United States District Court, D. Massachusetts
NORMAN TRAVERSE AND NASSRINE TRAVERSE, INDIVIDUALLY AND ON BEHALF OF TECHNOLOGY PARK X LIMITED PARNTERSHIP, Plaintiffs,
THE GUTIERREZ COMPANY, GUTIERREZ CONSTRUCTION COMPANY, ARTURO J. GUTIERREZ, ARTHUR J. GUTIERREZ JR., and TECHNOLOGY PARK X LIMITED PARTNERSHIP, Defendants.
MEMORANDUM AND ORDER
J. Casper, United States District Judge.
Norman Traverse and Nassrine Traverse, individually and
derivatively on behalf of Technology Park X Limited
Partnership (collectively, “the Traverses”),
filed suit against The Gutierrez Company (“TGC”),
Gutierrez Construction Company, Inc. (“GCCI”),
Arturo J. Gutierrez, Arthur J. Gutierrez, Jr. and Technology
Park X Limited Partnership (collectively,
“Defendants”). D. 15. Defendants now bring a
counterclaim against the Traverses alleging breach of
contract (Count II), breach of fiduciary duty (Count III) and
abuse of process (Count IV) and seek a declaratory judgment
(Count I). D. 34. The Traverses have moved to dismiss the
counterclaim pursuant to Fed.R.Civ.P. 12(b)(6). D. 38.
Defendants have also moved to amend the answer and
counterclaim. D. 56. The Court ALLOWS Defendants' motion
to amend, D. 56, and accordingly considers the proposed
amended counterclaim filed at D. 57-1 to be the operative
counterclaim. For the following reasons, the Court
ALLOWS in part and DENIES in part the Traverses' motion
to dismiss Defendants' counterclaim, D. 38.
Standard of Review
motion to dismiss for failure to state a claim upon which
relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6), the
Court must determine if the facts alleged “plausibly
narrate a claim for relief.” Schatz v. Republican
State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012)
(citation omitted). The Court will dismiss a pleading that
fails to include “enough facts to state a claim to
relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). “To
avoid dismissal, a [counterclaim] must provide ‘a short
and plain statement of the claim showing that the pleader is
entitled to relief.'”
García-Catalán v. United States, 734
F.3d 100, 102 (quoting Fed.R.Civ.P. 8(a)(2)). “A
pleading that offers ‘labels and conclusions' or
‘a formulaic recitation of the elements of a cause of
action will not do.'” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S.
at 555). “Nor does a [counterclaim] suffice if it
tenders ‘naked assertion[s]' devoid of
‘further factual enhancement.'” Id.
(second alteration in original) (quoting Twombly,
550 U.S. at 557). “In determining whether a [pleading]
crosses the plausibility threshold, ‘the reviewing
court [must] draw on its judicial experience and common
sense.'” García-Catalán, 734
F.3d at 103 (second alteration in original) (citation
omitted). “This context-specific inquiry does not
demand ‘a high degree of factual
specificity.'” Id. (citation omitted).
following summary is based upon the allegations in the
amended counterclaim, D. 57-1 (which starts on page 20),
which are accepted as true for the consideration of the
motion to dismiss.
Norman Traverse (“Norman”) entered into the Tech
Park Associates Joint Venture Agreement in 1981 to develop
property in Billerica, Massachusetts. D. 57-1 ¶ 13. In
2003, Norman assigned his interest in the venture to himself
and Nassrine Traverse (“Nassrine”) as joint
tenants with rights of survivorship. D. 57-1 ¶ 20. The
Traverses currently have a 38% ownership in the joint
venture, as well as in two limited partnerships: Technology
Park X Limited Partnership (“Tech Park X”) and
Technology Park V Limited Partnership (“Tech Park
V”). D. 57-1 ¶¶ 21, 49. Tech Park X is a
limited partnership that was created by the Tech Park X
Limited Partnership Agreement (the “LP
Agreement”) in 1987 and amended most recently in 1997.
D. 57-1 ¶¶ 22-23. Tech Park V is also a limited
partnership created by agreement (the “Tech Park V LP
Agreement”) in 1999 and amended most recently in 2015.
