Furlong v. Donarumo

24 Mass. L. Rptr. 314
CourtMassachusetts Superior Court
DecidedJuly 13, 2008
DocketNo. 080155BLS2
StatusPublished

This text of 24 Mass. L. Rptr. 314 (Furlong v. Donarumo) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Furlong v. Donarumo, 24 Mass. L. Rptr. 314 (Mass. Ct. App. 2008).

Opinion

FabricaNT, Judith, J.

INTRODUCTION

This action arises from the sale of a plumbing business, and the subsequent failure of the business, which each party attributes to actions of the other. Before the Court is the plaintiff buyer’s special motion to dismiss certain counts of the defendant seller’s counterclaim, pursuant to the so-called “SLAPP Act.” For the reasons that will be explained, the motion will be allowed.

BACKGROUND

The plaintiff s complaint, filed on January 10,2008, alleges the following. Prior to January 14, 2005, defendant Andrew C. Donarumo (“Donarumo”), a plumber, owned and operated Drew’s Plumbing & Heating, Inc. (Drew’s I). Deirdre Donarumo (“Deirdre”) was trustee of a trust that owned the real estate on which the business operated. On that date, Donarumo sold the assets of the business to the plaintiffs, Michael and Joann Furlong, and Deirdre leased the real estate to them. Part of the consideration for the sale were two notes from the Furlongs to Donarumo, one for $200,000, and the second for $28,000 (allocated to two vehicles). As part of the sale transaction, Donarumo agreed not to compete with the business within a specified region for five years, and also to provide consulting to the business for three months without additional compensation. The Furlongs formed the plaintiff Drew’s Plumbing & Heating II, Inc. (“Drew’s II”), to operate the business, and Donarumo agreed to serve as “a director and/or officer” of that company, and to “be associated with [it] as Master Plumber.”

The complaint alleges that, prior to the closing, Donarumo made a series of misrepresentations to the Furlongs regarding the condition of the business, the capabilities of its staff, and his own intentions with respect to his future activities and the assistance he would provide. The complaint alleges that the plaintiffs relied on these misrepresentations in entering into the transaction. After the purchase, the complaint alleges, Donarumo, contrary to his represented intentions and contractual duties, remained in the plumbing business in competition with the plaintiffs, did not provide the promised consulting and assistance to the plaintiffs’ business, and made statements to employees and others that undermined the plaintiffs business.

As a result, the plaintiffs’ business deteriorated, despite their best efforts, and they were unable to pay the notes and rent. Donarumo accelerated the notes, initiated eviction, and repossessed the vehicles. The plaintiffs closed the business on June 5, 2006, and subsequently filed for bankruptcy protection, losing their home and an investment condominium to foreclosure.

Based on these allegations, the complaint asserts eight counts against Donarumo and Drew’s I: breach of the covenant not to compete (count I); breach of the implied covenant of good faith and fair dealing (count II); fraud in the inducement (count III); breach of fiduciary duty (count IV); violation of G.L.c. 93A (count V); interference with advantageous business relationships (count VI); intentional infliction of emotional distress (count VII); and “rescission and constructive trust on sale proceeds” (count VIII). The complaint also asserts a claim to reach and apply Donarumo’s beneficial interest in certain real estate trusts (count IX), and a claim for fraudulent transfer with respect to the proceeds of the sale (count X).

Simultaneously with the filing of their verified complaint, the plaintiffs moved ex parte for attachments on the defendants’ real estate, and trustee process attachments on certain bank accounts, in the amount of $1,080,000. In support of that motion, the plaintiffs filed their own affidavits and those of other witnesses detailing the defendants’ alleged misconduct. The Court (Neel, J.) allowed the ex parte motion on January 10, 2008. After a hearing on February 13, 2008, the Court (Neel, J.) left the attachments in place, but reduced their amount to $100,000.

