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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NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.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. Auditor. Practice, Civil, Motion to dismiss. Jurisdiction, Nonresident, Long-arm statute. Due Process of Law, Jurisdiction over nonresident. Negligence, Misrepresentation, Proximate cause. Proximate Cause. Civil action commenced in the Superior Court Department on January 17, 2014. Motions to dismiss were heard by Janet L. Sanders, J. Rachel S. Fleishman, of New York (Philip Y. Brown with her) for the plaintiffs. Grant J. Esposito, of New York, for Grant Thornton LLP. William M. Connolly, of Pennsylvania, for EisnerAmper LLP & another. Jonathan D. Cogan, of New York, for SS&C Technologies, Inc. MEADE, J. The plaintiffs, Fletcher Fixed Income Alpha Fund, Ltd. (Alpha), and Massachusetts Bay Transportation Authority Retirement Fund (MBTARF), Alpha’s sole shareholder, appeal from the dismissal of their claims for accounting malpractice and negligent misrepresentation against certain entities that audited and administered Alpha, for failing to discover the fund manager’s fraud. The claims against the defendants, Grant Thornton LLP (Grant Thornton), and EisnerAmper LLP and EisnerAmper (Cayman) Ltd. (collectively, EisnerAmper), who served as auditors, were dismissed for lack of personal jurisdiction, a Superior Court judge ruling that the plaintiffs failed to show that their claims arose from the defendants’ transaction of business in Massachusetts. The claims brought by MBTARF against SS&C Technologies, Inc. (SS&C), a former Alpha administrator, were dismissed for failure to state a claim upon which relief can be granted, the judge reasoning that Alpha was insolvent by the time SS&C was hired, thereby negating the element of proximate cause. Pending their appeal to this court, the plaintiffs settled with EisnerAmper. As to the remaining defendants, the plaintiffs principally argue that in deciding the issue of specific jurisdiction, the judge should have taken into account a broader range of contacts between Grant Thornton and Massachusetts, and should have considered Grant Thornton’s knowledge that the audit reports would be sent to a Massachusetts entity. MBTARF also maintains that the judge held it to an incorrect pleading standard in dismissing its claims against SS&C for failure to allege facts to support causation. We affirm. Background. We summarize the undisputed facts from the judge’s February 23, […]

Hugenberger, et al. v. Alpha Management Corp. (Lawyers Weekly No. 11-087-13)

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‑1788 Appeals Court CHRIS HUGENBERGER & another[1] vs. ALPHA MANAGEMENT CORP. No. 12‑P‑1788. June 28, 2013. Consumer Protection Act, Demand letter. The plaintiffs appeal from a decision of the Appellate Division of the Boston Municipal Court Department (BMC) affirming the trial judge’s allowing the defendant’s motion for reconsideration and ordering the entry of judgment for the defendant. The trial judge concluded that “the failure to offer the [G. L. c.] 93A demand letter, proof of a required element in the plaintiffs’ case, was a fatal mistake.” The plaintiffs claim error in this ruling on the ground that they were not required, in the circumstances, to offer the demand letter in evidence and that the failure to do so was not manifestly wrong so as to allow the judge to reconsider his earlier denial of the defendant’s motion for a directed finding. As we disagree, we affirm. The plaintiffs brought a complaint in the BMC, alleging, as here relevant, a claim against the defendant, a residential property management company, under G. L. c. 93A, § 2, for reneging on a promised lease of premises. After a bench trial, the judge ordered judgment to enter in favor of the plaintiffs in the amount of $ 1,851, which he doubled to $ 3,702, and awarded attorney’s fees of $ 6,000. The judge also made the finding the “G. L. c. 93A demand letter was not offered as an exhibit by the plaintiff during the trial. A copy of the 93A demand letter was attached as an exhibit to the complaint.” Furthermore, the defendant requested a ruling of law that its response to the plaintiffs’ demand letter was reasonable. The judge ruled in response: “Requests finding of fact. Defendant’s response not in evidence. Denied.” The defendant filed a motion for reconsideration of the ruling on its motion for a directed finding, asserting that the plaintiffs’ failure to introduce the demand letter in evidence was fatal to their claim.[2] The plaintiffs opposed the motion, asserting in part that the defendant itself had established receipt of the demand letter in its request for a ruling of law. The judge allowed reconsideration and allowed the defendant’s motion for a directed finding in its favor. The Appellate Division agreed, stating: “[b]ecause the demand letter is an element that must be proven […]