Posts tagged "Inc."

Geanacopoulos v. Philip Morris USA Inc. (Lawyers Weekly No. 12-070-17)

COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT.
9884CV06002-BLS1
____________________
THOMAS GEANACOPOULOS, on behalf of himself and a class
v.
PHILIP MORRIS USA INC.
____________________
MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION FOR DISPOSITION OF RESIDUAL FUNDS
Judge Leibensperger found after a lengthy bench trial that, “for more than twenty-eight years until 1999,” Philip Morris USA, Inc., “knowingly and willfully marketed Marlboro Lights as a cigarette less harmful or safer than Marlboro Reds without sufficient evidence to substantiate that claim.” Judge Leibensperger concluded that in so doing Philip Morris deliberately deceived Massachusetts consumers in violation of G.L. c. 93A. He awarded statutory damages of $ 25 per class member, or an estimated total of $ 4,942,500, plus prejudgment interest. The parties then entered into a settlement agreement to govern the distribution of this award to eligible class members. Philip Morris paid $ 15,273,815 to fund the settlement.
Given the number of class members who have been identified, the parties expect that residual funds totaling roughly $ 6.8 million will be left in the settlement fund after the distribution of the statutory damages plus interest to each class member and the payment of all authorized expenses.
Plaintiffs have asked the Court to approve distribution of the residual funds. The distribution of such residual funds in a class action is governed by Mass. R. Civ. P. 23(e). It provides that any such residual funds “shall be disbursed [a] to one or more nonprofit organizations or foundations (which may include nonprofit organizations that provide legal services to low income persons) which support projects that will benefit the class or similarly situated persons consistent with the objectives and purposes of the underlying causes of action on which relief was based, or [b] to the Massachusetts IOLTA Committee to support activities and programs that promote access to the civil justice system for low income residents of the Commonwealth of Massachusetts.” Rule 23(e)(2). This rule is similar in aim to common law cy pres doctrine, which governs the disposition of property dedicated for
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charitable purposes where the original purposes had become impossible or impracticable.1
In their original motion, Plaintiffs asked that $ 1.6 million be distributed to each of four non-profit organizations or sets of programs—the Campaign for Tobacco-Free Kids, the Massachusetts General Hospital Tobacco 21 and CEASE Programs, the University of Massachusetts Medical School Center for Tobacco Treatment and Research and Training, and Northeastern University’s Public Health Advocacy Institute—and that any remaining residual funds (which Plaintiffs estimated would amount to roughly $ 383,500) be distributed to the Massachusetts IOLTA Committee.
After the Massachusetts IOLTA Committee objected to this proposal, the Plaintiffs and the Committee agreed upon an alternative recommendation.
Plaintiffs and the Committee now jointly request that forty percent of the residual funds be paid to the Massachusetts IOLTA Committee. Plaintiffs recommend that the remainder be distributed in equal shares of fifteen percent each to the four public health organizations listed above. The Committee no longer takes any position as to whether distributing money to any or all of those organizations would be proper.
Distribution of a portion of the residual funds to the Massachusetts IOLTA Committee is permissible and appropriate because it is specifically authorized by Rule 23(e)(2).
The Court finds that it would also be proper and appropriate to distribute a portion of the residual funds to the Campaign for Tobacco-Free Kids, the Massachusetts General Hospital Tobacco 21 and CEASE Programs, the University of Massachusetts Medical School Center for Tobacco Treatment and Research and Training, subject to the condition that each organization used any such funds for their charitable activities in Massachusetts. For the reasons stated in Plaintiffs’ written submissions, the Court finds that such use of residual funds by these three organizations or programs will benefit Massachusetts residents who are members or
1 See generally Board of Selectmen of Provincetown, 15 Mass. App. Ct. 639, 646 (1983) (summarizing cy pres doctrine).
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the plaintiff class or are similarly situated, and will do so in a manner consistent with the objectives and purposes of this class action.
The Court declines to authorize the distribution of any portion of the residual funds to Northeastern University’s Public Health Advocacy Institute in order to avoid any appearance that the selection of funding recipients was not made on the merits. One of the lead attorneys representing the plaintiff class in this lawsuit serves as PHAI’s litigation director and as director of PHAI’s Center for Public Health Litigation. The Court fully credits PHAI’s showing that this individual will not benefit personally from any residual funds that may be distributed to PHAI. Nonetheless, the Court is convinced that it should not authorize any distribution to PHAI in order to avoid any appearance of impropriety.2
In the exercise of its discretion, the Court will order that the Massachusetts IOLTA Committee receive 55 percent of the residual funds and that other three organizations or programs discussed above, other than the PHAI, each receive 15 percent of the residual funds.
ORDER
Plaintiffs’ motion for disposition of residual funds is ALLOWED IN PART. The Court hereby orders that any residual funds available in the Settlement Fund after paying or accounting for all permissible distributions to class members and all allowable expenses shall be distributed as follows: (1) 55 percent of the total residual funds shall be paid to the Massachusetts IOLTA Committee to support activities and programs that promote access to the civil justice system for low income residents of the Commonwealth of Massachusetts; (2) 15 percent shall be paid to the Campaign
2 Cf. Weeks v. Kellogg Co., No. CV 09-08102(MMM)(RZx), 2013 WL 6531177, *19 (C.D. Cal. 2013) (Morrow, J.) (declining to approve cy pres distribution to local food bank that had a “preexisting relationship with certain of plaintiffs’ counsel”); In re Linerboard Antitrust Litigation, MDL No. 1261, 2008 WL 4542669, *5 (E.D. Pa. 2008) (DuBois, J.) (declining to approve cy pres distribution to Public Interest Law Center of Philadelphia because attorney that appeared in case “currently serves in a lead role at PILCOP”); see generally American Law Institute, draft Principles of the Law of Aggregate Litigation, § 3.07, comment b (2009) (“a cy pres remedy should not be ordered if the court or any party has any significant prior affiliation with the intended recipient that would raise substantial questions about whether the selection of the recipient was made on the merits”).
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for Tobacco-Free Kids, to be used only for programs or activities in Massachusetts; (3) 15 percent shall be paid to the Massachusetts General Hospital’s Tobacco 21 and CEASE Programs, to be used only for programs or activities in Massachusetts; and (4) 15 percent shall be paid to the University of Massachusetts Medical School’s Center for Tobacco Treatment and Research and Training, to be used only for programs or activities in Massachusetts.
June 9, 2017
___________________________
Kenneth W. Salinger
Justice of the Superior Court

