Boston Business Litigation Blog

In a recent case, Macri v. Macri, the Massachusetts Appeals Court recently cemented a trial court decision to, among other things, attribute income to Husband, who was unemployed at the time of trial. Attribution of income is often a contested topic in the Probate and Family Courts of Massachusetts, and this case provides further guidance on the issue.

In a recent summary decision, Casey v. Sweeney, a panel of the Massachusetts Appeals Court reaffirmed that a payor's alimony obligation determined prior to the enactment of the Alimony Reform Act in March 2012 cannot be modified without a showing of a material change in circumstances (i.e., a material change affecting either the recipient's need or the payor's ability to pay.

In most commercial lending transactions, it is a common practice for lenders to secure the loan with a mortgage on the business property, which would permit the lender to foreclose on the mortgage securing the property if the borrower were to default on the. For closely held businesses, many lenders also require the business owners to secure the loan with a personal guaranty. A guaranty is an agreement made by a third party to secure the debt of a borrower to a lender in the event that the borrower defaults on the loan.

In Foisie v. Worcester Polytechnic, Institute (September 30, 2019), the United States District Court for the District of Massachusetts allowed a Motion to Dismiss where a former wife brought claims of fraudulent transfer and/or constructive fraudulent transfer against Worcester Polytechnic Institute ("WPI") located in Massachusetts under Connecticut law. The former wife alleged that the assets donated to WPI by her former husband were hidden from her during their divorce, and that the donation was intended to defraud her.

It is the unfortunate case that, in many divorces, the marital home is sold as part of the divorce proceedings. Sometimes, the decision is made for non-financial issues - the house is tied to too many memories and both parties decide that they are better off starting anew. More often than not, however, the financial circumstances are such that the house is simply unaffordable. Perhaps the party who wants to stay will no longer be able to afford the carrying costs; an unfortunate corollary of most divorces is that oftentimes one income or even two are insufficient to maintain two different households. Whatever the reason, often by agreement and sometimes by court order, the marital home is just ordered to be sold either during or after the divorce.

In a recent unpublished decision, Bakhtiar v. Infineon Technologies Americas Corp., the Superior Court in Worcester County (Yarashus, J.) found that an employee could establish a prima facie case of retaliation under Massachusetts law (G.L.c. 151B, § 1) even though eight months passed between his complaint of discriminatory treatment by his supervisor and his termination.

In Massachusetts, the amount of weekly child support to be paid by a parent is calculated by relying on the Massachusetts Child Support Guidelines, which are published by the Executive Office of the Massachusetts Trial Court and updated every three years. Although it is a simple proposition to say that child support orders are largely based on the parents' respective incomes, it is important to understand what is included as "income" by the Probate and Family Court in determining a child support obligation.  The Guidelines themselves take the broadest possible approach to defining income, stating that "income is defined as gross income from whatever source, regardless of whether that income is recognized by the Internal Revenue Code or reported to the Internal Revenue Service or state Department of Revenue or other taxing authority."  The Guidelines go on to list 29 different types of income which are presumptively included in a parent's income for child support purposes, including, among other items, salaries, wages, overtime, tips, commissions, severance pay, royalties, interest and dividends, bonuses, certain government benefits, workers' compensation, distributions from trusts, pension and annuity income, capital gains, lottery or gambling winnings, prizes and awards, and rental income.

In Sullivan v. Sleepy's LLC, the Massachusetts Supreme Judicial Court (SJC) answered this question in the affirmative. In Sullivan, the SJC considered whether an employer satisfied its obligations to its employees under Massachusetts Overtime and Sunday wage laws, where its employees' wages were comprised entirely of commission (or draws against commission), if their total weekly income met or exceeded one and a half times their regular hourly rate or at least one and a half times the minimum wage for each hour they worked over forty. The Court concluded that those employees were entitled to a separate payment - in addition to their draws or commissions - of one and a half times their regular rate or at least one and a half times minimum wage for every hour they worked over forty. With regard to Sunday pay, the SJC affirmed that a plain reading of that statute requires a separate and distinct time and a half payment for hours worked on a Sunday pay even when an employee received commission payments in the first instance that equaled or exceeded what the employee would be entitled to per the Sunday pay statute.

