Posts tagged "Ltd."

Roma, III, Ltd. v. Board of Appeals of Rockport (Lawyers Weekly No. 10-002-18)

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NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.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

SJC-12278

ROMA, III, LTD.  vs.  BOARD OF APPEALS OF ROCKPORT.

Suffolk.     September 6, 2017. – January 8, 2018.

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

Municipal Corporations, By-laws and ordinances.  Zoning, Validity of by-law or ordinance, Private landing area.  Federal Preemption.

Civil action commenced in the Land Court Department on March 12, 2015.

The case was heard by Robert B. Foster, J., on motions for summary judgment.

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

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Posted by Massachusetts Legal Resources - January 9, 2018 at 4:37 pm

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In re Rewalk Robotics Ltd. Stockholder Litigation (Lawyers Weekly No. 09-063-17)

COMMONWEALTH OF MASSACHUSETTS

 

SUFFOLK, ss.                                                                       SUPERIOR COURT

                                                                                                CIV. NO. 16-3336- BLS 2

                                                                                                (Consol. with 16-3670-BLS 2)

 

 

IN RE REWALK ROBOTICS LTD.

STOCKHOLDER LITIGATION

 

 

 MEMORANDUM OF DECISION AND ORDER

ON DEFENDANTS’ RENEWED REQUEST TO STAY  

 

This is a putative class action brought pursuant to Sections 11, 12 and 15 of the Securities Act of 1933.  The lead case was filed October 31, 2016 and the second on November 30, 2106, with the two actions consolidated in January 2017.  In April this year, the defendants moved to stay this case because of pending parallel federal multi-district litigation proceedings.  This Court (Salinger, J.) denied that request because nothing had taken place of note in the federal litigation and because this case was filed first. read more

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Posted by Massachusetts Legal Resources - January 9, 2018 at 2:20 am

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Mullins v. Colonial Farms Ltd., et al. (Lawyers Weekly No. 12-077-17)

