Posts tagged "Weekly"

Commonwealth v. Cooley (Lawyers Weekly No. 10-119-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.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-11691

COMMONWEALTH  vs.  EDWARD COOLEY.

Hampden.     March 10, 2017. – July 13, 2017.

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

Homicide.  Robbery.  Firearms.  Joint Enterprise.  Evidence, Joint venturer, Exculpatory.  Practice, Criminal, New trial, Capital case.

Indictments found and returned in the Superior Court Department on June 29, 2010.

The cases were tried before Mary-Lou Rup, J., and a motion for a new trial, filed on October 24, 2011, was heard by her.

read more

Posted by Stephen Sandberg - July 13, 2017 at 6:14 pm

Categories: News   Tags: , , , ,

Calabria v. Calabria (Lawyers Weekly No. 11-087-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.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-1397                                       Appeals Court

SAKTI CALABRIA  vs.  PETER J. CALABRIA, JR.

No. 16-P-1397.

Bristol.     May 31, 2017. – July 13, 2017.

Present:  Green, Wolohojian, & Ditkoff, JJ.

Divorce and Separation, Child support, Modification of judgment.  Parent and Child, Child support.

Complaint for divorce filed in the Bristol Division of the Probate and Family Court Department on March 13, 2009.

A complaint for modification, filed on July 16, 2014, was heard by Anthony R. Nesi, J.

read more

Posted by Stephen Sandberg - July 13, 2017 at 2:40 pm

Categories: News   Tags: , , ,

City of Boston v. Boston Police Patrolmen’s Association (Lawyers Weekly No. 10-118-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.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-12077

CITY OF BOSTON  vs.  BOSTON POLICE PATROLMEN’S ASSOCIATION.

Suffolk.     December 5, 2016. – July 12, 2017.

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

Arbitration, Confirmation of award, Authority of arbitrator.  Municipal Corporations, Police.  Police, Discharge.  Public Employment, Police, Termination.  Public Policy.

Civil action commenced in the Superior Court Department on July 22, 2013.

The case was heard by Dennis J. Curran, J.

read more

Posted by Stephen Sandberg - July 13, 2017 at 12:21 am

Categories: News   Tags: , , , , , , ,

Essex Regional Retirement Board v. Justices of the Salem Division of the District Court Department of the Trial Court, et al. (Lawyers Weekly No. 11-086-17)

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-1158                                       Appeals Court

ESSEX REGIONAL RETIREMENT BOARD  vs.  JUSTICES OF THE SALEM DIVISION OF THE DISTRICT COURT DEPARTMENT OF THE TRIAL COURT[1] & another.[2]

No. 16-P-1158.

Essex.     March 8, 2017. – July 12, 2017.

Present:  Grainger, Blake, & Neyman, JJ.[3]

Public Employment, Retirement, Forfeiture of pension.  Police, Retirement.  PensionConstitutional Law, Public employment, Excessive fines clause.  County, Retirement board.  Practice, Civil, Action in nature of certiorari.  District Court, Appeal to Superior Court.

read more

Posted by Stephen Sandberg - July 12, 2017 at 8:47 pm

Categories: News   Tags: , , , , , , , , , , , , ,

Shulman v. Tosi (Lawyers Weekly No. 12-087-17)

COMMONWEALTH OF MASSACHUSETTS

 

NORFOLK, ss.                                                                      SUPERIOR COURT

                                                                                                CIVIL ACTION

  1. 16-01268-C

 

 

FREDERICK I. SHULMAN

 

vs.

 

LINDA TOSI, personal representative[1]

 

MEMORANDUM OF DECISION AND ORDER

ON DEFENDANT’S MOTION TO DISMISS

In his complaint in this action, plaintiff Frederick I. Shulman claims damages from the estate of Velia N. Tosi (“the Estate”).  Shulman contends that his former employers, Velia Tosi (“Velia”)[2] and her husband, Carlos Tosi (“Carlos”),  promised to pay him a sum of money upon the last of them to die.  Shulman alleges that after Carlos and later Velia died, Linda Tosi (“Linda”), the executrix of the Velia’s Estate, refused to pay the money allegedly promised.

read more

Posted by Stephen Sandberg - July 12, 2017 at 5:12 pm

Categories: News   Tags: , , , ,

Commonwealth v. Muller (Lawyers Weekly No. 10-117-17)

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-11176

COMMONWEALTH  vs.  CHRISTIAN MULLER.

Worcester.     December 9, 2016. – July 11, 2017.

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

Homicide.  Armed Assault with Intent to Murder.  Armed Home Invasion.  Firearms.  Mental Impairment.  Insanity.  Intoxication.  Evidence, Insanity, Intoxication.  Practice, Criminal, Capital case, Instructions to jury, Argument by prosecutor.

Indictments found and returned in the Superior Court Department on August 23, 2007.

read more

Posted by Stephen Sandberg - July 11, 2017 at 4:09 pm

Categories: News   Tags: , , , ,

Beninati, et al. v. Borghi, et al. (Lawyers Weekly No. 12-086-17)

