Case Title: Mullins v. Corcoran

Citation: 

Docket Number: SJC-13049

State: massachusetts

Court: Massachusetts Supreme Court

Date: 2021-08-26T00:00:00Z

Document:
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SJC-13049 
 
JOSEPH R. MULLINS1  vs.  JOSEPH E. CORCORAN & another.2 
 
 
 
Suffolk.     March 5, 2021. - August 26, 2021. 
 
Present:  Budd, C.J., Lowy, Cypher, Wendlandt, & Georges, JJ. 
 
 
Res Judicata.  Collateral Estoppel.  Judgment, Preclusive 
effect.  Contract, Performance and breach.  Fiduciary. 
Judicial Estoppel.  Corporation, Close corporation, 
Stockholder's derivative suit.  Practice, Civil, Judgment 
on the pleadings. 
 
 
 
 
Civil action commenced in the Superior Court Department on 
July 11, 2017. 
 
 
The case was heard by Brian A. Davis, J., on a motion for 
judgment on the pleadings. 
 
 
The Supreme Judicial Court on its own initiative 
transferred the case from the Appeals Court. 
 
 
 
Jonathan M. Albano for the plaintiff. 
 
Andrew R. Levin for Gary A. Jennison. 
 
Bruce E. Falby for Joseph E. Corcoran. 
 
 
 
1 Individually and derivatively on behalf of Cobble Hill 
Center LLC. 
 
 
2 Gary A. Jennison. 
 
2 
 
 
 
 
WENDLANDT, J.  "If at first you don't succeed, try, try 
again."3  Not so in litigation.  In this case, we apply the 
doctrine of issue preclusion to affirm a Superior Court judge's 
allowance of the defendants' motion for judgment on the 
pleadings on the ground that the claims were based on issues 
that had been litigated and decided in previous litigation 
between the same three parties.  We also address the question 
whether the plaintiff, an owner of the closely held corporation 
at the center of the parties' long-standing dispute, is 
precluded from asserting these claims by means of a derivative 
action.  We conclude that where, as here, the interests of the 
parties fully coincide with that of the closely held 
corporation, such a derivative action is precluded. 
1.  Background.  We recite the facts "drawn from the 
parties' pleadings and the exhibits attached thereto."  See 
Merriam v. Demoulas Super Mkts., Inc., 464 Mass. 721, 723 
(2013).  
a.  Parties' course of dealings.  The plaintiff, Joseph 
Mullins, and the defendants, Joseph Corcoran and Gary Jennison, 
share ownership of Corcoran, Mullins, Jennison, Inc. (CMJ), an 
entity engaged in real estate development.  The parties have 
been in business together since the early 1970s, and by the mid-
 
 
3 T.H. Palmer, The Teacher's Manual 223 (1840).   
3 
 
 
 
1980s had developed and owned approximately twenty-five 
residential apartment projects.  Corcoran owns a sixty percent 
interest in CMJ, while Jennison and the plaintiff each own a 
twenty percent share of the company.   
In 1987, the plaintiff sought to create his own company, 
and the parties entered into a written contract (1987 agreement) 
governing the plaintiff's separation from certain businesses of 
CMJ, as well as the conduct of ongoing and future business 
between the three owners.4  The agreement stated that business 
dealings among the group would be "conducted in scrupulous good 
faith."   
One of the projects governed by the 1987 agreement involved 
a parcel of land in Somerville that contained a 224-unit 
apartment building and a one-story building with retail space.  
In 2003, CMJ began to explore possibilities for redeveloping the 
property.  CMJ decided to divide the property, with one portion 
containing the apartment building and another including the 
retail building (Cobble Hill Center site).  A new entity, Cobble 
 
4 Thereafter, the plaintiff created his own company, Joseph 
R. Mullins Company, and the defendants formed Cor-Jen, now known 
as Corcoran Jennison Company, Inc. (CJ).  In 2001, the plaintiff 
commenced the first of a series of civil actions among the 
parties, see Mullins v. Corcoran, 65 Mass. App. Ct. 1122 (2006), 
which eventually led to the instant matter.  Since the 
plaintiff's initiation of the first action in 2001, Corcoran has 
not spoken to him. 
 
