Superior Court of Massachusetts, Suffolk, Business Litigation Session
SUGARMAN & SUGARMAN, P.C.
Daniel B. SHAPIRO dba Shapiro & Associates
Date: February 4, 2019
Kenneth W. Salinger, Justice of the Superior Court
2016, Attorney Daniel Shapiro brought his federal workersâ
compensation law practice to Sugarman & Sugarman, P.C.,
pursuant to an "Employment and Purchase of Practice
Agreement" between the parties. By late 2017 the
partiesâ relationship had soured and Shapiro left with his
law practice. Sugarman filed suit seeking quantum meruit
compensation for its work on Shapiroâs cases, damages for
alleged breach of contract and breach of Shapiroâs duty of
loyalty to the firm, and an accounting for all monies
received by Shapiroâs law practice. Shapiro inserts
counterclaims for fraud in the inducement, breach of
contract, breach of fiduciary duty, and violation of G.L.
Sugarman has now moved that a constructive trust be imposed
on the proceeds from all matters on which Sugarman provided
services while Shapiro worked there. Shapiro has filed a
cross-motion to dismiss Sugarmanâs quantum meruit claim. The
Court will DENY both motions.
constructive trust "is imposed âin order to avoid the
unjust enrichment of one party at the expense of the other
where the legal title to the property was obtained by fraud
or in violation of a fiduciary relation or arose where
information confidentially given or acquired was used to the
advantage of the recipient at the expense of the one who
disclosed the information.â" Meskell v.
Meskell, 355 Mass. 148, 151 (1969), quoting Barry v.
Covich, 332 Mass. 338, 342 (1955). In the absence of
fraud, breach of fiduciary duty, or taking unfair advantage
of a confidential relationship, no constructive trust may be
implied. Meskell, supra, at 151-52 (1969);
accord Nessralla v. Peck, 403 Mass. 757, 762 (1989).
Sugarman seeks a constructive trust on the theory that
Shapiro breached his fiduciary duty of loyalty to the law
appears to be undisputed, while he was at Sugarman, Shapiro
held a position of trust and confidence in which he was
responsible for a substantial case practice and had access to
those clients and their information.
result, it appears that Schapiro owed Sugarman a fiduciary
duty of loyalty whether he was a joint venture with a
partner-like status or an employee of the firm. See
Meehan v. Shaughnessy, 404 Mass. 419, 433-34, 438
(1989) (law firm partners, non-equity junior partner, and
associates all owed duty of loyalty to firm).
Sugarman succeeds in proving that Shapiro breached his duty
of loyalty, then Sugarman may well be entitled to an order
requiring Shapiro to hold some part or all of his earnings
from disputed client accounts in a constructive trust for the
benefit of Sugarman. See Meehan, supra, at
Sugarman has not prevailed yet. Nor does it seek summary
judgment in its favor on its claim for breach of fiduciary
Court will therefore treat this motion as a motion for a
preliminary injunction barring Shapiro "from using or in
any way alienating" any funds received as payment for
work on the disputed client accounts. See Boston Athletic
Assân v. International Marathons, Inc., 392 Mass. 356,
362 (1984) (affirming similar preliminary injunction tying up
particular funds in which plaintiff claimed to have an
Court will DENY this motion because Sugarman has not met its
burden of proving that it is likely to succeed in proving its
claim for breach of fiduciary duty. A plaintiff is not
entitled to preliminary injunctive relief if it cannot prove
that it is likely to succeed on the merits of its claim. See,
e.g., Fordyce v. Town of Hanover, 457 Mass. 248, 265
(2010) (vacating preliminary injunction on this ground);
Wilson v. Commissioner of Transitional Assistance,
441 Mass. 846, 858-59 (2004) (same). "The burden of
showing a likelihood of success on the merits is on the party
seeking the preliminary injunction." Berrios v.
Dept. of Pub. Welfare, 411 Mass. 587, 598 (1992),
quoting Robinson v. Secretary of Admin., 12
Mass.App.Ct. 441, 451 (1981).
Court cannot tell from the current record which side, if any,
is at fault. The mere fact that Shapiro left the firm and
took clients with him does not mean that he breached any
fiduciary duty. The factual basis for Sugarmanâs claim that
Shapiro breached his duty of loyalty are hotly contested. For
the purposes of this motion Shapiro is not required to prove
that his conduct was lawful. Instead, to obtain this