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Posted by Stephen Sandberg - June 16, 2017 at 7:56 am

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Bassett, et al. v. Triton Technologies, Inc., et al. (Lawyers Weekly No. 12-074-17)

COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT.
1684CV03475-BLS2
____________________
LAURA BASSETT, JAMIE ZALINSKAS, ALYSSA WRIGHT, and ALEXIS CRAMER, on behalf of themselves and all others similarly situated
v.
TRITON TECHNLOGIES, INC., S. JAY NALLI, and ANDREW S. BANK
____________________
MEMORANDUM AND ORDER ALLOWING PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
The four named plaintiffs used to work for Triton Technologies, Inc., as “inside sales” employees. They assert two distinct claims for unpaid wages. The first claim alleges that Defendants violated the overtime statute, G.L. c. 151A, § 1A, by not paying Plaintiffs time-and-a-half for working more than forty hours per week. The second claim alleges that Defendants violated the Sunday pay law, G.L. c. 136, § 6(50), by not paying Plaintiffs time-and-a-half for working on Sundays.
Plaintiffs have now moved to certify a class consisting of two distinct subclasses—one comprised of sales employees at Triton who have not received time-and-a-half for working more than forty hours in any given week, and another comprised of all sales employees who have not received time-and-a-half for hours worked on a Sunday.
The Court finds that class certification is appropriate because both sub-classes are so numerous that it is not practical to join all class members, there are questions of law or fact that are common to all members of each subclass and that predominate over questions of fact that affect only individual members, the claims of the named Plaintiffs are representative of the claims of each subclass, the named Plaintiffs and their counsel will fairly and adequately protect the interests of the class, and a class action would permit the most fair and efficient adjudication of this dispute. See Mass. R. Civ. P. 23.
Although Defendants do not oppose certification of the overtime subclass, they argue that the class should be limited to salespeople who claim to be owed overtime by Triton for work performed after November 13, 2013. Defendants point out that the
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overtime claim is subject to a three-year statute of limitations, see G.L. c. 151, § 20A,1 and this action was filed on November 14, 2016. Plaintiffs agree that it is appropriate to limit the overtime class to this three-year period. The Court will do so.
Defendants do oppose certification of the Sunday subclass. They argue that this claim is subject to a six-month statute of limitations under G.L. c. 136, § 9, and that none of the named Plaintiffs worked for Triton within six months before this lawsuit was filed (i.e. after May 13, 2015). The Court disagrees.
The Sunday claim is not governed by the six-month limitations period invoked by Defendants. That statute provides that “Prosecution for violations of sections two, three, or five [of chapter 136] shall be commenced within six months after the offense was committed.” G.L. c. 136, § 9. This limitations period only governs criminal prosecutions brought against persons who commit one of the crimes set forth in G.L. c. 136, §§ 2, 3, or 5. But this case is not a criminal prosecution, and Plaintiffs do not seek to enforce any part of sections 2, 3, or 5 of chapter 136.
The Sunday claim is actually governed by a three-year limitations period. As the Court explained in a prior decision in this case dated March 6, 2017, Plaintiffs may enforce the Sunday pay law by asserting a cause of action for non-payment of wages under G.L. c. 149, § 150. Cf. Drive-O-Rama, Inc. v. Attorney General, 63 Mass. App. Ct. 769, 769-770 (2005) (failure to pay time and a half for work on legal holidays, as required by G.L. c. 136, § 13, violated the Wage Act). All Wage Act claims, including claims to enforce the Sunday pay law, are governed by the three-year limitations period established in G.L. c. 149, § 150. It appears to be undisputed that each of the named Plaintiffs worked for Triton within three years before this action was filed.
The Court will certify the Sunday pay class but limit it to the applicable three-year statutory limitations period.
1 The limitations period for overtime claims used to be two years, but § 20A was amended effective November 18, 2014, to extent that period to three years. See St. 2014, c, 292, §§ 3, 4.
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ORDER
Plaintiffs’ motion for class certification is ALLOWED IN PART. The Court hereby certifies a class of plaintiffs that shall consist of the following two subclasses: (1) all sales employees of Triton Technologies, Inc., who did not receive compensation equal to one and one-half times their regular hourly rate for all of the hours that they worked in excess of forty house during any week at any time after November 13, 2013; (2) all sales employees of Triton Technologies, Inc., who did not receive compensation equal to one and one-half times their regular hourly rate for all of the hours that the worked on a Sunday at any time after November 13, 2013.
June 13, 2017
___________________________
Kenneth W. Salinger
Justice of the Superior Court