4 
 
 
 
Hill Center LLC, was formed as a closely held corporation5 to 
manage the Cobble Hill Center site.6 
In 2009, CMJ began to explore the feasibility of developing 
the Cobble Hill Center site, and, by January 2012, CMJ was 
working on plans to develop a 160- to 170-unit apartment 
building on the site; CMJ estimated that the development would 
cost approximately $36.7 million.  In July 2012, the plaintiff 
consented to the planned development.  By October 2013, CMJ 
obtained the requisite approvals from the city of Somerville 
(city).  In December 2013, the plaintiff received a package of 
documents explaining that the zoning approvals were in place, 
and the project was moving forward to the construction planning 
phase (December 2013 proposal).  Thereafter, in January 2014, 
the plaintiff sent a letter to the defendants stating that he 
 
5 "A close corporation is typified by a small number of 
shareholders, no ready market for the corporate stock, and 
substantial majority shareholder participation in the 
management, direction, and operations of the corporation."  
Merriam v. Demoulas Super Mkts., Inc., 464 Mass. 721, 726 n.12 
(2013), citing Donahue v. Rodd Electrotype Co. of New England, 
367 Mass. 578, 586 (1975).   
 
6 Cobble Hill Center LLC was operated by CMJ, and was 
indirectly owned by Corcoran, Mullins, and Jennison.  
Specifically, Cobble Hill Center LLC had as its only member the 
Cobble Hill Trust.  The sole beneficiary of the Cobble Hill 
Trust was CMJ Cobble Hill LLP.  CMJ Cobble Hill LLP was a 
limited liability partnership between the plaintiff (twenty 
percent), Jennison (twenty percent), and Corcoran (sixty 
percent); it was managed by CMJ.   
 
5 
 
 
 
did not consent to the development.  Over the next several 
months, CMJ moved forward with evicting the tenants from the 
retail building so that construction could begin. 
b.  2014 action.  In July 2014, the plaintiff filed a 
complaint against the defendants, alleging breach of the 1987 
agreement and breach of their fiduciary duties stemming from, 
inter alia, the defendants' pursuit of the December 2013 
proposal notwithstanding the plaintiff's withdrawal of his 
consent in January 2014 (2014 action).  See Mullins v. Corcoran, 
95 Mass. App. Ct. 1107 (2019), cert. denied, 140 S. Ct. 905 
(2020); Mullins vs. Corcoran, Mass. Super. Ct., No. 1484CV02302 
(Suffolk County June 19, 2018).7  The complaint sought injunctive 
relief and damages for the plaintiff's share of the expenses 
incurred in 2014 relative to the development effort, as well as 
his share of the lost rental income from the retail center that 
was closed in anticipation of development.  The defendants 
counterclaimed that the plaintiff had committed a breach of the 
1987 agreement, and his fiduciary duties, by withdrawing his 
 
7 More particularly, the complaint alleged breaches of the 
1987 agreement and breaches of the defendants' fiduciary duties 
by "(1) proceeding with the development of the Cobble Hill 
property according to the December 2013 [proposal] without 
consent of [the plaintiff]; (2) spending CMJ funds of other 
affiliates on such venture without consent of [the plaintiff]; 
(3) refusing to cease the unauthorized venture; [and] 
(4) refusing to meet with [the plaintiff] or otherwise 
conducting themselves in accordance with their fiduciary 
duties."   
6 
 
 
 
consent more than a year after he had approved the development, 
and after CMJ had received the necessary zoning approvals, and 
by interfering with the development efforts.   
Discovery in the 2014 action ended in November 2015.  
Sixteen months later, in March 2017, the plaintiff sought to 
amend the complaint to add additional asserted breaches of the 
1987 agreement and of the defendants' fiduciary duties, 
occurring after the complaint was filed, as well as to add 
derivative claims on behalf of Cobble Hill Center LLC.  The 
defendants argued that the motion to amend should be denied as 
untimely, and a Superior Court judge agreed.  Nonetheless, the 
parties were permitted to supplement their expert reports on 
damages to account for any changes due to the passage of time.   
A jury-waived trial took place in May and June of 2018.  
Consistent with their earlier opposition to the plaintiff's 
motion to amend the complaint, the defendants filed several 
motions in limine seeking to exclude evidence regarding 
alternative development proposals by the plaintiff in 2016 and 
2017.8  The judge denied the defendants' motion to exclude 
evidence of any proposals for the development and disposition of 
the property that the plaintiff had presented to the defendants 
 
 
8 The defendants also sought to include additional evidence 
concerning their efforts to proceed with the December 2013 
proposal after the complaint was filed in July 2014. 
7 
 
