Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Roth v. Grail Partners, LLC

Superior Court of Massachusetts, Suffolk, Business Litigation Session

October 30, 2018

Stephen Scott ROTH
v.
GRAIL PARTNERS, LLC et al.

          DECISION AND ORDER REGARDING PLAINTIFF’S MOTION TO DISMISS COUNTERCLAIM PURSUANT TO THE ANTI-SLAPP STATUTE, OR IN THE ALTERNATIVE, PURSUANT TO MASS.R.CIV.P. 12(B)(6) (DOCKET ENTRY NO. 10.0)

          Brian A. Davis, Associate Justice of the Superior Court

          Plaintiff Stephen Scott Roth ("Plaintiff" or "Mr. Roth") previously was an investor in Chalice Fund, L.P. ("Chalice Fund"), and in Chalice Fund’s general partner, Grail Partners, LLC ("Grail"). Mr. Roth redeemed his investment in Chalice Fund and Grail in April 2012. He subsequently filed this action in June 2018 alleging that Grail and its managing partners, defendants Donald H. Putnam and S. Craig Cognetti (collectively, with Grail, "Defendants"), violated the terms of the Chalice Fund’s Limited Partnership Agreement (the "LPA") by improperly charging Mr. Roth an incentive fee, and by misrepresenting to Mr. Roth and other investors the circumstances under which Defendants would charge incentive fees. Mr. Roth further alleges that Defendants violated the LPA by refusing to comply with their obligations to honor his exercise of certain put options included with warrants he obtained from Chalice Fund. Defendants, in turn, have asserted a single breach of contract counterclaim against Mr. Roth alleging that his commencement of this action violates, at least in part, a Settlement Agreement and Mutual Release (the "Settlement and Release") that Mr. Roth and Grail executed in connection with a separate lawsuit Mr. Roth filed in California Superior Court on October 27, 2016. See Stapleton v. Grail Partners LLC, No. CGC-16-555072 (Cal.Super.Ct. Oct. 27, 2016) (the "California Action").[1]

         Some additional background facts concerning the California Action are necessary to an understanding of the parties’ respective claims in this case. The California Action arose after Mr. Roth redeemed his investment in Grail and Chalice Fund in April 2012. At that time, he received warrants in exchange for his Chalice Fund units and a Subordinated Note ("Note") in exchange for his Grail units. Grail allegedly failed to pay any of the principal or interest due under the Note, prompting Mr. Roth to file the California Action, in which he accused Grail of breaching the terms of the Note.[2] The California court entered a default judgment against Grail on January 18, 2017. Thereafter, Mr. Roth and Grail engaged in discussions concerning settlement of the judgment, which resulted in the parties signing the Settlement and Release in May 2017. The Settlement and Release provides, in relevant part:

1.2 Recitals: (a) On January 18, 2017, JUDGMENT CREDITORS obtained a judgment for $1, 046, 132.45 against GRAIL.
(b) JUDGMENT CREDITORS have proceeded with enforcement of the Judgment, including levies and judgment liens and have seized a total of $23, 674.30 from Grail accounts on March 23 and April 13, 2017.
JUDGMENT CREDITORS and GRAIL desire to satisfy the Judgment as set forth below:

          ...

2.7 The parties will mutually release all claims, known and unknown, against one another. The mutual release ... [is] more fully set forth below.

         ...

3.1 Mutual Release: In consideration of the execution of this Agreement, and for other good and valuable consideration, and except as specifically excluded in Section 3.2 hereof, each party hereby mutually releases and fully discharges one another, and each of their respective principals, shareholders, employees, employers, directors, officers, subsidiaries, affiliates, parent corporations, agents, representatives, heirs, executors, administrators, insurers, attorneys, predecessors, successors, assignors and assigns, from any and all claims, demands, debts, covenants not to compete, confidentiality and causes of action that might occur or exist, and arising from or in any way connected with the matters referred to in the Recitals set forth above at Part I [i.e., Section 1.2], including without limitation all claims, demands, debts, covenants, confidentiality and causes of actions of whatever kind or nature, whether known or unknown, suspected or unsuspected, mature or immature, which each party has against the other.

          Plaintiff’s Memorandum of Law in Support of Special Motion to Dismiss, Exhibit C.

         Mr. Roth now has filed a special motion to dismiss Defendants’ breach of contract counterclaim in this action pursuant to G.L.c. 231, § 59H (the "Anti-SLAPP Statute").[3] He contends that the Settlement and Release does not apply, on its face, to his present claims and that it is, therefore, evident that "the purpose of the [c]ounterclaim [is] to chill Roth’s exercise of [his] right of petition"; i.e., his filing of this lawsuit. Id. at 6.

         Alternatively, Mr. Roth has moved to dismiss Defendants’ counterclaim under Mass.R.Civ.P. 12(b)(6) on the same grounds.

         Defendants oppose Mr. Roth’s special motion. They assert that the text of the Settlement and Release forecloses Mr. Roth from pursuing any claims against Grail that existed at the time the Settlement and Release was executed, including any claims Mr. Roth may have concerning incentive fees. Thus, they argue that Mr. Roth’s purported breach of the Settlement and Release provides "a substantial basis for Defendants’ claims other than ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.