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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
CIVIL ACTION
NO. 2013-04375 BLS1
JOSEPH R. MULLINS, on behalf of nominal defendants CMJ MANAGEMENT COMPANY and CMJMC, INC.
vs.
COLONIAL FARMS LTD., & others1
FINDINGS OF FACT AND CONCLUSIONS OF LAW FOLLOWING JURY WAIVED TRIAL ON DAMAGES
INTRODUCTION
As reflected in the court’s earlier Memorandum of Decision and Order on the Parties’ Cross-Motions for Summary Judgment (the Decision, capitalized terms shall have the same meaning in this memorandum as in the Decision), it is undisputed that, at Corcoran’s direction, the Partnerships ceased making payment of the Incentive Management Fees to CMJ Management under the Supplemental Agreements in January, 2010. Further, the termination of these payments would constitute a breach of each of the Supplemental Agreements, unless Corcoran (on behalf of the Partnerships) proved at trial that (i) Corcoran, Jennison and Mullins had all agreed that the Supplemental Agreements were to be cancelled as part of the transaction in which each of them repurchased their interests in the Partnerships from Paine Webber in 1999, and (ii) this cancellation was not reflected in the 1999 transaction documents as a consequence of a mutual mistake. Following a jury trial, on March 1, 2017, the jury answered the single
1 Fawcett’s Pond Apartments Company (Fawcett), Holbrook Apartments Company (Holbrook) Marvin Gardens Associates (Marvin) Quaker Meadows Apartments Company (Quaker), Joseph E. Corcoran, and Gary A. Jennison and CMJ Management Company and CMJMC, Inc., nominal defendants.
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question put to them in a special verdict slip concerning the existence of such a mutual mistake2: “NO.” The parties had previously agreed that if the jury found that no mutual mistake had occurred, they would submit the question of how much should have been paid to CMJ Management by the Partnerships to the court for its decision, jury-waived.
The court heard evidence on this issue on March 3, 2016 (as a supplement to the evidence presented during the jury trial). Three witnesses testified and an additional six exhibits were admitted in evidence. Thereafter, the parties submitted proposed findings of fact and conclusions of law.
FINDINGS OF FACT/CONCLUSIONS OF LAW
Findings and Conclusions Addressing the Manner in which the Incentive Management Fees are Calculated During Years in which there were no Regulatory/Loan Restrictions on Distributions
The Supplemental Agreements for four of the Partnerships—Colonial, Marvin, Quaker, and Fawcett all provided that, “to the extent funds are available for [their] payment”:
The Incentive Management Fee shall be an annual, non-cumulative fee payable out of cash available therefor . . . in an amount equal to, for each year, 40% of the amount, if any, by which Cash Flow for such year exceeds one half of the maximum amount of distributable cash flow allowed by [the Federal and state regulator and the lender].3
The limitations on the amount of cash that a Partnership could distribute existed as long as it had a loan backed by a state or federal agency for the purpose of fostering the development of affordable housing projects. Fawcett paid off its loan in 2003 and the other three partnerships paid off their loans in 2012. The first question to be decided is the method for calculating the amount of Incentive Management Fees due CMJ Management for years in which there was no
2 The question was: “Have Joseph Corcoran and the Five Partnerships proved by full, clear, and decisive evidence that Joseph Corcoran, Joseph Mullins and Gary Jennison agreed that the Supplemental Management Agreements would terminate and the incentive management fees end as part of the Paine Webber buy-out and it was a mistake that the Paine Webber buy-out documents did not reflect their agreement?”
3 Each of the Partnerships was regulated by HUD, however, the state regulating body differed depending on the state in which the development was located. Holbrook had a different formula for calculating Incentive Management Fees, and there is no dispute concerning the amount of the fees due CMJ Management from Holbrook.
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lender limitation on the amount of cash that could be distributed to the Partnerships’ owners. This question is principally a question of law because it requires the court to address the meaning of a provision in a contract. Where the court is basing its decision on any factual finding it will make this clear.