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Posted by Stephen Sandberg - June 16, 2017 at 12:47 am

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Meunier, et al. v. Market Strategies, Inc. (Lawyers Weekly No. 12-072-17)

COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT.
1684CV01546-BLS2
1684CV03592-BLS2
____________________
JOHN J. MEUNIER, CHRISTY M. WHITE, and the JOHN J. MEUNIER 2012 IRREVOCABLE TRUST
v.
MARKET STRATEGIES, INC.
____and____
MARKET STRATEGIES, INC.
v.
COGENT RESEARCH HOLDINGS LLC
____________________
MEMORANDUM AND ORDER ON MARKET STRATEGIES, INC.’S MOTION FOR SUMMARY JUDGMENT
John Meunier, Christy White, and the John J. Meunier 2012 Irrevocable Trust (the “Trust”) claim that Market Strategies, Inc. (“MSI”) breached its contractual obligations to make certain payments to Cogent Research Holdings LLC (which the parties refer to as “Holdco”). They also claim that after signing the contract at issue MSI misrepresented its willingness and ability to pay what it owes and thereby committed deceptive acts in violation of G.L. c. 93A. Finally, Meunier and White seek declaratory judgment regarding the enforceability of certain non-competition, non-solicitation, and confidentiality agreements. MSI has moved for summary judgment.
The Court will grant summary judgment in MSI’s favor on the contract claim because Plaintiffs are not intended beneficiaries of MSI’s payment obligations to Holdco as a matter of law. It will also allow MSI’s motion with respect to the declaratory judgment claim because any dispute regarding enforceability of the non-competition or non-solicitation agreements is moot and Plaintiffs lack standing to challenge the confidentiality agreement on the ground that MSI committed a material breach of contract by not paying Holdco. However, the Court will deny the summary judgment motion with respect to the misrepresentation and c. 93A claims because they are independent from the contract claim.
1. Undisputed Factual Background. These actions arise from the May 2013 sale of Cogent Research LLC to MSI. At the time of the transaction, Meunier, White,
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and the Trust were the sole owners of Cogent Research. They agreed to sell Cogent Research to MSI in exchange for an “Initial Payment” of $ 8.0 million, a “Delayed Payment” of $ 2.0 million, and a “Contingent Payment” of roughly $ 3.15 million that was due after MSI received additional audited financial statements of Cogent Research. Meunier and White also agreed to work for MSI for three years and entered into a non-competition, non-solicitation, and confidentiality agreement.
Meunier, White, and the Trust created Holdco in connection with this transaction. They are the sole owners of Holdco. They transferred ownership of Cogent Research to Holdco, which in turn sold Cogent Research to MSI. The parties’ purchase agreement provides that MSI was required to pay an Initial Payment, Delayed Payment, and Contingent Payment to Holdco. MSI does not have any contractual obligation to make any of these payments to Meunier, White, or the Trust.
Although the parties’ purchase agreement provides that MSI was to make the Deferred and Contingent Payments to Holdco no later than April 30, 2016, a separate subordination agreement executed at the same time modifies those terms. The parties to the subordination agreement were Holdco, MSI, and an administrative agent representing Senior Lenders of MSI. Meunier and White signed this contract on behalf of Holdco. The subordination agreement provides in § 2.1 that the obligations of MSI to make the Delayed and Contingent Payments “shall be subordinate and subject in right and time of payment … to the prior Payment in Full of all Senior Debt” held by the Senior Lenders. It provides in § 2.3 that, so long as Senior Debt is outstanding, MSI shall not make and Holdco shall not accept payment of any part of the Deferred and Contingent Payments if doing so would cause MSI to default under the Senior Credit Agreement.1 And it provides in § 2.4(a) that Holdco shall not sue
1 In its prior decision dated February 23, 2017, the Court construed § 2.3 as providing that MSI shall not make and Holdco shall not accept payment of any part of the Deferred and Contingent Payments until the Senior Lenders are paid in full. The Court understood the clause barring payments that would cause a default as limiting payments to Holdco that would otherwise be permitted under § 2.2 if MSI were involved in a bankruptcy or similar proceeding. In their summary judgment memoranda, however, both sides say that § 2.3 permits MSI to make Deferred or Contingent Payments at any time—even if Senior Debt is still unpaid—so long as doing so does not breach any obligation owed to the Senior Lenders. The Court accepts the parties’ shared construction of their own contract.
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MSI or take any other action to enforce MSI’s payment obligations under the purchase agreement until the Senior Debt is paid in full.
2. Contract Claim. To date, MSI has not paid any part of the $ 5.15 million in Deferred and Contingent payments that it owes to Holdco. Plaintiffs claim that this constitutes a breach of the purchase agreement. Meunier, White, and the Trust all sued MSI in their own names, purporting to assert their own rights as intended third-party beneficiaries of MSI’s contractual promise to pay Holdco these amounts.
MSI contends that it is entitled to summary judgment on this claim because Plaintiffs have no standing to raise it. (On the merits, MSI contends that it is required or at least permitted to withhold these payments under the subordination agreement. It does not seek summary judgment on that ground.)
2.1. Legal Background — Intended Beneficiaries and Contract Interpretation. The purchase agreement provides (in § 9.09) that it “will be governed by and construed and enforced in accordance with” Massachusetts law.
