Opinion
16-P-375
05-15-2017
Edmund SHAMSI, individually and as trustee, & others v. Dennis DUCHARME.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This dispute for breach of contract arises out of actions taken by defendant Dennis Ducharme in his capacity as managing officer of Massachusetts corporation Seacoast Resorts, Inc. (SRI). Ducharme, along with plaintiffs Keith Carlson and Edmund Shamsi, formed SRI to operate as the general partner of Massachusetts limited partnership Atlantic Resort Development Limited Partnership (ARD). All of the parties are limited partners of ARD, but only Ducharme, Carlson, and Shamsi own interests in SRI. Ducharme, Carlson, and Shamsi are also the only signatories of the stockholders agreement governing SRI's management and operations.
All references to "Shamsi" are to Edmund Shamsi, individually, unless otherwise indicated.
The plaintiffs allege in this lawsuit that Ducharme breached the SRI stockholders agreement by taking certain actions affecting ARD without the approval of Carlson and Shamsi. Specifically, the plaintiffs allege that Ducharme, without the necessary approval, caused ARD to pay excess commissions and unauthorized bonuses to its sales and marketing agent, Curran Management Services, Inc. (CMS). On Ducharme's motion for summary judgment, a Superior Court judge ruled (1) that issue preclusion effectively worked to bar the claim relating to excess commissions because the essential factual issue was fully litigated and decided in a previous arbitration brought by ARD against Ducharme, and (2) that the plaintiffs who were not signatories of the SRI stockholders agreement (nonsignatory plaintiffs) had no standing to sue Ducharme because they were not third-party beneficiaries of that agreement. The only remaining claim—Carlson's and Shamsi's claim alleging payment of unauthorized bonuses—proceeded to trial, after which the jury returned a verdict for Carlson and Shamsi and awarded them $233,730 in damages.
The plaintiffs now appeal from the order partially allowing Ducharme's motion for summary judgment, and Ducharme cross-appeals from the judgment on jury verdict, challenging the jury's verdict as to both liability and damages, and from the order denying his posttrial motion for judgment notwithstanding the verdict or for new trial. We agree with Ducharme that the evidence was insufficient to support the jury's award of damages and vacate so much of the judgment that awards damages and remand for further proceedings limited to that issue.
Background. We summarize the facts, reserving certain details for when they become pertinent to our analysis. ARD was formed in 1993 for the purpose of acquiring timeshare intervals at a resort development in Cape Cod known as The Cove at Yarmouth (Cove). The partners of ARD executed a limited partnership agreement, which requires arbitration of "any claim or controversy arising out of or relating to this Agreement." The agreement also provides that "no Partner shall be liable to any other Partner or to the Partnership by reason of his actions or omission to act in connection with the Partnership, except for actual fraud, bad faith or gross negligence."
SRI is the sole general partner. The limited partners consist of the parties to this case, plus one other individual.
On the same day ARD was created, Ducharme, Carlson, and Shamsi formed SRI, with Carlson being named the president and Ducharme the treasurer, and executed the stockholders agreement. The stockholders agreement contains a provision requiring "the affirmative vote of the Stockholders having at least 80% interest in the outstanding stock of [SRI]" before SRI can take action on any one of a specified list of "Major Decisions." Because Carlson and Shamsi each owned, at all relevant times, a 42.8 percent interest in SRI, the effect of this provision was that both had to consent before SRI could act on any "Major Decision," including "[e]ntering into any contract binding upon [SRI] in its own behalf or as General Partner of [ARD] pursuant to which [SRI] or [ARD] would incur an obligation greater than $25,000."
In 2000 Ducharme negotiated for ARD to hire CMS as the sales and marketing agent for ARD's timeshare intervals at the Cove. Carlson and Shamsi consented to the hiring, and ARD retained CMS pursuant to an oral contract. The oral contract provided for the following payment schedule: (1) on the first $10 million of sales, ARD would pay commissions of fifty percent of the sale price of each interval, together with "lugs," which were additional commissions paid for selling at a price in excess of the base price established by ARD; and (2) after the first $10 million of sales, ARD would pay commissions of fifty-five percent of the sale price of each interval, without any lugs. Several months later, Ducharme replaced Carlson as the president of SRI and was given sole managerial control of both SRI and ARD.