Most of the background facts that provide the context for this question are undisputed and set out in the Decision. Briefly stated, in 1983, Paine Webber purchased a limited partnership interest in each of the Partnerships from Corcoran, Mullins, and Jennison and became the principal equitable owner of each.4 As part of that transaction, each Partnership entered into a Supplemental Agreement with CMJ Management that provided for the payment of Incentive Management Fees. The court finds, as a matter of fact, that CMJ Management provided no additional services to the Partnerships under the Supplemental Agreements. Rather, these Supplemental Agreements were a means to achieve the financial terms of the deal that had been negotiated with Paine Webber. The Supplemental Agreements provided a mechanism for CMJ Management to receive supplemental cash distributions, i.e., supplements to the minimal cash that Corcoran, Mullins and Jennison would receive as deminimus owners of the Partnerships which were now principally owned by Paine Webber, if the cash available for and distributed each year exceeded certain base amounts. In 1999, Corcoran, Mullins and Jennison bought out Paine Webber’s interests in the Partnerships, returning ownership of the Partnerships to that which it was before 1983. As noted above, in 2003 and 2012 the agency backed loans to the Partnerships were retired.
While the agency backed loans were in place, a formula in the loan documents and related government regulations determined “the maximum amount of distributable cash flow” for
4 Paine Webber purchased 95% of the ownership interests in four Partnerships and 85% of one Partnership.
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each Partnership based upon the economic performance of the Partnership, as established in its annual audited financial statements. The term “Cash Flow” as used in the Supplemental Agreements is defined in the Partnership Agreements. According to the provision of the Supplemental Agreements quoted above, in any given year in which the economic performance of a Partnership permitted cash to be distributed under the loan documents, the Incentive Management Fee paid in that year could be no greater than 20% of cash distributed: “40% of the amount, if any, by which Cash Flow for such year exceeds one half of the maximum amount of distributable cash flow allowed” under the loan documents. In consequence, if for any reason “Cash Flow” was less than the maximum amount that could be distributed under the loan agreements5, the Incentive Management Fees would be less than 20% of the total cash distributed in that year.
It is clear that once the agency backed loans were paid in full, there no longer was a “maximum amount of distributable cash flow allowed” by any lender. Mullins argues that this means that the Incentive Management Fee then simply became 40% of all Cash Flow, i.e., the incentive fee was due on the first dollar available for distribution by a Partnership. Clearly, that is not what the Supplemental Agreement says. It is also inconsistent with the premise underlying the purpose of the Supplemental Agreements, that is, that Incentive Management Fees would kick in only after Paine Webber, as the principal owner of the Partnerships, had first received some minimum return on its investment.6
5 This could happen if, for example, the general partner of the Partnership (in each case CMJ) decided to set aside reserves for capital expenditures greater than what was required by the loan documents. See par. 4.1.2.2 of the Partnership Agreements.
6 Mullins points out that there was one year (2003) before this dispute erupted in which Fawcett made a distribution after the agency backed loan had been paid off and in that distribution the Incentive Management Fee was applied to the entire sum distributed. There was no evidence that any of the principals had any input into the decision to make the distribution in that manner, or, indeed that it was in an amount that the principals even noticed. The court did not find this 2003 distribution instructive in interpreting the Supplemental Agreements.
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Mullins next argues that a fixed amount measured by what the “maximum amount of distributable cash flow allowed” by the lenders had been in years prior to the loans’ repayment should be established for each Partnership. The court does not believe that those amounts have been entered in evidence. But more to the point, it is clear that no language that would support the creation of a fixed sum to be paid before the Incentive Management Fee is due is found in the Supplemental Agreements. The court would have to rewrite the Supplemental Agreements to reach that result, and it is not permitted “to suppose a meaning [to a contract] that the parties have not expressed.” Rogaris v Albert, 431 Mass. 833, 835 (2000).
Corcoran argues that the Supplemental Agreement is unambiguous in providing that, when there are no loans outstanding that require a lender to set the “maximum amount of distributable cash flow allowed,” the “maximum amount of distributable cash flow allowed” is simply all the Cash Flow that a Partnership has available to distribute.7 That is, however, not what the Supplemental Agreement actually says, but rather an interpretation of it. It is also generally the interpretation that the court adopts as reasonable and consistent with evidence of what the real parties in interest to the Supplemental Agreements intended when they drafted them in 1983.