“Under Massachusetts law, only intended beneficiaries, not incidental beneficiaries, can enforce a contract.” See Harvard Law School Coalition for Civil Rights v. President and Fellows of Harvard College, 413 Mass. 66, 71 (1992). “One need not be a beneficiary of every provision of the contract in order to be an intended beneficiary with enforceable rights; it is enough to be the intended beneficiary of the promise one is seeking to enforce.” The James Family Charitable Foundation v. State Street Bank and Trust Co., 80 Mass. App. Ct. 720, 725 (2011). An intended third-party beneficiary “stands in the shoes” of, and thus has no greater rights than, the contracting party whose rights the beneficiary seeks to enforce. Rae v. Air-Speed, Inc., 386 Mass. 187, 196 (1982), quoting Restatement (Second) of Contracts § 309 (1981); accord Campione v. Wilson, 422 Mass. 185, 194 (1996).
Plaintiffs would have standing to enforce MSI’s promises to pay Holdco only if the purchase agreement expressly or implicitly conveyed a “clear and definite” intent that Plaintiffs have the right to enforce those promises. See James Family Charitable Foundation, supra, at 724-725, quoting Lakew v. Massachusetts Bay Transp. Auth., 65 Mass. App. Ct. 794, 798 (2006), and Anderson v. Fox Hill Village Homeowners Corp., 424 Mass. 365, 366-367 (1997). “[T]he language and circumstances of the
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contract” determine whether the contracting parties intended that Plaintiffs would have the right to sue MSI for not paying amounts it owes to Holdco. Anderson, supra, at 367.
If written contracts are unambiguous, as they are here, a court “may determine whether” someone who was not a direct party to a particular promise “was an intended beneficiary as a matter of law.” James Family Charitable Foundation, 80 Mass. App. Ct. at 725. This follows from the general rule that “[i]f a contract … is unambiguous, its interpretation is a question of law that is appropriate for a judge to decide on summary judgment.” Seaco Ins. Co. v. Barbosa, 435 Mass. 772, 779 (2002). “Whether a contract is ambiguous is also a question of law.” Eigerman v. Putnam Investments, Inc., 450 Mass. 281, 287 (2007).
Although the parties disagree sharply as to whether the purchase agreement expressly or implicitly indicates that Plaintiffs are intended beneficiaries with the right to enforce MSI’s payment obligations, that does not mean that the contract is unclear. “[A]mbiguity is not created simply because a controversy exists between parties, each favoring an interpretation contrary to the other’s.” Indus Partners, LLC v. Intelligroup, Inc., 77 Mass. App. Ct. 793, 795 (2010) (affirming summary judgment based on contract interpretation), quoting Jefferson Ins. Co. v. Holyoke, 23 Mass. App. Ct. 472, 475 (1987).
Plaintiffs are mistaken in asserting that the parties’ dispute regarding their contractual intent is a factual question, and that the issue can only be decided at trial and after considering Plaintiffs’ subjective understanding that they would be able to enforce MSI’s payment obligations. Since the parties’ contracts are unambiguous, parol or extrinsic evidence regarding the parties’ intent is inadmissible. See, e.g., General Convention of New Jerusalem in the United States of America, Inc. v. MacKenzie, 449 Mass. 832, 835 (2007); Herson v. New Boston Garden Corp., 40 Mass. App. Ct. 779, 792 (1996). But even if parol evidence could be considered, Plaintiffs’ uncommunicated subjective intent would still be irrelevant. The meaning and effect of a contract “is not to be determined by the secret thought or unexpressed intent of any of the parties, but is to be determined by the intent as expressed by words and acts of all the parties in the light of the circumstances.” Tudor Press v. Univ. Distrib.
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Co., 292 Mass. 339, 341 (1935). In other words, “contracts rest on objectively expressed manifestations of intent,” and cannot be altered by “subjective and unexpressed expectations” of one party or side. Beatty v. NP Corp., 31 Mass. App. Ct. 606, 612 (1991). Thus, the terms of a written contract—and not a party’s subjective motives, desires, or intent—“determine whether performance under the contract would necessarily and directly benefit” a third-party and thus make them an intended beneficiary with the right to enforce the contract. Lonsdale v. Chesterfield, 662 P.2d 385, 390 (Wash. 1983) (en banc); accord James Family Charitable Foundation, 80 Mass. App. Ct. at 725.
2.2. Construing the Contracts. The Court concludes that the contract documents are unambiguous and that they do not contain any clear or definite expression that Plaintiffs have any right to enforce MSI’s payment obligations.
The purchase agreement provides (in § 2.05) that MSI is required to pay the Delayed and Contingent Payments to Holdco, the seller of Cogent Research. No provision requires MSI to make those payments to any of the Plaintiffs, or gives Plaintiffs any right to compel MSI to make the payments to Holdco.
Plaintiffs’ assertion that the purchase agreement expressly makes them intended third-party beneficiaries with the right to enforce MSI’s obligations to pay Holdco is without merit. Plaintiffs point to § 9.07 of the purchase agreement, which provides in relevant part that “[t]his Agreement will not confer any rights or remedies upon any Person … other than the Parties and their respective successors and permitted assigns[.]”This provision means what it says and nothing more: no person or entity that is not a party to the purchase agreement has any right to enforce and may not seek any remedies for a breach of this contract. Although each of the Plaintiffs is a party to the purchase agreement, § 9.07 does not state that all of the contracting parties are intended beneficiaries of all of the contract provisions. Nor does § 9.07 resolve the matter against Plaintiffs, as MSI contends. This provision does not say that the contracting parties have no right to enforce obligations that are not owed to them directly. The heading to this section (“No Third Party Beneficiaries”) does not matter, because § 9.03 provides that “[t]he headings contained in this Agreement are included for purposes of convenience only, and will not affect the