In 2007 ARD commenced an arbitration proceeding against Ducharme, alleging, among other things, that he paid commissions to CMS that exceeded the terms of the oral contract. In October of 2008, after four days of hearings, the arbitrator issued an award in favor of Ducharme. Pertinent to this case, the arbitrator found, based on the "relatively scant evidence before [him]," that ARD "ha[d] not met its burden of proving that [CMS] was ‘overpaid’ on [its] commissions." The arbitrator further found that ARD had not proven that Ducharme "acted in bad faith in setting whatever commission rate was paid." By joint motion of ARD and Ducharme, the award was confirmed by a Superior Court judge as a final judgment.
In March of 2009, Carlson was relocating files when he discovered five invoices issued by CMS to ARD in mid to late 2000, requesting bonuses for sales of certain timeshare intervals at the Cove. Carlson also found documentation of three checks that ARD issued to CMS in January and February of 2001. The first two checks totaled $250,000—the exact amount of the five CMS invoices—and the third check, labeled "bonus," was in the amount of $25,000. Based on this discovery, Carlson believed that ARD paid bonuses to CMS that were not authorized by the oral contract. When Carlson asked Ducharme for an explanation of the payments, he did not receive a response.
The plaintiffs commenced this action in May of 2009, alleging that Ducharme, in his capacity as shareholder of SRI or limited partner of ARD, paid excess commissions to CMS—the same allegation made by ARD in the arbitration. The plaintiffs framed their complaint as one for breach of the SRI stockholders agreement and the covenant of good faith and fair dealing. Although Ducharme raised as an affirmative defense that the claims were "barred by the mandatory arbitration clause of the ARD Limited Partnership Agreement," there is no indication that he moved at any point to compel arbitration.
The complaint contained no allegations relating to the $275,000 in purported bonus payments that Carlson discovered in March of 2009.
Instead, in December of 2009, Ducharme moved for summary judgment, arguing that the claims were barred by claim preclusion because they were fully litigated and decided in the arbitration. He also argued that the nonsignatory plaintiffs did not have standing to sue as third-party beneficiaries of the SRI stockholders agreement. The judge allowed the motion with respect to the nonsignatory plaintiffs, ruling that they were "[a]t the most ... incidental beneficiaries and cannot enforce the stockholder[s] agreement." As to claim preclusion, the judge ruled that that doctrine was inapplicable but that issue preclusion barred Carlson and Shamsi from relitigating the arbitrator's finding that "Ducharme did not act in bad faith in the amount he paid to CMS for commissions," as well as "[t]he subsidiary findings of fact made by the arbitrator to support [his] ultimate finding[ ] of fact."
The parties apparently agreed that the motion judge's order should be interpreted to preclude litigation on the claim relating to excess commissions, but to permit litigation by Carlson and Shamsi on the claim relating to unauthorized bonuses, even though it was not asserted in the complaint. After a first trial on the unauthorized bonuses claim, followed by an appeal and remand, a second trial was held in June and July of 2015, resulting in a judgment for Carlson and Shamsi. The second trial judge denied Ducharme's postjudgment motion, and these cross appeals ensued.
In the first trial, the judge allowed Ducharme's motion for a directed verdict and entered judgment in his favor. In an unpublished memorandum and order pursuant to our rule 1:28, this court vacated the judgment and remanded for a new trial, concluding that there was sufficient evidence for the jury to have found in favor of Carlson and Shamsi. See Shamsi v. Ducharme, 86 Mass. App. Ct. 1103 (2014).
Discussion. 1. The plaintiffs' appeal. The plaintiffs challenge the motion judge's allowance of partial summary judgment to Ducharme, arguing that the arbitrator's award does not preclude the excess commissions claim and that the nonsignatory plaintiffs are intended third-party beneficiaries of the SRI stockholders agreement. We review both of these issues de novo, viewing the evidence in the light most favorable to the plaintiffs, the nonmoving parties. See Pinti v. Emigrant Mort. Co., 472 Mass. 226, 231 (2015).
a. Issue preclusion. The doctrine of issue preclusion "prevents relitigation of an issue determined in an earlier action where the same issue arises in a later action ... between the same parties or their privies." Kobrin v. Board of Registration in Med., 444 Mass. 837, 843 (2005), quoting from Heacock v. Heacock, 402 Mass. 21, 23 n.2 (1998). The doctrine applies if the following elements are met: "(1) there was a final judgment on the merits in the prior adjudication; (2) the party against whom preclusion is asserted was a party (or in privity with a party) to the prior adjudication; and (3) the issue in the prior adjudication was identical to the issue in the current adjudication, was essential to the earlier judgment, and was actually litigated in the prior action." DeGiacomo v. Quincy, 476 Mass. 38, 42 (2016) (quotation omitted). The plaintiffs do not contest that the arbitrator's award, which was confirmed by the Superior Court as a final judgment, suffices to satisfy the first element. The dispute concerns the second and third elements.