A contract provision can be facially ambiguous or ambiguous as applied to a certain set of circumstances. See Robert Ind. Inc. v. Spencer, 362 Mass 751, 753 (1973). In this case, it seems doubtful that when the Supplemental Agreements were drafted any particular thought was given to the question of whether they would still be in force when the agency backed loans were retired. They were drafted in 1983 as contracts between the Partnerships and CMJ Management,
7 Corcoran argues that, at least, this is true while the Partnerships are still subject to Section 8 contracts with HUD which provide for housing assistance payments to the Partnerships. The court does not find the existence of Section 8 contracts of value in its interpretation of the Supplemental Agreements, as those contracts do not place limitations on distributions, only the agency backed loans did that.
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but their purpose was to address the economics of the deal between Corcoran, Mullins, and Jennison, on the one hand, and Paine Webber, on the other. The court doubts that the parties contemplated that whey would remain in force after Paine Webber was bought out or the agency backed loans paid off. Therefore, the Supplemental Agreements do not unambiguously address how the Incentive Management Fees would be calculated when ownership returned to Corcoran, Mullins and Jennison and the loans were no longer in effect. Nonetheless, that is what happened.
There is, however, a reasonable interpretation of the Incentive Management Fee language in the Supplemental Agreements that addresses these circumstances. While the loans were still in effect, as explained above, the maximum amount of Cash Flow that could be paid as an Incentive Management Fee was 20% of cash distributed in any year. That happened whenever all cash that could be distributed under the distribution restrictions in the loans was also “Cash Flow,” as defined in the Partnership Agreements, and distributed to the owners of the Partnership and CMJ Management as distributions to equity holders and Incentive Management Fees. The court finds that the only reasonable interpretation of the Supplemental Agreements is that if the loans no longer restricted the amount of cash that could be distributed, the Incentive Management Fee would be 20% of Cash Flow available for distribution, as the Supplemental Agreements provided for no situations in which Incentive Management Fees could ever exceed that ceiling. Stated differently, this interpretation is consistent with all extrinsic evidence concerning the intent of the parties when the Supplemental Agreements were negotiated in 1983, at which time the real parties in interest were Paine Webber and CMJ Management (owned by Corcoran, Mullins and Jennison) and these incentive fees were limited to no more than 20% of cash distributed. See Robert Industries Inc. v. Spencer, 362 Mass. at 754 (“When the written agreement, as applied to the subject matter, is in any respect uncertain or equivocal in meaning, all the circumstances of
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the parties leading to its execution may be shown for the purpose of elucidating, but not of contradicting or changing its terms. Smith v. Vose & Sons Piano Co., 194 Mass. 193, 200, 80 N.E. 527; Goldenberg v. Taglino, 218 Mass. 357, 359, 105 N.E. 883. See Restatement 2d: Contracts (Tent. draft No. 5, March 31, 1970), §§ 235, 236 (Tent. draft No. 6, March 31, 1971), §§ 240, 241.”).
Findings of Fact and Conclusions of Law relating to the Calculation of Cash Flow under the Supplemental Agreements
Under the definition of “Incentive Management Fees” contained in each Supplemental Agreement (quoted above), the calculation of that fee in any given year begins with a determination of “Cash Flow” for the Partnership. Cash Flow is a capitalized term in the Supplemental Agreements, and, therefore, according to the terms of those Agreements, defined in the Partnership Agreements. While the definition of Cash Flow is multi-faceted and spread over several paragraphs of the Partnership Agreements, the parties’ dispute concerning the calculation of Cash Flow arises out of only one clause found in Section 4.1.2.2. As relevant to this dispute, it provides: “In determining Cash Flow for any year, there shall be subtracted the following items which were not otherwise excluded or deducted from partnership income for such year in calculating Partnership Profits and Losses, . . . , (iii) other reasonable payments to the Partnership reserve accounts determined by the Operating General Partner, . . .”
Because this dispute again requires an interpretation of contract language, it involves mixed questions of law and fact. Nonetheless, here certain findings of fact are required before the Partnership Agreements provision quoted above can be applied to the circumstances presented by this dispute.
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Factual Findings Relating to Reserve Issue
