Superior Court of Massachusetts, Suffolk, Business Litigation Session
DECISION AND ORDER REGARDING PLAINTIFFâS 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)
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 Fundâs
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 Fundâs 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").
additional background facts concerning the California Action
are necessary to an understanding of the partiesâ 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. 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
(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.
Plaintiffâs Memorandum of Law in Support of Special Motion to
Dismiss, Exhibit C.
Roth now has filed a special motion to dismiss Defendantsâ
breach of contract counterclaim in this action pursuant to
G.L.c. 231, § 59H (the "Anti-SLAPP
Statute"). 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 Rothâs exercise of [his]
right of petition"; i.e., his filing of this lawsuit.
Id. at 6.
Mr. Roth has moved to dismiss Defendantsâ counterclaim under
Mass.R.Civ.P. 12(b)(6) on the same grounds.
oppose Mr. Rothâs 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. Rothâs purported breach of the Settlement and
Release provides "a substantial basis for Defendantsâ
claims other than ...