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meaning or interpretation of this agreement.” In sum, § 9.07 does not expressly resolve the issue one way or the other.
The fact that Meunier, White, and the Trust are the sole owners of Holdco, and therefore will directly benefit if and when MSI pays Holdco the Deferred and Contingent Payment amounts, is not enough to show that Plaintiffs are intended beneficiaries of the promise to make those payments to Holdco. See The James Family Charitable Foundation, 80 Mass. App. Ct. at 724 (intent to give third-party benefit of performance is not enough to make them intended beneficiary with right to enforce performance). Whenever someone contracts to pay money to a closely held company they know that the owners of the company will benefit from that payment. Typically, however, members or shareholders who wish to enforce a contractual obligation owed to a close corporation must bring a derivative action on behalf of the business; they do not automatically have any right to sue in their own names merely because they will benefit if the duty to the corporation is carried out. See, e.g., Pagounis v. Pendleton, 52 Mass. App. Ct. 270, 275 (2001).
The structure of MSI’s purchase and Holdco’s sale of Cogent Holdings indicates that the parties did not intend for Plaintiffs to be able to compel MSI to pay any part of the Deferred or Contingent Payments or seek damages if it failed to do so. If MSI had promised Holdco that it would make payments directly to Meunier, White, and the Trust, then Plaintiffs would have been intended beneficiaries of that promise. See Choate, Hall & Stewart v. SCA Services, Inc., 378 Mass. 535, 546 (1979). But since MSI instead promised to make payments to Holdco, with the understanding and expectation that the economic benefit of those payments would indirectly flow through to its members, Plaintiffs are merely incidental beneficiaries with no right to enforce those contract provisions. Id. at 547 & n.21;2 accord, e.g., Spring Valley IV Joint Venture v. Nebraska State Bank of Omaha, 690 N.W.2d 778, 782-783 (Neb.
2 The SJC quotes with approval the following example from the Restatement of Contracts: “B promises A to pay whatever debts A may incur in a certain undertaking. A incurs in the undertaking debts to C, D and E. If the promise is interpreted as a promise that B will pay C, D and E, they are intended beneficiaries . . . ; if the money is to be paid to A in order that he may be provided with money to pay C, D and E, they are at most incidental beneficiaries.” Id., quoting draft version of what became Restatement (Second) of Contracts § 302, Illustration 3 (1981).
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2005) (where bank had contractual obligation to disburse loan funds to individual borrower, who had disclosed that purpose was to invest in specific partnerships, the partnerships “were at most incidental beneficiaries of the loan agreements and … lack[ed] any enforceable property rights to the loan proceeds”).
As the United States Court of Appeals for the First Circuit has explained, “Massachusetts courts steadfastly have refused to accord intended beneficiary status under a contract whose terms, interpreted in the particular transactional setting, do not provide for the benefits of performance to flow directly to the third party.” Public Service Co. of New Hampshire v. Hudson Light and Power Dept., 938 F.3d 338, 343 (1st Cir. 1991) (holding that, where PSNH agree to repurchase electricity from Massachusetts Municipal Wholesale Electric Company, with understanding that local municipal power companies would benefit from PSNH’s payments to MMWEC, power companies were not intended beneficiaries and had no right to enforce contract) (applying Massachusetts law). Massachusetts is consistent with other jurisdictions in confining intended beneficiary status to people and entities that have a right directly to receive benefits from performance of a contractual promise. See, e.g., Choate, Hall, 378 Mass. at 547 n.21 (citing cases); Public Service, 938 F.2d at 343 n.12 (citing cases); Lonsdale, 662 P.2d at 390 (under Washington law, third-party is intended beneficiary only where “the contract necessarily and directly benefits the third person”) (quoting Vikingstad v. Baggott, 282 P.2d 824, 826 (1955).
Not only is there nothing in the purchase agreement to suggest that Plaintiffs are third-party beneficiaries of MSI’s obligations to pay Holdco, but in addition the subordination agreement confirms that the parties had no clear intent to give Plaintiffs any right to enforce those obligations.
Since the purchase agreement and subordination agreement were closely related and part of a single transaction, the Court must read them together and consider that circumstance in construing any part of either document. See Chelsea Indus., Inc. v. Florence, 358 Mass. 50, 55-56 (1970); Chase Commercial Corp. v. Owen, 32 Mass. App. Ct. 248, 250 (1992). The Court must construe the parties’ contracts in a manner that will give them “effect as … rational business instrument[s] and in a manner which will carry out the intent of the parties.” Robert and Ardis James