Technology transfer is a critical way for innovation companies to enter into new markets and profit from the hard work that they have done in developing new technology. These agreements can take many forms, from an assignment of the intellectual property rights to a licensing agreement, to a joint venture. And unlike the sale of physical assets, with the sale or licensing of IP, there are numerous complicated issues involving exactly what is being transferred, adaptations or further development of the technology, and competition between the technology owner and the transferee.

During the heady moments when reaching a deal, everyone always seems on the same page. But months or years down the road, disputes can often arise, particularly where there are substantial royalty payments in the balance.

Pursuant to 2018 Session Laws Chapter 155, Section 2 (An Act Relative to Reproductive Health), Massachusetts's outdated law criminalizing adultery was repealed. The Governor approved the law on July 27, 2018.

2018 Session Laws Chapter 155, Section 2 specifically repealed Massachusetts General Laws Chapter 272, Section 14 (Adultery), which read:

This issue arose in the recent Massachusetts Appellate case Salem Five Mortgage Company, LLC v. Lester. In that case, a mortgage company lent a borrower $300,000 for the purchase of a home on Nantucket. After the mortgage company approved the loan, but before the closing date, the borrower requested that his wife be added to the deed as a tenant by the entirety. However, the wife's name was not added to the mortgage, which remained solely in the name of the borrower. As a result, the mortgage company received a security interest only in the borrower's undivided interest in the property. The closing attorney, who represented both the mortgage company and the borrower, was aware of way in which the title was worded and told the seller of the property that the borrower and his wife would take title as tenants by the entirety. The mortgage eventually went into default, at which time the mortgage company discovered the mistake and sued for reformation of either the deed or the mortgage.

If a divorce or 209C case is pending, the court, sooner or later, will schedule what is known as a pre-trial hearing. Sometimes this is also referred to as a pre-trial conference. This will happen either on the court's own initiative once a complaint has been on file long enough, or following a case management conference. At a case management conference, the parties and judge will address a timeline for the case - the appropriate timeline for a discovery deadline and a pre-trial hearing, among other matters. The parties can, by stipulation, avoid appearing at a pre-trial hearing by submitting a written agreement that specifies the specific dates for the case timeline.

In Thompson v. JPMorgan Chase Bank (1st Cir. 2019), the First Circuit reversed the District Court's dismissal of the borrowers' claims against the mortgagee, finding that the notice of default did not strictly comply with the terms of the mortgage and Massachusetts law. 

Electronically stored information ("ESI") has connected businesses in ways that were not previously possible. ESI has also become a major source of evidence in all forms of commercial disputes. Arbitration generally limits discovery in order to promote its underlying goal as a cost-effective alternative to litigation. Nonetheless, parties often request documents from each other in disputes and the prevalence of ESI makes it inevitable that these documents will continue to impact the nature of international arbitrations. 

Since its amendment in 2013, Supplemental Probate and Family Court Rule 412 has provided litigants/parties with the ability to jointly request that the Court modify an existing judgment or order administratively and without the need for a formal hearing. While such administrative modifications can cover a myriad of provisions, including child support, actions pending under M.G.L. 209A (abuse prevention orders) are specifically excluded from the modification procedures set forth in Rule 412.

The United States District Courts for the District of Massachusetts and the Northern District of Illinois recently reached different conclusions on the definition of an Automated Telephone Dialing System ("ADTS"), reinforcing a split of authority among courts across the country on the definition of such a system under the Telephone Consumer Protection Act ("TCPA), 47 U.S.C. § 227(a)(1).  The TCPA's definition of an ADTS is "Equipment that has the capacity - (A) to store or produce telephone numbers to be called, using a random or sequential number generator, and (B) to dial such numbers."

The Consumer Financial Protection Bureau (CFPB), established with the purpose of "ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive,"has been in the news quite a bit of late.  The Trump administration is considering an overhaul of the rules limiting bank overdraft fees, the head of enforcement at the CFPB, Eric Blankenstein, resigned amid scandal, and the United States House of Representatives passed a bill to reverse certain actions undertaken by the current administration to loosen bank oversight, to name just a few matters in the press.  Amid all that activity, the CFPB quietly defeated a challenge to its constitutionality in the courts...for now.

