undermining contract expectations,” on the theory that contracting parties are free to allocate the risk of economic loss as they see fit. Wyman v. Ayer Properties, LLC, 469 Mass. 64, 70 (2014); accord, e.g., Hunt Const. Group, Inc. v. Brennan Beer Gorman/Architects, P.C., 607 F.3d 10, 14 (2d Cir. 2010) (economic loss doctrine “serves to maintain the boundary between contract law, which is designed to enforce parties’ contractual expectations, and tort law, which is designed to protect citizens and their property” from physical harm) (quoting Hamill v. Pawtucket Mut. Ins. Co., 179 Vt. 250, 254, 892 A.2d 226 (2005)). Since Plaintiff has not raised the issue in support of its motion to dismiss Prince’s counterclaims, the Court will not consider it at this stage of the case.
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But whether Plaintiff’s duty of care required it to design a building that would comply with local zoning requirements is a question of fact. The standard of care owed by architects is a duty to do as good a job as one should expect from professionals in the same field in similar circumstances. “Architects, like other professionals, do not have a duty to be perfect in their work, but rather are expected to exercise ‘that skill and judgment which can be reasonably expected from similarly situated professionals.’ ” LeBlanc v. Logan Hilton Joint Venture, 463 Mass. 316, 329 (2012), quoting Klein v. Catalano, 386 Mass. 701, 718 (1982). “Establishing the applicable standard of care” owed by a member of some specialized profession “typically requires expert testimony” by someone with “sufficient knowledge of the practices” of professionals in the same field “to assert that the average qualified practitioner would, or would not, take a particular course of action in the relevant circumstances.” Palandjian v. Foster, 446 Mass. 100, 1045-106 (2006); accord LeBlanc, supra (same as to standard of care applicable to architects).
The counterclaim expressly alleges that Plaintiff “was under a duty to ensure [that] the design met the local zoning requirements,” Plaintiff breached that duty of care, and Prince was injured as a result. Nothing more is needed to state a claim for negligence. Cf. Adams v. Congress Auto Ins. Agency, Inc., 90 Mass. App. Ct. 761, 765 (2016) (elements of claim for negligence are “(1) duty; (2) breach of duty; (3) a causal connection between the breach of duty and damages; and (4) damages”).
ORDER
Plaintiff’s motion to dismiss part of Defendants counterclaims is ALLOWED IN PART with respect to the counterclaim for negligent misrepresentation and DENIED IN PART with respect to Defendants’ other counterclaims.
June 14, 2017
___________________________
Kenneth W. Salinger
Justice of the Superior Court read more

Posted by Stephen Sandberg - June 15, 2017 at 9:12 pm

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Copley Place Associates, LLC v. Téllez-Bortoni (Lawyers Weekly No. 11-029-17)

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-165                                        Appeals Court

COPLEY PLACE ASSOCIATES, LLC  vs.  CARLOS TÉLLEZ-BORTONI.

No. 16-P-165.

Suffolk.     December 9, 2016. – March 16, 2017.

Present:  Milkey, Massing, & Sacks, JJ.

Fraud.  Deceit.  Real Property, Lease.  Contract, Lease of real estate.  Practice, Civil, Summary judgment, Judgment notwithstanding verdict.

Civil action commenced in the Superior Court Department on April 24, 2012. read more

Posted by Stephen Sandberg - March 16, 2017 at 3:36 pm

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Columbia Plaza Associates, et al. v. Northeastern University (Lawyers Weekly No. 12-175-16)