All of the buildings in CMJ’s portfolio are thirty to thirty-five years old. There are approximately 3700 units in those buildings; the five Partnerships constitute approximately 510 units of that total number. On average, during the period 2013 through 2017, $ 2,400 to $ 2,500 in capital expenditures have or will be spent on each unit in the portfolio. These expenditures are required for basic maintenance because of the age of buildings. Additionally, the subsidies provided by HUD are based on market rates for comparable units, so improvements to interior finishes and amenities increase HUD payments to the Partnerships.
Fawcett, in particular, required substantial work. As reflected in a 2007 internal memo prepared by a CMJ manager before the matters in dispute in this litigation arose, all of the siding and windows needed replacement. This was due, in part, to the manner in which Fawcett was constructed, where the siding was nailed directly to the sheet rock allowing moisture to invade and create substantial damage. This 2007 memo states that as a result of the capital needs of this project, there would likely be no cash available for distribution over the next ten years. The memo actually recommended that the project be sold. Nonetheless, the Project was not sold and the following distributions were made from Fawcett to its Partners during the years in question: 2012-$ 343,049; 2013-$ 132,195, and 2015-$ 212,605. Not only are the fact of these distributions inconsistent with the 2007 memo, the distributions are also inconsistent with credible testimony concerning the capital needs of and expenditures made for the Fawcett project. There is a suggestion in certain financial exhibits that at least some of the cash distributed came from the release of funds held in a restricted account. Then, in 2016, $ 877,000 was spent on capital
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improvements, which included a substantial sum provided by Fawcett’s owner. No reserves for improvements were ever accounted for on Fawcett’s financial statements.
The first year that Colonial, Marvin, and Quaker were no longer subject to restrictions on cash distributions because of agency backed loans was 2013. The chart below shows the so-called Surplus Cash available at the end of each of these three years according to Mullins calculations. The parties agree that Surplus Cash is determined according to a formula used in determining the amount of cash available for distribution under the agency backed loans and the starting place for determining Cash Flow under the Partnership Agreements. They also agree on these figures (reflected in Mullins’ damages exhibit) except for the year 2015, for reasons that will be discussed further below.
2013
2014
2015
Colonial
$ 310,571
$ 480,011
$ 872,574
Marvin
$ 364,548
$ 369,538
$ 573,436
Quaker
$ 232,691
$ 792,031
$ 1,327,874
In fiscal year 2015 (as reflected in the audited financial statements for each Partnership), the Partnerships recorded capital reserves as follows: Colonial-$ 655,653; Marvin-$ 388,544; and Quaker-$ 797,531. The Partnerships transferred these sums to reserve accounts, and therefore they would not have been included in Surplus Cash, if the accounting policies followed in prior years had bee applied. Nonetheless, the table does not reflect the establishment of these reserves in 2015. Rather, the establishment of these reserves was not accounted for by Mullins at all.
Corcoran offered in evidence exhibit 216, which spread the reserves established for the three Partnerships in 2015 over three years (2013, 2014, and 2015). However, that allocation was performed in 2015 (or perhaps later). During 2013 and 2014, these sums were not reflected
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in the audited financial statements, segregated from unrestricted cash, nor reflected in any subsidiary ledger, book or account maintained by CMJ Management.
Conclusions of Law Relating to Reserve Issue
Colonial, Marvin, and Quaker
With respect to Colonial, Marvin, and Quaker, Corcoran argues that Cash Flow, by definition is reduced by “reasonable payments to the Partnership reserve accounts determined by the Operating General Partner.” He then maintains that there is nothing in the Partnership Agreement that precludes the Operating General Partner from allocating reserve amounts retrospectively over prior years and then calculating Surplus Cash, retrospectively, as if these accounts had actually been created in those prior years. The court disagrees. As the court understands the accounting policies consistently employed by the Partnerships, if cash was reserved for capital needs, it would be transferred to a reserve account and therefore not be reflected in Surplus Cash. As result, it would also not be included in Cash Flow. Under generally accepted accounting principles this is part of the annual process of closing the Partnership’s books of account and preparing the financial statements for a fiscal year. Additionally, the Partnership Agreement provides that Cash Flow shall be determined on an annual basis and distributed as Incentive Management Fees on an annual basis.
Moreover, in this case, the Partnerships did not identify these reserves in some manner of internal ledger not accounted for in the audited financials or disclose their existence in footnotes to the audited financials.