With respect to the second element, the plaintiffs contend that there is no identity of parties because the claimant in the arbitration was ARD (the limited partnership itself), whereas the plaintiffs in this case are individuals suing in their capacity as limited partners of ARD or shareholders of SRI. But issue preclusion applies of course to "parties and their privies" (emphasis supplied). Kobrin, 444 Mass. at 843 (quotation omitted). Disregarding this settled principle, the plaintiffs fail to offer any explanation why they were not privies of ARD in the arbitration proceeding. They do not state or apply the relevant test, nor do they refute Ducharme's argument that their interests in the arbitration were aligned with those of ARD. They have thus failed to present adequate appellate argument as to this element. See G.R. v. Department of Developmental Servs., 84 Mass. App. Ct. 791, 807 n.14 (2014).
Generally, "the determination whether a nonparty is in privity with a party depends on the nature of the nonparty's interest, whether that interest was adequately represented by a party to the prior litigation, and whether binding the nonparty to the judgment is consistent with due process and common-law principles of fairness." DeGiacomo, 476 Mass. at 43–44.
Turning to the third element, the plaintiffs do not dispute that their claim in this litigation and ARD's claim in the arbitration have the same factual predicate—that Ducharme paid excess commissions to CMS without the knowledge or approval of Carlson and Shamsi. Nonetheless, the plaintiffs contend that they are not precluded from relitigating the factual issues decided by the arbitrator because, under the ARD limited partnership agreement, ARD's burden of proof in the arbitration was "bad faith," a higher burden than needed to prove breach of the SRI stockholders agreement. Thus, they argue, the issues are not "identical" for purposes of preclusion.
This argument misses the mark. "Issue preclusion may apply where the two adjudications involve the same subsidiary findings, even if they involve different ultimate claims." Bellermann v. Fitchburg Gas & Elec. Light Co., 470 Mass. 43, 61 (2014). Here, after four days of hearings, which included testimony from multiple witnesses and extensive briefing from the parties, the arbitrator made a subsidiary finding that ARD had not met "its burden of proving that [CMS] was ‘overpaid’ on [its] commissions." Although the arbitrator then went on to find that ARD also failed to prove that Ducharme acted in "bad faith," the former finding did not depend on a standard of bad faith; rather, the arbitrator made a factual determination that the overpayment did not actually occur. As that factual issue is identical to the one raised in this suit, the plaintiffs are precluded from relitigating it. See id. at 64 (issue preclusion warranted "if the burden of proof did not affect the outcome of the prior determination"). Summary judgment was thus properly entered for Ducharme on the excess commissions claim.
For the first time in their reply brief, the plaintiffs suggest that because the arbitrator made alternative findings—i.e., CMS was not paid excess commissions, and, even if it was, Ducharme did not act in bad faith in doing so—neither finding was "essential" to the award. See Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244, 251-255 (3d Cir. 2006) (discussing preclusive effect of independently sufficient alternative findings). We decline to address the plaintiffs' argument, as it was neither timely raised nor adequately briefed. See Kitras v. Aquinnah, 474 Mass. 132, 136 n.11 (2016).
b. Third-party beneficiary. We next consider whether the nonsignatory plaintiffs have standing to sue Ducharme for breach of contract as third-party beneficiaries of the SRI stockholders agreement. In order to have standing, the nonsignatory plaintiffs must prove that they are intended, as opposed to merely incidental, beneficiaries of the agreement. As provided in the Restatement (Second) of Contracts, "[a] promise in a contract creates a duty in the promisor to any intended beneficiary to perform the promise, and the intended beneficiary may enforce the duty." Restatement (Second) of Contracts § 304 (1981). See James Family Charitable Foundation v. State St. Bank & Trust Co., 80 Mass. App. Ct. 720, 723 (2011). Conversely, "an incidental beneficiary obtains no right to enforce the contract." Id. at 724.
The parties agree that we need not reach this issue if we affirm the jury's award of damages, but, as discussed infra, we conclude that the award must be vacated. We therefore address the plaintiffs' argument.