1
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
CIVIL ACTION
NO. 12-1985 BLS2
Consolidated with
NO. 13-1772 BLS2
ELIZABETH BENINATI and JOSEPH MASOTTA,
Plaintiffs,
vs.
STEVEN BORGHI, et al.
Defendants
MEMORANDUM OF DECISION AND ORDER
ON VARIOUS MOTIONS
This is an action primarily derivative in nature brought on behalf of fourteen limited liability companies that operate health clubs under the trade name “Work out World” in the New England area (collectively, WOW New England or WOW). Following a jury waived trial, this Court on July 9, 2014 issued findings and rulings that ultimately resulted in a $ 4.1 million award of damages to the plaintiffs on those counts against the defendants alleging breach of fiduciary duty (the July 2014 Decision). As to the count against the defendant Harold Dixon alleging a violation of G.L.c. 93A §11, this Court ruled that he could not be held liable under that statute as a matter of law. The plaintiffs appealed from that ruling. In a rescript opinion dated October 24, 2016, the Appeals Court affirmed the judgment in all respects except for this Court’s ruling on the 93A claim against Dixon. Beninati v. Borghi, 90 Mass.App.Ct. 556 (2016). It remanded the case for further proceedings.
The case is now before the Court on two sets of motions. The first set of motions addresses the question of Dixon’s liability under G.L.c. 93A. As to that issue, plaintiffs have
2
moved for further findings and more specifically ask this Court to conclude that the 93A violation was willful and knowing, warranting multiple damages. Dixon has filed an opposition and has further asked to supplement the trial record. The second set of motions concerns the extent to which the defendants Steven and Linda Borghi should be required to contribute to the damages award on the non-93A claims. These motions also raise the question of whether and to what extent this Court can or should take steps to prevent the Borghis, as members of WOW England, from sharing in the award of 93A damages. This Court will discuss each set of motions in turn.
A. Liability of Dixon under G.L.c. 93A
The fact findings underlying this Court’s July 2014 Decision were extensive. They detailed a course of conduct whereby Dixon, a businessman with no prior experience in the fitness industry, allied himself with the defendants Steven and Linda Borghi, both members of WOW New England, to open a chain of competing health clubs in the same geographic area operated through Dixon-controlled entities (collectively, Blast). Dixon accomplished this, with the Borghis’ assistance, by misappropriating WOW’s confidential information, using WOW’s resources, and engaging in other activity that promoted the interest of Blast at the expense of WOW New England. Based on these findings, this Court concluded that this provided ample factual basis for an award of damages against Dixon for breach of fiduciary duty: although, unlike the Borghis, he was not himself a member of WOW New England and thus would not otherwise have any fiduciary obligations to those entities, he had aided and abetted the Borghis in breaching their obligations and therefore was jointly and severally liable to the plaintiffs for the damages that flowed from that breach. As to the 93A claim, however, this Court concluded that, because the Borghis themselves could not be held liable under that
3
statute (Chapter 93A being inapplicable to intra-corporate disputes), neither could Dixon. It was on this point that the Appeals Court disagreed and reversed. The Appeals Court noted that, having erroneously determined that Chapter 93A was inapplicable, this Court had not attempted to asses Dixon’s level of culpability under Chapter 93A. It therefore remanded the matter “for a determination whether Dixon and the Blast defendants violated c.93A and, if so, whether single or multiple damages are warranted.” 90 Mass.App.Ct. at 567. The Appeals Court left undisturbed this Court’s fact findings and otherwise affirmed my rulings in the case.
In opposing plaintiffs’ request for entry of judgment against him on the 93A count, Dixon makes several arguments as to why the elements of a 93A claim have not been established. First, he contends that his actions were not sufficiently egregious to constitute the kind of unfair and deceptive conduct prohibited by G.L.c. 93A §2. This Court disagrees. Contrary to Dixon’s contention that all he gained was a “head start,” this Court found that Dixon aided and encouraged the Borghis in misappropriating WOW New England club membership data, revenue information, reports that analyzed the demographics of the WOW New England membership base, employee training manuals, payroll data, and a list of the clubs’ vendors. Dixon accomplished this by infiltrating WOW New England under the guise of being a consultant; he knew of the Borghis’ fiduciary obligations to other WOW members, who were left in the dark about Dixon’s role until it was too late. Dixon also used WOW assets to open up competing clubs, piggybacked on WOW advertising and marketing efforts, and used his knowledge of the arrangement by which WOW New England obtained permission to use the WOW name in order to obtain unfair advantages for himself and his companies. All of these facts were laid out in the Court’s July 2014 Decision. If that was not clear enough, the Court was explicit in a later decision on plaintiff’s Motion for Reconsideration, stating that ‘Dixon’s
4
conduct was – standing alone – unfair and deceptive as defined by G.L.c. 93A §2.” See page 8 of Memorandum of Decision and Order on various Post-trial Motions, dated October 17, 2014 (the October 2014 Decision). This Court continues to adhere to this conclusion.
Dixon’s second argument is that the Court’s fact findings fail to demonstrate that WOW New England suffered some “loss of money or property” within the meaning of G.L.c. 93A §11. Instead, they show only that Blast unfairly benefited; this unfair benefit (it is argued) is not enough to trigger the statute. This Court concludes that Dixon reads too much into that phrase; that is, he construes Section 11 to be more restrictive in its reach than it actually is. Although it is certainly true that Dixon unfairly benefited from his wrongful acts, that benefit also came at WOW New England’s expense. Precisely what monetary loss WOW New England sustained may be difficult to quantify, but that does not mean that Chapter 93A is inapplicable.
The Appeals Court recognized as much in Specialized Tech.Res. Inc. v. JPS Elastomeric Corp., 80 Mass.App. Ct. 841, (2011) in upholding a judge’s Chapter 93A award of damages against a defendant who, like Dixon, had misappropriated plaintiff’s confidential information. Although the Court acknowledged that the plaintiff’s monetary loss was difficult to determine with any specificity, it was fair to infer that the plaintiff suffered some loss of sales when it faced competition from another entity using plaintiff’s trade secrets. The same can be inferred here. “Having satisfied the requirement that it demonstrate some monetary loss, the use of disgorgement of profits to compensate [the plaintiff] for the defendant’s misuse of the trade secret was entirely appropriate.” 80 Mass.App.Ct. at 850. In other words, damages that are based on the benefit that defendant received could be awarded on a claim brought under Section 11 once the threshold requirement of some monetary harm (however imprecise) was established.
5
That threshold requirement was met in the instant case.1
Dixon argues more generally that this Court must separately analyze each and every act by Dixon, and assess the particular damages attributable to that specific act rather than simply use the same $ 4.1 million figure as the basis for a damages award. This Court disagrees. In its July 2014 decision, this Court carefully analyzed the evidence presented at trial and concluded that plaintiffs had proved that the defendants caused harm to WOW New England in an amount totaling $ 4.1 million. Dixon’s conduct when considered as a whole amounted to unfair and deceptive conduct within the meaning of 93A and supports the same $ 4.1 million damages award. In short, there is no basis to award anything less than that same amount on the 93A claim.
