Merrimack College v. KPMG LLP (Lawyers Weekly No. 12-054-17)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT. 1484CV02098-BLS2 ____________________ MERRIMACK COLLEGE v. KPMG LLP ____________________ MEMORANDUM AND ORDER ALLOWING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT Merrimack College incurred substantial financial losses because its former financial aid director, Christine Mordach, deliberately approved fake Perkins loans for many students without their knowledge.1 For years Mordach awarded far more financial aid than she was authorized to spend. She made the college’s financial aid budget appear balanced by replacing grants and scholarships with fake Perkins loans, the proceeds of which were used to pay tuition owed to Merrimack. Ms. Mordach pleaded guilty to federal criminal charges of mail and wire fraud. Merrimack seeks to recover its losses from its former auditor, KPMG LLP. Merrimack claims that KPMG noticed but did not follow up on discrepancies in some student loan accounting and deficiencies in internal controls for such loans, and as a result failed to discover Mordach’s fraud. Merrimack asserts that KPMG was negligent, breached its contract, and violated G.L. c. 93A. KPMG has moved for summary judgment on several grounds, including that Merrimack’s claims are barred under the equitable doctrine known as in pari delicto because Mordach committed fraud to benefit her employer and her deliberate wrongdoing on behalf of Merrimack was far worse than KPMG’s alleged negligence. The Court agrees that, in light of the undisputed material facts, Merrimack’s claims are barred by the in pari delicto doctrine. Under these circumstances, Merrimack is legally responsible for Mordach’s misconduct. Merrimack is also 1 The Perkins Loan program provides “low-interest loans to financially needy students” at institutions of higher education that are funded with federal monies, matching contributions by each participating school, and repayment of prior loans. De La Mota v. United States Dept. of Educ., 412 F.3d 71, 74 (2d Cir. 2005). “The schools independently determine eligibility, advance funds, collect payments[,] and make decisions concerning loan forgiveness.” Id.; see also 20 U.S.C. §§ 1070 et seq. – 2 – bound by the allegations in its complaint that Mordach engaged in intentional fraud. That deliberate misconduct by Merrimack’s employee was far more serious than KPMG’s purported negligence. Finally, the Court is not persuaded that Massachusetts should recognize, on public policy grounds, an exception to this doctrine for claims against an allegedly negligent outside auditor. The Court will therefore allow KPMG’s motion and dismiss this action. 1. Legal Background. “The doctrine of in pari delicto bars a plaintiff who has participated in wrongdoing from recovering damages for any loss resulting from the wrongdoing.” Choquette v. Isacoff, 65 Mass. App. Ct. 1, 3 (2005). It reflects an equitable and policy judgment that courts should “not lend aid to parties who base their cause of action on their own […]
Harvard Climate Justice Coalition, et al. v. President and Fellows of Harvard College, et al. (Lawyers Weekly No. 11-142-16)
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-905 Appeals Court HARVARD CLIMATE JUSTICE COALITION & others[1] vs. PRESIDENT AND FELLOWS OF HARVARD COLLEGE & others.[2] No. 15-P-905. Suffolk. June 7, 2016. – October 6, 2016. Present: Cypher, Grainger, & Kinder, JJ. Charity. Corporation, Charitable corporation. Practice, Civil, Motion to dismiss, Standing. Civil action commenced in the Superior Court Department on November 19, 2014. Motions to dismiss were heard by Paul D. Wilson, J. Joseph E. Hamilton, pro se. Benjamin A. Franta, pro se. Brett Blank, Assistant Attorney General, for the Attorney General. Martin F. Murphy for President and Fellows of Harvard College & another. Jeffrey D. Pierce, of California, & Piper Hoffman, for Animal Legal Defense Fund, amicus curiae, submitted a brief. Daniel M. Galpern, of Oregon, & Joseph B. Simons, for James E. Hansen, amicus curiae, submitted a brief. CYPHER, J. The plaintiffs, Harvard Climate Justice Coalition, an unincorporated association of students at Harvard University (university), and its members, appeal from a Superior Court judgment dismissing their action that sought a permanent injunction requiring the President and Fellows of Harvard College (the university’s formal name) and Harvard Management Company, Inc. (the company that manages the endowment funds) (collectively, Harvard), to divest the university’s endowment of investments in fossil fuel companies. In a two-count complaint, the plaintiffs allege that those investments contribute to climate changes (commonly known as global warming), which adversely impact their education and in the future will adversely impact the university’s physical campus. We affirm.