Turner v. Cheffers, et al. (Lawyers Weekly No. 09-064-17)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss SUPERIOR COURT CIVIL ACTION 2017-00210-BLS2 EDWARD S. TURNER, individually and as a designee of shareholders comprising more than 15% of issued and outstanding shares of IVES Group, Inc., a Nevada Corporation vs. MARK L. CHEFFERS and CHRISTINE M. RENDA MEMORANDUM OF DECISION AND ORDER ON DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT ON COUNTS III, IV, AND V Plaintiff Edward S. Turner, a minority shareholder of IVES Group, Inc. (IVES), brings this action individually and as designee of certain other minority shareholders against defendants Mark Cheffers and Christine Renda, both of whom are directors and shareholders of IVES. IVES is a closely-held Nevada corporation. Turner alleges that Cheffers and Renda engaged in transactions that diverted certain corporate assets and opportunities to themselves. He further alleges that Cheffers removed him from the IVES Board of Directors and terminated his employment with IVES in retaliation for seeking information related to the value of his investment and his efforts to improve the company’s corporate governance procedures. The defendants now seek summary judgment on Counts III, IV, and V of Turner’s Complaint, each of which is based on the alleged diversion of corporate assets and opportunities. Specifically, defendants contend that these claims are derivative under Nevada law, and that the shareholders have since voted to terminate those claims. For the reasons that follow, this Court concludes that the Motion must be Allowed. BACKGROUND The relevant facts in the summary judgment record are as follows. In May 2000, Cheffers and Turner founded IVES, a closely-held corporation, and incorporated the company in Nevada. Cheffers became the company’s President and Treasurer, while Turner became its Chief Information Officer and later it’s Chief Technology Officer. Renda became IVES’s Chief Administrative Officer (CAO) and later its General Counsel. Each of them is presently an IVES shareholder along with Michael Nohrden, Joseph Cyr, Joseph Keufler, Donald Whalen, Jeffrey Bourassa, and Turner’s wife and children. Cheffers is by far the company’s largest shareholder, owning 53.6156% of all outstanding shares. The next largest shareholder is Nohrden, who owns 14.0200% of all outstanding shares. In 2007, Cheffers founded Allen David Press, Inc. (ADP) and IVES began a business relationship with the company soon thereafter. This relationship was reduced to writing in a Memorandum of Understanding dated September 15, 2010 (the 2010 MOU) pursuant to which IVES agreed to “license ADP content, corporate positioning and its independence abilities on a retainer basis totaling up to $ 10,000 a month.” The MOU also provided, however, that the extent to which compensation would be actually paid depended on whether IVES had sufficient funds. Renda was the President of ADP at the time IVES […]
Turner Construction Company v. MJ Flaherty Company (Lawyers Weekly No. 12-028-17)
1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION NO. 13-2308 TURNER CONSTRUCTION COMPANY vs. MJ FLAHERTY COMPANY MEMORANDUM OF DECISION AND ORDER ON PLAINTFF’S MOTION FOR SUMMARY JUDGMENT and PLAINTIFF’S MOTION TO STRIKE THE EXPERT REPORT OF JACK GRANT INTRODUCTION This case arises out of a subcontract between the plaintiff, Turner Construction Company (Turner), and the defendant MJ Flaherty Company (Flaherty). Turner was the general contractor on the construction of a 23 story commercial building at 157 Berkeley Street and certain related remodeling of an adjacent building for Liberty Mutual Insurance Company (the Project). Flaherty entered into a subcontract with Turner to perform the HVAC work on the Project (the Subcontract). The initial value of the Subcontract was $ 12,462,252. Turner brought this action against Flaherty to recover damages that it alleges that it suffered when Flaherty failed to complete its work on the Project and Turner had to hire another subcontractor to complete the HVAC work.1 Flaherty has asserted counterclaims against Turner. Some of these claims are based on Turner’s failure to pay Flaherty for all of the work that it performed. Here, the amount in dispute 1 Turner’s complaint also includes allegations concerning subcontracts that Turner entered into with Flaherty on two other projects, a new building at University of Massachusetts at Lowell and a Liberty Mutual Conference Center. Turner alleges that Flaherty also failed to complete these projects causing it damage; however, the focus of this litigation appears to be the 157 Berkeley Project. It seems that Flaherty is no longer in business. 