 
 
during the pendency of the 2014 action, including in 2016 and 
2017.  Accordingly, at trial, the plaintiff presented evidence 
regarding these alternative proposals for the development and 
disposition of the parcel as evidence of the defendants' failure 
to mitigate their losses. 
Following the close of the evidence, the parties submitted 
proposed findings of fact and conclusions of law for the judge's 
consideration.  The plaintiff specifically asked the judge to 
find that these alternative development proposals were feasible, 
that the defendants either ignored or inadequately considered 
them, and that, as a result, the defendants could not recover on 
their counterclaims. 
The judge concluded that the plaintiff had failed to prove 
his claims and found in favor of the defendants on their 
counterclaims.  The judge determined that the plaintiff had 
committed a breach of the 1987 agreement, as well as his 
fiduciary duties, by "trying to withdraw [his] consent [to the 
development detailed in the December 2013 proposal] in 2014 and 
by deliberately interfering with the efforts of CMJ to finance 
and construct the project," by "failing to promote the best 
interests of CMJ," and by "not acting in good faith."  The judge 
also found that the defendants did not commit breaches of their 
8 
 
 
 
contractual or fiduciary duties by proceeding with the December 
2013 proposal.9   
Of the alternative proposals for the development or 
disposal of the parcel that the plaintiff presented to the 
defendants following the commencement of litigation, the judge 
determined that the plaintiff had shown only one to have been 
feasible; specifically, he concluded that the defendants could 
have mitigated their damages by pursuing a sale of the property 
in 2015 for $15 million.10  Subtracting from the profits lost as 
a result of the plaintiff's breach both the costs that would 
have been incurred in the development and the mitigation value 
of the parcel itself, the judge awarded $9 million to Corcoran 
(calculated based on his sixty percent interest) and $3 million 
to Jennison (calculated based on his twenty percent interest) 
for their counterclaims.  
 
9 At the same time, the judge determined that the defendants 
had committed a breach of their contractual obligation to 
provide the plaintiff with "all reports prepared for the 
management" of CMJ and material information on projects, by 
failing to inform the plaintiff of a particular offer to 
purchase the Cobble Hill Center site, but found that the failure 
was not material and did not result in harm to the plaintiff. 
 
10 In particular, the judge credited an appraisal by 
Institutional Property Advisors (IPA) that the undeveloped land 
could have been sold for $15 million in 2015, a time when the 
purchaser could have commenced construction on the December 2013 
proposal because the requisite special permit and zoning 
variance were still in effect. 
9 
 
 
 
The plaintiff appealed, and the defendants cross-appealed 
with respect to the amount of damages.  The Appeals Court 
affirmed the judgment, see Mullins, 95 Mass. App. Ct. 1107, and 
this court denied the plaintiff's application for further 
appellate review, see Mullins v. Corcoran, 482 Mass. 1106 
(2019).  
 
The Cobble Hill Center site lay undeveloped, fenced, and 
vacant during the pendency of these proceedings.  The resulting 
deterioration and urban blight led the Somerville Redevelopment 
Authority (SRA) to effect a taking of the property in March 
2019.11   
c.  2017 complaint.  The plaintiff filed the complaint in 
the present case in July 2017, after his motion to amend the 
complaint in the 2014 action had been denied, but before the 
trial in that action.  The complaint alleged that the defendants 
had engaged in "further misconduct beyond that alleged in [the 
2014 action]."  The complaint included claims for breaches of 
fiduciary duty and breaches of the 1987 agreement that occurred 
 
11 Cobble Hill Center LLC commenced an action in the 
Superior Court against the SRA, seeking a declaratory judgment 
that the taking was unlawful.  After a Superior Court judge 
declined to issue the requested injunction, Cobble Hill Center 
LLC filed an appeal in the Appeals Court, and we transferred the 
case to this court on our own motion.  Our decision upholding 
the action of the SRA issued on April 22, 2021.  See Cobble Hill 
Ctr. LLC v. Somerville Redev. Auth., 487 Mass. 249 (2021). 
10 
 
 
 
after the 2014 action had commenced, and also asserted 
derivative claims on behalf of Cobble Hill Center LLC.   
In August 2018, the defendants moved for judgment on the 
pleadings, pursuant to Mass. R. Civ. P. 12 (c), 365 Mass. 754 
(1974).  Decision on the motion was stayed pending resolution of 
the 2014 action.  In September 2019, a Superior Court judge, who 
was not the trial judge in the 2014 action, allowed the 
defendants' motion.  The plaintiff appealed, and we transferred 
the matter to this court on our own motion.  
2.  Discussion.  The plaintiff contends that the motion 
judge's allowance of the motion for judgment on the pleadings 
was error because the conduct at issue in this subsequent 
complaint occurred after the date in July of 2014 when the 2014 
complaint was filed, his motion to amend the 2014 complaint to 
add these claims was denied, and the evidence of subsequent 
conduct that ultimately was introduced did not result in the 
issue being adequately litigated.  He maintains as well that the 
prior action did not address damages incurred after 2016; the 
defendants are estopped from raising the issue of preclusion; 
fundamental fairness requires that his claims not be precluded; 
and none of the prior individual claims bars his derivative 
claims here. 
a.  Standard of review.  A motion for judgment on the 
pleadings under Mass. R. Civ. P. 12 (c) is "actually a motion to 
11 
 