There is simply no justification for including these after-the-fact declaration of reserves in the calculation of Cash Flow for 2013 and 2014. The court finds that Mullins proposed
11
calculation of Cash Flow (which avoids double counting by assuming that all of 2013’s Cash Flow had been distributed in determining 2014 Cash Flow) is fair and appropriate.
2015 is, however, more complicated. Reserves were taken in those years and reported in the Partnerships’ audited financial statements. Given the age of these facilities and the evidence entered, the court cannot find that these amounts were unreasonable. Furthermore, the cash required to establish the reserves was accumulated in the Partnerships’ and might well have been intended for capital improvements, even if not properly accounted for, as it had not been distributed and accumulated in a cash account. The court has spent much time trying to find a damages analysis that approaches this issue in an equitable manner. It concludes that, for each of the three Partnerships, in year 2015, the Incentive Management Fee should be Surplus Cash (as calculated by Mullins), less the reserves established according to the audited financial statements for that year, times 20%.8
With respect to Fawcett, the court finds such financial statements as have been provided, documents, and testimony confusing, if not contradictory. On the one hand, there is credible evidence that Fawcett was expending substantial sums on necessary maintenance including replacement of all of the siding and all of the windows. It credits the testimony that $ 877,000 was spent on capital improvements in 2016, and that included additional capital invested by Corcoran. On the other hand, each year Fawcett reported some surplus cash. Finally, it appears that in three years substantial cash was distributed to the owner, and in one of those years distributions far exceeded Surplus Cash. The court concludes that the Incentive Management
8 The court’s calculations reflect the following, but they should be checked: Colonial-$ 43,384; Marvin-$ 37,178; Quaker-$ 106,068.
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Fee for the years in question should be the amount of distributions to the owner times 20%.9 Interest to accrue from the date of each distribution.
G. L. c. 156D, § 7.46
G.L. c. 156D, § 7.46 provides, in relevant part: “On termination of the derivative proceeding the court may: (1) order the corporation to pay the plaintiff’s reasonable expenses, including counsel fees, incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation.” Mullins asks that the court make such a finding and then exercise its discretion to award him the legal fees he incurred in prosecuting this case.
Under § 7.46, the award of expenses to a plaintiff who succeeds in a derivative claim is clearly discretionary with the court. As the parties to this case recognized, and the jury was instructed at the outset of the trial, this was a dispute between Mullins and Corcoran10. While the Supplemental Agreement was between CJM Management and the Partnerships, it was from its inception understood to be a vehicle for distributing cash generated by the operation of the Partnerships to Corcoran, Mullins and Jennison (as the owners of CMJ Management), which would otherwise be distributed to the owners of the Partnerships (principally Paine Webber when the Supplemental Agreements were negotiated and executed in 1983). As noted above, CMJ Management performed no additional services for its Incentive Management Fees. As was clear from the evidence, because Corcoran, Mullins and Jennison did not pay any attention to the Supplemental Agreements when Paine Webber was bought out in 1999, they continued in force, and the jury so held. The award to CMJ Management in this case will then be distributed to Corcoran, Mullins and Jennison, as required under Section 4(c)(1) of the 1987 Agreement. It is
9 The court’s calculation is $ 137,569.80.
10 Jennison seemed to be a bystander, although his economic interests are the same as Mullins.
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Mullins and Jennison who will personally, substantially benefit from the judgment entered in this law suit and Corcoran who will be personally disadvantaged. The court declines to award litigation expenses to Mullins.
ORDER
The court orders that Mullins prepare a chart of damages, including accrued prejudgment interest, consistent with this Memorandum of Decision and an accompanying proposed form of Final Judgment and file it with the court within fourteen days of this order. Corcoran shall file a pleading within seven days of the Mullins filing indicating if he has any objections to the Mullins proposed form of Final Judgment. These filings should not be used to reargue any positions. All arguments previously raised are preserved for purposes of appeal. Rather, the pleadings are intended to insure that the amount of damages and accrued prejudgment interest awarded is consistent with the findings and rulings set out herein.
_______________________
Mitchell H. Kaplan
Justice of the Superior Court
Dated: May 2, 2017 read more