2 is complicated by the fact that in early 2013 several sub-subcontractors and material suppliers to Flaherty were not being paid and began to file notices of contract in anticipation of asserting mechanics’ liens on the Project. In response, Turner entered into a series of agreements with Flaherty pursuant to which it issued checks to Flaherty for subcontracted work that were made jointly payable to Flaherty and the vendors to insure that they were being paid out of the sums Turner was disbursing to Flaherty. Flaherty, however, also has alleged that as a result of the manner in which Turner ran the Project, Flaherty was so adversely affected that the value of Flaherty as a going concern was adversely impacted and this resulted in a $ 6.4 million reduction in Flaherty’s “new worth.” This is, of course, a paradigm claim for consequential damages. This claim is the subject of the motion now before the court. It would be an extraordinary understatement to say that this case has a tortured procedural history. Turner has filed two previous motions for summary judgment that the court was unable to decide on their merits because they […]
Turner Construction Company v. MJ Flaherty Company (Lawyers Weekly No. 12-028-17)
1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION NO. 13-2308 TURNER CONSTRUCTION COMPANY vs. MJ FLAHERTY COMPANY MEMORANDUM OF DECISION AND ORDER ON PLAINTFF’S MOTION FOR SUMMARY JUDGMENT and PLAINTIFF’S MOTION TO STRIKE THE EXPERT REPORT OF JACK GRANT INTRODUCTION This case arises out of a subcontract between the plaintiff, Turner Construction Company (Turner), and the defendant MJ Flaherty Company (Flaherty). Turner was the general contractor on the construction of a 23 story commercial building at 157 Berkeley Street and certain related remodeling of an adjacent building for Liberty Mutual Insurance Company (the Project). Flaherty entered into a subcontract with Turner to perform the HVAC work on the Project (the Subcontract). The initial value of the Subcontract was $ 12,462,252. Turner brought this action against Flaherty to recover damages that it alleges that it suffered when Flaherty failed to complete its work on the Project and Turner had to hire another subcontractor to complete the HVAC work.1 Flaherty has asserted counterclaims against Turner. Some of these claims are based on Turner’s failure to pay Flaherty for all of the work that it performed. Here, the amount in dispute 1 Turner’s complaint also includes allegations concerning subcontracts that Turner entered into with Flaherty on two other projects, a new building at University of Massachusetts at Lowell and a Liberty Mutual Conference Center. Turner alleges that Flaherty also failed to complete these projects causing it damage; however, the focus of this litigation appears to be the 157 Berkeley Project. It seems that Flaherty is no longer in business. 2 is complicated by the fact that in early 2013 several sub-subcontractors and material suppliers to Flaherty were not being paid and began to file notices of contract in anticipation of asserting mechanics’ liens on the Project. In response, Turner entered into a series of agreements with Flaherty pursuant to which it issued checks to Flaherty for subcontracted work that were made jointly payable to Flaherty and the vendors to insure that they were being paid out of the sums Turner was disbursing to Flaherty. Flaherty, however, also has alleged that as a result of the manner in which Turner ran the Project, Flaherty was so adversely affected that the value of Flaherty as a going concern was adversely impacted and this resulted in a $ 6.4 million reduction in Flaherty’s “new worth.” This is, of course, a paradigm claim for consequential damages. This claim is the subject of the motion now before the court. It would be an extraordinary understatement to say that this case has a tortured procedural history. Turner has filed two previous motions for summary judgment that the court was unable to decide on their merits because they […]