 
 
dismiss . . . [that] argues that the complaint fails to state a 
claim upon which relief can be granted."  Jarosz v. Palmer, 436 
Mass. 526, 529 (2002), quoting J.W. Smith & H.B. Zobel, Rules 
Practice § 12.16 (1974).  We review the allowance of a motion 
for judgment on the pleadings de novo.  See Merriam, 464 Mass. 
at 726, citing Wheatley v. Massachusetts Insurers Insolvency 
Fund, 456 Mass. 594, 600 (2010).  In deciding the motion, all 
facts pleaded by the nonmoving party must be accepted as true.  
Jarosz, supra at 529-530.  We also may rely on "matters of 
public record, orders, items appearing in the record of the 
case, and exhibits attached to the complaint" (citation 
omitted).  Schaer v. Brandeis Univ., 432 Mass. 474, 477 (2000).  
We "draw every reasonable inference in favor of . . . the 
nonmoving party . . . to determine whether there are factual 
allegations plausibly suggesting (not merely consistent with) an 
entitlement to relief" (quotations and citations omitted).  UBS 
Fin. Servs., Inc. v. Aliberti, 483 Mass. 396, 405 (2019).   
b.  Doctrine of issue preclusion.  The key question before 
us is whether the motion judge erred in his determination that 
the plaintiff's claims were precluded because the issues upon 
which the claims rested had been previously decided in the 2014 
action.  "The doctrine of issue preclusion provides that when an 
issue has been 'actually litigated and determined by a valid and 
final judgment, and the determination is essential to the 
12 
 
 
 
judgment, the determination is conclusive in a subsequent action 
between the parties whether on the same or different claim.'"  
Jarosz, 436 Mass. at 530-531, quoting Cousineau v. Laramee, 388 
Mass. 859, 863 n.4 (1983).  See DeGiacomo v. Quincy, 476 Mass. 
38, 42 (2016).  The doctrine is intended "to conserve judicial 
resources, to prevent the unnecessary costs associated with 
multiple litigation, and to ensure the finality of judgments."  
Martin v. Ring, 401 Mass. 59, 61 (1987).  The burden of 
demonstrating that an issue is precluded "is always on the 
person raising the bar."  Fireside Motors, Inc. v. Nissan Motor 
Corp. in U.S.A., 395 Mass. 366, 373 (1985).  See Taylor v. 
Sturgell, 553 U.S. 880, 907 (2008), quoting 18 C.A. Wright, A.R. 
Miller, & E.H. Cooper, Federal Practice and Procedure § 4405, at 
83 (2d ed. 2002) ("a party asserting preclusion must carry the 
burden of establishing all necessary elements"); Mass. R. Civ. 
P. 8 (c), 365 Mass. 749 (1974) (res judicata is affirmative 
defense). 
An issue has been "actually litigated" if it "was subject 
to an adversary presentation and consequent judgment that was 
not a product of the parties' consent" (quotations omitted).  
Jarosz, 436 Mass. at 531, quoting Keystone Shipping Co. v. New 
England Power Co., 109 F.3d 46, 52 (1st Cir. 1997).  "When an 
issue is properly raised . . . and is submitted for 
determination, and is determined, the issue is actually 
13 
 
