Opinion
No. 15–P–1352.
06-14-2016
Daniel L. McDONOUGH v. Kevin W. McDONOUGH.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
On appeal from a judgment of the Superior Court, the plaintiff Daniel L. McDonough (Daniel) claims error in the admission of certain evidence at trial, and in the dismissal of his claims for breach of fiduciary duty and breach of the implied covenant of good faith and fair dealing. We discern no error, and affirm, addressing Daniel's claims of error in turn.
Daniel also contends that the judge erroneously conditioned the dissolution of 10 Commercial Avenue, LLC (a limited liability company in which the parties held equal ownership shares), upon final resolution of other litigation pending between the parties.
There is no merit in Daniel's separate claims of error in the trial judge's denial of his motion for limited reconsideration and/or to amend the judgment (based on the same grounds), for the same reasons explained with respect to his primary claims of error.
1. Testimony regarding financial condition. We review the determination by a trial judge that evidence is relevant for abuse of discretion, which we uphold absent palpable error. See Commonwealth v. Bonds, 445 Mass. 821, 831 (2006). The testimony of the defendant, Kevin W. McDonough (Kevin), regarding the financial condition of McDonough Electric Construction Corporation (MECC) at the time he agreed, on behalf of 10 Commercial Avenue, LLC (LLC), to accept a reduced monthly rental payment from MECC was plainly relevant to the question whether Kevin breached his fiduciary duty or the implied covenant of good faith and fair dealing toward Daniel. Kevin sought at trial to defend his actions by reference to the business imperative of maintaining the financial viability, during difficult economic times, of the sole tenant occupying the building owned by the LLC. We discuss infra our assessment of the judge's consideration of Kevin's argument in that regard, but we discern no abuse of the judge's considerable discretion in her determination that the evidence was relevant.
Though Daniel contends on appeal that the testimony constituted inadmissible hearsay, and that it violated the best evidence rule, he did not object to the testimony on either ground at trial. Both claims accordingly are waived. See Commonwealth v. Doyle, 67 Mass.App.Ct. 846, 861–862 (2006). In any event, both claims are meritless. Kevin's testimony was not offered for the truth of any out-of-court statement, but instead described the financial condition of MECC based on his personal knowledge. In addition, Kevin did not testify to the content of any document, so the best evidence rule is inapplicable. See Commonwealth v. Koney, 421 Mass. 295, 303 (1995).
2. Trial subpoenas. We likewise discern no abuse of discretion in the order of the trial judge quashing subpoenas by which Daniel sought to obtain and to introduce various documents relating to MECC. The subpoenas were served on the eve of the last day of trial, without prior notice to Kevin's trial counsel, and long after discovery had closed. The judge's order fell well within her considerable discretion. See Mattoon v. Pittsfield, 56 Mass.App.Ct. 124, 131–132 (2002).
3. Breach of fiduciary duty. We discern no error in the judge's conclusion that Kevin's actions in agreeing to reduce the monthly rental payable by MECC to the LLC did not constitute a breach of his fiduciary duty or of the implied covenant of good faith and fair dealing owed to Daniel at the time. As a threshold matter, we observe that Kevin and Daniel held equal ownership shares in both MECC and the LLC at all times affected by the reduced rental . Moreover, Kevin did not, by his action, eliminate the LLC's entitlement to receive payment of the full contract rent; instead it simply deferred payment of the full amount during a time in which Kevin concluded (and the trial judge found) that MECC did not have the financial capacity to pay it. For these and the other reasons explained by the trial judge in greater detail in her clear and thorough memorandum of decision, we discern no error.
The transfer of Daniel's interest in MECC, as a result of separate litigation between the parties, did not occur until a later time.
3. Dissolution. The trial judge's order for the dissolution and the winding up of the LLC did not, as Daniel contends, condition dissolution of the LLC on the resolution of other litigation between the parties. Instead, it merely preserved the status quo during the period of winding up the LLC by allowing MECC to continue to rent the premises.
In the exercise of our discretion, we decline to award appellate attorney's fees and double costs to Kevin.
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Judgment affirmed.
Order denying motion for limited reconsideration and/or to amend judgment affirmed.