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Commonwealth Insurance Partners, LLC v. Estate of Boucher

Superior Court of Massachusetts, Suffolk, Business Litigation Session

June 15, 2018

COMMONWEALTH INSURANCE PARTNERS, LLC et al.
v.
ESTATE OF Mark BOUCHER et al.

          File Date: June 18, 2018

          MEMORANDUM AND ORDER ON DEFENDANTS’ MOTIONS TO DISMISS

          Kenneth W. Salinger, Justice of the Superior Court

          Plaintiffs claim that Mark Boucher violated contractual and fiduciary obligations by usurping business opportunities. Plaintiffs allege that they went into business with Mr. Boucher to acquire and then operate small retail insurance agencies, that Mr. Boucher usurped the opportunity to acquire several agencies, and that Boucher essentially stole from Plaintiffs the future commissions earned on policies sold or renewed by the acquired agencies.

         Defendants have moved to dismiss the claims against the Estate of Mark Boucher on the ground that they were not brought within one year of Boucher’s death, and thus are time-barred. They have also moved to dismiss on the alternative ground that the operating agreements among Boucher and Plaintiffs contain mandatory mediation and arbitration provisions. (Defendants initially filed both motions to dismiss on behalf of all Defendants. At oral argument, however, Defendants stated that they were withdrawing both motions with respect to the claims against Patricia Boucher individually and against DDM Insurance Alliance, LLC.)

         The Court will ALLOW the motion to dismiss the claims against the Estate because they are barred by the one-year statute of limitations. The alternative motion to dismiss on grounds that there is a mandatory arbitration clause is therefore moot.

         The claims against the Estate are time-barred. By statute, no claim may be brought against the personal representative of an estate unless the claim is filed and process is served "within 1 year after the date of the death of the deceased." G.L.c. 190B, § 3-803(a). Mark Boucher died on November 10, 2015. This action was filed almost two years later, on November 2, 2017. It is therefore untimely.

         Plaintiffs’ assertion that each renewal of an insurance policy sold by one of the agencies acquired by Boucher gives rise to a new claim is without merit. Where an Estate engages in a pattern of continuing violations, for example by failing to make weekly alimony payments to the decedent’s ex-spouse, the one-year limitations period for claims against the estate does not apply to claims that did not arise until after that one-year period. See Flannery v. Flannery, 429 Mass. 55, 58 (1999). But Plaintiffs allege something very different than the claims at issue in Flannery. They claim that Boucher breached his obligations to Plaintiffs before he died, and that the harm or injury caused by that prior misconduct continued to accumulate after his death. In other words, plaintiffs assert a "continuing harm theory," not a claim based on continuing violations of a legal duty. Cf. Luger v. McCarthy, No. 16-P-632, 2017 WL 26064 (Mass.App.Ct. Jan. 3, 2017) (unpublished rule 1:28 decision).

         Where allegedly unlawful conduct has occurred and not been repeated, the mere fact that resulting injury or harm continues to accrue does not restart the statute of limitations. Lambert v. Fleet Nat. Bank, 449 Mass. 119, 126 n.10 (2007). "If knowledge of the extent of injury were to control the accrual of a cause of action, the fixed time period of statutes of limitations effectively would be destroyed." Id., quoting Olsen v. Bell Tel. Labs., Inc., 388 Mass. 171, 175 (1983).

          Plaintiffs ask the Court to exercise its discretion to allow their claims against the Estate to proceed even though they were filed more than one year after Boucher died. By statute, a creditor that fails to file a timely claim against an estate may nonetheless obtain a judgment against the estate if a court determines that "equity and justice require it" and the "creditor is not chargeable with culpable neglect in not prosecuting his claim" within one year after the decedent’s death.[1] See G.L.c. 190B, § 3-803(e).[2] "In other words, a creditor must show ‘both that justice and equity require recognition of a meritorious claim and that failure to bring the claim was not due to carelessness or lack of diligence.’" Gates v. Reilly, 453 Mass. 460, 467 (2009), quoting Matter of the Estate of Grabowski, 444 Mass. 715, 719 (2005).

         Plaintiffs’ attempt to invoke this safety valve is unavailing because they have not met their burden of showing that their failure to bring a timely claim against the Estate "was not due to carelessness or lack of diligence." Id. Plaintiffs concede they were aware of their claims against Boucher before he died, and that they knew Boucher had died, but assert that they held off on suing his Estate because they were "engaged in efforts to resolve the outstanding dispute." But settlement talks do not justify failing to file a timely claim against the Estate. See City of Haverhill v. Porter, 333 Mass. 594, 597 (1956) (City was chargeable with culpable neglect where it knew of claim against estate and delayed filing suit because it was negotiating possible compromise with estate). The fact that Plaintiffs were "seeking to gain relief in a more efficient manner than litigation and by doing so" put the Estate "on notice of [their] claim is not sufficient to toll the statute of limitations." See Shafnacker v. Raymond James Assocs., Inc., 425 Mass. 724, 728 (1997) (submission of claims to arbitration does not toll statutes of limitations).

         ORDER

         Defendants’ motion to dismiss the complaint pursuant to Mass.R.Civ.P. 12(b)(6) on statute of limitations grounds is ALLOWED IN PART as to the claims against the Estate of Mark Boucher and against Patricia Boucher in her capacity as personal representative of the Estate of Mark Boucher. It is DENIED IN PART as to the claims against Patricia Boucher individually and DDM Insurance Alliance, LLC.

         When final judgment enters the claims against the Estate shall be dismissed with prejudice.

         Defendants’ motion to dismiss the complaint pursuant to Mass.R.Civ.P. 12(b)(1) on mandatory ...


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