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Massachusetts’ Highest Court Affirms Ruling Against Restaurants Seeking Insurance Coverage for Losses Arising from COVID-19 Dining Restrictions

In Verveine Corp., et al., v. Strathmore Insurance Company, et al., the Massachusetts Supreme Judicial Court (SJC) held that claims for business losses made by three restaurants arising from COVID-19 dining restrictions were not covered by “all-risk” property insurance policies because the losses were not “direct physical loss or damage” under those policies.

In spring 2020, Governor Baker issued an emergency order prohibiting in-person dining at restaurants and bars in the Commonwealth. Two of the plaintiffs responded by offering takeout and delivery services, while the third plaintiff suspended operations. Though limited in-person dining resumed in June 2020, the plaintiffs continued to lose revenue due to the restrictions. The restaurants filed insurance claims for the lost income. Strathmore Insurance Company denied the claims. The restaurants then brought a declaratory judgment action against Strathmore and asserted claims for breach of contract and violation of G. L. c. 93A and G. L. c. 176D. Superior Court Judge Sanders dismissed the claims, ruling that the restaurants did not suffer “direct physical loss or damage,” as required by the policies.

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.”

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.

Our Most Popular Posts of 2020

It was another eventful year at the BLS, which included Judge Green replacing Judge Kaplan in the BLS1. As 2020 concludes, check out our top five widely read posts:

Condo Owner’s Claims Seeking to Hold Developer Liable Survive Motion to Dismiss

In Hershey v. Mount Vernon Partners, LLC, Judge Green faced dueling motions to dismiss in a dispute arising from the purchase of an “ultra-luxury” condominium in Beacon Hill. Judge Green granted Brett Hershey’s motion, in part, dismissing counterclaims for interference with business relations and violation of the Massachusetts Wiretap Act brought by the defendants, Mount Vernon Partners, LLC, Marcel D. Safar, Chevron Partners, LLC and Chevron Builders, LLC. Judge Green also denied most of the defendants’ motion to dismiss, allowing all but one of Hershey’s claims (a claim against Safar in his individual capacity) to proceed.    

Justice: Justice Green
Judge Salinger Thaws Defendants’ Attempt to 'Chill' Malicious Prosecution Claims under Massachusetts’ Anti-SLAPP Statute

In Crotty v. Continuum Energy Technologies, Judge Salinger granted Thomas Crotty’s special motion to dismiss counterclaims for tortious interference brought by Continuum Energy Technologies (CET) and John Preston under the Massachusetts anti-SLAPP statute.   

This is the latest litigation chapter in "the unravelling of a lengthy business relationship" between CET’s co-founders, John Preston and Christopher Nagel, after Nagel resigned in 2014 to form a competing business, IDL Development, Inc. (IDL). Preston and CET brought claims against Nagel and IDL alleging that Nagel had utilized and exploited CET’s proprietary information without a license. In March 2018, the parties entered into settlement and licensing agreements, under which CET licensed certain intellectual property to IDL. Crotty had participated in these settlement negotiations on behalf of IDL as its lead investor. IDL subsequently defaulted on its payment obligations and declared bankruptcy. 

Community Health Systems Affiliate Found Subject to Personal Jurisdiction in Massachusetts

In Steward Health Care System v. CHSPSC, Judge Sanders found that CHSPSC, an affiliate of Community Health Systems (CHS), is subject to personal jurisdiction in Massachusetts for claims made under transition-services agreement (TSAs) signed along with an asset-purchase agreement (APA).

Under the APA between Steward Health Care System LLC (Steward) and CHSPSC, Steward agreed to purchase eight hospitals outside Massachusetts. Under the TSAs between the same parties, CHSPSC agreed to provide services to facilitate the transition of the hospitals.

Court Lacks Personal Jurisdiction Over Connecticut Corporation Incorporated After Its Owner Allegedly Committed Tortious Acts

In Renova Partners v. Michael Singer and Greenlight Development Partners, Judge Sanders granted Greenlight’s motion to dismiss for lack of personal jurisdiction because, among other things, Greenlight was “not even in existence” when the allegedly tortious acts occurred.

Judge Davis’s recent denial of an anti-SLAPP motion to dismiss provides helpful guidance on how to distinguish between counterclaims used as solely as a “cudgel” and meritorious claims in breach of contract cases. The ruling also underscores the importance of drafting clear release language in a settlement agreement.

Justice: Justice Davis
Our Most Popular Posts of 2018

It’s been a busy year at the BLS Blog. As we wrap up 2018, take a look at our top five most well-read posts:

  • America’s Test Kitchen Faces Abuse of Process Claim: Judge Salinger denied
    America’s Test Kitchen’s motion to dismiss an abuse-of-process claim asserted by William Thorndike, Jr. According to Thorndike, America’s Test Kitchen brought a baseless lawsuit to hinder Christopher Kimball’s efforts, supported by Thorndike, to compete against America’s Test Kitchen. That assertion, according to Judge Salinger, was sufficient to state an abuse-of-process claim.

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