 
 
litigated . . . ."  Restatement (Second) of Judgments § 27 
comment d (1982).   
The "requirement that the issue decided be 'essential to 
the judgment' requires that the issue be essential to the merits 
of the underlying case."  Jarosz, 436 Mass. at 529.  The issue 
must have had a "bearing on the outcome of the case," and not 
"merely [have been] essential to a determination of the narrow 
issue before the court at that time."  Id. at 533.  The 
nonmoving party previously must have had a full and fair 
opportunity to litigate the issue.  See Alba v. Raytheon Co., 
441 Mass. 836, 841 (2004).  "When issues not raised by the 
pleadings are tried by express or implied consent of the 
parties, they shall be treated in all respects as if they had 
been raised in the pleadings."  K.G.M. Custom Homes, Inc. v. 
Prosky, 468 Mass. 247, 257 (2014), quoting Mass. R. Civ. P. 
15 (b), 365 Mass. 761 (1974).   
"A determination is considered final when 'the parties were 
fully heard, the judge's decision is supported by a reasoned 
opinion, and the earlier opinion was subject to review or was in 
fact reviewed.'"  Jarosz, 436 Mass. at 533-534, quoting 
Tausevich v. Board of Appeals of Stoughton, 402 Mass. 146, 149 
(1988).  
c.  Application.  The plaintiff's individual allegations in 
the 2017 complaint center on the defendants' alleged "bad-faith 
14 
 
 
 
rejections and/or refusals to consider" the alternative 
development proposals that he brought to their attention during 
the pendency of the prior litigation;12 a third count of the 
complaint, brought by the plaintiff as a member on behalf of 
Cobble Hill Center LLC, raises similar derivative claims.   
i.  Effect of motion to amend.  The plaintiff maintains 
that the claims here are not precluded because his motion to 
amend the complaint in the 2014 action to add these asserted 
breaches, such as the failure to consider his alternative 
development proposals or to address periods of time after the 
filing of that action, was denied.  Evidence concerning these 
events, however, was introduced at trial for purposes of 
establishing the plaintiff's mitigation of damages defense and 
was relied on by the plaintiff in his proposed findings, in 
which he specifically invited the trial judge to find that the 
defendants committed breaches of the 1987 agreement and their 
fiduciary duties by not adequately considering his alternative 
proposals to enhance revenue or to prevent impairing the value 
of the property.  The trial judge declined to do so.  
 
12 The 2017 complaint also contains a number of specific 
claims that mirror claims asserted and rejected in the 2014 
action, including alleged breaches due to the termination of the 
leases for the retail space and the associated loss of rental 
income, the failure to disclose a particular offer to purchase, 
and Corcoran's refusal to speak with the plaintiff.  We agree 
with the motion judge that the plaintiff is precluded from 
pursing these virtually identical allegations in this action.  
15 
 
 
 
With one exception -- a potential sale of the property in 
2015 for $15 million -- the trial judge concluded that the 
plaintiff had failed to show that the alternative developments 
he proposed were feasible, at least in the relevant time frame, 
because they all would have required zoning variances or changes 
in the zoning bylaw.13  Accordingly, because the plaintiff was 
unable to establish in the 2014 action that the proposed 
alternatives were feasible, he is precluded from now asserting 
that the defendants committed a breach of their obligations to 
him under the 1987 agreement, or their fiduciary duty of "utmost 
good faith and loyalty."14  Merriam, 464 Mass. at 726, quoting 
O'Brien v. Pearson, 449 Mass. 377, 383 (2007).  In other words, 
the failure to act upon alternative development proposals, which 
were determined not to be feasible, constituted neither a breach 
of contract nor a breach of a fiduciary duty to act in good 
 
 
13 The trial judge found that it would have been "highly 
unlikely that the zoning [bylaw would] be changed" by the city 
in a manner so as to permit construction of the second proposed 
apartment building on the site, as contemplated by many of the 
plaintiff's alternative proposals, "in the foreseeable future."  
 
 
14 Likewise, the requirement of, and unlikelihood of 
obtaining, changes to the zoning bylaw was the reason the judge 
found that the defendants' one breach in failing to disclose a 
potential sale to the plaintiff was not material, see note 9, 
supra, as the undisclosed offer was conditioned on obtaining 
changes in or variances to the zoning bylaw.  
 
16 
 
 
 
faith and to take reasonable measures to avoid impairing the 
value of the property. 
The plaintiff maintains that the 2014 action nonetheless 
should not be given preclusive effect because, if he were able 
to establish that the defendants committed a breach of their 
fiduciary duty to him in connection with their treatment of the 
alternative development proposals, the burden would shift to the 
defendants to show that there was no causal connection between 
their breach of duty and the plaintiff's damages.  See Meehan v. 
Shaughnessy, 404 Mass. 419, 440-442 (1989) (placing burden on 
fiduciary to show absence of causal connection between breach 
and damages).  By contrast, in the 2014 litigation, the 
plaintiff, who was determined to have committed a breach of the 
1987 agreement on the defendants' counterclaims, bore the burden 
of establishing that the defendants failed to mitigate their 
damages through these alternative proposals.  See Kiribati 
Seafood Co. v. Dechert LLP, 478 Mass. 111, 123-124 (2017), 
quoting American Mech. Corp. v. Union Mach. Co. of Lynn, 21 
Mass. App. Ct. 97, 103 (1985) ("[T]he burden of proving that 
losses could have been avoided by reasonable effort rests with 
the party in breach").   
As the plaintiff argues, "[t]he determination of an issue 
in a prior proceeding has no preclusive effect where '[t]he 
party against whom preclusion is sought had a significantly 
17 
 
