Mar-Lees Seafood and related entities sued John Lees and others for breach of fiduciary duty, alleging that Lees sold tilapia from TAF without giving the plaintiffs a chance to participate in those transactions. The trial court initially ruled that this claim could survive summary judgment. Lees and his co-defendants moved for reconsideration.
The Superior Court granted the motion and dismissed the breach of fiduciary duty claim. The court found no admissible evidence that Lees actually sold tilapia from TAF. Plaintiffs relied on their own interrogatory answers, which lacked personal knowledge and thus could not support summary judgment under the civil rules. More significantly, an arbitration award in the same dispute had already determined that the transactions were loans to TAF, not sales, and that the loans benefited rather than harmed Mar-Lees since the company would not have extended credit itself. The arbitrator also found plaintiffs suffered no harm. Under collateral estoppel principles, plaintiffs could not relitigate these findings to support a fiduciary duty claim.
The full text of the opinion follows below. Slip opinions are subject to formal revision; the official version is published in the official reports.
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss.SUPERIOR COURT
CIVIL ACTION
- 2012-4609-BLS2
MAR-LEES SEAFOOD LLC, MAR-LEES HOLDING LLC, and
SEAFOOD DEVELOPMENT PARTNERS, LLC,
Plaintiffs
vs.
JOHN A. LEES, JR., JAL CONSULTING, INC., ML HOLDINGS, INC.,
LEES SEAFOOD HOLDINGS, LLC, MICHAEL F. SWEENEY, DUFFY & SWEENEY, LTD., NORATLANTIC 21, LLC, N.A. 21 HOLDINGS, LLC, and JAMES DWYER,
Defendants
MEMORANDUM OF DECISION AND ORDER
ON LEES AND SWEENEY DEFENDANTS’
MOTIONS FOR RECONSIDERATION
The Lees and Sweeney Defendants have moved for reconsideration or clarification of the Court’s ruling that Plaintiffs’ Count Six for breach of fiduciary duty survives summary judgment to the extent it is based on allegations that “Lees sold tilapia from TAF without providing plaintiffs an opportunity to participate in these transactions.” See Memorandum of Decision and Order dated July 22, 2016, at p.15. After carefully considering the arguments put forward by both partiesand on further review of the summary judgment record, this Court concludes that the Motion should be ALLOWED.
The summary judgment record contains no evidence cognizable under Mass. R. Civ. P. 56(e) that Lees sold tilapia from TAF. In support of this allegation, Plaintiffs point to a statement in their Second Answers to Interrogatories in which they asserted that Lees “purchas[ed] and [sold] tilapia from TAF, at a profit, without providing Plaintiffs an opportunity to make the same business deal.” The statement, however, is not based on personal knowledge and therefore
does not constitute admissible evidence under Rule 56(e). Plaintiffs also suggest that the Arbitration Award provides support for their claim. Quite the contrary is true. The Panel explicitly found that the transactions at issue were loansto TAF and not purchases or sales. Moreover, as to those loans, the Panel expressly found that the plaintiffs did not suffer any harm as a result of Lees making such loans. In so finding, it pointed out that New Mar-Lees had previously refused to extend credit to TAF and would not have loaned TAF money if it had been asked to do so. It also concluded that the loans were “designed to assist a business that [Lees] hoped would do more business with Mar-Lees,” gave TAF “the funds to purchase a substantial amount of product from Mar-Lees,” and “benefited rather than harmed Mar-Lees.” Award at p. 20. Given these findings and their collateral estoppel effect on these proceedings, plaintiffs may not assert a breach of fiduciary duty claim based on this set of allegations.
SO ORDERED.
__________________________________
Janet L. Sanders
Justice of the Superior Court
Dated: October 20, 2016