Wise v. Big Tuna, LLC, et al. (Lawyers Weekly No. 09-025-18)
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
CIVIL ACTION
- 2017-2403-BLS2
BETSY WISE,
Plaintiff,
vs.
BIG TUNA, LLC, JEFFREY SENIOR,
RESTAURANT CONCEPTS, INC.,
BETH SENIOR, and ELLIOTT M. LOEW,
Defendants
and
ELLIOTT M. LOEW,
Third Party Plaintiff,
vs.
HUTCHINGS, BARSAMIAN & MANDELCORN, LLP,
THEODORE M. HESS-MAHAN, and JEFFREY FINK,
Third Party Defendants
MEMORANDUM OF DECISION AND ORDER ON
PLAINTIFF’S MOTION TO DISMISS COUNTERCLAIMS
ASSERTED BY DEFENDANT ELLIOT M. LOEW AND
THIRD PARTY DEFENDANTS’ MOTIONS TO
DISMISS THE THIRD PARTY COMPLAINT
This is an action brought by Betsy Wise, a member of Big Tuna, LLC (Big Tuna) and a shareholder of Restaurant Concepts, Inc. (RCI), against Big Tuna, RCI, Jeffrey Senior, and Attorney Elliott M. Loew.[1] Wise alleges that Big Tuna, RCI, and Senior are liable for misappropriation of corporate funds, breach of contract, breach of fiduciary duty, civil conspiracy, and violation G.L. c. 93A in connection with several allegedly unauthorized transactions. She also alleges that Loew, in his role as an attorney acting on behalf of Big Tuna and RCI, breached his fiduciary duty to her and violated c. 93A by concealing and/or seeking to obstruct her ability to obtain company documents and information related to her claims against the other defendants.
In response to the claims against him, Loew has asserted a variety of claims against Wise as well as her “settlement counsel,” Jeffrey Fink, and her litigation counsel, Theodore M. Hess-Mahan and Hutchings, Barsamian & Mandelcorn, LLP (HBM). Wise, Fink, Hess-Mahan, and HBM (collectively, the Moving Parties) now seek to dismiss all of these claims pursuant to Mass. R. Civ. P. 12(b)(6).[2] For the reasons that follow, the Motion to Dismiss brought by Fink is Allowed in its entirety, and the Motions to Dismiss brought by Wise, Hess-Mahan, and HBM are Allowed in part and Denied in part.
BACKGROUND
The following is taken from the allegations in Loew’s Counterclaims and Third Party Complaint together with documents referenced therein.[3] Beginning in the mid-1980s, Wise and Senior opened several Skipjack’s restaurants and established various business entities for the purpose of starting, owning, and operating the restaurants. RCI was formed to manage all the restaurants and the other related business entities, and Big Tuna was formed for the purpose of owning and operating the Skipjack’s-Foxboro restaurant only. RCI was the manager of Big Tuna, and Senior was RCI’s President.
At some point, Wise came to believe that Senior was engaging in a variety of wrongful actions in connection with his management of Big Tuna, and her relationship with Senior soured. In 2016, Wise sought a buyout of her interests in Big Tuna and redress for Senior’s alleged improprieties. Negotiations ensued but were ultimately unsuccessful. In those negotiations, Wise was represented by Fink, and Senior was represented by Loew. The Complaint alleges that Loew was also the attorney for Big Tuna and RCI — an assertion that the Third Party Complaint states is not true. During the negotiations, Wise retained HBM in anticipation of litigation.
On July 31, 2017, Mahan, who is Of Counsel to HBM, filed this lawsuit on behalf of Wise naming Big Tuna, Senior, and RCI as defendants. The Complaint alleged that, beginning in 2014, these defendants delayed paying Wise distributions from Big Tuna to which she was entitled, made unauthorized payments from Big Tuna’s bank account to other entities for reasons unrelated to Big Tuna’s costs or liabilities, provided unauthorized loans from Big Tuna to Senior, and made an unauthorized transfer of a liquor license. A month later, Mahan, on behalf of Wise, amended the Complaint to add claims against Loew. In the First Amended Complaint, Wise falsely alleged that Loew was legal counsel to all the defendants, not just Senior; it further asserted that, as a consequence of this relationship, Loew violated Chapter 93A and breached his fiduciary duty to Wise by obstructing her from discovering certain company documents and information relating to her allegations against the other defendants.
In response, Loew filed Counterclaims against Wise and a Third Party Complaint against Fink, Hess-Mahan, and HBM alleging malicious prosecution and abuse of process. Additional claims are asserted against Fink, Hess-Mahan, and HBM for tortious interference with a contractual relationship and civil conspiracy. Specifically, the Third Party Complaint alleges that Loew at all times represented only Senior and therefore had no fiduciary obligations to Wise – a fact that Wise, Fink and HBM knew or reasonably should have known. Wise and her attorneys nevertheless named Loew as a defendant in this lawsuit solely for the purpose of pressuring Loew to advise or otherwise convince his client Senior to offer a greater settlement amount, and to disrupt their attorney-client relationship. These Motions followed.