Third, Dixon contends that that the conduct at issue did not occur in the course of “trade of commerce” as required by G.L.c. 93A §11. The basis for this position is Dixon’s claim that Blast and WOW New England are not separate and distinct entities engaged in arm’s length transactions but are intertwined by virtue of their overlapping ownership and control. Although maintaining that this is “another, different argument” from the one that Dixon made before the Appeals Court as to why he could not be held liable under 93A, this Court agrees with the plaintiffs that it is in fact the same. Clearly, the Appeals Court would not have rejected this Court’s conclusion on the 93A count and remanded for further findings regarding the nature of the conduct at issue if Chapter 93A were inapplicable.
1 This Court also finds it significant that the Appeal Court — which had this Court’s fact findings before it — did not give any indication that Section 11 relief was not available because WOW New England suffered no “loss of money or property” within the meaning of the statute. If this were indeed a problem, then the failure to meet this requirement would have been another way for the Appeals Court to affirm this Court’s conclusion that Chapter 93A did not apply.
6
What the Appeals Court could not decide and quite properly remanded to this Court to determine was whether this Court regarded Dixon’s conduct as “unfair” or deceptive” and if so, whether the damages award should be multiplied. The fact findings that this Court made in its July 2014 Decision amply support the conclusion not only that Dixon’s conduct was unfair and deceptive but also that it was intentional and willful, justifying an award of multiple damages. Plaintiffs have accurately cited those portions of the trial record that support this conclusion. See Memorandum in Support of Further Findings at pages 4 through 7, together with Appendix submitted in support. To the extent that such evidence consisted of witness testimony, this Court finds that testimony to be credible.2
In reaching the conclusion that multiple damages are warranted, this Court has not considered Dixon’s affidavit, where he claims to have lost millions on the Blast business. That affidavit was submitted in support of Defendant’s Motion to Supplement the Record, which is Denied. This Court’s award of damages is factually supported and is not subject to revision based on events taking place after the trial was over, nor does this Court have any desire to reopen the evidence.
As to whether to double or treble the damages, this Court concludes that doubling the damages is sufficiently punitive at the same time that it is proportional to the wrongdoing at issue. In so concluding, this Court takes into account the fact that Dixon was acting in concert with the Borghis. Had it not been for the Borghis’ willful breach of their own fiduciary obligations, Dixon would not have had the access he did to WOW New England confidential information or have been able to use that information as effectively had he been acting on his own. Certainly, Dixon is culpable, but the Borghis – who put their own self-interest ahead of
2 This Court also finds and concludes that Dixon’s violations of Chapter 93A should be imputed to CapeCapital, LLC and Auburndale Fitness, LLC, for the reasons stated at pages 8 through 9 of Plaintiff’s Memorandum.
7
their fiduciary obligations — are no less responsible for the harm that was inflicted on WOW New England.
B. The Borghis’ Contribution Obligation on the Common Law Count and their Ability to Share in any 93A Award to WOW
The second set of issues – raised by way of two motions–pertains to the Borghis. The first motion, entitled “Harold Dixon’s Motion for Entry of Judgment for Contribution from Defendant Steven and Linda Borghi,” asks this Court to reaffirm what I thought I had already decided — namely, that the Borghis are responsible for fifty percent of the judgment entered in favor of WOW New England on December 30, 2014. That judgment was on the common law claim for breach of fiduciary duty. In order to forestall the accumulation of interest of that judgment, Dixon sought leave to pay the full amount of that judgment, plus accumulated interest; obtaining that leave, he paid $ 4,806,631 into the court on February 11, 2015. Dixon now seeks to recover contribution from the Borghis in accordance with G.L.c. 231B §§1(b) and 3(b) (permitting one tortfeasor to enforce his right of contribution in the same action which gave rise to the judgment against both). He also seeks to “clarify” the Borghis’ pro rata share. The Borghis not only oppose Dixon’s request but cross move to dismiss the contribution claim on the grounds that it is barred by a general release (the Release) contained in an earlier agreement of the parties. This Court discussed the impact of this Release first.
The Release appears in the last of a series of agreements that restructured the relationship between the Borghis and Dixon. The first agreement was entered into when it was clear that litigation among the parties was imminent. The final agreement was executed before the trial took place. The result of these agreements was that Steven Borghi went from holding a majority position in Blast, which ran sixty clubs nationwide, to being the owner of a small handful of those clubs. See July 2014 Decision at pages 31-32. Although not particularly relevant to the
8
Court’s ultimately rulings on the legal claims before me, it seemed clear that this was an attempt on Dixon’s part to distance himself from the Borghis.
The agreement relevant to the motion now before this Court is the Purchase and Redemption Agreement dated July 22, 2013 (the P&R Agreement). Subsection 7(d) of the P&R Agreement states that the Blast entities (including Dixon) discharge Steven Borghi and his affiliates (described as the “Borghi Released Parties”) from any actions, claims, or causes of action “whether known or unknown, contingent or otherwise, which [Blast]…had, has or may have had at any time based upon events, agreements, actions or occurrences occurring in the past until and including the Closing Date against the Borghi Released Parties…” Such claims included “any claims which relate to or arise out of [Blast’s] prior relationship” with the Borghi Released Parties…” In Subsection 7(a) of the P&R Agreement, Borghi agreed to do the same as to any claims he or related entities had or may have had against Blast.
The jury waived trial began in October 2013. Following this Court’s July 2014 decision finding the Borghis and Dixon jointly and severally liable to WOW New England on the claim of breach of fiduciary duty, Dixon asked this Court to apportion damages among the defendants as permitted by G.L.c. 231B. Oral arguments on this request (and on other post-trial motions) was held on October 7, 2014 (the October 2014 Hearing). The Borghis’ counsel argued at that hearing that, because Steven Borghi had no interest in certain Blast clubs as a consequence of the P&R Agreement, he should not be liable for a certain portion of the damages. At no time did counsel suggest that the P&R Agreement absolved the Borghis from any and all liability to Dixon in contribution in the event that Dixon paid the judgment first. In a Memorandum of Decision and Order dated October 17, 2014 (the October 2014 Decision) this Court determined that Dixon’s pro rata share of the damages award of $ 4.112,376 was fifty percent, with the
9
Borghis responsible for the remaining fifty percent. Dixon sought and obtained leave to pay the full judgment plus accumulated interest, totaling $ 4,806,631 into Court. The Chapter 93A claim against Dixon was dismissed on the grounds that the statute did not apply as a matter of law.
For the next year, the parties litigated their appeal from this judgment: plaintiffs complained of this Court’s 93A ruling, and the Borghis cross appealed as to this Court’s decision upholding a vote by WOW members to remove the Borghis from their management positions. The Borghis did not appeal this Court’s ruling allocating responsibility among the parties for payment of the judgment. The first time the Borghis raised the P&R Agreement’s Release was in response to the motion for contribution now before this Court.
