Accutrax LLC v. Finnegan, Henderson, Farabow, Garrett &Dunner, LLP (Lawyers Weekly No. 09-058-17)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION No. 2017 – 1617 BLS 1 ACCUTRAX LLC vs. FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP MEMORANDUM AND ORDER ON DEFENDANT’S MOTION TO DISMISS In this legal malpractice action the defendant law firm moves to dismiss on the ground that the plaintiff, Accutrax LLC, was not the firm’s client. There is no question, however, that the law firm was engaged to perform the legal services described in the First Amended Complaint (FAC). There is also no question that the FAC adequately pleads a claim for professional malpractice and the other related claims, assuming that the plaintiff is the client of Finnegan. Thus, the issue presented is whether the sole plaintiff, Accutrax LLC, has standing as a client to assert the claims. BACKGROUND The following facts are taken from the First Amended Complaint (FAC), and the documents attached to the FAC as exhibits. Three individuals acted as partners, or joint venturers, to patent and market a razor utility knife. They agreed to form a Delaware LLC to pursue the project. One partner, Kildevaeld agreed 1 to assign his ownership and patent rights to the LLC in exchange for contributions by the other two partners, Billado and Cumings, to commercialize and market the knife. The three partners went to defendant, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP (Finnegan) to obtain legal counsel for their enterprise. The partners informed Finnegan that they intended to form a Delaware LLC with the name “Contractor Trusted, LLC.” They informed Finnegan that the LLC had not yet been formed. Nevertheless, Finnegan prepared an engagement letter for the legal representation, designating the client as “Contractor Trusted, LLC.” The engagement letter, dated March 4, 2013, was signed by Billado on behalf of Contractor Trusted, LLC. The engagement letter made it clear that Finnegan’s client was Contractor Trusted, LLC and not any officer, director, shareholder or employee of the LLC. The engagement letter attached an invoice for $ 5,000. On March 6, 2013, the invoice was paid by a check from Billado. The partners intended to market the knife under the name Accutrax. When they finally incorporated the anticipated LLC, they decided to name the corporation Accutrax LLC, instead of Contractor Trusted, LLC. Accutrax LLC was formed on June 6, 2013. No entity by the name of Contractor Trusted, LLC was ever formed. All three partners became members of Accutrax LLC. “Finnegan had actual as well as constructive knowledge that Kildevaeld, Billado, and Cumings used the name Accutrax LLC instead of Contractor Trusted, LLC for their LLC.” FAC ¶ 35. Finnegan proceeded to perform legal services. Billado provided to Finnegan a prior art search result that he had from another attorney. […]
Finnegan, et al. v. VBenx Corporation, et al. (Lawyers Weekly No. 09-049-17)
1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT SUCV2009-03772-BLS1 J. BRENT FINNEGAN, and others Plaintiffs vs. VBENX CORPORATION, and others Defendants VBENX CORPORATION, and others Plaintiffs-in–Counterclaim vs. J. BRENT FINNEGAN, and others Defendants-in-Counterclaim INTERIM ORDER ON DEFENDANTS’ MOTION FOR AN AWARD OF FEES AND COSTS UNDER G.L. c. 231, §6F Still pending in this action is the G.L. c. 231, § 6F motion brought by the defendants VBenx Corporation, Richard Baker, Peter Marcia, Walter Smith and D. Michael Sherman (collectively, VBenx)1 in which they seek an award of reasonable counsel fees and other costs incurred in defending the claims asserted against them by the plaintiffs J. Brent Finnegan, Kenneth F. Phillips, Karen W. Finnegan and Back Bay Ventures, LLC (collectively, Finnegan 1 The Court recognizes that VBenx is not actually a party to either the § 6F motion or the counterclaim for malicious prosecution as it was not a defendant in the claims prosecuted by Finnegan et al. However, the Court believes this is a convenient way to collectively refer to the defendants/plaintiffs-in-counterclaim. 2 and the Finnegan claims). An abbreviated review of the prolix proceedings in this eight year litigation (there are 291 docket entries) is necessary to place this motion in context. BACKGROUND Finnegan filed his claims on September 4, 2009; VBenx filed its counterclaims on October 28, 2009. After much pretrial sparring, the Finnegan claims were severed from VBenx’ counterclaims and proceeded to trial, without a jury, on April 25, 2011 (Lauriat, J. presiding). The case was tried over twenty-five days, concluding on June 5, 2011. 819 exhibits were entered in evidence (6.5 feet of paper according to Judge Lauriat’s Memorandum of Decision). On October 19, 2012, the Court issued extensive Findings of Fact and Rulings of Law finding in favor of VBenx with respect to all claims asserted against it. After further motions and hearings, on March 26, 2013, the Court entered a Separate and Final Judgment based upon its Findings and Rulings which dismissed all of the Finnegan claims. On May 3, 2013, Finnegan appealed; the Superior Court’s Judgment was affirmed by the Appeals Court on August 14, 2015. See Finnegan v. Baker, 88 Mass. App. Ct. 35 (2015). In the meantime, the parties commenced litigation of VBenx’ counterclaims. Of relevance to the motion now before the court, on May 6, 2013 the parties filed a Rule 9A package including both Finnegan’s motion to dismiss the counterclaims and VBenx’ cross-motion for an award fees and costs under §6F based on the outcome of the jury-waived trial.2 It 2 It is notable that this § 6F cross-motion is based on orders entered following the trial of the Finnegan claims, the entry of a Separate and Final Judgment […]
Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, et al. (Lawyers Weekly No. 10-202-15)
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-11800 CHRIS E. MALING vs. FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP, & others.[1] Suffolk. September 8, 2015. – December 23, 2015. Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & Hines, JJ. Patent. Conflict of Interest. Attorney at Law, Conflict of interest, Attorney-client relationship, Representation of differing interests. Civil action commenced in the Superior Court Department on April 25, 2013. A motion to dismiss was heard by Janet L. Sanders, J. The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court. Thomas M. Bond for the plaintiff. Erin K. Higgins (Christopher K. Sweeney with her) for the defendants. Paul A. Stewart, of California, & Sara E. Hirshon, for Knobbe, Martens, Olson & Bear, LLP, & others, amici curiae, submitted a brief. Heather B. Repicky & Lauren E. Ingegneri, for Boston Patent Law Association, amicus curiae, submitted a brief. CORDY, J. In this case we consider whether an actionable conflict of interest arises under Mass. R. Prof. C. 1.7, as appearing in 471 Mass. 1335 (2015), when attorneys in different offices of the same law firm simultaneously represent business competitors in prosecuting patents on similar inventions, without informing them or obtaining their consent to the simultaneous representation.[2] The plaintiff, Chris E. Maling, engaged the defendant law firm Finnegan, Henderson, Farabow, Garrett & Dunner, LLP (Finnegan), including the three individual attorneys named in this suit, to represent him in connection with the prosecution of patents for Maling’s inventions for a new screwless eyeglass. After obtaining his patents, Maling learned that Finnegan had been simultaneously representing another client that competed with Maling in the screwless eyeglass market. Maling then commenced this action, alleging harm under various legal theories resulting from Finnegan’s failure to disclose the alleged conflict of interest. A judge in the Superior Court dismissed Maling’s complaint for failure to state a claim under Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754 (1974). Maling appealed, and we transferred the case to this court on our own motion. We conclude that the simultaneous representation by a law firm in the prosecution of patents for two clients competing in the same technology area for similar inventions is not a per se violation of Mass. R. Prof. Conduct 1.7. We further conclude that based on the facts […]
Finnegan, et al. v. Baker, et al. (Lawyers Weekly No. 11-111-15)
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-1995 Appeals Court J. BRENT FINNEGAN & others[1] vs. RICHARD BAKER & others.[2] No. 13-P-1995. Suffolk. January 6, 2015. – August 14, 2015. Present: Grainger, Brown, & Milkey, JJ. Corporation, Close corporation, Stock. Loan. Civil action commenced in the Superior Court Department on September 4, 2009. The case was heard by Peter M. Lauriat, J., and entry of separate and final judgment was ordered by him. Ilyas J. Rona for the plaintiffs. David B. Chaffin for the defendants. BROWN, J. This is a shareholder dispute over control of VBenx Corporation (VBenx), a closely held Delaware corporation that has depended largely on financing from its shareholders to stay afloat, some of which was in the form of promissory notes convertible to shares of VBenx stock. The plaintiffs appeal from a Superior Court judgment dismissing their claims for breach of fiduciary duty, unjust enrichment, and rescission, stemming from the defendants’ conversion of their notes to VBenx stock, pursuant to which the defendants gained a majority interest in the company. Following a jury-waived trial, the judge upheld the validity of the loan transactions. The issues on appeal involve Delaware law as it applies to the convertible notes, which were issued to VBenx shareholders without formal director approval and often without contemporaneous documentation, and the question whether the notes were void, or merely voidable and thus subject to ratification. The judge determined that the loan transactions were not void but were, at most, voidable, and that the VBenx board of directors had impliedly ratified the convertible nature of the loans. We affirm. 1. Background. We summarize the facts relevant to this appeal from the judge’s very thorough October 18, 2012, “Findings of Fact, Rulings of Law and Order for Entry of Judgment.” The plaintiffs, J. Brent Finnegan (Finnegan), Kenneth F. Phillips, and Karen W. Finnegan, seek to invalidate shares of VBenx stock issued to the defendants, principally Walter Smith and Peter Marcia, who made convertible loans to VBenx and subsequently converted their notes to stock. Other defendants include Richard Baker, a VBenx director and chief financial officer, and D. Michael Sherman, a VBenx shareholder as of 2010. All of the parties are shareholders in VBenx.[3] VBenx was formed by Finnegan, Phillips, Salvatore Percia, Baker, and Marcia in 2004, with its headquarters in Duluth, Georgia, […]