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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2013-2392-BLS 2
COLUMBIA PLAZA ASSOCIATES, et al.
Plaintiffs
vs.
NORTHEASTERN UNIVERSITY
Defendant
FINDINGS OF FACT, RULINGS OF LAW
AND ORDER OF JUDGMENT
This case arises from a series of agreements between the defendant Northeastern University (Northeastern) and the plaintiff Columbia Plaza Associates (CPA), a minority owned general partnership. The agreements related to the development of land known as Parcel 18 adjacent to Northeastern’s main campus. Northeastern owned the parcel, and plaintiffs held certain development rights. Plaintiffs allege that that Northeastern reaped unbargained for benefits in developing the parcel without adequately compensating them, and also convinced the Boston Redevelopment Authority (BRA) to approve plans needed to allow that development by misrepresenting to the BRA that it had the plaintiffs’ participation. This matter came before the Court in October 2016 for jury-waived trial on the sole remaining count of the Verified Complaint, Count VII, alleging a violation of Chapter 93A. This Court concludes that judgment should enter for the defendant.
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FINDINGS OF FACT1
Parcel 18 is located in the Roxbury neighborhood of Boston next to Northeastern’s main campus. It consists of five sub parcels: 18-1A, 18-1B, 18-2, 18-3A and 18-3B. The BRA designated Parcel 18 as a Planned Development Area (PDA), specifically PDA 34. A PDA is a zoning overlay district and is one of the tools used by the BRA to impose certain controls on commercial development. Those tools include Cooperation Agreements, Sales and Construction Agreements, Master Plans and Development Plans.
In June 1989, the BRA adopted a Master Plan and a Development Plan for Parcel 18. The Master Plan provided for the development of multiple buildings on four of the sub parcels, 18-1A, 18-1B, 18-3A, and 18-3B (collectively the “Development Parcels”). The remaining sub parcel, 18-2, was to be the site of a parking garage (the “Garage Parcel”). At the time, Parcel 18 was owned by various government entities, although Northeastern would ultimately become the owner of all of Parcel 18.
CPA was formed for the purpose of participating in Boston’s “linkage plan,” a program created to promote development in areas of Boston in need of revitalization by linking together a commercial developer with a minority partner. CPA held certain development rights on Parcel 18. The commercial developer with whom CPA was paired was Metropolitan Structures, an Illinois-based general partnership.
From its inception until December 2008, CPA had two general partners: plaintiff Ruggles-Bedford Associates Limited Partnership, (Ruggles-Bedford LP) comprised primarily of
1 In ruling on a motion for summary judgment in this case, another Superior Court judge outlined in the “Background” section of his decision certain facts contained in the summary judgment record, with all inferences drawn in favor of the non-movant, CPA. Many of those same facts are set forth herein. To the extent that those facts differ from those contained in the earlier opinion, this Court’s findings are controlling.
3
investors from the Roxbury neighborhood; and Chinese Investment Limited Partnership (Chinese Investment LP) which consisted of investors from Boston’s Chinese community. Ruggles Bedford LP held a sixty percent interest in CPA, whereas Chinese Investment LP held a forty percent interest. Ruggles Bedford LP had 25 limited partners and one general partner, plaintiff Ruggles Bedford Associates Inc. (Ruggles Bedford, Inc.) The fourth plaintiff in this case is Columbia Ruggles Associates (CRA), a limited liability corporation created by CPA to participate in the development of the parking garage. 2 In 2008, Ruggles Bedford LP bought out Chinese Investment LP’s interest.
The identity of those who held positions in CPA or purported to act on its behalf is important to the resolution of many of the issues in this case. Chief among them was Kenneth Guscott, a businessman who was the chairman of Ruggles Bedford LP. William Chin served as CPA’s legal counsel; Robert Gunderson, a Boston attorney, also provided legal advice to CPA. CPA’s President was John Cruz, the founder of a company that develops real estate and oversees constructions projects. Beginning in 1994 or 1995, Kevin Cohee, Chief Executive Officer of One United Bank, served as CPA’s treasurer. Up until 2007, Northeastern dealt exclusively with Guscott, Chin, and Gunderson from the Ruggles Bedford wing of CPA; neither Cruz nor Cohee had any communications with Northeastern before then. Paul Chan, the treasurer of Chinese Investment LP, acted on behalf of that group and was also in regular communication with Northeastern until it was bought out by the Ruggles Bedford group.
In 1991, CPA and Metropolitan Structures formed the Ruggles Center Joint Venture for the purpose of building on the Development Parcels. Guscott, Chin and Chan represented CPA in connection with that joint venture. An office building was constructed on sub parcel 18-1B
2 Because the interests of these four plaintiffs are essentially identical, the Court will refer to them collectively simply as CPA.
4