 
 
heavier burden of persuasion with respect to the issue in the 
initial action than in the subsequent action; the burden has 
shifted to his adversary; or the adversary has a significantly 
heavier burden than he had in the first action.'"  See Jarosz, 
436 Mass. at 532, quoting Restatement (Second) of Judgments 
§ 28(4) (1982).  However, the plaintiff's focus on the differing 
burdens of proof is misplaced.  As discussed, it was the 
plaintiff's burden in the 2014 action to establish that the 
defendants failed to undertake reasonable efforts to mitigate 
their damages by considering feasible alternatives; this 
required the plaintiff to show that the alternatives he proposed 
were feasible.  Similarly, to prevail on his claim in the 2017 
complaint, the plaintiff would be required to show that the 
proposed alternatives were feasible in order to establish that 
the refusal to consider them constituted a breach.  Having 
failed to show that the alternatives were feasible in the 2014 
action, he is precluded from grounding his claims for breach on 
those same proposals.   
ii.  Post-October 2016 conduct.  The trial judge in the 
2014 action awarded damages to the defendants calculated based 
upon, inter alia, the value of the project as of October 2016, 
the date on which the December 2013 proposal was anticipated to 
have been completed but for the plaintiff's breach.  The 
plaintiff contends that he is not precluded from pursuing claims 
18 
 
 
 
against the defendants for asserted breaches of the 1987 
agreement and their fiduciary duty by failing to consider in 
good faith alternative development proposals that the plaintiff 
obtained and presented to them after October 2016.   
The primary alternative proposals that the plaintiff 
identifies as subsequent to October 2016 are an analysis and 
report by Peter Quinn Architects (PQA report), and a plan 
developed by DPZ Partners (DPZ plan), both created in 2016.  
Each envisioned a more extensive development effort than had 
been defined in the December 2013 proposal, and involved 
multiple buildings and both parts of the divided Cobble Hill 
parcel.  Both plans were considered during the trial in the 2014 
action.  Indeed, during the 2014 action, citing these plans, the 
plaintiff proposed that the judge make factual findings that he 
"presented several reasonable, good faith proposals" that had 
"either been ignored, inadequately considered, and/or rejected 
by [the defendants]."  The proposed findings also stated that 
the defendants could not recover for any of their counterclaims 
because they had ignored the plaintiff's alternative development 
proposals. 
The judge concluded, however, that the PQA report and DPZ 
plan would not have been feasible at that time.  The judge found 
that both proposals "sketched out possible redevelopment of the 
combined Cobble Hill Apartments and Cobble Hill Center sites.  
19 
 
 
 
The projects, as sketched out, would have been far larger and 
far riskier than the Cobble Hill Center approved by the [c]ity 
in the fall of 2013," and "neither of those projects could be 
built under the existing [city] zoning ordinance."  The judge 
concluded that there was "no reasonable prospect that CMJ could 
obtain rezoning that would allow projects of that scale on the 
combined Cobble Hill Apartments and Cobble Hill Center sites."15  
In addition to the PQA report and DPZ plan, the plaintiff 
points to two other proposals that were made both before and 
after October 2016.  First, the plaintiff proposed a presale 
transaction, whereby a sale of the property in the future to a 
third-party investor would be contracted before starting 
construction.  The judge found such a transaction to be 
"completely speculative" and concluded that propounding it 
evinced the plaintiff's bad faith in withdrawing his consent to 
the December 2013 proposal.  The judge observed, "If risks in 
the financial markets, the residential real estate market, and 
the economy, as a whole, made it far too risky to go forward 
 
 
15 The 2017 complaint also alleges that the defendants did 
not consider the plaintiff's June 9, 2017 letter, in which he 
shared his evaluation of the value of the Cobble Hill Center 
based on the DPZ plan and PQA report and asserted that CMJ 
should "explore development options for the parcel and take 
action to preserve value for CMJ."  This letter, as with the DPZ 
plan and PQA report on which it was based, was introduced at 
trial and similarly proposed plans of the scale that the judge 
found had "no reasonable prospect" of the projects coming to 
fruition.   
20 
 
