Opinion
14-P-656
09-04-2015
RICHARD B. MATEER, P.A. v. BEDFORD LIMITED PARTNERSHIP & others.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its 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 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 1:28
The defendants appeal from a judgment entered for the plaintiff, after a jury-waived trial, on the plaintiff's claims for breach of the covenant of good faith and fair dealing, civil conspiracy, and declaratory relief. We reverse.
Background. This is not the first time that this case has come before us. See Bishins v. Richard B. Mateer, P.A., 61 Mass. App. Ct. 423 (2004). As detailed in our prior decision, the plaintiff represented defendant Irwin Bishins's former wife during their divorce proceedings. Id. at 424. The former wife received a fifteen percent interest in Bedford Limited Partnership (Bedford) pursuant to the divorce judgment. Ibid. Instead of paying the plaintiff's $40,000 legal fee, the former wife signed a promissory note and, as security, executed a "chattel mortgage" assigning her fifteen percent interest in Bedford to the plaintiff. Ibid. The plaintiff eventually acquired the former wife's interest in Bedford. Id. at 431-432.
According to the defendants, after the plaintiff acquired its interest in Bedford, Bedford was "restructured" into a limited liability company, Century LLC (Century), and properties held by Bedford were conveyed, with Bedford's liabilities, to Century. Century sold a number of those properties and a dispute arose as to the plaintiff's share of the proceeds. The plaintiff brought the underlying action, essentially alleging that its share of the proceeds had been wrongfully reduced. Count I of the complaint seeks declaratory relief; count II asserts claims of breach of the implied covenant of good faith and fair dealing and breach of fiduciary duty; and court III alleges civil conspiracy.
After a three-day bench trial, the judge found for the plaintiff on its claims of breach of the covenant of good faith and fair dealing and civil conspiracy against only defendants Bedford, Century, Bishins, and Alan Altman, and issued declaratory relief accordingly. The judge awarded damages of $404,814.45 (plus statutory interest and costs) on the plaintiff's claim of breach of the covenant of good faith and fair dealing. He did not award damages on the civil conspiracy claim, indicating that such damages would be duplicative.
The judge dismissed the remaining defendants. Our reference to "defendants" hereinafter is to the four defendants against whom the judgment entered.
The judge's decision was based solely on his finding that the defendants breached the covenant of good faith and fair dealing. The judge made no findings regarding the breach of fiduciary duty claim, and the plaintiff does not refer to it on appeal. In any event, on the record before us, we see no support for the breach of fiduciary duty claim. The judgment as entered states that the plaintiff's recovery is based on "Count II (Breach of Fiduciary Duty)." We view the parenthetical description of count II as a misnomer and place no reliance on it.
Discussion. 1. Breach of covenant of good faith and fair dealing. "The covenant of good faith and fair dealing is implied in every contract." Weiler v. PortfolioScope, Inc., 469 Mass. 75, 82 (2014). The defendants claim that the judge erred in concluding that they owed the plaintiff a duty of good faith and fair dealing based on the partnership agreement, as the plaintiff is not a party to that contract. We agree. "An assignment of a partnership interest [does] not . . . entitle the assignee to become or to exercise any rights of a partner." G. L. c. 109, § 40, inserted by St. 1982, c. 202, § 1. Here, the plaintiff acquired only an interest in the partnership. See Bishins v. Richard B. Mateer, P.A., supra at 427 n.8 ("Under the terms of the partnership agreement and the Uniform Limited Partnership Act . . . [the plaintiff's foreclosure on the partnership interest] entitled [the plaintiff] to receive the distributions to which [the former wife] would be entitled, but did not make [the plaintiff] a limited partner").
The plaintiff's brief does not counter the defendants' claim that they did not owe the plaintiff a duty of good faith and fair dealing based on the partnership agreement. Instead, the plaintiff puts forth an alternative ground for affirming the judge's decision. The plaintiff appears to claim that a contract between the parties was created when the defendants agreed that the plaintiff would receive a fifteen percent interest in distributions, and that it is this contract that gave rise to the covenant of good faith and fair dealing. We are not persuaded by the plaintiff's argument in support of this position.
2. Civil conspiracy. The judge found a civil conspiracy based on the theory of an underlying tort, see Kurker v. Hill, 44 Mass. App. Ct. 184, 188-190 (1998), relying solely on his finding that the defendants breached the covenant of good faith and fair dealing. In light of our conclusion that the breach of the covenant of good faith and fair dealing claim cannot be sustained, we also conclude that the judge erred in finding a civil conspiracy.
On appeal, the plaintiff appears to claim that the judge found that the plaintiff was a creditor and that the defendants' actions to defeat, defraud, hinder, or delay payment of their debt to the plaintiff constituted the civil conspiracy. As this claim is stated in conclusory fashion, unaccompanied by citation to the record, and inadequately supported by legal citation, we do not address it. See Mass.R.A.P. 16(a)(4), as amended, 367 Mass. 921 (1975); Mass.R.A.P. 16(b), as appearing in 411 Mass. 1602 (1992).
3. Challenged findings. As the plaintiff did not establish the existence of a contract that would give rise to the covenant of good faith and fair dealing, or a tort that would sustain his conspiracy claim, we need not address the challenged findings. Nonetheless, we note that at least two of the judge's key subsidiary findings are clearly erroneous. The finding that the capital accounts increased from 1996 to 1999 is contradicted by the tax returns on which this finding is based. In addition, the finding that interest on the loans accrued at a compounded rate is not supported by the trial exhibit listing those loans.
Judgment reversed.
By the Court (Cohen, Wolohojian & Maldonado, JJ.),
The panelists are listed in order of seniority. --------
Clerk Entered: September 4, 2015.