Dixon argues – quite persuasively – that the Release does not bar the contribution claim since it was executed prior to the time that the claim accrued. But see Sword & Shield Restaurant, Inc. v. Amoco Oil Co., 11 Mass.App.Ct. 832 (1981) (holding that release with similar language barred joint tortfeasor claim for contribution even though claim did not become ripe until the joint tortfeasor paid more than his share of a judgment). Moreover, the Borghis’ construction of the Release would lead to nonsensical results: there is no right of contribution until one joint tortfeasor pays more than his fair share of a judgment but, because mutual releases were executed, whoever paid the judgment first (whether voluntarily or involuntarily) would necessarily give up his right to seek contribution against the other. At the very least, the Release is ambiguous, and would require the Court to hear evidence regarding the parties’ intent. That is not necessary, however, since I conclude that Dixon’s second argument regarding waiver is dispositive on this issue.
A release is an affirmative defense that should be raised at the earliest opportunity. See Rule 8(c), Mass.R.Civ.P.; see also Sharon v City of Newton, 437 Mass. 99, 103 (2002) (the
10
omission of an affirmative defense from an answer generally constitutes a waiver of that defense). Here, the Borghis could have raised the issue of the Release at multiple junctures in the post trial process but did not. The most obvious time would have been at the October 2014 Hearing concerning apportionment of damages pursuant to G.L.c. 231B. At that hearing, the Court was asked to allocate responsibility among the defendants in a manner that was consistent with the purposes of that statute as applied to the facts of the case before me. At no time in their pleadings or during oral argument did the Borghis’ counsel mention the mutual Releases and how they might affect any right of contribution of one defendant against another. Indeed, the Borghis’ counsel – appearing to acknowledge that Dixon did have some right of contribution — sought only to minimize the amount of the Borghis’ pro rata percentage. If the mutual Releases had been raised, then clearly Dixon would have acted differently than he did: no one would have rushed in to pay the full amount of the judgment — or permitted the plaintiffs to execute on the judgment– until and unless this Court had fully resolved the issues as to the Releases’ impact on any contribution right. The Borghis’ Motion to Dismiss Dixon’s claim for contribution is therefore Denied and Dixon’s Motion of Entry of Judgment of Contribution is Allowed.
Dixon also asks that I “clarify” my decision as to the amount of the Borghis’ pro rata contribution. Specifically, he argues that he should be entitled to recover an additional amount of contribution from Steven Borghi to account for the fact that, as a member of WOW New England, Steven Borghi will receive 37.93 percent of the net recovery to WOW on the common law claim of breach of fiduciary duty. The so-called “windfall” that Steven Borghi would receive as result of that judgment was necessarily known to all parties well before the October 2014 Hearing: as Dixon concedes, it is well settled that, in a derivative action such as this one where one shareholder alleges that another shareholder breached his fiduciary duties to the
11
corporation, the wrongdoer shareholder both pays damages and participates in the recovery through his continued ownership in the corporation. Not only did Dixon’s counsel not raise this issue at the October 2014 Hearing but he then joined in submitting a proposed judgment for this Court to sign following this Court’s October 2014 Decision. That proposed judgment – which this Court adopted — by its terms does not limit Borghi’s subsequent proportionate participation in the recovery in any way. This Court sees no reason to amend that judgment at this late date. Dixon’s Motion for Clarification of Judgment Concerning Pro Rata Contribution from the Borghis is therefore Denied.
As to whether Steven Borghi should, together with other WOW members, share in the 93A award,3 that issue has been raised in a timely fashion and in fact seems to have been anticipated by the Appeals Court when it reversed this Court on its 93A ruling. Specifically, the Appeals Court stated in a footnote to its opinion:
We recognize the irony that Steven, as a shareholder of WOW New England, may stand to benefit from any additional damages that Dixon and the Blast defendants are required to pay. Any such inequity is a matter between erstwhile partners Steven and Dixon, and the trial judge is free to take the equities into account in fashioning any remedy under c. 93A.
90 Mass.App.Ct. at 567, n. 11. Notwithstanding the Appeals Court’s suggestion to the contrary, Dixon would not appear to have any legal recourse against Steven Borghi, for the additional damages that Dixon will be required to pay WOW on the 93A count: the Borghis cannot be held jointly and severally liable (and thus cannot be required to contribute to the 93A award pursuant to G.L.c. 231B) because Chapter 93A does not as a matter of law apply to them.
3 Plaintiffs are recovering compensatory damages on the common law count, and on that count, this Court can and does take into account the Borghis’ conduct by requiring them to contribute to the damages pursuant to G.L.c. 231B. Plaintiffs are not entitled to double recovery. Thus, what is at issue on the 93A count is that amount over and above compensatory damages that WOW New England will receive in damages by virtue of this Court’s decision to award double damages.
12
As the Appeals Court went on to say, however, this Court can take steps that it believes are necessary to address the inequity that would result if Steven Borghi were to receive almost 40 percent of a 93A award that is based on conduct in which Borghi himself was an active participant.
Plaintiffs join with Dixon in offering the best suggestion as to how to deal with this unique situation – a suggestion that this Court adopts. In entering judgment on the 93A count, this Court will direct that WOW New England shall not permit Borghi to benefit in any way from that amount of damages that WOW receives pursuant to 93A over and above the compensatory damages awarded on the common law count. See fn. 3, supra. Thus, If WOW New England decides to split the award among WOW members as a distribution to each of them according to their percentage ownership, then Steven Borghi would not be entitled to receive any distribution.4 At the same time, other members of WOW should not receive more than their fair share; thus, to prevent an undeserved windfall to them, this Court must reduce the amount that Dixon has to pay to WOW by the percentage of Steven Borghi’s membership interest – that is, by 37.93 percent. This Court recognizes that this means that WOW itself will receive less than it would have received had Steven Borghi not participated with Dixon in the conduct that forms the basis for the 93A claim. But then Dixon would not have been able to do what he did without Steven Borghi either. Moreover, this Court’s approach seems the only way to prevent Steven Borghi from affirmatively benefiting from his misconduct without overcompensating other WOW members. It is also worth noting that WOW New England will receive the substantial benefit of being relieved of its obligation to pay attorney’s fees. Those fees are now Dixon’s
4 As this Court understands it, a distribution is indeed the way that WOW intends to handle the proceeds from this case. As to how the Borghis will be excluded from benefiting from any recovery on the 93A claim if WOW chooses to use the award in some other way, this Court will leave that to WOW to figure out.
13
financial responsibility and to the extent that WOW has already paid the fees, it will be entitled to be reimbursed for them by Dixon.
CONCLUSION AND ORDER
For all the foregoing reasons, this Court rules as follows:
1. Defendants’ Motion to Supplement the Record is DENIED;
2. Defendant Harold Dixon’s Motion for Entry of Judgment for Contribution from Defendants Steven and Linda Borghi is ALLOWED;
3. Steven and Linda Borghi’s Cross-Motion to Dismiss Dixon’s Contribution Claim is DENIED;
4. Defendant Harold Dixon’s Motion for Clarification of Judgment Concerning Pro Rata Contribution from the Borghis is DENIED;
5. Plaintiffs’ Motion for Further Findings and Entry of Judgment is ALLOWED, and it is hereby ORDERED that judgment enter on Count XXV of the Second Amended Complaint against Harold Dixon, CapeCapital, LLC and Auburndale Fitness Group Investment, LLC (together with any other Blast entities identified as defendants in that count) in an amount twice the compensatory damages, together with attorney’s fees, pursuant to G.l.c. 93A §11. The parties shall submit a proposed form of judgment on or before July 21, 2017 in line with this opinion.
____________________________________
Janet L. Sanders
Justice of the Superior Court
Dated: June 30, 2017
14