 
 
with the project, as [the plaintiff] had asserted just one month 
earlier, then no third-party investor would be willing to agree 
to such a presale transaction on terms that would allow CMJ to 
share in any meaningful part of profits if the project were 
built and commercially successful."   
Second, the plaintiff proposed that CMJ enter into a joint 
venture with an equity partner.  The plaintiff's proposed 
findings of fact stated that the possibility of obtaining a 
joint venture equity partner was a reasonable good faith 
proposal that the defendants had ignored.  The judge declined 
the invitation to make such findings.  See Mass. R. Civ. 
P. 15 (b) ("When issues not raised by the pleadings are tried by 
express or implied consent of the parties, they shall be treated 
in all respects as if they had been raised in the pleadings").   
In sum, because the issues underlying the post-2016 
alternate proposals were fully litigated and decided, the 
findings are preclusive on those issues.  Because the alternate 
projects were deemed infeasible, the plaintiff is precluded from 
arguing here that the defendants' failure to consider these 
proposals was a breach of the 1987 agreement and their fiduciary 
duties.16   
 
 
16 In addition to damages for breaches of contract and 
breaches of fiduciary duty, the plaintiff seeks injunctive 
relief.  He asserts that, "[u]nless Corcoran's and Jennison's 
breaches of [their] fiduciary duties are enjoined, [he] will 
21 
 
 
 
 
iii.  Judicial estoppel and fundamental fairness.  The 
plaintiff contends that the defendants are judicially estopped 
from arguing that the claims in the 2017 complaint are subject 
to preclusion, because the defendants successfully opposed his 
motion to amend the complaint in the 2014 action to add the 
instant claims.  "Judicial estoppel is an equitable doctrine 
that precludes a party from asserting a position in one legal 
proceeding that is contrary to a position it had previously 
asserted in another proceeding."  Otis v. Arbella Mut. Ins. Co., 
443 Mass. 634, 639-640 (2005), quoting Blanchette v. School 
Comm. of Westwood, 427 Mass. 176, 184 (1998).  The doctrine of 
judicial estoppel seeks "to prevent the manipulation of the 
judicial process by litigants."  Commonwealth v. DiBenedetto, 
458 Mass. 657, 671 (2011), quoting Canavan's Case, 432 Mass. 
304, 308 (2000).  For judicial estoppel to apply, "the position 
being asserted in the litigation must be 'directly 
inconsistent,' meaning 'mutually exclusive' of, the position 
asserted in a prior proceeding," and "the party must have 
succeeded in convincing the court to accept its prior position" 
(citation omitted).  Otis, supra at 640-641.  
 
suffer irreparable harm."  Injunctive relief is a remedy, and 
not a cause of action.  See Woods v. Wells Fargo Bank, N.A., 733 
F.3d 349, 353 n.3 (1st Cir. 2013).  Accordingly, because the 
plaintiff's underlying claims for breach were precluded, his 
request for injunctive relief also is precluded.  See id.  
22 
 
 
 
 
Here, while the defendants succeeded in opposing the 
plaintiff's motion to amend the 2014 complaint, the trial judge 
denied the defendants' efforts to exclude evidence of these 
proposals that the plaintiff sought to introduce to show the 
defendants had failed to mitigate their damages, and the 
plaintiff then was able to introduce evidence concerning these 
events.  As set forth supra, that evidence was introduced 
substantively and relied upon by the parties and the trial 
judge.  Thus, the defendants did not succeed in their efforts to 
exclude this evidence, and judicial estoppel does not apply.  
 
Principles of fundamental fairness similarly do not provide 
a basis to avoid issue preclusion here.  See Bar Counsel v. 
Board of Bar Overseers, 420 Mass. 6, 11 (1995) (before 
collateral estoppel may be used offensively, fact finder must 
determine whether doing so would be fair).  Even where an issue 
meets the requirements for preclusion, fundamental fairness 
mandates that preclusion not be applied where there was a lack 
of "an adequate opportunity or incentive to obtain a full and 
fair adjudication in the initial action."  Restatement (Second) 
of Judgments § 28(5) (1982).  Here, the plaintiff had the 
opportunity and incentive to litigate the issue whether the 
alternative proposed developments were feasible and considered 
by the defendants in good faith.  
23 
 
 
 
 
Significantly, the trial judge found that the plaintiff 
commenced the 2014 action in bad faith, specifically with the 
intent of preventing development of the 2013 proposal.  The 
judge found: 
"In July of 2014, [the plaintiff] filed this lawsuit 
against [the defendants] to stop them from going forward 
with the Cobble Hill Center project.  [The plaintiff] knew 
when he did so that no one would finance the project so 
long as one principal is suing the other two.  
 