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Foundation v. Meyers, 474 Mass. 181, 188 (2016), quoting Starr v. Fordham, 420 Mass. 178, 192 (1995). And “the parties’ intent ‘must be gathered from a fair construction of the contract[s] as a whole and not by special emphasis upon any one part.’ ” Kingstown Corp. v. Black Cat Cranberry Corp., 65 Mass. App. Ct. 154, 158 (2005), quoting Ucello v. Cosentino, 354 Mass. 48, 51 (1968), and Crimmins & Peirce Co. v. Kidder Peabody Acceptance Corp., 282 Mass. 367, 375 (1933).
Plaintiffs’ claim that they are intended beneficiaries of MSI’s payment obligations cannot be squared with the terms of the subordination agreement. That contract, as explained above, provides that MSI’s obligations to pay Holdco under the purchase agreement are subordinate to MSI’s pre-existing obligations to repay its Senior Lenders. The subordination agreement also contained a covenant not to sue. It provides that Holdco “shall not … take any Enforcement Action with respect to” the Deferred and Contingent Payment obligations of MSI “without the prior written consent” of the administrative agent representing the Senior Lenders. The phrase “Enforcement Action” is defined to include bringing a lawsuit, or initiating or participating with others in a lawsuit, to collect all or any part of the Deferred or Contingent Payment amounts. The covenant that Holdco will not sue to enforce MSI’s payment obligations would have little meaning if Plaintiffs could circumvent it at any time by suing MSI in their own names rather than on behalf of Holdco.
For all of these reasons, MSI is entitled to summary judgment in its favor on the contract claim.3
3. Claims for Misrepresentation and Violation of G.L. c. 93A. In Counts II and III of their amended complaint, Plaintiffs claim that they relied to their detriment on false representations by MSI that it was willing and able to pay all amounts it owes
3 Plaintiffs made a request under Mass. R. Civ. P. 56(f) for more time to conduct discovery. But they have not shown that the additional discovery they seek would be relevant to the issue of whether Plaintiffs have standing to enforce MSI’s payment obligation under the purchase agreement. It would therefore be inappropriate to delay resolution of this part of the summary judgment motion to await further discovery. See Commonwealth v. Fall River Motor Sales, Inc., 409 Mass. 302, 308 (1991) (“One common reason for the denial of a continuance [under Rule 56(f)] is the irrelevance of further discovery to the issue being adjudicated in summary judgment.”).
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to Holdco by the due date specified in the purchase agreement. These are not fraud in the inducement claims, as the alleged misrepresentations occurred after the contracts were signed.
MSI argues that if Plaintiffs lack standing to assert their claim for breach of contract, as the Court ruled above, then they also lack standing to bring suit under G.L. c. 93A or for intentional or negligent misrepresentation.
This argument is without merit. The c. 93A and misrepresentation claims do not depend upon and are not derivative of Plaintiffs’ failed claim for breach of contract. Plaintiffs have mustered evidence sufficient to support their claims for misrepresentation. If they can prove that MSI committed a fraud or a deceptive act in violation of c. 93A by misrepresenting its willingness and ability to pay Holdco what it is owed, MSI cannot avoid liability under these theories on the ground that the subordination agreement still absolves it of any current obligation to pay Holdco. The Court will deny the summary judgment motion with respect to these two claims.
4. Declaratory Judgment Claim. Finally, Count IV of the complaint seeks a declaratory judgment regarding the enforceability of the non-compete, non-solicitation, and confidentiality provisions that Meunier and White agreed to as part of the purchase agreement. Plaintiffs did not directly oppose the summary judgment motion with respect to the declaratory judgment claim.
This claim is moot with respect to the non-competition and non-solicitation provisions because they expired by their terms on May 23, 2017, which was four years after the parties executed the purchase agreement. With respect to their duty not to disclose confidential information, Plaintiffs claimed that this provision was unenforceable because MSI had breached its obligation to pay all amounts owed to Holdco. Since Plaintiffs have no standing to enforce those contractual obligations, they also lack standing to seek declaratory judgment as a remedy for such a brief.
In sum, given that there is no longer any actual controversy about the part of this claim that is moot and Plaintiffs lack standing to press the rest of the claim, it would not be appropriate to declare the rights of the parties and MSI is instead entitled to summary judgment dismissing this claim. See Alliance, AFSME/SEUI, AFL-CIO, v. Commonwealth, 425 Mass. 534, 537-539 (1997) (in absence of actual
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controversy between the parties, claim for declaratory relief under G.L. c. 231A must be dismissed); City of Revere v. Massachusetts Gaming Comm’n, 476 Mass. 591, 607-608 (2017) (affirming dismissal of declaratory judgment claim for lack of standing); Manufacturing Imp. Corp. v. Georgia Pacific Corp., 362 Mass 398, 400-401 (1972) (affirming dismissal of declaratory judgment claim regarding rights under contract, because plaintiff alleged no facts under which it would be entitled to recover from defendant for breach of contract).
ORDER
Market Strategies, Inc.’s motion for summary judgment is ALLOWED IN PART with respect to the claims against it for breach of contract and declaratory judgment, which shall be dismissed with prejudice when final judgment enters in these consolidated actions, and DENIED IN PART with respect to the claims against it for violating G.L. c. 93A and for intentional or negligent misrepresentation.
June 12, 2017
___________________________
Kenneth W. Salinger
Justice of the Superior Court

