Opinion
22-P-152
01-10-2023
SURESH C. SRIVASTAVA v. SUNITA SRIVASTAVA & others. [1]
Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass.App.Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass.App.Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass.App.Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 2 3.0
The plaintiff, Dr. Suresh C. Srivastava, appeals from an order of a Superior Court judge denying his motion for a preliminary injunction seeking thirty-six specific orders regarding the operation of ChemGenes Corporation (company) which, for the most part, would have established the plaintiff's control of the company. Concluding that the judge acted within his discretion in denying the plaintiff's motion for a preliminary injunction, we affirm.
We have jurisdiction over this appeal from an order denying a motion for a preliminary injunction. See G. L. c. 231, § 118; Commonwealth v. Roxbury Charter High Pub. Sen., 69 Mass.App.Ct. 49, 52 n.10 (2007). The defendants suggest, without explanation, in a motion to supplement the record on appeal, that the case is moot because the underlying litigation has been dismissed. Although a final judgment in litigation usually renders the question of a preliminary injunction moot, see, e.g., Bask, Inc. v. Municipal Council of Taunton, 490 Mass. 312, 318 n.13 (2022), here the underlying litigation continues, as only some of the counts have been dismissed. Accordingly, "it has not been demonstrated to us" that the case is moot. Ralph v. Civil Serv. Comm'n, 100 Mass.App.Ct. 199, 201 n.4 (2021).
1. Standard of review.
On appeal, "[w]e review the grant or denial of a preliminary injunction for abuse of discretion." Eaton v. Federal Nat'1 Mtge. Ass'n, 462 Mass. 569, 574 (2012). In doing so, we determine "whether the judge applied proper legal standards and whether there was reasonable support for his evaluation of factual questions." Doe v. Superintendent of Schs. of Weston, 461 Mass. 159, 164 (2011), quoting Commonwealth v. Fremont Inv. & Loan, 452 Mass. 733, 741 (2008).
2. Preliminary injunction.
To obtain a preliminary injunction, the moving party must show "(1) a likelihood of success on the merits; (2) that irreparable harm will result from denial of the injunction; and (3) that, in light of the [moving party's] likelihood of success on the merits, the risk of irreparable harm to the [moving party] outweighs the potential harm to the [nonmoving party] in granting the injunction." King v. Shank, 92 Mass.App.Ct. 837, 839 (2018), quoting Tri-Nel Mgt., Inc. v. Board of Health of Barnstable, 433 Mass. 217, 219 (2001).
"At the preliminary injunction stage, such questions may be approached by affidavit or evidentiary hearing, as the trial judge, in his discretion, considers indicated." R.G. v. Hall, 37 Mass.App.Ct. 410, 414 (1994). "In contrast to practice in the Federal courts, the situations are rare in our practice where a hearing on the issuance of a preliminary injunction involves taking live testimony. Typically the record on appeal is documentary, as in this case." Carabetta Enters., Inc. v. Schena, 25 Mass.App.Ct. 389, 391-392 (1988). Accord Doe v. Worcester Pub. Schs., 484 Mass. 598, 604 (2020) (based on affidavits submitted, "judge had sufficient evidence for his conclusion"); Fremont Inv. & Loan, 452 Mass. at 735 n.5 (factual findings on motion for preliminary injunction properly "derived from the affidavits and other materials submitted in support of and in opposition to the motion for a preliminary injunction"). Here, where the parties submitted extensive corporate documentary evidence, the judge acted well within his discretion in deciding the motion based on the affidavits and documents submitted to him.
Based on that record, the judge acted within his discretion in denying the plaintiff's motion for a preliminary injunction. See Boston Police Patrolmen's Ass'n v. Police Pep't of Boston, 446 Mass. 46, 53 (2006). First, the judge found that the plaintiff had "no likelihood of success on the merits . . . [because the plaintiff's claims are] primarily based on the notion that his wife is not a joint owner of the shares, [and] there is substantial evidence to demonstrate the falsity of that proposition." We agree with this assessment.
At oral argument, the plaintiff advanced only his ownership of the company's stock as an issue on which he had a likelihood of success on the merits.