To determine whether a third party is an intended beneficiary, we look to "the language and circumstances of the contract" for evidence of the contracting parties' intent to confer a right of enforcement on the third party. Ibid., quoting from Anderson v. Fox Hill Village Homeowners Corp., 424 Mass. 365, 366 (1997). In applying this test, we keep in mind that "contracting parties may well intend that a third party receive a benefit as a result of their contract but not intend to confer on the third party a right to enforce the contract." Lakew v. Massachusetts Bay Transp. Authy., 65 Mass. App. Ct. 794, 799 n.10 (2006). The key question is whether "recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties" (emphasis supplied). Restatement (Second) of Contracts § 302. See Lakew, 65 Mass. App. Ct. at 799 ; James Family Charitable Foundation, 80 Mass. App. Ct. at 724. The intention of the contracting parties must be "clear and definite." Lakew, 65 Mass. App. Ct. at 798, quoting from Anderson, 424 Mass. at 367.
Here, the plaintiffs assert that the intention of the parties is clear from the language of the SRI stockholders agreement—specifically, from the provisions that restrict SRI from acting on "Major Decisions" affecting ARD without the approval of Carlson and Shamsi. The provisions relied on by the plaintiffs require Carlson's and Shamsi's approval before SRI can act in its capacity as general partner of ARD to borrow money, sell assets in bulk transactions, acquire real estate other than intervals at the Cove, change the salary of any stockholder employed by ARD, distribute funds to the partners of ARD, enter into a contract that would incur an obligation greater than $25,000, and engage or discharge a marketing group to market the property owned by ARD. According to the plaintiffs, because these provisions were intended to "protect [ARD's] assets," the clear intent of the contracting parties was to "benefit" the interests of the limited partners of ARD, including the nonsignatory plaintiffs.
Again, however, the question we must answer to determine whether the nonsignatory plaintiffs are intended beneficiaries is not whether the contracting parties "intend[ed] that a third party receive a benefit as a result of their contract" but, rather, whether they "intend[ed] to confer on the third party a right to enforce the contract." Lakew, 65 Mass. App. Ct. at 799 n.10. There is nothing in the language of the SRI stockholders agreement that evidences intent, let alone clear and definite intent, to confer such a right. See id. at 798. We agree with Ducharme that the plaintiffs' argument to the contrary ignores the entity structure of ARD. The benefits of performance of the SRI stockholders agreement do not flow directly to the individual limited partners of ARD; they flow through the partnership in accordance with the ARD limited partnership agreement. Cf. First Hartford Realty Corp. v. Corporate Property Investors, 12 Mass. App. Ct. 911, 912 (1981) ("[A] member of a partnership may not recover by his individual suit on the partnership's rights.... In that respect a partner is like a shareholder, who may not claim to be a third-party beneficiary of a contract made on behalf of the corporation in which he owns stock"). Thus, whatever the benefits of performance to ARD, the limited partners are, at most, incidental beneficiaries of the stockholders agreement. Cf. ibid. ("That the flow of funds to the partnership would have redounded to the significant financial benefit of [the partner] did not make [the partner] anything better than an incidental beneficiary").
Although First Hartford Realty Corp. was decided under New York law, New York's courts, like ours, follow the third-party beneficiary formulation set out in the Restatement (Second) of Contracts. See Fourth Ocean Putnam Corp. v. Interstate Wrecking Co., 66 N.Y.2d 38, 43-45 (1985).
The plaintiffs also rely on the circumstances of the SRI stockholders agreement; in particular, they ask that we read the SRI stockholders agreement together with the ARD limited partnership agreement, which was executed on the same day. But the ARD limited partnership agreement only confirms our conclusion that the nonsignatory plaintiffs are not intended beneficiaries of the SRI stockholders agreement. Under the ARD limited partnership agreement, the general partner, as is typical, has "the full and complete responsibility" over "[m]anagement of the Partnership business," and its decisions "shall be binding upon the Partnership." The ARD limited partnership agreement further provides that "no Partner shall be liable to any other Partner or to the Partnership by reason of his actions or omission to act in connection with the Partnership, except for actual fraud, bad faith or gross negligence." Having agreed that SRI's management decisions would be binding on the partnership, and that no partner would be liable to another except for fraud, bad faith, or gross negligence, the nonsignatory plaintiffs have no right to sue Ducharme, either in his capacity as shareholder of SRI or as limited partner of ARD, for straight breach of the SRI stockholders agreement. Recognizing such a right would allow the nonsignatory plaintiffs to do an end-run around the terms and limitations of the ARD limited partnership agreement, which they signed. Certainly, there is no clear and definite evidence that the contracting parties intended this result. See Lakew, 65 Mass. App. Ct. at 798 ; James Family Charitable Foundation, 80 Mass. App. Ct. at 724.