which briefly became the home for the Registry of Motor Vehicles. Sometime in the mid-1990s, the building was condemned, and the bank that had financed the construction foreclosed on the property, acquiring all four Development Parcels. In November 1997, Northeastern acquired the Development Parcels from the entity that had held title to them following the foreclosure.
Around that same time, Northeastern entered into discussions with CPA and the BRA about developing Parcel 18. Guscott and Chan represented CPA in these discussions. On November 12, 1997, both Guscott and Chan, on behalf of CPA, signed a Letter of Intent with Northeastern setting forth a framework for an agreement among the parties regarding that development. In late June 1999, Northeastern, CPA and the BRA (whose approval was needed for any development) formally entered into the arrangement contemplated by that Letter of Intent. The arrangement was memorialized in several contemporaneous agreements.
Three of those agreements related to acquisition and development of the Garage Parcel and are not directly relevant to the issues presented at trial. A fourth agreement dated June 29, 1999 (the Master Agreement) set forth the obligations of the parties with respect to both the Garage Parcel and future development on the Development Parcels. See Trial Exhibit 1. A fifth agreement (the Cooperation Agreement) documented the parties’ plan to develop the Garage Parcel and further stated that “Northeastern, individually and/or in partnership with CPA” planned to develop the remaining parcels. See Trial Exhibit 15. CPA was represented in the negotiation of these agreements by two attorneys, Chin and Gunderson. The agreements were all signed by Guscott and Chan on behalf of CPA and were approved by CPA’s board of directors.
Together, these agreements provided the following. Northeastern and CPA would form a limited liability company, Renaissance Park Garage LLC (the Garage LLC), with Northeastern
5
as its manager. Northeastern would make an initial contribution of $ 380,000 to the Garage LLC, which funds would be used to acquire Parcel 18-2 (the Garage Parcel) from the BRA after the BRA acquired the parcel from the MBTA. Northeastern would pay CPA $ 320,000 in cash in return for what the Master Agreement described as CPA’s “Personal Property.” That was defined to include “Garage Plans” and certain “Intangible Property” consisting of “all contract rights, licenses, permits and warranties” related to Parcel 18-2. Northeastern would make an additional payment of $ 100,000 as CPA’s capital contribution toward any joint venture formed between Northeastern and CPA to develop a building on Parcel 18-3A. Section 6.3 of the Master Agreement describes that contemplated joint venture and lies at the heart of the dispute now before the Court.
Significantly, neither Section 6.3 nor any other provision in the Master Agreement actually created a joint venture, nor did the Master Agreement require that either party actually enter into one. It did require that the parties work “diligently and in good faith” to negotiate terms “mutually satisfactory to both parties.” See Section 6.3.1 of Master Agreement. The Master Agreement also set forth a list of issues that any joint venture agreement should include. See Section 6.3.3 of Master Agreement. For example, although it was contemplated that Parcel 18-3A would be developed as a hotel or office building, the joint venture could decide to develop it for the “institutional purposes” of Northeastern, provided that Northeastern pay the joint venture the fair rental value of the building. Negotiations regarding the terms of any joint venture agreement was to commence within six months of the Closing Date on the Master Agreement, although that date could be extended by either party. Finally, the Master Agreement provided that Section 6.3 was to survive the Closing “until full execution of the Joint Venture
6
Agreement.” Any notices to CPA in relation to the Master Agreement were to be sent to Chin, CPA’s legal counsel.
As it turned out, no joint venture agreement was ever entered into among the parties. Indeed, neither Northeastern nor CPA submitted a draft proposal for such an arrangement. Over the next six years, however, Northeastern did explore the possibility of developing a hotel on Parcel 18-3A, even hiring an outside development firm, Newcastle, to look into its economic feasibility. Northeastern directed Newcastle to work with CPA as a partner in that development. Both Newcastle and Mel Shuman, outside counsel for Northeastern, discussed these plans with Guscott and Chin of CPA. Gunderson, CPA’s outside legal counsel, was also included in these discussions.
Around this same time period (1999-2005), there was growing concern in the surrounding community regarding Northeastern’s use of private housing to meet its institutional needs. In response to those concerns, discussions among the parties shifted away from using Parcel 18-3A as the site for a hotel and using it instead for a dormitory, with the hotel to be built on Parcel 18-1A instead. Northeastern consulted with various community groups, state legislators and city councilors as well as the BRA, whose approval was required for any change in plans. Northeastern also spearheaded the formation of a Community Task Force to broaden its outreach. Ultimately, the consensus in the community was that more dormitories were needed and that Parcel 18-1A was a better site for a hotel than Parcel 18-3A because it had greater visibility, bordering as it did on Melnea Cass Boulevard.