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Posted by Massachusetts Legal Resources - July 1, 2017 at 2:08 am

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In re ReWalk Robotics Ltd. Stockholder Litigation (Lawyers Weekly No. 12-048-17)

COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT.
1684CV03336-BLS2
1684CV03670-BLS2
____________________
IN RE REWALK ROBOTICS LITD. STOCKHOLDER LITIGATION
____________________
MEMORANDUM AND ORDER DENYING DEFENDANTS’ MOTION TO STAY PENDING PARALLEL FEDERAL PROCEEDINGS
The named plaintiffs in these putative class actions claim that ReWalk Robotics Ltd. and thirteen other defendants are liable under §§ 11, 12(a)(2), and 15 of the federal Securities Act because ReWalk purportedly made false statements in a registration statement and prospectus concerning a public offering of securities. The first of these actions was filed on October 31, 2016. The second was filed on November 30, 2016. They were consolidated on January 9, 2017.
A similar lawsuit making similar Securities Act claims against the same Defendants was filed in the United States District Court for the District of Massachusetts on January 31, 2017. That lawsuit was docketed as Deng v. ReWalk Robotics et al., no. 1:17-cv-10179-FDS, and is pending before Judge Saylor.
Defendants have moved to stay these state court proceedings pending dispositive resolution of this federal lawsuit.1 A trial judge has broad discretion to grant or deny a stay of proceedings pending resolution of the same or similar claims in another forum. Travenol Laboratories, Inc. v. Zotal, Ltd., 394 Mass. 95, 97 (1985). The Court concludes, in the exercise of its discretion, that there is no good reason to stay these actions. It will therefore DENY Defendants’ motion.
1 When Defendants filed their motion to stay, they represented that a second federal class action asserting similar claims had been filed against them in the United States District Court for the Northern District of California, and that Defendants have moved to have the two federal actions consolidated in the District of Massachusetts as a single multidistrict litigation proceeding. In their reply memorandum, however, Defendants report that the California action was voluntarily dismissed on March 23, 2017. As a result, there are currently only two sets of actions asserting similar Securities Act claims against ReWalk and the other Defendants: these two actions in Massachusetts Superior Court and the Deng case filed several months later in federal court in the District of Massachusetts.
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Although Defendants argue that it would be inefficient for these cases and the pending federal action to proceed at the same time, they do not muster any convincing explanation as to why they seek a stay of these actions in Massachusetts court rather than asking the federal judge to stay the later-filed federal action.
The first of these consolidated actions was filed in the Massachusetts Superior Court three months before the pending federal action was filed. Furthermore, the additional factual allegations asserted in the consolidated complaint in these actions suggest that the state court plaintiffs have made more progress in investigating the factual basis for their claims. There is no evidence that the plaintiffs in the federal action have done anything of substance to move their case forward. As a result, and in the absence of any other reason to defer to the federal court, the fact that these actions were filed first weighs heavily against staying these actions. See, e.g., C.D.S., Inc. v. Zetler, 198 F.Supp.3d 323, 332 (S.D.N.Y. 2016). Defendants argue that the federal action should be treated as if it were the first-filed case because those plaintiffs originally asserted the same claims against the same Defendants in an action filed in California state court on September 20, 2016, a month before the first action was filed in Massachusetts. But the California action was dismissed because the California state courts lacked personal jurisdiction over the Defendants. If a judgment had been entered in the California action it would have violated the constitutional requirements of due process and thus been a “nullity.”2 Since the California action was a nullity, it can hardly count as being the first filed action.
The fact that Plaintiffs in these actions are asserted claims under the federal Securities Act has no bearing on whether this action should be stayed until the later-filed federal action is resolved. State and federal courts have concurrent subject
2 “[A] judgment rendered in the absence of personal jurisdiction is a nullity.” Vazquez-Robles v. CommoLoCo, Inc., 757 F.3d 1, 4 (1st Cir. 2014); accord World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291-292 (1980) (judgment entered by state court with no personal jurisdiction over defendant violates Fourteenth Amendment due process clause and therefore is void); Lamarche v. Lussier, 65 Mass. App. Ct. 887, 889 (2006) (“A judgment is void if the court from which it issues lacked jurisdiction over the defendant.”); see also Securities and Exchange Comm’n v. Ross, 504 F.3d 1130 (9th Cir. 2007) (vacating disgorgement order entered in Securities Act case because district court lacked personal jurisdiction over defendant).
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matter jurisdiction over Securities Act claims. See Fortunato v. Akebia Therapeutics, Inc., 1584CV02665-BLS2, slip op. at 2-16, 2017 WL 716356, *1-*9 (Mass. Sup. Ct. Feb. 21, 2017) (Salinger, J.). As a result, Plaintiffs in these actions are entitled to choose to proceed in State court.
Plaintiffs’ choice of forum should not be disregarded merely because they are asserting federal claims. “State courts are adequate forums for the vindication of federal rights;” this is “a foundational principle of our federal system.” Burt v. Titlow, 134 S. Ct. 10, 15 (2013). The Supreme Court has “consistently held that state courts have inherent authority, and are thus presumptively competent, to adjudicate claims arising under the laws of the United States.” Id., quoting Tafflin v. Levitt, 493 U.S. 455, 458 (1990). Defendants’ arguments to the contrary are without merit.
Defendants have not suggested that they would be unfairly prejudiced by having to litigate in Massachusetts and thus have not moved to dismiss under the doctrine of forum non conveniens. To the contrary, Defendants’s preferred forum is in Massachusetts, albeit in federal rather than state court.
In sum, Defendants have not shown there is any good reason to stay these actions.
ORDER
Defendants’ motion to stay these consolidated case pending resolution of a parallel civil action in federal court is DENIED.
April 3, 2017
___________________________
Kenneth W. Salinger
Justice of the Superior Court read more

