Barron v. Fidelity Magellan Fund

784 N.E.2d 634, 57 Mass. App. Ct. 507, 2003 Mass. App. LEXIS 305
CourtMassachusetts Appeals Court
DecidedMarch 5, 2003
DocketNo. 00-P-66
StatusPublished
Cited by12 cases

This text of 784 N.E.2d 634 (Barron v. Fidelity Magellan Fund) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barron v. Fidelity Magellan Fund, 784 N.E.2d 634, 57 Mass. App. Ct. 507, 2003 Mass. App. LEXIS 305 (Mass. Ct. App. 2003).

Opinion

Rapoza, J.

The primary issue before us is whether, in the circumstances of this case, the plaintiff, Sean Mitchell Barron (Sean), can recover multiple damages and attorney’s fees from [508]*508the defendants (collectively, Fidelity) pursuant to G. L. c. 93A, § 9. A judge of the Superior Court concluded that he could not, citing G. L. c. 93A, § 9(3), as amended through St. 1987, c. 664, § 3, which limits recovery to actual damages in cases involving “any security.” As Sean’s c. 93A claim relates to Fidelity’s handling of his mutual fund account, the judge concluded that the limitation applies and allowed the defendants’ pretrial motion to restrict Sean’s claim to his actual damages and to deny him the recovery of attorney’s fees. Thereafter, having concluded that Sean could not prove his damages in excess of the amount already paid to him by the defendants and the Commonwealth, the judge allowed the defendants’ motion for summary judgment. This appeal followed.

Background. Starting in 1961, both Maurice Barron (Maurice) and his then wife, Rebecca, began investing in various mutual funds in the Fidelity Group. In 1965, Maurice purchased fifty shares of the Fidelity Magellan Fund under the Uniform Gifts to Minors Act (UGMA) for the benefit of his infant son, Sean. At a point, Maurice instructed Fidelity to reinvest, on a continuing basis, any dividends and capital gain distributions in additional shares of the Magellan Fund. As a result, the number of shares in Sean’s Magellan UGMA account increased over time.

In 1969, the Barron family moved from one house to another in the town of Randolph and provided their new address to Fidelity. Although the Barrens, including Maurice, continued to receive periodic statements from Fidelity with respect to several of their accounts, at some point Maurice, unbeknownst to him, stopped receiving statements concerning the mutual fund account that he had opened for Sean.3

In 1981, Fidelity deemed Sean’s UGMA account to be abandoned, and reported the account to the unclaimed property division of the Department of the State Treasurer pursuant to G. L. c. 200A, § 7, the abandoned property statute. On February 9, 1982, Fidelity transferred the 783.508 shares then in [509]*509Sean’s account to the Commonwealth, as provided in G. L. c. 200A, § 8A. Thereafter, the shares continued to earn dividends, which were reinvested, along with distributions, to purchase additional shares. When no one claimed the shares, which ultimately reached 1,518.48 in number, the Treasurer liquidated them on May 23, 1988. See G. L. c. 200A, § 9.

In early 1994, Sean, then twenty-eight years old, was contacted by a private investigator who asked if he wished to retain her for the purpose of recovering his abandoned property. Sean declined and called Fidelity directly, requesting that the company reinstate his Magellan account. Fidelity refused.

Sean then filed a claim with the Treasurer’s division of unclaimed property for the value of his shares as of the date of their liquidation. The Treasurer subsequently issued three checks to Sean, totaling $104,613.65. Sean and his father were not satisfied with the amount paid by the Commonwealth, and they filed an action in Superior Court against several entities associated with Fidelity, as well as against Joseph Malone, the Treasurer and Receiver General of the Commonwealth.4 5In their complaint, the Barrens requested an accounting and asserted claims not only under c. 93A, but also for negligence, breach of fiduciary duty, and breach of contract.

On November 4, 1997, over two years after suit was filed, Fidelity issued a check in the amount of $152,379.30 to the Barrens, asserting that the amount of the check, combined with the sums previously paid by the Commonwealth, equaled the value of Sean’s account as of October 20, 1997.5 The total amount received by the Barrens from both the Commonwealth and Fidelity thus came to $256,992.95.

Shortly before the scheduled trial date, Fidelity filed a “Motion for Pretrial Ruling Regarding Plaintiff’s Chapter 93A Count” to determine the scope of recovery available to the Barrens in a case relating to “any security.” G. L. c. 93A, [510]*510§ 9(3). In its motion, Fidelity essentially asked the court to rule that the Barrons were not entitled to recover either multiple damages or attorney’s fees. In support of its claim, Fidelity cited G. L. c. 93A, § 9(3), as in effect on April 4, 1988,6 which provides that “recovery shall be in the amount of actual damages” in cases where any method, act or practice is adjudged “unlawful with regard to any security.”

The motion was allowed by a Superior Court judge, who concluded that since the case was one relating to securities, the limitation on recovery contained in G. L. c. 93A, § 9(3), applied and barred any claim for either multiple damages or attorney’s fees.* 7 As Fidelity had previously conceded liability on the Barrons’ c. 93A claim contingent on the judge’s ruling that recovery was limited to actual damages, this left only the issue of the extent of those damages for trial.8

Fidelity subsequently filed two additional motions: first, a motion in limine seeking to exclude any evidence from the Barrons’ expert concerning the valuation of the shares in Sean’s mutual fund account and, second, a motion for summary judgment claiming that, without the testimony of their expert, the Barrons could not demonstrate that they were owed anything more than the combined amount already paid to them by Fidelity and the Commonwealth. The motion in limine was allowed, and any evidence from the Barrons’ expert was excluded based upon the plaintiffs’ failure adequately to answer Fidelity’s interrogatories and, later, to supplement the answers they did provide. See Mass.R.Civ.P. 26(e)(1), 365 Mass. 772 (1974).

Although the judge ruled that the Barrons were precluded from presenting expert testimony at trial, she nonetheless [511]*511considered the affidavit of the Barrons’ expert when she ruled on the summary judgment motion. From that affidavit, the judge determined that the Barrens’ expert had accepted and used Fidelity’s methodology in computing the value of the shares. The only difference between the calculations submitted by Fidelity and those computed by the Barrons’ expert was the starting number of shares, with Fidelity asserting that it transferred 783.508 shares to the Commonwealth, and the Barrons claiming the number should have been 1,179.142. The judge, in turn, concluded that the Barrons had no competent evidence to support the starting number used by their expert. Consequently, she deduced, there was no basis upon which the Barrons could prove actual damages in excess of the $256,992.95 that they had already received from Fidelity and the Commonwealth. Accordingly, the judge ruled that there were no disputed issues of material fact left to be resolved at trial. Fidelity’s motion for summary judgment was thus allowed, and Sean appealed.9

Discussion

A. General Laws c. 93A. Sean alleges that Fidelity committed an unfair and deceptive act or practice when it failed to maintain adequate records of him as a customer and shareholder to the point where it erroneously concluded that he had abandoned his account.10

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Cite This Page — Counsel Stack

Bluebook (online)
784 N.E.2d 634, 57 Mass. App. Ct. 507, 2003 Mass. App. LEXIS 305, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barron-v-fidelity-magellan-fund-massappct-2003.