[3] The students filed their complaint in November, 2014. Almost two months later, the defendants, Harvard and the Attorney General,[4] filed motions to dismiss. In count one of the complaint, the plaintiffs asserted that the harms of global warming resulting from investments in fossil fuel companies constitute mismanagement of the charitable funds in the university’s endowment. In count two, the plaintiffs sought to assert the rights of “[f]uture [g]enerations” to be free of what the plaintiffs call the “[a]bnormally [d]angerous [a]ctivities” of those companies, and proposed a new tort of “[i]ntentional [i]nvestment in [a]bnormally [d]angerous [a]ctivities.” The judge allowed both motions to dismiss. As to count one, the judge ruled that the plaintiffs failed to show that they had standing to maintain their claim of mismanagement of the endowment. As to count two, the judge declined […]
Merrimack College v. KPMG LLP (Lawyers Weekly No. 11-002-16)
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-122 Appeals Court MERRIMACK COLLEGE vs. KPMG LLP. No. 15-P-122. Suffolk. November 2, 2015. – January 6, 2016. Present: Milkey, Carhart, & Massing, JJ. Accountant. Negligence, Accountant. Arbitration, Arbitrable question, Appropriateness of judicial proceedings. Contract, Arbitration. Civil action commenced in the Superior Court Department on June 30, 2014. A motion to compel arbitration was heard by Janet L. Sanders, J. Ira M. Feinberg, of New York (Christopher H. Lindstrom with him) for the defendant. T. Christopher Donnelly (Kelly A. Hoffman with him) for the plaintiff. MILKEY, J. The defendant, KPMG LLP (KPMG), is an accounting firm that performed annual audits for the plaintiff, Merrimack College (Merrimack). In the underlying action, Merrimack alleges that KPMG committed malpractice when it failed to detect serious financial irregularities that occurred in Merrimack’s financial aid office during fiscal years 1998 through 2004. Based on a dispute resolution provision included in a contract the parties executed for fiscal year 2005, KPMG argues that Merrimack waived its right to sue KPMG regarding services it had provided in prior years and was required to arbitrate those claims. In addition, KPMG maintains that whether Merrimack’s pre-2005 claims are subject to compulsory arbitration must be resolved by arbitration. In a thoughtful decision, a Superior Court judge rejected such arguments and denied KPMG’s motion to compel arbitration. We affirm. Background. The essential facts are undisputed. For the fiscal years at issue in the malpractice action, Merrimack had hired KPMG through a succession of separate annual service agreements. Each such agreement took the form of a letter that KPMG sent to Merrimack that was then countersigned by Merrimack. None of the annual agreements from 1998 through 2004, referred to by the parties as “engagement letters,” makes any mention of arbitration as an available (much less mandatory) means for the parties to resolve disputes that might arise between them. In claiming that Merrimack’s malpractice action nevertheless is subject to binding arbitration, KPMG is relying on the engagement letter that the parties executed for fiscal year 2005. The 2005 agreement spelled out specific auditing services that KPMG would provide to Merrimack during that year. Unsurprisingly, in laying out KPMG’s affirmative obligations, the 2005 engagement letter is a forward-looking document, referring, for example, to the audit report that KPMG “will issue” in […]
Massachusetts Community College Council v. Massachusetts Board of Higher Education/Roxbury Community College (Lawyers Weekly No. 10-128-13)