On the vital question of the stock ownership, the parties submitted conflicting affidavits. See Foster v. Commissioner of Correction, 488 Mass. 643, 647 (2021) (in deciding preliminary injunction, judge "credit[ed] representations made by [defendant] in two affidavits"). The wife attested that since 1981 she has "been a shareholder and Director of ChemGenes Corporation" and that she left her job to join the company based on discussions with the plaintiff "that [she] was a joint owner of the company." Contrast Blanchette v. Blanchette, 362 Mass. 518, 520 (1972) ("[wife] took no part in the purchase of the stock and did not know when the stock certificates were issued or how many shares were acquired"). In contrast, the plaintiff attested that "any shares that reflect joint ownership were manipulated" because the shares were intended "for estate planning purposes." In resolving this dispute for preliminary injunction purposes, the judge properly turned to the corporate documents, which largely supported the wife's version. The company's stock certificates, stock issue list ledger, board of directors meeting minutes, shareholder meeting minutes, waiver signed by the plaintiff, and a notarized letter signed by the plaintiff providing the breakdown of the company's shares all reflect that the bulk of the company's shares are jointly owned by the plaintiff and his wife. Contrast Blanchette, supra (jointly owned stock was for estate planning purposes; wife believed company shares "would be hers only after [her husband's] death"). Based on this record, we discern no abuse of discretion in the judge's conclusion that "the plaintiff[] failed to demonstrate a likelihood of success" that he is the majority shareholder. Tri-Nel Mgt., Inc., 433 Mass. at 227.
Second, the judge found that the "plaintiff ha[d] failed to establish a risk of irreparable harm. Based on everything [presented], this company is operating properly, it's following appropriate corporate policies, forms, and requirements, and is performing well." See Koshy v. Sachdev, 477 Mass. 759, 770 (2017) ("A corporation may suffer irreparable injury due to severe corporate dysfunction or a frustration of the company's purpose, or by placing the company's business in jeopardy"). In this regard, the plaintiff predicted corporate doom based on his view that "the current Board of Director's experience and technology depth and grasp is highly lacking." His affidavit, however, contained few specifics other than a backlog in product delivery. Through a verified opposition, Mar Srivastava explained that "the Company has strived to meet unprecedented demand for its RNA products, which are vital [f]or the manufacture of COVID vaccines." Although the plaintiff remains president of the company, he presented no corroboration for his predictions of corporate ruin. Accordingly, we discern no abuse of discretion in the judge's finding that the plaintiff had failed to demonstrate a risk of irreparable harm. See Carroll v. Marzilli, 75 Mass.App.Ct. 550, 555 (2009) .
On appeal, the plaintiff shifted gears and argued that the irreparable harm consisted of the reduction of his authority over the company. That harm, however, could be repaired if the plaintiff is ultimately successful once the ownership of the contested shares is resolved.
Third, the judge found that "if there is any balance of harms here, it's decidedly in the company's favor. . . . [I]t would be quite harmful to this company to try to undo what's being done right now." In assessing the balancing of harms, "[w]hat matters as to each party is not the raw amount of irreparable harm the party might conceivably suffer, but rather the risk of such harm in light of the party's chance of success on the merits." Siemens Bldg. Techs., Inc. v. Division of Capital Asset Mgt., 439 Mass. 759, 762 (2003), quoting Packaging Indus. Group, Inc., 380 Mass. at 617. In light of the plaintiff's failure to show a likelihood of success on the merits or a risk of irreparable harm, "we conclude that the balance of harms does not weigh in [his] favor." King, 92 Mass.App.Ct. at 8 4 7.
The defendants' requests for attorney's fees are denied. "Although the . . . appeal is unsuccessful, it is not frivolous." Filbey v. Carr, 98 Mass.App.Ct. 455, 462 n.10 (2020), quoting Gianareles v. Zegarowski, 467 Mass. 1012, 1015 n.4 (2014).
Order denying motion for preliminary injunction affirmed.
Wolohojian, Ditkoff & Walsh, JJ.
The panelists are listed in order of seniority.