In Baer v. Montachusett Regional Technical School District (D. Mass. May 17, 2019), the United States District Court for the District of Massachusetts granted summary judgment to an employer on a former employee's claim that he was discriminated and retaliated against because of his association with his wife, who was also a former employee. 

In McDonnel Group, LLC v. Great Lakes Insurance SE, UK Branch (5th Cir. 2019), the Fifth Circuit recently held that the New York Convention trumps state insurance law.  When its insurance claim was denied, McDonnel Group, LLC ("McDonnel") sued the insurers seeking a declaratory judgment that it was entitled to coverage.  The insurers moved to dismiss arguing that the policy contained a provision to arbitrate all disputes between the parties.  The policy, however, also contained a conformity to statute provision, meaning that if any term of the policy conflicts with a state statute, then "the terms are amended to conform to such statutes."  Invoking that provision, McDonnel argued that it had no obligation to arbitrate because the arbitration clause was void as it conflicted with a Louisiana statute forbidding arbitration in insurance contracts.  

The vast majority of divorce cases are resolved not by trial, but by the parties agreeing upon and submitting a Separation Agreement to the Probate and Family Court for approval.  One of the more confusing elements of a Separation Agreement for many clients is the fact that certain provisions of the agreement are deemed to "merge" with the Judgment of Divorce and other provisions are deemed to "survive."  Although these terms may be unfamiliar to non-attorneys, the distinction between the two is not particularly complex.  

Recently in Jouret v.  Buteau, Docket-18-P-68 (Mass. App. Ct. April 11, 2019) (Memo and Order Pursuant to Rule 1:28), the Appeals Court of Massachusetts vacated those parts of a modification judgment that eliminated Father's parenting time and prohibited his contact with the children, holding that the trial court should not have given the children's preference "decisive weight."

Last month in Incutto v. Newton Public Schools, et al., the United States District Court - District of Massachusetts denied a Newton Public Schools' motion for summary judgment regarding a former kindergarten teacher's claim for disability discrimination, despite the school district's assertion that the teacher's ability to work full-time was an essential function of her job as a full-time teacher. 

In Zucker v. Rodriguez, No. 17-1749 (1st Cir. 2019), the First Circuit interpreted the rights of Receivers under 12 U.S.C. § 1821(d)(2)(A) in the Federal Deposit Insurance Corporation's favor.

The answer is: it depends.  A Superior Court recently addressed that issue in Lockley v. Studentcity.com (Suffolk Superior Court, No.201801293-BLS2). Ms. Lockley, a resident of Colorado, brought a putative class action lawsuit alleging violation of the Wage Act against Studentcity.com, Inc. ("Student City"), a foreign corporation doing business in Massachusetts.

In a novel recent decision, the Business Litigation Session of the Superior Court of Massachusetts held that a financial consultant who had left his job and then allegedly prepared a list of his old firm's clients entirely from memory on his first day with his new employer had violated the non-solicitation and confidential information provisions in his employment agreement with the former employer.  

Although it may be difficult to imagine for someone going through the difficult process of a divorce, on occasion divorce cases can linger for months, if not years, with little to no activity on the docket. The parties may have filed divorce papers, but never got around to following through with the divorce process. Or, the parties may have separated and then settled into new lives, never actually filing divorce papers or finalizing the divorce. The parties may have even reconciled. It is not unusual to have a client who has been separated for five, ten, sometimes fifteen years without having formalized his or her divorce.

The Massachusetts Supreme Judicial Court (the "SJC") recently held that an employer's failure to approve a lateral transfer request of an employee can qualify as an adverse employment action in the context of employment discrimination.

In a recent summary decision, a panel of the Massachusetts Appeals Court considered whether or not certain payments that a former husband received in addition to his base salary constituted "bonus income," of which husband would then be obligated to pay his former wife a percentage as alimony.  (See Dunbar v. Dunbar, 2019 WL 993330) (Pursuant to Rule 1:28).  

In a recently decided case, the Supreme Judicial Court held that two employees who asserted claims under the Massachusetts Wage Act, G.L. c. 149, §§148 and 150, were entitled to recover attorneys' fees from their former employer where the parties had entered into a private settlement agreement. In Ferman v. Sturgis Cleaners, Inc., the SJC held that the employees were entitled to an award of attorneys' fees where their lawsuit acted as a "necessary and important factor" in causing their former employer to "provide a material portion" of the relief they requested in the form of a private settlement.