Guscott and Chin were not only aware of these public meetings but had numerous discussions with Vincent Lembo, Northeastern’s legal counsel, about the possibility of moving the hotel to Parcel 18-1A; there is no evidence that either of them expressed any reservations
7
about it. As late as August 2006, however, Northeastern was still exploring the possibility of building a hotel on Parcel 18-3A as originally contemplated. Newcastle drew up a letter outlining the basic terms of such an arrangement, which would have included CPA, and Newcastle representatives came to Boston to meet with both Gunderson and Chin, but no agreement could be reached as to the financial terms of CPA’s participation. At no time did Northeastern suggest that it would not participate with CPA in the development of a hotel; indeed, it was quite the opposite.
Ultimately Northeastern, in consultation with both Gunderson and Chin, decided to proceed with the proposal to use Parcel 18-3A for a dormitory and to place any hotel that would be constructed on Parcel 18-1A. To do that, however, it had to seek an amendment to the Master Plan and the Development Plan and to the related Cooperation Agreement for PDA 34. It also had to seek an amendment to its Institutional Plan or IMP. Both Guscott and Chin of CPA were fully informed as to the amendments that Northeastern was proposing.
These amendments required the approval of the BRA and the Zoning Commission. Before that could be obtained, Northeastern had to participate in an extensive public hearing process. Between December 2005 and December 2006, more than 40 public meetings were held, some of which were the subject of newspaper articles. In the summer of 2006, the BRA placed a public notice of Northeastern’s proposal to amend its IMP in local newspapers and invited public comment. On January 11, 2007, the BRA formally approved the Amended and Restated Development Plan so as to permit construction of a hotel on Parcel 18-1A. That Plan made it clear that Northeastern would construct that a building on that parcel “in partnership” with CPA, expressly identified in that document as the “Developer” together with Northeastern. At the same time, the BRA approved Northeastern’s application to add Parcels 18-3A and 18-3B to its
8
Institutional Plan. On October 2, 2007, the BRA approved an amendment to the Cooperation Agreement for PDA 34. That document confirmed that, as a result of the removal of Parcels 18-3A and 18-3B from the PDA, “CPA is neither an owner [n]nor a developer nor has a beneficial interest as owner or developer of any portion of the removed parcels.”
Northeastern continued to have sporadic communications with CPA (specifically Gunderson) about CPA’s participation in a hotel development into the fall of 2007. At some point thereafter, however, Lembo of Northeastern was informed that Cruz was taking over a representative role. Up until then, no one at Northeastern had had any dealings with either Cruz or Cohee.
On March 26, 2008, Lembo sent a letter to Cruz stating that he had recently learned that Cruz was taking a leadership position in CPA and that he looked forward to working with him “as we continue the long term partnership between CPA and Northeastern University.” He also noted in the letter, however, that several months had passed without any contact with CPA and that, if the project to develop the hotel was to go forward, it was important they get together “at the earliest possible moment.” Cruz responded in a letter dated April 2, 1008 in which he remarked that “there have been so many meetings and interactions concerning these two land holdings that I have difficulty keeping them orderly in my mind.” He stated that he understood that CPA had certain agreements with Northeastern concerning Parcel 18 and that members of CPA intended to review the “appropriate documents” in an expeditious fashion so that they could have an “informed dialogue.” Cruz signed the letter as president of Ruggles Bedford Inc. and copied Guscott and Cohee.
Before those letters were exchanged, Cruz was aware that Northeastern had already begun the construction of a dormitory on Parcel 18-3A. He knew this because his business office
9
was near the site and sometime in 2007, he saw that excavation had begun there. When Cruz noticed this, he realized that Northeastern was constructing a dormitory there and that CPA was not part of that project. Thus, by the time he wrote to Lembo, Cruz by his own admission knew that CPA, to the extent it had any development rights to Parcel 18-3A, was being harmed.
In May 2008, Lembo sent another letter to Cruz, noting that, although Northeastern had worked closely with Chin and Guscott concerning the hotel development, Northeastern had heard nothing from CPA since Cruz’s last communication with Lembo in April. The letter explained that Northeastern had paid for three studies regarding the hotel project and had selected Newcastle as the developer. Newcastle had in turn engaged a design firm and was working to put together financing. Lembo stated that Northeastern’s inability to have any substantive discussion with CPA, however, was placing the project in jeopardy. He received no reply. Lembo sent a third letter on March 18, 2009 describing a time limited opportunity regarding funding for the proposed hotel project but this too went nowhere.