read more

Posted by Stephen Sandberg - July 6, 2017 at 9:40 pm

Categories: News   Tags: , , , ,

Commonwealth v. Jordan (Lawyers Weekly No. 11-085-17)

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-1251                                       Appeals Court

COMMONWEALTH  vs.  MICHAEL AARON JORDAN.[1]

No. 16-P-1251.

Suffolk.     May 9, 2017. – July 6, 2017.

Present:  Agnes, Massing, & Lemire, JJ.

Cellular Telephone.  Practice, Criminal, Motion to suppress, Warrant, Affidavit.  Constitutional Law, Search and seizure, Probable cause.  Search and Seizure, Warrant, Affidavit, Probable cause.  Probable Cause.

Indictments found and returned in the Superior Court Department on February 20, 2015.

read more

Posted by Stephen Sandberg - July 6, 2017 at 6:05 pm

Categories: News   Tags: , , , ,

Commonwealth v. Martin (Lawyers Weekly No. 11-084-17)

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-403                                        Appeals Court

COMMONWEALTH  vs.  DEQUAN MARTIN.

No. 15-P-403.

Suffolk.     April 1, 2016. – July 6, 2017.

Present:  Meade, Wolohojian, & Maldonado, JJ.

Marijuana.  Practice, Criminal, Motion to suppress.  Threshold Police Inquiry.  Probable Cause.  Search and Seizure, Threshold police inquiry, Exigent circumstances, Probable cause, Pursuit, Emergency.  Constitutional Law, Search and seizure, Investigatory stop, Probable cause.

read more

Posted by Stephen Sandberg - July 6, 2017 at 2:31 pm

Categories: News   Tags: , , , ,

NTV Management, Inc. v. Lightship Global Ventures, LLC, et al. (Lawyers Weekly No. 12-080-17)