In an important decision for foreign companies, the First Circuit Court of Appeals recently reversed a trial court ruling and held that a foreign manufacturer of an allegedly defective product was subject to personal jurisdiction and could be sued in Massachusetts.  In Knox v. Metalforming, Inc., 914 F.3d 685 (1st Cir. 2019), plaintiff Stephen Knox badly injured his hand at his place of work, Cape Cod Copper, while operating a machine manufactured by German company Schechtl Maschinenbau GmbH and sold to Cape Cod Copper by MetalForming, Inc., Schechtl's Georgia-based exclusive U.S. distributor.  

Last month the Supreme Judicial Court announced amendments to the Massachusetts Rules of Appellate Procedure, which will take effect on March 1, 2019. The amendments include substantial modifications and clarifications to the rules of appellate procedure currently in effect. A key modification throughout the amendments is a change to filing deadlines. The deadlines for filing will be in 7-day increments, replacing the 10- or 20-day deadlines which have caused confusion because the deadlines sometimes landed on a weekend or holiday. Throughout the amendments there are general changes, such as using only gender-neutral terms, replacing "trial court" with "lower court", eliminating references to obsolete technology, and making the language of the rules more modern and easily understood. Additionally, the new rules are more handily broken down into parts and subparts, making referencing specific rule provisions easier for litigants and the courts.

The United States District Court for the District of Columbia has temporarily halted an effort to enforce a foreign arbitral awardagainst Uzbekistan where the prevailing party had previously initiated proceedings in France topartially vacatethe same award. The twist in Gretton Ltd. v. Republic of Uzbekistan, 2019 WL 464793 (C.A. No. 18-1755, February 6, 2019) ("Gretton v. Uzbekistan"), is that the prevailing partyinitiated the French proceedings, while the prevailing party'sthird party funder initiated the U.S. proceedings.

A recent Appeals Court case addressed that issue, affirming the trial court's judgment that found that the husband's misrepresentations about his income were egregious enough that the trial judge's use of discretion to attribute and impute income to the husband was appropriate, and that the assets that he had tried to divert were subject to equitable division.

Under the Massachusetts Uniform Trust Code, the Probate Court generally cannot "entertain proceedings" concerning the administration of trusts "registered or having [their] principal place of administration in another state." But does that mean a Massachusetts court cannot hear breach of fiduciary duty and other related claims against a Massachusetts-based trustee where the situs of the trust is another state? The Superior Court considered this question in Curran v. Berkshire Hills Bancorp, No. 1784CV03580-BLS2, 2018 WL 3431892 (Mass. Super. Ct. May 24, 2018), when the beneficiaries of a Vermont trust brought claims of breach of fiduciary duty and violation of Chapter 93A (the Massachusetts consumer protection statute) against the trustee, a Massachusetts bank. Over the bank's objections, the court allowed the suit to proceed, drawing a distinction between actions seeking an order instructing or compelling a trustee to act in a certain way concerning the ongoing management of trust assets, on the one hand, and actions seeking damages under a tort-based theory for the trustee's prior conduct concerning the trust, on the other, as in the present case. Similarly, the court found that, since the beneficiaries brought claims against the trustee itself rather than claims regarding the status or disposition of trust assets (such as for an accounting or other relief concerning ongoing administration of the trust), asserting jurisdiction over those claims in Massachusetts would not raise the potential to disrupt or disrespect any pending Vermont proceedings concerning the administration of the trust.

Do you know what fiduciary duties your condominium board owes? And to whom the duty is owed?

First, what, exactly, is a fiduciary duty? The nature of fiduciary duties depends on the nature of the relationship between the parties but, at its simplest, it is a duty of loyalty and good faith. It is an obligation to act for the benefit of another. It is a well-established general principle that an organization's board has a fiduciary duty to the organization.

Consistent with this general principle, members (or trustees) of a condominium's board also have certain fiduciary duties. But, you may be asking, to whom is that fiduciary duty owed? The answer is surprisingly clear: In Massachusetts, members of condominium boards owe a fiduciary duty to the condominium association (or trust), not to any individual condominium owner. See, e.g., Cigal v. Leader Dev. Corp., 408 Mass. 212, 219 (1990).