On April 13, 2009, the law firm of Goodwin Procter, on behalf of CPA, sent a Chapter 93A demand letter to Northeastern. The letter complained that Northeastern’s development of the dormitory on Parcel 18-3A without the involvement of CPA violated the parties’ 1999 agreements, specifically Section 6.3.1 of the Master Agreement. The letter also accused Northeastern of falsely representing to the BRA that it was acting in “partnership” with the CPA in order to obtain the necessary BRA approvals for the dormitory project. CPA paid Goodwin Procter for these legal services.
The instant case was filed on July 1, 2013.
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CONCLUSIONS OF LAW
Northeastern makes several arguments as to why plaintiffs’ claim fails – either as a matter of law or as a matter of fact. This Court finds that at least two of those arguments support the conclusion that judgment should enter in favor of Northeastern. Although either is dispositive of the case, this Court will discuss both.
A. Plaintiffs have not proved that Northeastern engaged in any unfair or deceptive practice
Count VII alleges a violation of G.L.c. 93A §11, which requires proof, by a preponderance of the evidence, that the defendant, while engaged in the conduct of trade or commerce, committed an unfair or deceptive act or practice. In determining whether an act or practice violates Chapter 93A, courts consider: “(1) whether the practice…is within at least the penumbra of some common-law, statutory or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive or unscrupulous [and] (3) whether it causes substantial injury to consumers (or competitors or other businessmen).” PMP Assoc.’s Inc. v. Globe Newspaper Co., 366 Mass. 593, 596 (1975) (quoting a definition adopted by the Federal Trade Commission). “The objectionable conduct must attain a level of rascality that would raise an eyebrow of someone inured to the rough and tumble of the world of commerce.” Levings v. Forbes & Wallace, Inc. 8 Mass.App.Ct. 498 504 (1979). As to the conduct at issue here, CPA contends that Section 6.3.1 of the Master Agreement compelled Northeastern to act together with CPA in any development of Parcel 18-3A and that Northeastern’s decision to build the dormitory on its own wrongfully deprived CPA of certain valuable development rights. Northeastern accomplished this (it is argued) by not only keeping CPA in the dark as to its intentions but also by falsely representing to the BRA that it remained in a partnership with
11
the CPA so as to obtain necessary BRA approvals. CPA’s position, however, is simply not supported by the facts as found by this Court.
First, Northeastern kept CPA fully informed about its plans following the execution of the 1999 Agreements right up until the time that it began building the dormitory on Parcel 18-3A. Northeastern representatives were in regular contact with Chan (representing the Chinese investors), Chin and Guscott, all of whom played central roles in representing CPA’s interests in connection with Parcel 18. Plaintiffs’ arguments notwithstanding, all of these individuals had actual authority to represent CPA. Guscott as chairman of Ruggles Bedford LP and Chan as treasurer of Chinese Investment LP (the two general partners in CPA) signed the 1997 Letter of Intent as well as the 1999 agreements on behalf of CPA. The Master Agreement designated Chin, CPA’s legal counsel, as the person to whom any notices had be sent in order to keep CPA informed. In addition to Guscott and Chan, Northeastern also consulted regularly with Gunderson, who acted as CPA’s outside legal counsel.3 When Limbo learned that Cruz was taking on some leadership role at CPA in 2007, he immediately wrote Cruz requesting that they meet to discuss the hotel project, which by that time, with CPA’s full knowledge, had been moved to Parcel 18-1A.
That Northeastern kept CPA fully apprised about Parcel 18 also highlights a second flaw in plaintiffs’ position. CPA claims that it was wrongfully deprived of certain bargained for benefits in connection with Parcel 18-3A. Even assuming that it had such rights, however, this Court concludes that CPA’s complete failure to do anything to exercise those rights or to respond to Northeastern’s invitation to work with it in connection with the construction of a
3 Significantly, none of these individuals were called by the plaintiffs to testify, so that the testimony offered by Northeastern’s witnesses as to their communications with Guscott, Chan, Chin and Gunderson is uncontradicted.
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hotel meant that they lost whatever rights they had had. As McCann from the BRA described these development rights, they were not much better than a fishing license: they essentially gave CPA the opportunity to become a developer on a project provided that it met the BRA’s rigorous prerequisites, which included a demonstration that it had a specific and economically feasible development plan. There was no evidence that CPA presented such a plan, much less that it was ready and willing to enter into one with Northeastern. Certainly, Northeastern did not in any way attempt to hinder CPA in exercising those development rights: indeed, it specifically directed Newcastle to work with CPA when it was still exploring the possibility of locating the hotel on Parcel 18-3A. CPA not only failed to take Northeastern up on its invitation but did not offer any proposal of its own to participate in the development. And when Northeastern sought amendments to various plans which had the effect of extinguishing whatever inchoate rights CPA had in connection with Parcel 18-3A, CPA representatives (through Guscott and Chin) were not only aware of those proposed amendments but also, with that knowledge, voiced no objection to anyone, seemingly content with the prospect of still becoming a development partner for a hotel on Parcel 18-1A.
