O’Donnell v. Davidson, et al. (Lawyers Weekly No. 09-010-17)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION No. 2017-001 BLS 1 JOSEPH O’DONNELL vs. BERT B. DAVIDSON, JR., JEREMIAH S. HUBENY and DAVIDSON HUBENY COMPANIES, INC. MEMORANDUM AND ORDER ON DEFENDANTS’ MOTION TO DISMISS In this action by a minority shareholder against the majority shareholders of a closely-held corporation, defendants move to dismiss on the ground that all of plaintiff’s claims must be brought as a derivative action on behalf of the corporation. The motion will be allowed, in part, and denied, in part, as described below. BACKGROUND The following facts are taken from the First Amended Complaint (“FAC”). Plaintiff, Joseph O’Donnell, is the holder of 400 shares of Davidson Hubeny Brands, Inc. (“DH Brands”), a Massachusetts corporation. O’Donnell’s shares constitute 5% of the issued and outstanding shares of DH Brands. Defendants, Bert B. Davidson and Jeremiah S. Hubeny, each own 2,800 shares of DH Brands. The 2,800 shares constitute 35% of the issued and outstanding shares of DH Brands. Davidson is the president of DH Brands and Hubeny is the treasurer and secretary of the company. Davidson and Hubeny are both directors of DH Brands. At relevant times, until November 2014, Davidson and Hubeny were the only directors. On a date “shortly after” 1 November 21, 2014, a third director was elected. DH Brands is a closely-held corporation formed in 1988. In addition to the 70% of shares owned collectively by Davidson and Hubeny, approximately seven other individuals, including O’Donnell, own or owned shares. It is alleged that Davidson and Hubeny as majority shareholders, directors and officers of DH Brands control the management, direction and operations of the company. There is no ready market for the shares of DH Brands. DH Brands’ financial statement for the fiscal year ended June 30, 2014 described “related party transactions.” The financial statement disclosed that DH Brands paid management services costs of over $ 1.7 million and commissions of over $ 1.8 million to a company owned by the two majority stockholders. O’Donnell avers that while he had received “limited disclosure” of payments by DH Brands for management service costs and commissions to a marketing and management company owned by Davidson and Hubeny, he received no details of the transactions or explanation of why the costs were being incurred. In September 2014, Davidson and Hubeny offered to purchase the shares of non-active shareholders, including the shares owned by O’Donnell. The offer calculated a purchase price based on the income and cash flow of the company discounted by the lack of marketability of the minority shares and the lack of control of the business by the minority shareholders. O’Donnell alleges that the offer did not disclose that the company’s expenses were vastly […]
Commonwealth v. O’Donnell (Lawyers Weekly No. 11-122-17)
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 15-P-1616 Appeals Court COMMONWEALTH vs. MICHAEL W. O’DONNELL. No. 15-P-1616. Bristol. February 14, 2017. – September 21, 2017. Present: Maldonado, Massing, & Henry, JJ. Search and Seizure, Expectation of privacy, Administrative inspection, Warrant. Constitutional Law, Search and seizure, Privacy. Practice, Criminal, Warrant, Sanitary code violation. Electricity. State Sanitary Code. Municipal Corporations, Building inspector. Complaint received and sworn to in the Taunton Division of the District Court Department on August 8, 2012. A pretrial motion to suppress evidence was heard by Mary E. Heffernan, J., and the case was tried before Thomas L. Finigan, J. Jane D. Prince for the defendant. Yul-mi Cho, Assistant District Attorney, for the Commonwealth. MALDONADO, J. After a jury trial, the defendant was convicted of fraudulent use of electricity, under G. L. c. 164, § 127. On appeal, the defendant contends that the motion judge erred in denying his motion to suppress evidence recovered during a search on his property conducted pursuant to the execution of an administrative inspection warrant. Because we conclude that the authorities exceeded the bounds of the administrative warrant in searching for and seizing evidence of a crime, we reverse. Background. The defendant, who was representing himself, filed a motion to suppress certain evidence. The motion judge first considered the four corners of the administrative warrant application and determined that the warrant was validly issued. The motion judge then heard testimony from Dennis Machado, the building commissioner for the town of Raynham (town), and Sergeant David LaPlante of the Raynham police, both of whom were present when the administrative warrant was executed. The motion judge made no findings of fact; however, consistent with his denial of the motion, we assume the judge credited the testimony of Machado and Sergeant LaPlante, see Commonwealth v. Houle, 35 Mass. App. Ct. 474, 475 (1993), and therefore, we recite the following facts from their testimony. The defendant had received citations from the town for keeping trash and “junk” on a property located at 320 Titicut Road. On July 31, 2012, Machado applied for and obtained an administrative warrant to inspect the property and ensure that it was in compliance with local by-laws and the Massachusetts Sanitary Code. Machado testified that he had been advised by the town’s attorney not to contact the owners of the property […]
O’Donnell, et al. v. O’Donnell, et al. (Lawyers Weekly No. 12-148-16)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION No. 1684-CV-0897 BLS 1 J. JOSEPH O’DONNELL, PATRICK A. O’DONNELL, BRIAN M. O’DONNELL and DANIEL O’DONNELL vs. MARYELLEN O’DONNELL, JOSEPH F. RYAN and PARKLAKE REALTY CORP. MEMORANDUM AND ORDER ON DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT This is a dispute among members of the family of James J. O’Donnell III (“JJO”) who died on May 4, 2011. Plaintiffs are children of JJO and his first wife (deceased). Defendants are JJO’s second wife, Maryellen, and the long time lawyer, Joseph F. Ryan, for JJO and the real estate company that constitutes the major asset left by JJO. In addition, the real estate company, Parklake Realty Corp., is named as a nominal defendant for plaintiffs’ derivative claims of corporate waste and mismanagement, including the failure to pay dividends. The present motion does not challenge the claims by plaintiffs as shareholders of Parklake, brought both as direct and derivative claims, alleging breach of fiduciary duty and corporate waste and mismanagement. Instead, this motion for partial summary judgment seeks to dismiss claims alleging breach of fiduciary duty in connection with purchases of shares in Parklake by an insurance trust and by the company from the estate of JJO. Specifically, the motion requests the dismissal of Count III of the Verified Amended Complaint (“complaint”) alleging breach of fiduciary duty by Ryan as 1 trustee of the insurance trust. In addition, however, the motion requests that the court eliminate from the other counts of the complaint any allegations by plaintiffs for breach of fiduciary duty arising from transactions in the insurance trust and the estate of JJO. Defendants contend that such allegations are barred by plaintiffs’ previous consents or by operation of law. The complaint alleges that Maryellen and Ryan in their fiduciary capacities as directors and, in Maryellen’s case, controlling shareholder, of Parklake caused Parklake to consent to the purchase of a number of shares from the JJO estate in a manner that allegedly benefitted Maryellen to the detriment of plaintiffs. Because the sale by the estate was accomplished as part of a plan to provide cash to the estate to pay estate taxes, and those transactions were approved by the Probate and Family Court, defendants argue that plaintiffs are barred in this action from challenging the transactions. Accordingly, defendants want all allegations in the complaint concerning purchases of shares in Parklake held by the estate, whether by the insurance trust or as a redemption by Parklake, to be stricken or dismissed. BACKGROUND At the time of his death, JJO owned 96.7% of the shares of Parklake. The remaining 3.3% of the shares were owned by his ten children in equal amounts. Parklake owned and operated […]