On March 18, 2008, the defendants filed their answer and three-count counterclaim. The counterclaim alleges, in substance, that Donarumo worked with the plaintiffs for three months to transition the business; at the conclusion of the three months Michael Furlong provided written acknowledgment of his satisfaction with Donarumo’s fulfillment of that obligation; Donarumo worked in plumbing in the proscribed area only when Michael Furlong asked him to handle particular jobs; and the business deteriorated through the plaintiffs’ mismanagement. The counterclaim further alleges that the defendants defaulted on the notes and rent, leading the defendants to protect their security by issuing notice of the defaults and starting eviction proceedings. After the bankruptcy proceedings concluded, the counterclaim alleges, the plaintiffs “filed this action, alleging falsely and without basis that Donarumo fraudulently induced him into the sale of the business (notwithstanding the integration clause of the contract) and that Donarumo violated his non-compete agreement prior to Drew’s II going out of business.”

Count I of the counterclaim, entitled “Recoupment,” alleges that the plaintiffs owe the defendants an outstanding balance on the. notes, which the defendants are entitled to recoup from any judgment that might enter against them on the plaintiffs’ claims. Count II, entitled “abuse of process,” alleges that the plaintiffs’ “use of legal process is motivated by a desire to hinder, injure and interfere with plaintiffs-in-counterclaim’s legitimate pursuit of business and their business reputation”; it is “motivated by a desire to retaliate against plaintiffs-in-counterclaim’s legiti[316]*316mate, lawful and necessary actions taken to protect their assets through foreclosure upon defendants-in-counterclaim’s default ... by inflicting costs and expenses on plaintiff-in-counterclaim without legitimate claims and by misleading the Court”; it is “motivated by personal jealousy and malice and is intended to harass, vex and/or annoy, and to slander the business name of plaintiffs-in-counterclaim, and to inflict emotional distress”; “the foregoing reasons for defendants-in-counterclaim’s use of legal process are improper and illegitimate ulterior motives for a lawsuit”; and “Defendants-in-counterclaim furthered their abuse of process by seeking ex parte attachment . . . without good cause and by misleading the Court in relevant respects,” which are then detailed; and “as a result of defendants-in-counterclaims’ abuse of process, plaintiffs-in-counterclaim have been and will continue to be damaged, including, without limitation, through loss of business, through having to divert time and resources to this litigation, through emotional distress, and by- incurring substantial legal fees and costs.” Count III of the counterclaim (“Violation of Chapter 93A”), alleges only that the parties “were engaged in trade or business,” and that “Defendants-in-counterclaim actions and motivations set forth above and in Count II constitute unfair and deceptive acts within the meaning of G.L.c. 93A.”

The plaintiff now moves to dismiss counts II and III, on the ground that they are based solely on petitioning activity protected under the SLAPP Act. The Court agrees.

DISCUSSION

The standard applicable to a special motion to dismiss under the SLAPP Act, G.L.c. 231, §59H, is well known, and has been reiterated recently by the Supreme Judicial Court in Wenger v. Aceto, 451 Mass. 1, 5 (2008).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Duracraft Corp. v. Holmes Products Corp.
691 N.E.2d 935 (Massachusetts Supreme Judicial Court, 1998)
McLarnon v. Jokisch
727 N.E.2d 813 (Massachusetts Supreme Judicial Court, 2000)
Baker v. Parsons
750 N.E.2d 953 (Massachusetts Supreme Judicial Court, 2001)
Fabre v. Walton
781 N.E.2d 780 (Massachusetts Supreme Judicial Court, 2002)
Office One, Inc. v. Lopez
437 Mass. 113 (Massachusetts Supreme Judicial Court, 2002)
Wenger v. Aceto
883 N.E.2d 262 (Massachusetts Supreme Judicial Court, 2008)
Ayasli v. Armstrong
780 N.E.2d 926 (Massachusetts Appeals Court, 2002)
Garabedian v. Westland
796 N.E.2d 439 (Massachusetts Appeals Court, 2003)
Adams v. Whitman
822 N.E.2d 727 (Massachusetts Appeals Court, 2005)
Demoulas Super Markets, Inc. v. Ryan
873 N.E.2d 1168 (Massachusetts Appeals Court, 2007)

Cite This Page — Counsel Stack

Bluebook (online)
24 Mass. L. Rptr. 314, Counsel Stack Legal Research, https://law.counselstack.com/opinion/furlong-v-donarumo-masssuperct-2008.