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Todesca v. Todesca

Superior Court of Massachusetts, Suffolk, Business Litigation Session

September 30, 2016

Charles E. Todesca, Jr.
Albert M. Todesca et al No. 135214


          Janet L. Sanders, Justice

         Plaintiff Charles E. Todesca, Jr. (Charles) brings this action against his two cousins, Albert M. Todesca (Albert) and Paul A. Todesca (Paul) as well as two other defendants alleging wrongdoing in connection with a series of financial transactions that date back to the 1990s. In a wide-ranging Complaint, plaintiff asserts fourteen counts, most of them tort-based. The defendants now move to dismiss the Complaint pursuant to Rule 12(b)(6), Mass.R.Civ.P. Specifically, they contend that the majority of the claims are barred by the applicable statute of limitations, G.L.c. 260, § 2A. They also allege that the plaintiff has no standing to assert certain claims and that the single contract-based claim is barred by the statute of frauds. After careful review of the parties' submissions, this Court concludes that the Complaint must be dismissed because it fails to state a claim upon which relief may be granted.


         The 27-page Complaint is a hodgepodge of allegations, and is a far cry from the " short and plain statement of the claim" required by Rule 8, Mass.R.Civ.P. It describes, in less than precise fashion, a series of transactions that occurred between Todesca Equipment, Co., Inc. (TEC) and other entities during a time period in which Charles, Paul, and Albert were each one-third owners in TEC and when each at different times served as an officer and director of the corporation. The gist of the Complaint is that Charles and Paul, with the " substantial assistance" of their lawyer, defendant Marshall Newman, engaged in self-dealing and took valuable assets of TEC in breach of their fiduciary obligations to Charles and to TEC. Although the Complaint acknowledges that Charles was in many instances aware of these transactions either at the time they occurred a decade or more ago or well before 2013 (three years before the Complaint was filed), it alleges that he was either not in a position to understand the scope of the wrongdoing or that the details were concealed from him.

         Those transactions that are the subject of the tort-based claims in the Complaint together with the allegations related to each of them, can be briefly summarized as follows.

         1. The transfer of assets from TEC to defendant Rochester Bituminous Products, Inc. (Rochester), an entity owned and controlled by defendants Paul and Albert

         This occurred shortly after Rochester was incorporated in June 1994. ¶ 43-44. Charles knew about the transfer, although he was led to believe that it " would not result in Charles losing his interest in the value of the assets." ¶ 51 of the Complaint. Unbeknownst to him, the transfer, which was facilitated by attorney Newman, was in fact intended " to create a windfall for Rochester Bituminous at TEC's expense." ¶ 46 of Complaint.

         2. TEC's purchase of Forte Brothers, Inc.

         Charles knew about this purchase at or around the time it occurred, which was sometime in the early 1990s. ¶ 29. He was told by the defendants, however, that TEC would benefit from this transaction, when in fact TEC never received any benefit. Charles and Albert used Forte to transfer other assets of TEC " to serve their own personal interests at the corporation's expense, and they did so without notifying Charles." ¶ 35 of Complaint. One of these transfers involved the sale of real property known as Ace Junkyard. When Charles discovered that Ace Junkyard was sold to another entity, he was assured that he would receive a share of the proceeds of the sale, but never did. ¶ 40 of Complaint. According to the Complaint, Forte Brothers was renamed Todesca Forte, Inc. and later Todesca Corp., which then filed for bankruptcy. Bankruptcy records show that Todesca Corp. filed for bankruptcy protection in 1997. See Bankruptcy Court docket, attached as Exhibit B to Defendant's Memorandum in Opposition.[1]

         3. The transfer of real estate located at " Laneville/Arboretum Road in West Roxbury" (the Lanesville Terrace Property )

         According to the Complaint, TEC transferred this property to Todesca Realty Trust (TRT), a trust created in 1984 by Paul. This occurred in 2007, three months after TEC was " dissolved administratively." ¶ 62-63 of Complaint. Charles did not know about this transfer. However, he became sole officer and director of TEC in 2010 after the Secretary of State's Office granted Albert's 2008 application for TEC's reinstatement. ¶ 73. When Charles took the helm at TEC, attorney Newman failed to provide him with information about TEC and to advise him that he was " assuming a legal responsibility to investigate the financial circumstances of the corporation." ¶ 208 of the Complaint. The Complaint does not state what role Newman played vis a vis Charles between 2010 and 2012--allegations which would be necessary to show that Newman owed some fiduciary duty to Charles at the time.

         The contract-based count in the Complaint (Count XIV) relates to a transaction that occurred in 2003. Paul and Albert persuaded Charles to borrow money against his personal residence and give the funds generated by that loan to TEC. Paul and Albert agreed to make payments on the loan and did so until 2013, when they stopped making payments. There is no suggestion in the Complaint that this agreement was reflected in any writing signed by Paul and/or Albert.

         There are certain other allegations in the Complaint that do not directly relate to any particular count but are nevertheless relevant to the issues before the Court. In the first part of 2007, Charles " sustained a work-related injury that resulted in three weeks of hospitalization, and significant long-term damage to Charles' memory and ability to work." ¶ 61 of Complaint. When Charles assumed the position of director and sole officer of TEC in 2010, he was " not capable of serving effectively in those positions." ¶ 78 of Complaint. In 2011, the Massachusetts Department of Revenue (DOR) sought to hold Charles personally liable for the assessed and unpaid taxes of TEC and other entities, including Rochester, the company ...

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