As to the claim that Northeastern misrepresented that it was in partnership with CPA, this too is not supported by the facts. In connection with proposed amendments to the Master Plan that were necessary to allow for construction of a dormitory on Parcel 18-3A, Northeastern stated that both CPA and Northeastern would be the “Developer” for any hotel located on Parcel 18-1A. This was a true statement. Northeastern agrees, even today, that CPA has certain rights in connection with development of that parcel and does not seek any order that would extinguish them.
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As to plaintiffs’ assertion that Northeastern’s conduct was in violation of the 1999 Agreements that is not supported by the language of the agreements themselves. The Master Agreement did not compel either party to actually enter into a joint venture agreement if Parcel 18-3A were to be developed. Rather, it required Northeastern to negotiate in good faith in an effort to reach an agreement, placing a time period upon the length of that negotiation, subject to mutually agreed upon extensions. If a joint venture was formed, then Northeastern would make a $ 100,000 payment as a credit toward CPA’s capital contribution. Similarly, if the joint venture that was formed decided to use Parcel 18-3A for a dormitory, then Northeastern was required to pay the joint venture fair rental value of the building. But no joint venture was ever entered into. Therefore, Northeastern had no contractual obligation to pay CPA anything. 4
B. Plaintiffs ‘Claim is Time-Barred
An action arising under Chapter 93A must be filed within four years after the cause of action
accrues. G.L.c. 260 §5A. A cause of action accrues for purposes of the statute of limitations when “the plaintiff knows or reasonably should have known that it sustained appreciable harm” as a result of the defendant’s conduct. Int’l Mobiles Corp. v. Corroon & Black/Fairfield & Ellis, Inc. 29 Mass.App.Ct 215, 217-218 (1990). “Reasonable notice that …a particular act of another person may have been a cause of harm to a plaintiff creates a duty of inquiry and starts the running of the statute of limitations.” Bowen v. Eli Lilly & Co., 408 Mass. 204, 210 (1990). It is not necessary that the plaintiff know the full extent of harm or loss or know precisely in what manner and what harmful after-effects flow from the defendant’s wrongful conduct. Frankston
4 Indeed, another Superior Court judge (Connors, J.) using similar reasoning, already dismissed the breach of contract claims from this case that were based on these allegations. See Memorandum of Decision on Defendants’ Motion to Dismiss, dated January 28, 2014. Their legal viability is no better simply because they have been recast as a 93A violation.
14
v. Denniston, 74 Mass. App. Ct. 366, 374, rev. den., 455 Mass. 1102 (2009). Appreciable harm encompasses the incurring of legal expenses. Id.
In order for the instant case to fall within the statute of limitations, it must not have “accrued” before July 1, 2009, four years before this case was filed. As this Court’s fact findings make clear, however, CPA knew well before that date about the claim now before the Court. As a result of Northeastern’s discussions with Guscott and Chan in 2005 and 2006, CPA was well aware of Northeastern’s plan to develop a dormitory on Parcel 18-3A without CPA’s involvement. Sometime in the fall of 2007, Cruz saw that excavation for the dormitory was occurring on that site and knew that CPA was not part of that; to the extent that CPA clams it was deprived of valuable development rights, Cruz knew as of that date that CPA had suffered some appreciable harm. It is not necessary that he know the full extent of that harm or that the harm be fully realized in order for the limitations period to begin running.
With regard to proceedings before the BRA, the evidence is uncontradicted that Guscott and Chin were aware of Northeastern’s filings. Indeed, the BRA’s approval of Northeastern’s proposal was preceded by extensive public hearings and a broad public outreach to leaders in the Roxbury community. It strains credulity to believe that CPA members had no knowledge that the topic of discussion at those hearings and meetings was Northeastern’s plan to build a dormitory on Parcel 18-3A, and in connection therewith, to filed amendments to PDA 34 which would extinguish CPA’s rights to that parcel. At the very least, CPA had reason to know. Certainly, plaintiffs had full knowledge of all the details of their claim when Goodwin Procter sent the Chapter 93A demand letter to Northeastern. The date of that letter was April 3, 2009, more than four years before this action was filed.
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CONCLUSION AND ORDER
For all the foregoing reasons, it is hereby ORDERED that judgment enter in favor of the defendant Northeastern University and that Count VII, the sole remaining count in this case, be DISMISSED with prejudice.
___________________________________
Janet L. Sanders
Justice of the Superior Court
Dated: December 15, 2016 read more