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 SJC‑11250 MASSACHUSETTS COMMUNITY COLLEGE COUNCIL vs. MASSACHUSETTS BOARD OF HIGHER EDUCATION/ROXBURY COMMUNITY COLLEGE. Suffolk. March 5, 2013. ‑ July 12, 2013. Present: Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ. Arbitration, Confirmation of award, Collective bargaining. Education, Public colleges and universities. Public Employment, Collective bargaining. Labor, Arbitration, Collective bargaining, Public employment. Civil action commenced in the Superior Court Department on November 10, 2009. The case was heard by Kimberly S. Budd, J. After review by the Appeals Court, the Supreme Judicial Court granted leave to obtain further appellate review. Will Evans for the plaintiff. Carol Wolff Fallon for the defendant. Deirdre Heatwole & Joseph Ambash, for University of Massachusetts, amicus curiae, submitted a brief. James B. Cox, Special Assistant Attorney General, & Alison Little Sabatello, for Bridgewater State University & others, amici curiae, submitted a brief. BOTSFORD, J. The plaintiff Massachusetts Community College Council (union) and the defendant Massachusetts Board of Higher Education/Roxbury Community College (college) were parties to a collective bargaining agreement (agreement) containing a provision that “[t]he granting or failure to grant tenure shall be arbitrable but any award is not binding.” After a professor, who was a member of the union, was denied tenure at the college, the union submitted his grievance to arbitration. An arbitrator concluded that the college violated the terms of the agreement, and ordered as a remedy that the professor be reinstated to his position, and that he be eligible for a new evaluation and tenure review process. A judge in the Superior Court affirmed the arbitrator’s award. The judge reasoned that the issue before the arbitrator was the manner in which the professor was reviewed and considered for tenure, not the substantive tenure decision itself, and that the arbitrator’s decision was binding on the college. The college appealed, and the Appeals Court concluded that under the “clear language” of the above-quoted provision of the agreement, the arbitrator’s award was not binding on the college, and therefore the judge erred in confirming the arbitrator’s award under G. L. c. 150C, § 10. Massachusetts Community College Council v. Massachusetts Bd. of Higher Educ./Roxbury Community College, 81 Mass. App. Ct. 554, 562-563 (2012) (Massachusetts Community College Council). We also conclude that the Superior Court judgment must be reversed. Background. On January 8, […]
14 Good Jobs That Don’t Require a College Degree
The following story was provided by AOLJobs.com By Dan Fastenberg As tough as the labor market is, college grads still have an easier time than those with only a high school degree. In February, college graduates had an unemployment rate of 3.8 percent—compared to a staggering 11 percent for those with only a high school diploma. Still, a new study released Tuesday shows that there are some good careers out there for those who lack a four-year degree. If you’re looking for a job in the South End, check out our jobs page. CareerCast.com, the job-portal site, compiled a list of 14 good careers that require only a high school degree (though some require additional training). The site used a variety of criteria to assess the quality of the careers, including salary, how physically demanding the positions are, and emotional factors such as the fields’ competitiveness, potential hazards and stress. Those with the lowest score received the highest ranking. CareerCast.com also looked at the potential income and employment growth for the decade ending in 2020, using data from the Bureau of Labor Statistics. Overall, the 14 jobs for high school grads offer an average median salary of $ 41,307, which means the group is in line with the overall average salary for all Americans. The highest-paying job on the list offers a median salary of $ 77,000 a year. But several of the careers on CareerCast’s list offer incomes of around $ 20,000. More: 10 Things HR Won’t Tell You About Your Resume The list includes careers that have long been popular trades for Americans who don’t attend college. But CareerCast also identified tech positions that are in high demand, and often don’t require a degree, just skill. Still, expect to be paid less without a college degree. “Business owners don’t always want to pay market rate if you don’t have a degree,” Sol Hershkowitz, of New York-based Viasoft.com, told CareerCast, according to its news release. Check out CareerCast.com’s list of “14 Great Jobs Without a College Degree“: 1. Administrative/executive assistantJobs-rated rank: 75.Median salary: $ 34,660.Job growth: 12 percent. 