1
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss SUPERIOR COURT
CIVIL ACTION
NO. 2016-0327-BLS1
NTV MANAGEMENT, INC.
vs.
LIGHTSHIP GLOBAL VENTURES, LLC and KENT PLUNKETT
MEMORANDUM OF DECISION AND ORDER ON
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT DISMISSING THE COMPLAINT AND PLAINTIFF’S CROSS-MOTION FOR SUMMARY JUDGMENT ON COUNT I OF ITS COMPLAINT
This case arises out of a Consulting and Advisory Services Agreement (the Agreement) between the plaintiff, NTV Management, Inc. (NTV) and the defendant Lightship Global Ventures, LLC (Lightship). The defendant, Kent Plunkett, founded a company, Salary.Com, Inc., which, following a series of acquisitions, became a division of IBM. Plunkett and a colleague formed Lightship for the purpose of reacquiring Salary.Com from IBM. The Agreement, while containing some one-off terms, was in effect a non-exclusive brokerage agreement pursuant to which NTV would be due a commission if it found financing for the acquisition and a lesser fixed sum for introducing “at least ten qualified sources of capital.” Lightship did acquire Salary.com, but not with equity or debt partners introduced to the deal by NTV. NTV, nonetheless, alleges that it is due fees under the Agreement and damages for a variety of other wrongful conduct on the part of the defendants. It has pled its complaint in seven counts: breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, unjust enrichment, deceit, a violation of Chapter 93A, violations of the Uniform Fraudulent Transfer Act, and a count to reach and apply stock or assets of Salary.com (although curiously it has not
2
named Salary.com, or the entity that presently owns it, as a defendant).
Apparently, concerned about matching NTV’s imaginative pleading measure for measure, the defendants have asserted five counterclaims against NTV: breach of a duty of confidentiality, breach of contract, defamation, misrepresentation, and tortious interference with contractual or business relations. These counterclaims are not the subject of a motion now before the court.
The case is before the court on the defendants’ motion for summary judgment dismissing all the claims asserted against them, and NTV’s cross-motion for summary judgment on part of its breach of contract claim. For the reasons that follow, the defendants’ motion is Allowed, in part, and Denied, in part, and NTV’s motion is Denied.
FACTS
Based on the summary judgment record, the following facts are undisputed or viewed in the light most favorable to the non-moving party.
Salary.com was founded by Plunkett in 1999. It became a public company in 2007, and then was acquired by a firm called Kenexa, Inc. in 2010. In 2012, Kenexa was acquired by IBM, after which Salary.com was operated as a division of that company or an IBM affiliate. In 2014, IBM informed Plunkett that it was interested in selling Salary.com. Also, in 2014, Plunkett and another former colleague at Salary.com formed Lightship for the purpose of attempting to acquire Salary.com from IBM. Lightship signed a Non-Disclosure Agreement with IBM which limited Lightship’s ability to disclose confidential information concerning Salary.com to others, including that IBM was actively seeking to dispose of this asset. As is typical in these kinds of potential transactions, IBM set up a data room where confidential information concerning
3
Salary.com could be reviewed by Lightship and potential investors who would finance the acquisition. The information available to potential investors did not include financial statements specific to Salary.com because it was operated by IBM as division of a larger enterprise. In February, 2015, Lightship and IBM entered into an agreement that gave Lightship the exclusive right, for a period of time, to negotiate a purchase agreement for Salary.com. Lightship had previously entered into an investment banking relationship with the firm Stifel Nicolaus & Co. (Stifel) to assist it in the proposed acquisition.
Through Stifel, a number of potential investors were identified who signed NDAs with Lightship, were informed of the acquisition target, and given access to the data room. A number of potential investors presented Lightship with term sheets for an acquisition of Salary.com. In early 2015, a private equity firm called Genstar Capital signed an agreement with Lightship that gave it an exclusive right to try and negotiate a transaction with IBM. Genstar retained a firm, Alvarez and Marsal, to analyze Salary.com’s earnings and prepare a report. This report was Genstar’s property. Genstar, however, failed to reach terms acceptable to IBM. Thereafter, a firm called Symphony Technology Group (Symphony) entered a similar agreement with Lightship, but it also failed to reach agreement with IBM. In July, 2015, Stifel informed Lightship that it would no longer represent it in connection with a Salary.com transaction.
In July, 2015, a mutual acquaintance, Steven Sandler, introduced Plunkett to a principal of NTV. NTV was then a newly formed organization which was planning to raise a venture capital fund, although it did not yet have any investors. After discussions, Lightship and NTV agreed to enter into an investment banking relationship in which NTV would seek to find investors willing to finance the acquisition of Salary.com. After some negotiations, their relationship was memorialized in the Agreement which was executed on August 5, 2015. As
4
relevant to this case, the Agreement contained the following provisions.
The term of the Agreement was six months, but it could be terminated by either party on 14 days notice. Section 4 of the agreement had standard confidentiality terms. It also provided that: “NTV further agrees to abide by all terms and conditions of the NDA entered into between IBM and Lightship.” This meant that NTV should not disclose the name of the target, Salary.com, or any of its data, to a potential investor identified by NTV until the investor had signed an NDA.
Most of provisions of the Agreement relevant to this case are found in a document entitled Scope of Work (SOW) that was an exhibit to the Agreement and made a part of it. The SOW described the services that NTV was going to provide Lightship as follows:
NTV will endeavor to source capital and structure financing transactions from agreed-upon target investors and/or lenders. NTV will facilitate and participate in meetings and due diligence with capital sources, structuring and negotiating terms, and closing financing for the Acquisitions as [Lightship’s] advisor.
With respect to fees potentially due NTV, the SOW provided:
[Lightship] will pay to NTV as transaction fees (collectively, “Fees”) at closing in cash the a [sic] success fee (the Success Fee”) equal to the greater of 3% of the value of the capital that NTV introduces to the project that is invested or $ 330,000. In the event a deal is consummated by management with investment or financial sponsorship other than parties introduced by NTV, but not including sources contacted and/or introduced by NTV, (ie: not a strategic buyer acquiring substantially all of the business other than incentive interests for and direct investment by management where such strategic partner and not management controls) and no success fee is earned, then NTV shall be entitled to a $ 330,000 advisory fee in consideration of its team’s effort, services, time, and opportunity costs associated with working with management, preparing materials, communication with potential sources of capital, and other services, provided NTV shall have introduced at least 10 qualified sources of capital and remained engaged with [Lightship] and available to provide advice and support. It is understood and agreed by the parties that: . . . (ii) NTV expects to introduce and facilitate investment from third party sources collectively able to finance all levels of the transactions (i.e., both equity and debt) and [Lightship] has agreed as to each level of the capital structure for which NTV has one or more sources of capital willing and able to provide financing that [Lightship] has agreed that the Company will close with such investor(s) introduced and facilitated by NTV and not with other investors who might offer such financing on
5
substantially the same terms; provided that if [Lightship] determines reasonably and in good faith that accepting financing from one or more of such investors would not be in the best interests of the Company and its management and shareholders (but specifically excluding as an interest of the Company avoidance of fees otherwise payable), [Lightship] shall not be required to close with such investor(s). If third parties not introduced by NTV shall offer better terms than parties introduced by NTV, then NTV will have the opportunity, within five days after notification to match such terms.
As is evident from the terms quoted above, NTV’s agreement with Lightship was not exclusive. If Lightship purchased Salary.com with investors that NTV had not introduced to the deal, it would not be due a Success Fee. NTV might still, however, be due an advisory fee of $ 330,000, if it met the preconditions to the award of that fee described in the SOW.
