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Mullins v. Corcoran

Superior Court of Massachusetts, Suffolk, Business Litigation Session

March 26, 2018

Joseph R. MULLINS
v.
Joseph E. CORCORAN et al.

          File Date: March 27, 2018

          MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION TO BIFURCATE AND DEFENDANTS’ MOTIONS IN LIMINE

          Kenneth W. Salinger, Justice of the Superior Court

         This lawsuit concerns failed attempts to develop certain property in Somerville, Massachusetts. The parties jointly own the property through a closely-held company known as Cobble Hill Center, LLC. They agreed to develop it together in a 1987 contract that divided up many of their other real estate interests.

         Joseph Mullins has asserted claims against Joseph Corcoran and Gary Jennison for breach of contract and breach of fiduciary duty. Corcoran and Jennison, in turn, assert similar counterclaims against Mullins for breach of contract and breach of fiduciary duty. The case is scheduled to be tried before a jury starting on May 14, 2018.

         The Court rules as follows on three motions in limine that were filed by Corcoran and Jennison and a motion to bifurcate trial into separate liability and damages phases that was filed by Mullins.

         1. Measure of Damages

         The Court will ALLOW the request by Corcoran and Jennison within Motion in Limine No. 1 for leave to present evidence of alleged damages calculated as the future profits Defendants claim to have lost as a result of Mullins’ alleged breaches of contract and fiduciary duty.

         The general measure of damages is the same for breach of contract as for breach of fiduciary duty; under either theory, a prevailing claimant is entitled to be put in the position they would have been in if there had been no breach of duty. See, e.g., Mailman’s Steam Carpet Cleaning Corp. v. Lizotte, 415 Mass. 865, 869 (1993) (breach of contract); Berish v. Bornstein, 437 Mass. 242, 270 (2002) (breach of fiduciary duty).

         In an appropriate case, lost profits can be the appropriate measure of damages either for breach of contract or breach of fiduciary duty, assuming that the claimant can meet its burden of proving that the alleged breach proximately caused a future loss of profits. See, e.g., Situation Management Systems, Inc. v. Malouf, Inc., 430 Mass. 875, 880 (2000) (breach of contract); O’Brien v. Pearson, 449 Mass. 377, 387 (2007) (breach of fiduciary duty).

         Defendants’ proposed methodology for calculating lost profits is permissible in concept. They intend to present evidence calculating their counterclaim damages as the future market value of the building they had wished to contract, minus the development costs that would have been incurred to construct the building, minus the residual value of the property in its current state. If the jury were to credit Defendants’ evidence, that would be a permissible way to value damages. See, e.g., Neal v. Jefferson, 212 Mass. 517, 522-23 (1912) (plaintiff deprived of leasehold interest in land on which he planned to build and operate a hotel was entitled to " such prospective profits as it was fairly proved that he would have realized" ).

         Mullins’ assertion that Defendants cannot seek future lost profits because damages must always be sought as of the date of the alleged breach of duty is without merit, for the reasons already discussed. However, Mullins will be entitled to an instruction that if the jury awards damages for future lost profits it must reduce the amount award to an equivalent economic value as of the date that Corcoran and Jennison first asserted their counterclaims. See Griffin v. General Motors Corp., 380 Mass. 362, 367 (1980).

         Mullins also argues that Defendants should be barred from presenting such lost profit evidence because the claimed counterclaim damages were not foreseeable in 1987 when the parties entered into their contract. This argument is unavailing. It was certainly foreseeable when the parties agreed to a framework for developing this property that a breach of contract or breach of fiduciary duty could result in the loss of a valuable development opportunity, and thus in a loss of profits. To the extent there is a factual dispute regarding the foreseeability of damages that dispute must be resolved by the jury.

         2. Mitigation Evidence

         The Court will DENY Defendants’ request within Motion in Limine No. 1 to bar Mullins from presenting evidence and argument regarding his 2016 and 2017 development proposals, in support of his assertion that Defendants failed to mitigate their claimed damages, because it is up to the jury to determine whether Defendants failed to take ...


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