DISCUSSION
To withstand a motion to dismiss under Rule 12(b)(6), a complaint must contain “allegations plausibly suggesting (not merely consistent with) an entitlement to relief….” Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-557 (2007). Although the complaint need not set forth detailed factual allegations, a plaintiff is required to present more than labels and conclusions and must raise a right to relief “above the speculative level.” Id. Applying this standard to Loew’s malicious prosecution claims, this Court concludes that they must be dismissed. To state a claim for malicious prosecution, a plaintiff must allege facts establishing that the action complained of terminated in his favor. Chervin v. Travelers Ins. Co., 448 Mass. 95, 103 (2006). The action complained of here (the present litigation against Loew) remains unresolved. Since the underlying litigation has not terminated in his favor, Loew has failed to state a claim against any of the Moving Parties for malicious prosecution.[4]
The Court likewise concludes that Fink is entitled to dismissal of all the remaining claims asserted against him. The Third Party Complaint alleges that, during the negotiations between Wise and Senior, Fink threatened to publicly question Big Tuna’s and Senior’s reputations and refer the case to HBM for litigation if an agreement could not be reached. Loew also alleges that Fink — who is not representing Wise in this action– assisted Wise, Hess-Mahan, and HBM with the filing of the claims against him. The first allegation cannot serve as a basis for any claim against Fink because the statements were made while this litigation was being contemplated. They are therefore protected by the absolute litigation privilege. See Sriberg v. Raymond, 370 Mass. 105, 109 (1976) (litigation privilege bars civil liability for statements made “in conferences and other communications preliminary to litigation” related to the contemplated proceeding); Fisher v. Lint, 69 Mass. App. Ct. 360, 365-366 (2007). The second allegation cannot serve as a basis for Loew’s claims because it is far too conclusory. Accordingly, Loew fails to state a claim for abuse of process, tortious interference, or conspiracy against Fink.
Those same claims are asserted against Wise, Hess-Mahan, and HBM, but they are based not on statements that were made in contemplation of or in the course of litigation but stem from the filing of the Amended Complaint adding Loew as a defendant. The third party defendants contend that the Third Party Complaint fails to state facts sufficient to show that this Amended Complaint was filed for an ulterior purpose or that they acted in bad faith. This Court disagrees. Loew alleges that Wise, Hess-Mahan, and HBM amended Wise’s Complaint and brought groundless claims against him in order to disrupt his relationship with Senior and in order to pressure or extort him into persuading Senior to settle the claims asserted against Senior, Big Tuna, and RCI in a manner favorable to Wise. Such conduct qualifies as an effort to obtain a collateral advantage and satisfies the ulterior purpose element. See Millennium Equity Holdings, LLC v. Mahlowitz, 456 Mass. 627, 640, 642 (2010) (husband liable for abuse of process where he brought a separate action against attorney to remove the attorney as wife’s divorce counsel).
CONCLUSION AND ORDER
For the forgoing reasons, it is hereby ORDERED that:
- Plaintiff Wise’s Motion to Dismiss is ALLOWED as to Count One (malicious prosecution) of the Counterclaims but otherwise DENIED;[5]
- Third Party Defendants Theodore M. Hess-Mahan and Hutchings, Barsamian & Mandelcorn, LLP’s Motion to Dismiss is ALLOWED as to Count Two (malicious prosecution) but otherwise DENIED;
- Third Party Defendant Jeffrey Fink’s Motion to Dismiss is ALLOWED as to all the counts asserted against him.
________________________
Janet L. Sanders
Justice of the Superior Court
Dated: February 21, 2018
[1] Beth Senior was originally named as a defendant, but plaintiff has voluntarily dismissed all claims against her.
[2] HBM has also moved to dismiss pursuant to Mass. R. Civ. P. 12(b)(8) for misnomer of party (Loew having misspelled “Hutchings” as “Hutchins” in his Third Party Complaint). The Court declines to dismiss the claims against HBM on this basis.
[3] In bringing their Motions, Wise, Hess-Mahan, and HBM rely in part on correspondence with Loew attached to an affidavit submitted by Hess-Mahan. This correspondence was not referenced in the Third Party Complaint and cannot be considered on a Rule 12(b) (6) motion.
[4] In connection with this claim, the Moving Parties seek an award of costs, attorneys’ fees, and expenses pursuant to G.L. c. 231, § 6F. The Court declines to make such an award.
[5] Although Loew labels his abuse of process claim as “Count Two,” he fails to label his malicious prosecution claim as “Count One.”