NTV sent a brief email to 28 potential sources of capital describing the transaction in very general terms. While the parties dispute whether Plunkett approved all of these possible investors as qualified sources of capital before the email was sent, for the purposes of this motion, the court assumes that he did. Of these 28 email recipients, 12 expressed interest in looking more closely at the deal. NTV sent these potential investors a 12 page power point presentation that provided additional information about the proposed transaction, but did not identify the target, although a recipient might have been able to deduce its identity. Lightship admits that NTV scheduled meetings or calls between 7 of these responders and Plunkett. NTV asserts that it had three others ready to speak with Plunkett: Vector Capital, Princeton Capital and Silicon Valley Bank, but the meetings did not take place. These three investors will be addressed further in the “Discussion” section of this memorandum.
Of the potential investors contacted by NTV, only 4 executed NDAs. None of the potential investors contacted by NTV presented Lightship with a proposed term sheet for a Salary.com transaction. NTV’s representatives testified at deposition that all of the investors it approached wanted audited or detailed financial statements for Salary.com, which did not exist
6
because it was operated as a division of a larger group.
In August, 2015, Plunkett also began discussions with other investment banking firms, including Moorgate Capital Partners (Moorgate), with a view to finding investors to finance a Salary.com acquisition. Several potential investors signed NDAs, performed due diligence in the IBM data room, and submitted term sheets. In October, Lightship began to focus on two potential investors, one of which—H.I.G. Capital (HIG)—was introduced by Moorgate. On November 3, 2015, Lighthouse and HIG entered into an Agreement providing HIG with a period of exclusivity in which to try and negotiate a purchase with IBM, as had been the case with Genstar and Symphony. HIG was offering to provide only the equity layer of financing, so the debt component would still be necessary even if HIG were more successful than Genstar or Symphony in reaching an agreement with IBM for the purchase of Salary.com. The terms of the debt financing would, of course, have to be acceptable to HIG, which would be contributing the equity at risk in the independent Salary.com enterprise.
Lightship did not provide a copy of the November 3rd letter to NTV; nor was it required to do so. It is, however, undisputed that not long thereafter NTV was aware that HIG was negotiating with IBM for the purchase of Salary.com. In a November 22-23, 2015 email exchange between representatives of a potential debt investor, Ares Management (Ares), introduced to the deal by NTV, and NTV, Ares wrote to NTV: “We were potentially interested at 2-3X EBITDA leverage, but that was so far below HIG’s ask that we didn’t do much work. If that’s interesting, let us know.” In fact, by November 17, 2015, NTV was threatening to sue Lightship for having entered into the agreement with HIG. On December 14, 2015, Lightship sent NTV a letter stating that it was terminating the Agreement on 14 days notice.
HIG was still negotiating with IBM on December 29, 2015. It closed the transaction on
7
December 31, 2015, the last day that IBM was willing to move forward at HIG’s offering price. The debt was provided by Prudential. The financing included $ 17 million of equity from HIG and $ 55 million of debt from Prudential, which included $ 10 million of operating capital. The actual terms of the acquisition are not provided in the summary judgment record, but it appears that the acquirer was a new company (the proverbial Newco) owned in undisclosed percentages by HIG, Plunkett, and other members of Salary.com management. At one time, spread sheets showing the sources and uses of funds to be provided HIG and a still unidentified debt financier included a $ 330,000 fee going to NTV, although that fee was not included in the final closing documents and no fee was paid to NTV.
DISCUSSION
Standard for Review
Summary judgment will be granted when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Mass. R. Civ. P. 56(c); Cassesso v. Commissioner of Corr., 390 Mass. 419, 422 (1983). To prevail on its summary judgment motion, the moving party must affirmatively demonstrate the absence of a triable issue, and that the summary judgment record entitles it to a judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). “[A]ll evidentiary inferences must be resolved in favor of the [nonmoving party].” Boyd v. National R.R. Passenger Corp., 446 Mass. 540, 544 (2006).
The nonmoving party, however, cannot defeat a motion for summary judgment by merely asserting that facts are disputed. Mass. R. Civ. P. 56(e); LaLonde v. Eissner, 405 Mass. 207, 209 (1989). Rather, to defeat summary judgment, the nonmoving party must “go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.”
8
Kourouvacilis v. General Motors Corp., 410 Mass. 706, 714 (1991). “Conclusory statements, general denials, and factual allegations not based on personal knowledge [are] insufficient.” Cullen Enters., Inc. v. Massachusetts Prop. Ins. Underwriting Ass’n, 399 Mass. 886, 890 (1987), quoting Madsen v. Erwin, 395 Mass. 715, 721 (1985).
Breach of Contract and Breach of the Covenant of Good Faith and Fair Dealing
NTV asserts that Salary.com breached the Agreement by failing to pay the 3% commission, or alternatively failing to pay the $ 330,000 advisory fee. The court will first address the claims asserting a breach for failure to pay the commission.
NTV argues that Lightship breached the Agreement by failing to tell NTV that it was talking to other investment banking firms. However, the Agreement was clearly not exclusive. Indeed, it contemplated what might happen if the transaction closed with investors not introduced by NTV. Lightship was under no obligation to inform NTV concerning other firms it was using to raise capital. NTV also complains that Lightship began focusing on HIG in October and signed an exclusivity arrangement with HIG on November 3, 2015. Never having introduced a potential investor that even submitted a term sheet to Lightship, NTV could not have been surprised that Lightship focused on a potential equity investor that did its due diligence, met with management, and submitted terms on which it would attempt to close a transaction with IBM. NTV also complains that HIG received a copy of the Alvarez and Marsal report; however, it paid Genstar for it. There is no evidence in the summary judgment record that Lighthouse would not have entered into negotiations with an investor generated by NTV, if any such investor presented a term sheet for a proposed transaction.
More specifically, NTV contends that there exists a triable issue of fact concerning whether MTV is due the 3% fee “under the lost opportunity doctrine.” This doctrine, however,
9
addresses the question of how lost profits may be proven when they are the consequence of a breach of contract or business tort. It is not a separate means of establishing a breach of contract or a tort. This doctrine simply has no application to this case. See, e.g., Herbert A. Sullivan, Inc. v. Utica Mutual Ins. Co., 439 Mass. 387, 413 (2003) (“An element of uncertainty is permitted in calculating damages . . . This is particularly the case in business torts, where the critical focus is on the defendant’s conduct.”) (emphasis supplied).
NTV argues that an investor that it introduced to the deal, Ares, “might” have “matched the terms that Prudential eventually offered on December 18, 2015.” There are two problems with this argument: one legal and one factual.
First, the Agreement provides: “If third parties not introduced by NTV shall offer better terms than parties introduced by NTV, then NTV will have the opportunity, within five days after notification to match such terms.” NTV never introduced a party to Lightship that offered to enter into a transaction, debt or equity, on any terms, and that includes Ares. Clearly, the contract envisions that a qualified investor introduced by NTV who had made an offer would be given a brief period to attempt to match or exceed a better offer made by another investor. It does not mean that NTV had the right to find a third-party that had never presented an offer sheet who might, on five days-notice, decide to invest more than $ 50 million on terms better than those offered by an investor prepared to close. There is no way to determine if an investor’s terms are better than those produced by an NTV introduced party, where the NTV party never submitted anything to compare.
Additionally, there is no evidence that Ares could possibly close on financing by December 31, 2015, the date by which IBM required the transaction be complete. The December 17, 2015 email from Ares to which NTV points expresses only a vague willingness to
10