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Posted by Stephen Sandberg - June 15, 2017 at 5:37 pm

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AIDS Support Group of Cape Cod, Inc. v. Town of Barnstable, et al. (Lawyers Weekly No. 10-104-17)

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

SJC-12224

AIDS SUPPORT GROUP OF CAPE COD, INC.  vs.  TOWN OF BARNSTABLE & others.[1]

Barnstable.     February 14, 2017. – June 14, 2017.

Present:  Gants, C.J., Lenk, Hines, Gaziano, Lowy, & Budd, JJ.

Hypodermic Needle.

Civil action commenced in the Superior Court Department on November 10, 2015.

A motion for a preliminary injunction was heard by Raymond P. Veary, Jr., J., and the case was reported to the Appeals Court by Robert C. Rufo, J.

The Supreme Judicial Court granted an application for direct appellate review.

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Posted by Stephen Sandberg - June 15, 2017 at 3:18 am

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People for the Ethical Treatment of Animals, Inc. v. Department of Agricultural Resources, et al. (Lawyers Weekly No. 10-105-17)

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

SJC-12207

PEOPLE FOR THE ETHICAL TREATMENT OF ANIMALS, INC.  vs.  DEPARTMENT OF AGRICULTURAL RESOURCES & another.[1]

Suffolk.     February 6, 2017. – June 14, 2017.