D. 57-1 ¶ 48. Tech Park X and Tech Park V both own
commercial office buildings on the venture's land in
Billerica that are managed by Defendant TGC. D. 57-1 ¶
54. TGC is the general partner of Defendants Tech Park X and
Tech Park V. D. 57-1 ¶ 5. Section 4.3 of the LP
Agreement grants TGC “the exclusive right to manage the
business of the Partnership.” D. 57-1 ¶ 27.
Defendant Arthur J. Gutierrez, Jr. (“Arthur”) is
the President of TGC and GCCI and a limited partner of Tech
Park X and Tech Park V. D. 57-1 ¶ 8. Defendant Arturo J.
Gutierrez (“Arturo”) is a limited partner of Tech
Park X and Tech Park V. D. 57-1 ¶ 7.
Park X rents offices to commercial tenants in its building.
D. 57-1 ¶¶ 39-40. TGC manages the building and
receives 5% of the gross income generated by the building. D.
57-1 ¶ 29. The LP Agreement specifies that parties to
the Agreement may contract with Defendant GCCI, an affiliate
of TGC, to provide construction and other services for Tech
Park properties. D. 57-1 ¶ 30. The only condition on
TGC's ability to retain the services of affiliated
entities is that the provision of such services must
“be at reasonable and competitive market rates.”
Id. (quoting LP Agreement § 4.6). Norman knew
at the time of execution of the Joint Venture Agreement and
LP Agreement that TGC wanted GCCI to provide most, if not
all, construction services to the Tech Park properties. D.
57-1 ¶ 31.
approximately 1989 through 2010, the Tech Park X building had
consistent occupancy and low vacancy rates and Tech Park X
made cash distributions to its partners. D. 57-1 ¶¶
40-41. In 2010, however, one of the building's tenants
filed for bankruptcy and another vacated the building. D.
57-1 ¶ 42. Since that time, there have been continued
vacancies in the building and Tech Park X has operated at a
deficit. D. 57-1 ¶ 44. Accordingly, Tech Park X has not
made any cash distributions to its partners since 2012.
Id. That same year, TGC decided to renovate the
building to attract tenants and increase occupancy. D. 57-1
¶ 45. Each year since the renovation, Tech Park X had
been able to reduce vacancies, but suffered a blow in 2017
when another tenant filed for bankruptcy and ended its lease.
D. 57-1 ¶ 46. Currently, only about 209, 015 square feet
of the building's total 449, 000 square feet are
occupied. D. 57-1 ¶ 47.
the Tech Park partnerships ceased making cash distributions
in 2012, the Traverses allegedly decided they wanted to leave
the partnerships and embarked on a course of conduct meant to
coerce TGC and other partners, including Arturo and Arthur,
to acquire their interests. D. 57-1 ¶ 56. Under the LP
Agreement, any limited partner needs consent of TGC to sell
their partnership interest to anyone other than immediate
family members. D. 57-1 ¶ 33.
2013, the Traverses began “bombarding” TGC with
ongoing requests and demands for information about the
partnerships' finances, including ongoing audits. D. 57-1
¶ 58. In 2016, the Traverses hired a forensic
accountant, and TGC gave the accountant access to Tech Park X
and Tech Park V's records. D. 57-1 ¶ 62. The
Traverses never shared the results of the forensic audit with
TGC, Tech Park X, Tech Park V or any of the other limited
partners. D. 57-1 ¶ 65.
Traverses' information requests continued after the
forensic audit and covered “nearly every expenditure
made by Tech Park X, regardless of the nature and
amount.” D. 57-1 ¶ 68. For example, Nassrine
allegedly sent a lengthy email to TGC seeking documentation
for charges that included “such small cost items as
caulk and tape.” D. 57-1 ¶ 71. Some of the
requests covered years' worth of expenditures, even
though the Traverses already had access to audits for some of
those years. D. 57-1 ¶ 72. In total, TGC employees spent
over 100 hours responding to requests from Nassrine. D. 57-1
Agreement contains several provisions governing the review of