2. Automobile body repairerJobs-rated rank: 77.Median salary: $ 34,660.Job growth: 17 percent. 3. Bookkeeper Jobs-rated rank: 71.Median salary: $ 34,040.Job growth: 14 percent. 4. Communications equipment mechanic Jobs-rated rank: 84.Median salary: $ 54,710.Job growth: 15 percent. 5. Electrician Jobs-rated rank: 76.Median salary: $ 48,250.Job growth: 23 percent. 6. GlazierJobs-rated rank: 59.Median salary: $ 36,640.Job growth: 42 percent. 7. Hair stylistJobs-rated rank: 83.Median salary: $ 22,500.Job growth: 14 percent. 8. Industrial machine repairer Jobs-rated rank: 44.Median salary: $ 44,160.Job growth: 19 percent. 9. Paralegal assistant Jobs-rated rank: 41.Median Salary: $ 46,680.Job Growth: 18 percent. 10. Pest control workerJobs-rated rank: 95.Median salary: $ 30,340.Job growth: 24 percent. 11. PlumberJobs-rated rank: 66.Median salary: $ 46,660.Job growth: 26 percent. 12. ReceptionistJobs-rated rank: 86.Median salary: $ 25,240.Job growth: 24 percent. 13. Skincare specialistJobs-rated rank: 43.Median salary: $ 28,920.Job growth: 25 percent. 14. Web developerJobs-rated rank: 24.Median salary: $ 75,660.Job growth: 22 percent. South End Patch
City of Worcester v. College Hill Properties, LLC, et al. (Lawyers Weekly No. 10-083-13)
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 SJC‑11166 CITY OF WORCESTER vs. COLLEGE HILL PROPERTIES, LLC, & another[1] (and four companion cases[2]). Worcester. January 7, 2013. ‑ May 15, 2013. Present: Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ. Lodging House. Contempt. Practice, Civil, Contempt. Words, “Lodgings.” Civil actions commenced in the Worcester Division of the Housing Court Department on January 13, 2010. The cases were heard by Timothy F. Sullivan, J., and complaints for contempt were also heard by him. After review by the Appeals Court, the Supreme Judicial Court granted leave to obtain further appellate review. Gary S. Brackett for the defendants. Ann S. Refolo, Assistant City Solicitor, for the plaintiff. Philip S. Lapatin & Nathaniel F. Hulme, for Greater Boston Real Estate Board, amicus curiae, submitted a brief. LENK, J. The defendants own two-family and three-family rental properties in Worcester. They leased dwelling units in these properties to groups of four unrelated adult college students. Each such dwelling unit contained a living room and dining room, kitchen, bathroom, and bedrooms. The inspectional services department of the city of Worcester (city) determined that, where such a dwelling unit is occupied by four or more unrelated adults, “not within the second degree of kindred” to each other, the dwelling unit is a “lodging” for purposes of G. L. c. 140, §§ 22-32 (lodging house act or act), and that each of the defendants was accordingly operating a lodging house without a license. See G. L. c. 140, § 24. This case presents the question whether such dwelling units as occupied constitute lodgings so as to render the subject properties lodging houses under the lodging house act. We conclude that the dwelling units are not lodgings and the properties are not lodging houses under the act. 1. Background. The essential facts are undisputed. The defendants own two‑family and three‑family rental properties in the city.[3] The properties contain dwelling units commonly referred to as apartments, consisting of a living room and dining room, a kitchen, a bathroom, and an unspecified number of bedrooms. Each apartment at issue here was leased to four local college students for a twelve‑month period. The students, all adults, were not related to each other or to the defendant lessors.[4] The students sharing an apartment each had access to the entire apartment and the use of all […]
Tsarnaev’s College Friends Face Federal Charges in Boston Marathon Bombing
