United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
B. Saris Chief United States District Judge
case stems from a 2013 legal malpractice suit against
Plaintiff Richard Langan, a solo practitioner of law. Having
prevailed in that suit, Langan now brings this action under
the federal Racketeer Influenced and Corrupt Organizations
Act, 18 U.S.C. § 1961, et seq.
(“RICO”), and state law. Because the complaint
fails to allege a plausible RICO claim, Defendants'
motions to dismiss (Dkt. Nos. 30, 35, and 42) are
ALLOWED with respect to the RICO
counts. The Court declines to exercise supplemental
jurisdiction over the remaining state-law claims.
Accordingly, the case is DISMISSED
without prejudice to filing the state-law claims in state
following facts are drawn from the complaint.
Defendants fall into three groups: the Smith Defendants, the
Arrowood Defendants, and the Keegan Defendants.
Smith Defendants include the entity at the center of this
case: AMPM Facility Services Corporation
(“AMPM”), a janitorial services company.
Defendant John Smith owns and operates AMPM, and is its
president, treasurer, secretary, director, registered agent,
and sole shareholder. Defendant Mary Beauregard is
Smith's wife and an AMPM employee.
Arrowood Defendants include the Massachusetts law firm
Arrowood LLP, as well as two of its attorneys: Lisa Arrowood,
a partner, and Elizabeth Kayatta, an associate.
Keegan Defendants include another Massachusetts law firm,
Keegan Werlin LLP, and one of its former partners, Matthew
Cleaning Up an Employment Contract
fall of 2010, Smith began to negotiate new terms of
employment with J. Kenneth Foscaldo, who had served as
AMPM's general manager since 1990. In September 2010,
Smith and AMPM retained attorney Richard Paster to represent
them in these negotiations. Over the course of several
months, the negotiations produced three interrelated
documents, all drafted by Paster: a stock-purchase agreement,
a five-year promissory note, and an employment agreement.
stock-purchase agreement, Foscaldo sold his shares of AMPM
stock to Smith; in exchange, Smith signed the note, which
bound him to pay Foscaldo in annual installments of $112,
500. At the same time, Foscaldo signed the employment
agreement, which provided that AMPM could only terminate
Foscaldo “for cause.” The promissory note and the
employment agreement were connected by way of an acceleration
clause that permitted Foscaldo to demand immediate payment on
the full amount of the note if AMPM terminated his employment
without cause or if Smith missed a payment.
2011, Foscaldo and AMPM agreed to modify the employment
agreement. George Shay, then the president of AMPM, retained
Langan to memorialize these changes via an addendum to the
employment agreement, which provided that either AMPM or
Foscaldo could terminate it without cause upon 30 days'
written notice. However, Langan did not alter the note's
acceleration clause, which continued to require full payment
if Foscaldo were terminated without cause. Langan billed one
hour of time to prepare the addendum.
Things Get Messy
November 2011, AMPM fired Foscaldo without cause, and
Foscaldo sued to enforce the note's acceleration clause.
In November 2012, a Massachusetts Superior Court judge
awarded summary judgment in Foscaldo's favor, determining
that the addendum, as drafted by Langan, could not be read to
alter the note's acceleration clause, and thus the entire
note was due.
with this adverse ruling, Smith and AMPM, in May 2013, sued
Paster for malpractice over his drafting of the documents.
This malpractice complaint was drafted and filed by Zayotti,
one of the Keegan Defendants. Over the next several months,
AMPM, Smith, and Beauregard retained Arrowood and her firm to
represent them in the malpractice suit. In November 2013,