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.

Butts v. Freedman

Appeals Court of Massachusetts, Suffolk

January 16, 2020

MARK BUTTS & another [1]
v.
ARNOLD E. FREEDMAN & others. [2]

          Heard: October 3, 2019.

          Civil action commenced in the Superior Court Department on July 24, 2015. The case was heard by Kenneth W. Salinger, J.

          Andrew C. Oatway (Benjamin D. Stevenson also present) for the plaintiffs.

          Charles M. Sims, of Virginia (Michael Paris also present) for the defendants.

          Present: Massing, Sacks, & Hand, JJ.

          MASSING, J.

         This appeal arises from the deterioration of the business relationship between the two members of a closely held investment banking firm, the plaintiff Boston Equity Advisors, LLC (BEA). BEA and one of its members, plaintiff Mark Butts, brought an action against three defendants: BEA's other member, Arnold E. Freedman; an independent contractor working with the firm, Oded Ben-Joseph; and an investment banking firm, Outcome Capital, LLC (Outcome). After a bench trial, a judge of the business litigation session of the Superior Court entered judgment in favor of the defendants. We affirm.

         Background.[3]

         Butts and Freedman cofounded BEA as equal members in 1999. Ben-Joseph began working with the firm as an independent contractor in 2010.[4] After various disagreements with Butts, mostly concerning Ben-Joseph's compensation, Freedman and Ben-Joseph decided to leave BEA. To this end, they began conversations with Outcome.[5] When Freedman and Ben-Joseph initially met with Outcome, Freedman raised the possibility of BEA and Outcome merging, as well as the possibility of Freedman and Ben-Joseph joining Outcome on some other basis. Neither informed Butts of this initial meeting or other ensuing discussions, and they never invited Butts to join them.

         After Freedman and Ben-Joseph joined Outcome, Butts and BEA filed this suit alleging an assortment of contract and business tort claims. The trial judge found in favor of the defendants on all counts. On appeal, Butts and BEA challenge the judge's rulings only on their breach of fiduciary duty claim against Freedman and on their G. L. c. 93A claim against all three defendants, including the denial of attorney's fees.

         Discussion.

         1. Breach of fiduciary duty claim against Freedman.

         Butts and BEA argue that Freedman breached his fiduciary duty owed to them by failing to disclose the negotiations with Outcome and by failing to share the opportunity for BEA to merge with, or for Butts to join, Outcome.[6] We review the judge's conclusions of law de novo. See Martin v. Simmons Props., LLC, 467 Mass. 1, 8 (2014); Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 510 (1997).

         As a preliminary matter, we agree with the judge that Freedman, as a member of a closely held corporation, owed Butts and BEA a fiduciary duty. See Pointerv.Castellani, 455 Mass. 537, 549 (2009). It is also well settled that "fiduciaries may plan to compete with the entity to which they owe allegiance, provided that in the course of such arrangements they [do] not otherwise act in violation of their fiduciary duties" (quotation and citation omitted). Meehanv.Shaughnessy, 404 Mass. 419, 435 (1989). The determination whether Freedman otherwise acted in violation of his fiduciary duties rests on the interpretation of the "Other Activities" ...


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.