As we have noted, the ARD limited partnership agreement also requires that any claim arising out of or relating to the agreement be brought in arbitration.
2. Ducharme's cross appeal. We turn to Ducharme's arguments that the trial judge erred in denying his postjudgment motion to set aside the jury's verdict on liability and damages.
a. Liability. Ducharme contends that the evidence was insufficient to support a finding that he paid $275,000 in bonuses to CMS without the approval of Carlson and Shamsi. We disagree. "An appellate court reviewing the denial of a motion for judgment notwithstanding the verdict must determine whether ‘anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the’ nonmoving party." One to One Interactive, LLC v. Landrith, 76 Mass. App. Ct. 142, 146–147 (2010), quoting from Poirier v. Plymouth, 374 Mass. 206, 212 (1978). It is uncontested that CMS submitted five invoices to ARD in late 2000 requesting $275,000 in "bonuses" and that ARD issued three checks totaling that amount to CMS in early 2001. It is also uncontested that Carlson and Shamsi did not approve these payments. Although Ducharme contends that there was no proof that he was the one who authorized the payments, the plaintiffs presented evidence that, by the end of 2000, Ducharme was the sole operating officer of ARD and SRI with direct oversight of sales and marketing, cashflow analysis, and receivables and payables. Moreover, on cross-examination, Ducharme admitted that he was "vitally interested in how much money [ARD took] in and how much money went out" and that he was "keeping a very close eye on [CMS]" during the relevant timeframe, including by "supervising commissions" to "mak[e] sure that the commissions that were paid by ARD were the correct amount." He also admitted that a payment of $100,000 would be a "significant cash flow event." This evidence was sufficient for the jury to find that Ducharme authorized payment of the bonuses to CMS without Carlson's and Shamsi's knowledge or approval, in breach of the SRI stockholders agreement.
b. Damages. We agree with Ducharme, however, that there was insufficient evidence to support the jury's award of $233,730 in damages. A plaintiff cannot "leave the amount of [his] damages to assumption or conjecture but [is] obliged to introduce evidence proving [his] damages to a reasonable certainty." Brewster Wallcovering Co. v. Blue Mountain Wallcoverings, Inc., 68 Mass. App. Ct. 582, 609 (2007). While "mathematical precision" is not required, at the same time, proof of damages cannot be "remote, speculative, or hypothetical." Ibid. See Squeri v. McCarrick, 32 Mass. App. Ct. 203, 209 (1992).
In breach of contract actions, the "fundamental premise" of calculating damages "is that the aggrieved party should be put in as good a position as if the other party had fully performed." Selmark Assocs. v. Ehrlich, 467 Mass. 525, 543 (2014), quoting from Quinn Bros. v. Wecker, 414 Mass. 815, 817 (1993). Thus, in this case, the damages award "should not exceed the value of the benefit of which [the plaintiffs were] deprived" as a result of Ducharme's breach of the SRI stockholders agreement. Selmark Assocs., 467 Mass. at 543. Furthermore, because the nonsignatory plaintiffs are not third-party beneficiaries of the agreement, as discussed supra, damages must be limited to those sustained by Carlson and Shamsi.
The plaintiffs' principal argument in support of the award is that Carlson and Shamsi were each "damaged to the extent of their percentage interest in the $275,000 that would have been returned to ARD and would have been available for distribution to the partners." There are several problems with this argument. First, Carlson and Shamsi together own a 51.87 percent interest in ARD, which, under the plaintiffs' theory, should have resulted in an award of $142,642.50, far short of the actual award of $233,730. Second, the assumption underlying the argument is that the $275,000 would have passed through ARD directly to the limited partners in amounts equal to their proportional ownership interests in the partnership. The plaintiffs offered no evidence, however, to support the premise that ARD would have served as a mere pass-through. To the contrary, one of their own witnesses, a certified public accountant who provided accounting and tax-compliance services to ARD, agreed that "there[ ] [is] a difference between a distribution to partners and net income," as illustrated, for example, by the fact that ARD made no distributions in 2003 despite reporting an overall net income for that year. Third, and relatedly, the plaintiffs offered no evidence as to the amount of individual distributions that Carlson and Shamsi would have personally received but for the $275,000 payment to CMS. Given the lack of such evidence, we agree with Ducharme that the jury were left to speculate as to whether distributions would have occurred and in what amount. Under the ARD limited partnership agreement, distributions to partners are based on "Net Cash Flow," but the plaintiffs provided no evidence whatsoever regarding how "Net Cash Flow" is calculated. As a result, the jury had no evidence to guide them in valuing the amount of distributions, if any, that would have been made to Carlson and Shamsi had ARD not paid the $275,000 to CMS.