Present:  Gants, C.J., Lenk, Gaziano, Lowy, & Budd, JJ.

Public RecordsAgricultureAnimal.  Statute, Construction.  Privacy.

Civil action commenced in the Superior Court Department on October 14, 2014.

The case was heard by Christopher J. Muse, J.

The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

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Posted by Stephen Sandberg - June 14, 2017 at 8:09 pm

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Blanchard, et al. v. Steward Carney Hospital, Inc., et al. (Lawyers Weekly No. 10-082-17)

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

SJC-12141

LYNNE BLANCHARD & others[1]  vs.  STEWARD CARNEY HOSPITAL, INC., & others.[2]

Suffolk.     November 7, 2016. – May 23, 2017.

Present:  Gants, C.J., Botsford, Lenk, Hines, Gaziano, Lowy, & Budd, JJ.[3]

“Anti-SLAPP” Statute.  Constitutional Law, Right to petition government.  Practice, Civil, Motion to dismiss.  Words, “Based on.”

Civil action commenced in the Superior Court Department on May 24, 2013.

Special motions to dismiss were heard by Linda E. Giles, J.

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Posted by Stephen Sandberg - May 24, 2017 at 1:48 am

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Hyannis Anglers Club, Inc., et al. v. Harris Warren Commercial Kitchens, LLC (and a consolidated case) (Lawyers Weekly No. 11-063-17)

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-34                                         Appeals Court

HYANNIS ANGLERS CLUB, INC., & others[1]  vs.  HARRIS WARREN COMMERCIAL KITCHENS, LLC[2] (and a consolidated case[3]).

No. 16-P-34.

Barnstable.     October 14, 2016. – May 23, 2017.

Present:  Vuono, Massing, & Sacks, JJ.

Consumer Protection Act, Unfair or deceptive act, Attorney’s fees, Damages.  Fraud.  Deceit.  Damages, Consumer protection case, Deceit.

Civil actions commenced in the Superior Court Department on September 6, 2011, and April 29, 2013.

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Posted by Stephen Sandberg - May 23, 2017 at 6:39 pm

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South Boston Elderly Residences, Inc. v. Moynahan (Lawyers Weekly No. 11-054-17)

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-209                                        Appeals Court

SOUTH BOSTON ELDERLY RESIDENCES, INC.  vs.  GERALD MOYNAHAN.

No. 16-P-209.

Suffolk.     December 1, 2016. – May 9, 2017.

Present:  Milkey, Massing, & Sacks, JJ.

Housing.  Summary Process.  Landlord and Tenant, Eviction, Rent, Repairs, Habitability, Reprisal against tenant, Consumer protection, Quiet enjoyment.  Practice, Civil, Summary process, Abatement, Damages.  Damages, Breach of implied warranty of habitability.

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Posted by Stephen Sandberg - May 10, 2017 at 7:22 pm

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A.L. Prime Energy Consultant, Inc. v. Massachusetts Bay Transportation Authority (Lawyers Weekly No. 12-052-17)

COMMONWEALTH OF MASSACHUSETTS

SUFFOLK, ss.                                                                                             SUPERIOR COURT

                                                         CIVIL ACTION

  1. 1684CV05562

 

 

A.L. PRIME ENERGY CONSULTANT, INC.

 

vs.

 

MASSACHUSETTS BAY TRANSPORTATION AUTHORITY

 

 

RESERVIATION AND REPORT OF AN INTERLOCUTORY ORDER TO THE APPEALS COURT

 

 

This action arises out of a contract between the plaintiff, A.L. Prime Energy Consultant, Inc. (Prime), and the defendant, Massachusetts Bay Transportation Authority (MBTA) for the supply of Ultra Low Sulfur Diesel Fuel (ULSDF) (the Supply Contract), and the unilateral termination of the Supply Contract by the MBTA.  Prime asserts, among other claims, that the MBTA breached the Supply Contract by terminating it before its end date.

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Posted by Stephen Sandberg - May 10, 2017 at 5:04 am

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South Boston Elderly Residences, Inc. v. Moynahan (Lawyers Weekly No. 11-054-17)

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-209                                        Appeals Court

SOUTH BOSTON ELDERLY RESIDENCES, INC.  vs.  GERALD MOYNAHAN.

No. 16-P-209.

Suffolk.     December 1, 2016. – May 9, 2017.

Present:  Milkey, Massing, & Sacks, JJ.

Housing.  Summary Process.  Landlord and Tenant, Eviction, Rent, Repairs, Habitability, Reprisal against tenant, Consumer protection, Quiet enjoyment.  Practice, Civil, Summary process, Abatement, Damages.  Damages, Breach of implied warranty of habitability.

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Posted by Stephen Sandberg - May 9, 2017 at 9:55 pm

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