In the days following the Boston Marathon bombings April 15, accused suspect Dzokhar Tsarnaev texted with a college friend thrusting him and two others into the precarious situation of helping the man who may have attacked the city. Dias Kadyrbayev, 19, Azamat Tazhayakov, 20, and Robel Phillipos, 20, looked every bit as young in their initial federal court appearance Wednesday afternoon as their actions in the days following the bombing would indicate, according to the federal criminal complaint against them. Kadyrbayev and Tazhayakov each face one count of conspiracy to obstruct justice, and Phillipos faces a charge of making false statements in a terrorism investigation. Each voluntarily denied bail and were detained following their appearance before Judge Marianne B. Bowler at John Joseph Moakley U.S. Courthouse in Boston. Kadyrbayev and Tazhayakov, nationals of Kazakhstan who were in immigration court Wednesday morning because of expired student visas, face a maximum penalty of five years in prison with three years supervised release and a fine of $ 250,000. Phillipos faces a maximum penalty of an eight-year prison term with three years supervised release and a fine of $ 250,000. All three said they would be able to afford lawyers. Kadyrbayev, Tazhayakov and Phillipos, who all attended University of Massachusetts Dartmouth with Tsarnaev, are accused of disposing of a backpack they found in Tsarnaev’s Pine Dale Hall dorm room that contained fireworks emptied of gunpowder and a laptop computer at around 10 p.m. April 18. Kadyrbayev stuffed the backpack, fireworks and laptop in a black trash bag and threw it in a trash dumpster near the Carriage Drive apartments in New Bedford where Kadyrbayev and Tazhayakov lived. Hours before, after seeing the photos released by the FBI of Dzokhar and Tamerlan Tsarnaev, Kadyrbayev texted Dzokhar Tsarnaev and told him he looks like the suspect, according to the complaint, filed by FBI special agent Scott P. Cieplik. It was then that they decided to go to Tsarnaev’s dorm room and take action. “Tsarnaev’s return texts contained ‘lol’ and other things Kadyrbayev interpreted as jokes such as ‘you better not text me’ and ‘come to my room and take whatever you want,’” the complaint says. In court, the stone-faced, soft-spoken suspects appeared in T-shirts, a sweatshirt and jeans. At one point Bowler scolded Phillipos for not paying attention. “I suggest you pay attention to me rather than looking down,” she said. Phillipos, from Cambridge, is accused to lying to federal investigators about his role in the attempted cover up. In an April 19 inverview, he told investigators he did not go to Tsarnaev’s dorm room after texting with Kadyrbayev April 18. He later […]
Should Boston College Punish Students for Handing Out Condoms on Campus?
Some Boston College students are in hot water with the university this week. The Jesuit school sent the students letters threatening them with disciplinary action for handing out condoms on campus. The students, who are part of the group Boston College Students for Sexual Health, were giving away condoms from their dorm rooms, according to boston.com. The rooms were called “Safe sites.” But the school has a policy against the distribution of contraceptives on school grounds. Representatives for the health group said the move comes as a surprise. The university has known about the program for years but did not act until now, according to organization chair Lizzie Jekanowski. Boston College, meanwhile, said the move was made to help students realize their actions did not conform with the schools stated policies. “We recognize that, as a reflection of society at large, many students do not agree with the Church’s position on these issues. However, we ask those who do not agree to be respectful of our position, and circumspect in their private affairs,” said BC spokesman Jack Dunn in a statement to boston.com. What do you think? Should Boston College punish students for taking a pro-active stance against the school’s stated position on condoms? Or is this stifling free expression on campus? Students knew Boston College was a religious institution when they applied, so should they respect the church’s point of view while on campus? Tell you what you think in the comment section below. South End Patch