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Posted by Massachusetts Legal Resources - April 27, 2017 at 4:32 pm

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Fletcher Fixed Income Alpha Fund, Ltd., et al. v. Grant Thornton LLP, et al. (Lawyers Weekly No. 11-085-16)

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-830                                        Appeals Court

FLETCHER FIXED INCOME ALPHA FUND, LTD., & another[1]  vs.  GRANT THORNTON LLP & others.[2]

No. 15-P-830.

Suffolk.     January 6, 2016. – July 14, 2016.

Present:  Cypher, Grainger, & Meade, JJ.

AuditorPractice, Civil, Motion to dismiss.  Jurisdiction, Nonresident, Long-arm statute.  Due Process of Law, Jurisdiction over nonresident.  Negligence, Misrepresentation, Proximate cause.  Proximate Cause. read more

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Posted by Massachusetts Legal Resources - July 18, 2016 at 2:20 pm

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Crown v. Kobrick Offshore Fund, Ltd., et al. (Lawyers Weekly No. 11-040-14)

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‑64                                         Appeals Court

MARC CROWN, trustee,[1]  vs.  KOBRICK OFFSHORE FUND, LTD., & others.[2]

No. 13‑P‑64.

Suffolk.     December 6, 2013.  ‑  April 24, 2014.

Present:  Fecteau, Sullivan, & Maldonado, JJ.

Uniform Securities ActSecurities, Sale.  Consumer Protection Act, Securities transactions.  Practice, Civil, Instructions to jury, Judgment notwithstanding verdict, Summary judgment, Attorney’s fees.  Evidence, Impeachment of credibility, Cross‑examination, Expert opinion, Qualification of expert witness.  Witness, Impeachment, Cross‑examination, Expert.  Contract, Indemnity.  IndemnityPublic Policy. read more

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Posted by Massachusetts Legal Resources - April 24, 2014 at 5:09 pm

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Fraco Products, Ltd., et al. v. Bostonian Masonry Corporation (Lawyers Weekly No. 11-118-13)

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

12‑P‑933                                                                              Appeals Court

FRACO PRODUCTS, LTD., & another[1]  vs.  BOSTONIAN MASONRY CORPORATION.

No. 12‑P‑933.

Suffolk.     May 6, 2013.  ‑  September 26, 2013.

Present:  Kantrowitz, Katzmann, & Rubin, JJ.

Negligence, Construction work, Scaffolding, Manufacturer, Vicarious liability, Joint tortfeasor.  IndemnityWorkers’ Compensation Act, Exclusivity provision.  Joint TortfeasorsContract, Indemnity. read more

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Posted by Massachusetts Legal Resources - September 26, 2013 at 4:05 pm

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Brigade Leverage Capital Structures Fund Ltd., et al. v. PIMCO Income Strategy Fund, et al. (Lawyers Weekly No. 10-167-13)

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‑11289

BRIGADE LEVERAGED CAPITAL STRUCTURES FUND LTD. & another[1]  vs.

PIMCO INCOME STRATEGY FUND & another.[2]

Suffolk.     May 6, 2013.  ‑  September 11, 2013.

Present:  Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ.

Business TrustTrust, Business trust.  Corporation, By‑laws, Stockholder, Board of directors.  ContractWords, “On at least an annual basis.”

Civil action commenced in the Superior Court Department on December 1, 2011. read more

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Posted by Massachusetts Legal Resources - September 11, 2013 at 6:19 pm

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Cannonball Fund, Ltd., et al. v. Dutchess Capital Management, LLC, et al. (Lawyers Weekly No. 11-094-13)

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

12‑P‑876                                   Appeals Court

CANNONBALL FUND, LTD., & others[1]  vs.  DUTCHESS CAPITAL MANAGEMENT, LLC, & others.[2]

No. 12‑P‑876.

Suffolk.     January 17, 2013.  ‑  August 2, 2013.

Present:  Cypher, Rubin, & Wolohojian, JJ.

Limitations, Statute ofPractice, Civil, Statute of limitations, Dismissal, Standing.  Jurisdiction, Personal, Long‑arm statute, Nonresident.  Corporation, Derivative action.  FiduciaryPartnership, Fiduciary duty.  Negligence, Causation.  Due Process of Law, Jurisdiction over nonresident.  Contract, Implied covenant of good faith and fair dealing, Performance and breach. read more

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Posted by Massachusetts Legal Resources - August 2, 2013 at 3:52 pm

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DeWolfe v. Hingham Centre, Ltd., et al. (Lawyers Weekly No. 10-064-13)

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‑11168

DANIEL DeWOLFE  vs.  HINGHAM CENTRE, LTD., & others.[1]

Plymouth.     December 3, 2012.  ‑  April 11, 2013.

Present:  Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ.

BrokerNegligence, Real estate broker, Misrepresentation.  Zoning.

Civil action commenced in the Superior Court Department on November 6, 2006.

The case was heard by Charles J. Hely, J., on a motion for summary judgment, and entry of final judgment was ordered by him. read more

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Posted by Massachusetts Legal Resources - April 12, 2013 at 2:39 am

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