talk to NTV about the deal. A previous November 23, 2015 email exchange between Ares and NTV shows that Ares had direct contact with HIG about this transaction, but HIG was looking for debt on terms that were of no interest to Ares. There is no evidence that HIG’s position ever changed. Indeed, Lightship submitted an affidavit from a managing director at Ares who attested that he had a good working relationship with HIG from other deals, he looked at material sent to him by HIG and spoke to HIG about it, and then told HIG that Ares would pass. NTV offers no evidence to contradict this affidavit. The summary judgment record contains no evidence creating a triable issue on the question of whether Ares would have presented matching or better terms than Prudential, if offered the opportunity to do so in late December, 2015. NTV’s speculation that this might have happened is insufficient.
NTV’s claims for breach of the implied covenant of good faith and fair dealing as it relates to the claim for the commission fails for similar reasons. There is simply no evidence that NTV brought the Salary.com transaction to the attention of any potential investor who might have provided financing for this transaction on better terms than HIG and Prudential. Even assuming that there is evidence in the summary judgment record that Plunkett was not responsive to requests to meet with an NTV sourced investor, a debatable proposition, there is no evidence that any such investor was actually prepared to invest.1
Turning to the advisory fee, the Agreement states: “In the event a deal is consummated by management with investment or financial sponsorship other than parties introduced by NTV, . . .
1 A brief reference to Silicon Valley Bank is made in the opposition in this regard; however, again defendants have submitted an affidavit from a Managing Director of this firm in which he points out that Silicon Valley was Salarly.com’s banker when it was an independent company, and he knew about the proposed transaction, but never met with Plunkett or anyone else associated with the Salary.com deal and never proposed any terms on which Silicon Valley would invest. NTV has not offered any deposition testimony or other evidence from Silicon Valley suggesting that it was ready to close on a Salary.com transaction by December 31, 2015. For these reasons, there can be no 93A claim premised on a refusal to pay the 3% commission because there is no evidence that NTV generated a potential investor actually interested in financing the acquisition.
11
then NTV shall be entitled to a $ 330,000 advisory fee in consideration of its team’s effort, services, time, and opportunity costs associated with working with management, preparing materials, communication with potential sources of capital, and other services, provided NTV shall have introduced at least 10 qualified sources of capital and remained engaged with [Lightship] and available to provide advice and support.” With respect to this fee, Lightship maintains that NTV failed to “introduce[] at least 10 qualified sources of capital and remained engaged with [Lightship] and available to provide advice and support.” It concedes, for purposes of its motion for summary judgment, an introduction to 7 potential investors, but contends that there is no evidence in the record supporting the last 3, viz: Vector Capital, Princeton Capital and Silicon Valley Bank (SVB).
In response, NTV first argues that the Agreement could be read to mean that all NTV had to do was “introduce” potential investors to the deal, i.e., let them know it was out there; it did not have to actually introduce them to Lightship. On this proposed interpretation, sending a brief email very broadly describing the deal to 28 firms fulfilled its obligation. The court does not find that this is a reasonable interpretation of the Agreement. The Agreement contemplated that NTV would find at least 10 qualified sources of capital sufficiently interested in the opportunity that they would want to meet with the principals of Lightship, i.e., be introduced to Lightship. Clearly, sending a cold email to investors, most of whom did not even respond, was not what the parties understood would be sufficient to earn $ 330,000. Moreover, sending a follow-up email that attached a power point providing some additional information, but still without identifying Salary.com as the target, was also inadequate.
As to the three investors, in dispute: Vector, Princeton, and SVB, Lightship argues that: (i) Stifel had already contacted Vector when it was still acting as Lightship’s investment banker;
12
(ii) Princeton was not an acceptable source of capital because one if its managers had sought to oust Plunkett as CEO of Salary.com a decade earlier; and (iii) SVB could not be introduced to this transaction because SVB was Salary.com’s banker when it was an independent company and Plunkett had already discussed the deal with SVB. The court finds these arguments insufficient to support dismissal of this claim by summary judgment. If Vector and SVB had previously passed on the Salary.com/Lightship transaction, but were willing to re-engage because of NTV’s efforts, a jury could find that they were introduced, or at least ready and willing to be introduced, to Lighthouse regarding their possible participation in the acquisition within the meaning of the Agreement. As to Princeton, there is evidence in the summary judgment record that Plunkett approved either directly or by inference this firm as an acceptable source of capital when it reviewed the original list of 28 firms to which NTV sent its initial email describing the transaction. The jury could also choose not to believe Plunkett regarding his reason for not meeting with Princeton or find that reason insufficient under the Agreement. While it may be that the literal terms of the Agreement have not been fulfilled if Plunkett or other members of Salary.com team never met with these three firms; however, a breach of the covenant of good faith and fair dealing might be might be demonstrated with evidence that Plunkett avoided meeting with potential investors who NTV had contacted and developed to the point that they wanted to engage with the Salary.com team to discuss the acquisition.
Additionally, there is evidence that at one point the $ 330,000 advisory fee was included in a spread sheet generated by Lighthouse as a transaction expense to be paid at closing. This is certainly not conclusive evidence that the fee was due, as there are other explanations as to why it might be included in an early draft of a closing document. It is, nonetheless, some evidence that Lighthouse believed that NTV had earned this fee.
13
Accordingly, summary judgment is denied with respect to so much of Counts I, II and VI as are based on a failure to pay the advisory fee.2 NTV’s motion for summary judgment on this claim is also denied, as NTV has only shown that there are disputed issues of fact material to the claim, not that it is entitled to judgment as a matter of law.
Deceit
NTV alleges a claim for Deceit/Negligent Misrepresentation in Count V. The only allegedly false statement identified in the complaint with any specificity is that Lighthouse represented to NTV that it had an agreement with IBM that gave it an exclusive right to negotiate a purchase of Salary.com, but failed to tell NTV that the agreement had expired. Even if this allegation were true, the summary judgment record establishes that IBM continued to negotiate the terms of the Salary.com purchase with Lighthouse and its equity partner HIG through the end of 2015, closing the transaction on December 31, 2015. This is not a case in which NTV was misled into expending substantial resources in assisting Lighthouse only to have IBM sell to another buyer. A necessary element of a claim of deceit is damages, and NTV has not alleged that it suffered any damage in reliance on this allegedly material misrepresentation. See Kilroy v. Barron, 326 Mass. 464, 465 (1950) (plaintiff must have relied upon the representation as true and “acted upon it to its damage.”)
Remaining Claims
In its opposition to the defendant’s motion for summary judgment, NTV raises no argument in support of its claims for promissory estoppel, unjust enrichment, fraudulent transfer, or its claims to reach and apply debt or other interests due either defendant from some other
2 Count VI alleges the violation of Chapter 93A. The court finds this claim to be quite weak. Nonetheless, there exist circumstances in which a breach of the covenant of good faith and fair dealing will support a Chapter 93A claim and it therefore declines to dismiss this Count to the extent it is related to the advisory fee. See, e.g., Massachusetts Employers Ins. Exchange v. Propac-Mass., Inc., 420 Mass. 39 (1995).
14
third-party, not named as a defendant in this action, nor could it. Those claims are dismissed.
ORDER
For the foregoing reasons, the defendants’ motion for summary judgment is ALLOWED, in part, and DENIED, in part, as follows: all Counts of the complaint are dismissed except so much of Counts I, II and VI as allege claims based upon Lighthouse’s refusal to pay the advisory fee. Plaintiff’s motion for summary judgment is DENIED.
____________________
Mitchell H. Kaplan
Justice of the Superior Court
Dated: May 31, 2017

read more

Posted by Stephen Sandberg - July 4, 2017 at 8:51 am

Categories: News   Tags: , , , , , , ,

« Previous PageNext Page »