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Judge Salinger Dismisses "Conclusory Assertions" Against Project Manager in Commercial Real Estate Dispute

Judge Salinger dismissed a real estate developer’s counterclaims against a project manager, ruling that the counterclaim allegations did not “plausibly suggest that [project manager] [wa]s liable for the contractor’s missteps.”

In Gerhardt v. Burr, the developer hired a project manager to oversee construction of a commercial property. According to the developer, a contractor defectively installed flooring during construction. The project manager filed suit, alleging insufficient payment. The developer, in turn, counterclaimed that the project manager “‘failed to perform his duties and fulfill his obligations’ because he was ‘responsible for ensuring that the Project was completed properly’ and the project was completed improperly.”

In COVID-19 Trip Cancellation Dispute, Judge Ricciuti Allows Massachusetts Consumer Protection Claim to Proceed

Judge Ricciuti ruled that the plaintiff, whose educational-travel trip was cancelled because of the COVID-19 pandemic, stated a viable Chapter 93A claim that the contractual remedy provided by the tour operator improperly limited available regulatory remedies.

In Godines, et al. v. EF Explore America, Inc., the contract permitted the tour operator to cancel the plaintiff’s trip due to an “Extraordinary Event.” There was no dispute that the COVID-19 pandemic was such an event. The contract further provided that, in the event of cancellation, customers would receive a voucher for future travel, less non-refundable fees. But the applicable consumer-protection regulation,  940 CMR 15.06, provides that if a trip is cancelled, a travel company must offer a full refund, a substitution travel service of equal value, or a lower-valued travel service and refund the difference. The contract, in other words, offered “more limited relief,” and the tour operator issued only a partial refund.

BLS 2022 Preferences for Hearings, Conferences, Trials, and Filings

The judges sitting in the BLS during calendar year 2022 recently adopted and published guidance about their preferences and practices on court proceedings and filings. These preferences and practices include:

  • encouraging the active participation in court proceedings by junior attorneys;
  • asking parties to include in motion papers a brief explanation of their preference between in-person versus virtual proceedings;
  • promoting in-person trials and evidentiary hearings; and
  • explaining the circumstances where paper or digital copies should accompany electronic filings.

The complete guidance can be found here.

Advice of Counsel Defense Ruled Not Applicable in MA Securities Fraud Action

In Bertolino v. Fracassa, Judge Salinger ruled that the advice-of-counsel defense did not insulate Frederick McDonald, a defendant in the case, from liability under the Massachusetts Uniform Securities Act (MUSA), G.L. c. 110A, § 410. McDonald claimed that because he relied on his counsel’s advice to determine what he needed to disclose when soliciting investors, he could not be held liable for failing to disclose material facts to potential investors when he offered and sold membership units in his LLC. Rejecting McDonald’s argument, Judge Salinger reasoned that, because the advice-of-counsel defense is available only “to rebut the scienter element of a crime or civil charge requiring a willful or intentional violation of the law” and “willful or intentional misconduct is not an element of liability under MUSA,” McDonald couldn’t rely on that defense. Judge Salinger also reasoned that, even if the advice-of-counsel defense were viable under MUSA, McDonald proffered no evidence that “he made [a] complete disclosure to counsel, sought advice as to the legality of his conduct, received advice that his conduct was legal, [or] relied on that advice in good faith.” 

Notes on BLS/Social Law Program and 2021 BLS Decisions—Including AG Healy v. Uber Technologies

Last month, the Social Law Library sponsored the Business Litigation Session 2021 Year in Review. The panel included Judge Kenneth Salinger, the BLS Administrative Justice, as well as Michael Tuteur and Andrew Yost, attorneys at Foley & Lardner LLP.

Massachusetts’ Highest Court Invalidates Limitation of Liability Clause in Commercial Lease, Citing Public Policy

The Massachusetts Supreme Judicial Court (SJC) recently ruled that a limitation-of-liability provision provides no protection for defendants who willfully or knowingly engage in unfair or deceptive conduct in violation of G. L. c. 93A, § 11.

In H1 Lincoln Inc. v. South Washington Street, LLC, the SJC invalidated a limitation-of-liability clause in a commercial leasing contract. The SJC held that the provision was “unenforceable as contrary to public policy” because of the lessor’s “fraudulent misrepresentations and intentional schemes to string along and take advantage of” the leasee. When a party’s conduct is sufficiently “callous and intentional” to “merit multiple damages” under G. L. c. 93A, § 11, the SJC reasoned, public policy concerns and the legislative intent of the statute to deter intentionally unfair and deceptive acts require invalidation of contractual limitations on liability.

Posted in Judges

Three new judges have joined the BLS rotation.

Judge Peter Krupp replaced Judge Karen Green for the January-June rotation period of BLS1. In 2013, Governor Deval Patrick appointed Judge Krupp to the Superior Court. Before his appointment, Judge Krupp founded Lurie & Krupp (n/k/a Lurie Friedman); worked for the Committee for Public Counsel Services; and served as an Assistant Federal Public Defender in the District of Massachusetts. Judge Krupp began his career as an Associate at Mintz, Levin, Cohn, Ferris, Glovsky & Popeo. You can find more information about Judge Krupp’s background at Massachusetts Lawyers Weekly.

Court Denies lululemon’s Motion for Attorneys’ Fees Under Fee Shifting Provision

As reported here last summer, Judge Salinger denied lululemon’s motion to dismiss a summary process action brought by lululemon’s landlord, CWB Retail. Later in the litigation, CWB voluntarily dismissed the action with prejudice. lululemon then brought a motion for attorney’s fees under the parties’ lease.

Posted in Judges

A few weeks ago, the Social Law Library sponsored its annual review of the BLS. Like most events over the past year, the 2020 Year in Review was conducted virtually with Judge Kenneth Salinger and BLS practitioners logging on to discuss significant decisions as well as practice tips and court procedures during these unusual times. While the way the BLS conducts its business changed in 2020, it is evident that the court’s ability to effectively manage complex business and commercial disputes has not. Below are five key takeaways from the 2020 Year in Review program:

E-Gaming Company FaZe Clan Subject to Potential Successor Liability  

In Crashfund LLC v. FaZe Clan, investors in Wanderset Inc. sued successor e-gaming company, FaZe Clan. Wanderset investors claimed that their agreements with Wanderset granted them conditional rights to obtain stock proportionate to their investment upon a “change of control.” The investors also claimed that FaZe Clan refused to issue stock to them after a de facto merger with Wanderset in violation of the agreements. FaZe Clan was sued for, among other things, breach of contract. The investors alleged two theories:

  • that the investors’ conditional right to stock in the event of a change of control entitled them to FaZe Clan stock after the de facto merger, or alternatively,
  • that FaZe Clan, as the successor entity, was liable for consequential damages caused by Wanderset’s alleged breach of the investor agreements.

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