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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

14-P-283                                        Appeals Court

RUSSELL BLOCK ASSOCIATES  vs.  BOARD OF ASSESSORS OF WORCESTER.

No. 14-P-283.

Suffolk.     November 10, 2014. – September 16, 2015.

Present:  Rubin, Brown, & Maldonado, JJ.

Taxation, Real estate tax:  abatement, classification of property.  Real Property, Tax.

Appeal from a decision of the Appellate Tax Board.

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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

14-P-607                                        Appeals Court

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No. 14-P-607.

Suffolk.     April 2, 2015. – September 4, 2015.

Present:  Kafker, C.J., Kantrowitz, & Hanlon, JJ.

 

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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

14-P-1120                                       Appeals Court

MARY ELLEN WESSELL  vs.  MINK BROOK ASSOCIATES, INC., & another.[1]

No. 14-P-1120.

Worcester.     April 7, 2015. – August 5, 2015.

Present:  Kantrowitz, Kafker, & Hanlon, JJ.

Massachusetts Wage Act.  Attorney at Law, Disqualification, Attorney-client relationship, Conflict of interest.  Employment, Retaliation, Termination.  Damages, Wrongful discharge of employee, Back pay.  Practice, Civil, Instructions to jury, Damages. read more

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Loring Towers Associates v. Furtick v. Boston Housing Authority (Lawyers Weekly No. 11-033-14)

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

13‑P‑799                                        Appeals Court

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No. 13‑P‑799.

Essex.     December 3, 2013.  ‑  March 27, 2014.

Present:  Grainger, Brown, & Carhart, JJ.

Summary ProcessPractice, Civil, Summary process, Complaint, Parties.  Boston Housing AuthorityDue Process of Law, Housing.

Summary process.  Complaint filed in the Salem Division of the District Court Department on April 23, 2012. read more

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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

12‑P‑1915                                       Appeals Court

STATE ROOM, INC.  vs.  MA-60 STATE ASSOCIATES, L.L.C., & others.[1]

No. 12‑P‑1915.

Suffolk.     May 10, 2013.  ‑  September 13, 2013.

Present:  Grasso, Sikora, & Maldonado, JJ.

AppraisalValueLandlord and Tenant, Rent.

Civil action commenced in the Superior Court Department on October 6, 2011.

A motion to dismiss was heard by Peter M. Lauriat, J. read more

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