Carlson owns a 38.02 percent interest in ARD, and Shamsi owns a 13.85 percent interest. The plaintiffs incorrectly asserted during their closing argument, and again in their brief on appeal, that Shamsi owns a 35.73 percent interest. That figure includes the percentage interest that Shamsi owns in his capacity as trustee of the Shamsi Children's Trust, which, as discussed, is not a third-party beneficiary of the SRI stockholders agreement. We note also that, even using the plaintiffs' incorrect figure, their theory yields an amount that is over $30,000 short of the jury's award.
The plaintiffs offer the alternative theory that damages can be based on the percentage interests that Carlson and Shamsi own in SRI, as opposed to ARD. As their argument goes, if Ducharme, on behalf of SRI, caused ARD to make unauthorized payments to CMS, SRI would have breached its fiduciary duty to ARD and would have a liability of $275,000. Thus, they say, Carlson and Shamsi were harmed to the extent of the 42.8 percent interest that each owns in SRI, resulting in total damages of $235,400.
The insuperable problem with this argument is that SRI is not a party to this litigation, no finding has been made that it is liable to ARD for breach of fiduciary duty, and the plaintiffs presented no evidence that Carlson and Shamsi were damaged in their capacity as shareholders of SRI. Rather, the plaintiffs' theory of the case has been, all along, that Ducharme caused ARD to pay $275,000 without proper authorization and, as a result, ARD or its limited partners were financially harmed. For instance, in their memorandum on damages, the plaintiffs argued to the trial judge that "[t]he proper measure of damages is to return the unauthorized $275,000 in payments to ARD since ARD initially paid the money." Likewise, in their closing argument, the plaintiffs asserted that the damages calculation is "not complicated at all" and should be either the entire $275,000 paid out by ARD, or that amount multiplied by the percentage interests that Carlson and Shamsi each owned in ARD as limited partners.
It is clear from our review of the record that the plaintiffs' focus throughout this litigation has been on the financial losses suffered by ARD or its limited partners, not by SRI or its shareholders. This is underscored by the plaintiffs' unsuccessful attempt, as trial was approaching, to amend the complaint to add ARD as a purported third-party beneficiary of the SRI stockholders agreement. But having chosen not to bring their claims in arbitration—as appears to us is required by the ARD limited partnership agreement—the plaintiffs cannot now recover for the losses to the partnership. Their damages are limited to those sustained by Carlson and Shamsi personally.
As the evidence is insufficient to support the jury's finding that Carlson and Shamsi personally lost $233,700, the case must be remanded for further proceedings on the question of damages. On remand the burden is on Carlson and Shamsi to prove the amount of distributions they would have each received, in the applicable time period, had ARD retained the $275,000, instead of paying it to CMS.
Although it is undisputed that ARD made no distributions in 2001, we do not view that fact as dispositive because, had the $275,000 not been paid to CMS, ARD would have had a greater net profit available for potential distribution to the limited partners. Nor do we preclude the possibility that the $275,000 payment to CMS affected distributions in later years. We reiterate that, so long as Carlson and Shamsi meet their burden of proof on remand, they are entitled to recover damages sufficient to ‘put [them] in as good a position as if‘ the breach had not occurred. Selmark Assocs., 467 Mass. at 543, quoting from Quinn Bros., 414 Mass. at 817.
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Conclusion. The orders allowing partial summary judgment in favor of Ducharme and denying Durcharme's posttrial motion for judgment notwithstanding the verdict or for new trial are affirmed. So much of the judgment on jury verdict that finds Ducharme liable and awards damages to Edmund Shamsi as trustee of the Shamsi Children's Trust, Helene Shamsi, and Kathleen L. McGirr is reversed. So much of the judgment on jury verdict that awards damages to Carlson and Shamsi is vacated, and the case is remanded for proceedings in regards to the amount of damages to be awarded consistent with this memorandum and order. The remainder of the judgment on jury verdict is affirmed.
So ordered.
Affirmed in part, reversed in part, vacated in part, and remanded.