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Mullins v. Corcoran

Superior Court of Massachusetts, Suffolk, Business Litigation Session

January 31, 2017

Joseph R. Mullins
v.
Joseph E. Corcoran et al No. 136529

          Filed February 1, 2017

          MEMORANDUM OF DECISION AND ORDER ON THE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          Mitchell H. Kaplan, Justice of the Superior Court.

         The court borrows the following introduction from one of the many other summary judgment decisions that it has written in connection with the numerous litigations that these parties have filed against one another. " Beginning in the early 1970s, the plaintiff Joseph R. Mullins and the defendants Joseph E. Corcoran and Gary A. Jennison, through many different manner of business entities, operated a very successful real estate business. In 1987, they entered into an agreement to separate, to the extent possible, Mullins' interests from those of Corcoran and Jennison (the 1987 Agreement). However, many of their ventures were apparently not susceptible to separation and continued in joint ownership. This case involves entities of that nature. Since 2001, from this court's perspective, it appears that the principal business of these individuals and their related businesses has been to sue one another. This is, at least, the fifth such case." The instant case is now before the court on Mullins' motion for summary judgment.

         In another summary judgment decision the court provided the following description of the parties' prior business arrangements and their 1987 Agreement, which is also equally applicable to this dispute.

         " From the early 1970s until 1987, Corcoran, Mullins, and Jennison operated a successful real estate business that involved the development and management of multi-unit affordable or mixed-income housing, as well as other real estate projects. For the most part, each project was owned by a limited partnership of which Corcoran, Mullins, Jennison, Inc. (CMJ) was the general partner. Other related entities (collectively with CMJ, the Companies) contracted to provide services to the projects, including construction, management and other related services.[1] Corcoran, Mullins, and Jennison were the sole shareholders of the Companies, owning, respectively, 60%, 20% and 20% of the shares of each.

         " In 1987, after Mullins expressed his desire to leave the business, the three of them, with the assistance of counsel, negotiated the separation and going-forward Agreement.[2] Pursuant to its terms, ownership of some of the projects was transferred to Corcoran and Jennison (or entities jointly owned by them) and others to Mullins (or entities owned by him), but ownership of many projects remained as it had been, i.e., jointly owned by all three through limited partnerships of which CMJ was the general partner. These projects would continue to be serviced by the related Companies, also jointly owned by Corcoran, Jennison and Mullins, in the manner described above.

The 1987 Agreement begins with three whereas clauses, the last two of which provide:
WHEREAS the parties wish to preserve and continue the business of Corcoran, Mullins, Jennison, Inc. (" CMJ") with respect to those endeavors listed on the schedule attached hereto . . . and to preserve and continue the businesses of CMJ Management Company, Inc. (" CMJ Management"), CMJ Builders, Inc. (" CMJ Builders"), CMJ Construction Corp. (" CMJ Construction"), CMJ Equipment Corp. (" CMJ Equipment"), CMJ Peninsula Construction, Inc. (" Peninsula") and Bay Pines Development Company, Inc. (" Bay Pines") (together with CMJ, the " Companies") with respect to those endeavors listed on the schedules attached hereto . . . and
WHEREAS the parties wish to conduct other aspects of their business separately hereafter, and accordingly wish to withdraw from joint sponsorship, management and/or ownership [of] the projects listed on the attached schedules respectively entitled " Cor-Jen Projects, " " C& J Entities" and " JRM Projects."

         " Consistent with the latter Whereas clause, Sections 1(a)-(f) of the Agreement describe the mechanism by which ownership interests in the projects that will no longer be jointly owned will be transferred, service contracts for those projects that will be assigned to Corcoran and Jennison owned entities (the C& J Entities and Cor-Jen) or Mullins owned entities (JRM), as the case may be, and the liabilities associated with each project born by the parties (or the corresponding entities) that now own the projects . . .

         " Consistent with the first Whereas clause quoted above, Section 1(g) provides that: " The individuals will retain their present stock ownership interests in the Companies. The business operations and conduct of the Companies will henceforth be governed by the provisions of this Agreement." Section 3 and 4 then proceed to describe how, going forward, the CMJ Projects, i.e., the projects as to which ownership will be presented among the three parties as it existed at the time of the 1987 Agreement, will operate and the Companies will be managed.

         " More specifically, Section 3 states that CMJ Management will continue to manage the CMJ Projects and CMJ Construction, CMJ Builders, and Peninsula will continue to be the contractors to them. Furthermore, the " terms and conditions" of these " arrangements shall be those presently in effect, and no change in such terms shall be effected without consent of all the parties hereto." This section goes on to state that " [a]ll business dealings of and among any one or more of" the parties to the agreement, the Companies (other than CMJ Equipment), Cor-Jen, the C& J Entities, and JRM " shall be conducted in scrupulous good faith according to good established business practices . . . It is the intent of this Agreement that each of the parties hereto be entitled to enjoy all the economic benefits of the Companies pro rata, in accordance with their present stock ownership, and in accordance with the provisions of Section 4(3) [sic] and 4(4) [sic]." [3] (Emphasis in original.) Lastly, Section 3 prohibits CMJ, CMJ Builders, CMJ Construction, or Bay Pines from entering into any new ventures " without the unanimous consent of the parties hereto."

         " Section 4(a), echoing Section 1(g), provides that: " Stock ownership of the individuals in the Companies shall be maintained in the current proportions and no issue or redemption of stock or other capital event shall be effected in any of the Companies without the unanimous consent of all of the parties hereto." Subsection (5) further provides that: " None of the Companies will . . . guaranty the obligations of any one or more of the parties hereto, JRM, Cor-Jen or any other entity."

         This litigation involves one of the CMJ Projects-the Cobble Hill Apartments.

         FACTUAL BACKGROUND OF THIS LITIGATION

         The following summary of relevant facts, which are material to the pending motion for summary judgment, are taken from the parties' 142-page, 350-paragraph Statement of Undisputed Material Facts, the vast majority of which are actually disputed by one side or the other. The court has attempted to distill from this dense pleading the facts necessary to consider the motion, viewed in the light most favorable to Corcoran and Jennison, the non-moving parties.

         The Cobble Hill Apartments are located in Sommerville. This property was owned by a Massachusetts limited partnership, Cobble Hill Apartments Company, LLP (CHAC), and CMJ was the general partner of CHAC. When the 1987 Agreement was executed, this property had a 224-unit apartment building on its east side and a convenience store and a few other small retail businesses on its west side. In 2003, Corcoran, Jennison and Mullins agreed to form Cobble Hill Center, LLC (CH Center), a limited liability company the sole member of which is Cobble Hill Trust; the beneficiaries of that trust, through another intermediary entity, are Corcoran, Jennison, and Mullins, in their traditional 60/20/20 percent arrangement. CH Center is managed by CMJ. Simultaneous with the formation of CH Center, CHAC created a separate parcel encompassing the west ...


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