". . .  
 
"I find the same was true in July of 2014, that [the 
plaintiff] intended, by filing suit, to stop the Cobble 
Hill Center project from going forward and that he 
succeeded in doing that.  
 
". . .  
 
"I find that if [the plaintiff] had not tried to withdraw 
his consent to the project and had not then brought a 
lawsuit to stop the project, that, in fact, CMJ would have 
been able to construct the new Cobble Hill Center apartment 
building as approved by the [c]ity, and I find that CMJ 
would have been able to stabilize it, achieving at least 
[ninety-five] percent residential occupancy, by October of 
2016." 
 
In these circumstances, there is no unfairness in the 
determination that the issues the plaintiff raised in the 2017 
complaint are subject to preclusion.  
iv.  Derivative claims.  The 2017 complaint also asserts a 
claim for breaches of fiduciary duty derivatively on behalf of 
Cobble Hill Center LLC:  the defendants' (1) pressing forward 
with the development project described in the December 2013 
proposal that was not in the best interests of Cobble Hill 
24 
 
 
 
Center LLC, and limited the potential value of the property; 
(2) terminating leases and evicting retail tenants, thereby 
ending by August 2014 a source of revenue for Cobble Hill Center 
LLC; and (3) refusing or failing to consider a number of 
development proposals that "would result in substantially higher 
returns to Cobble Hill Center LLC than the returns projected in 
[the] defendants' December 2013 [p]roposal."17 
"A party is precluded from relitigating an issue 
where . . . the party against whom preclusion is asserted was a 
party (or in privity with a party) to the prior adjudication" 
(quotation and citation omitted).  DeGiacomo, 476 Mass. at 42.  
At the same time, "[i]t is a violation of due process for a 
judgment to be binding on a litigant who was not a party or a 
privy and therefore has never had an opportunity to be heard."  
Id. at 44, quoting Parklane Hosiery Co. v. Shore, 439 U.S. 322, 
327 n.7 (1979).  The requirement of the identity of parties or 
privity for the purposes of issue preclusion derives from the 
principle that "a person who was not a party to a suit generally 
has not had a 'full and fair opportunity to litigate' the claims 
and issues settled in that suit.  The application of claim and 
 
 
17 The proposals included those set forth in the plaintiff's 
presale proposals, an "as built" proposal (one of three possible 
scenarios suggested by IPA for handling the Cobble Hill Center 
site), a number of alternatives for the sale of the undeveloped 
land, the PQA report, and the DPZ plan. 
25 
 
 
 
issue preclusion to nonparties thus runs up against the 'deep-
rooted historic tradition that everyone should have his own day 
in court'" (citation omitted).  Taylor, 553 U.S. at 892-893.   
Because "[a] corporation is for most purposes treated as a 
jural person distinct from its stockholders, members, directors, 
and officers," Restatement of Judgements (Second) § 59 comment a 
(1982), in a direct action by a shareholder and a derivative 
action, the parties generally are not the same.  Therefore, a 
judgment in an action involving a party who is an officer, 
director, stockholder, or member of a nonstock corporation 
ordinarily will not have preclusive effect on the corporation 
itself.  See id.  Ensuring shareholders are not precluded from 
bringing derivative suits is important as "[a] derivative suit 
involves a right of action of the corporation that is enforced 
by the stockholders because the corporation's management has 
failed to enforce the right."  Id. at § 59 comment c.   
In the case of a closely held corporation, however, the 
interests of a stockholder, on the one hand, and of the closely 
held corporation, on the other, may be so similar as to warrant 
preclusion.  See Spickler v. Dube, 644 A.2d 465, 468 (Me. 1994) 
("When a corporation is closely held, the interests of the 
corporation, its management and shareholders generally fully 
coincide . . . [such that] the judgment in the shareholder's 
action is conclusive on the corporation except when relitigation 
26 
 
 
 
is necessary to protect the interest of another owner or a 
creditor of the corporation").  As the Restatement (Second) of 
Judgments § 59 comment e (1982) explains, 
"For the purpose of affording opportunity for a day in 
court on issues contested in litigation, . . . there is no 
good reason why a closely held corporation and its owners 
should be ordinarily regarded as legally distinct.  On the 
contrary, it may be presumed that their interests coincide 
and that one opportunity to litigate issues that concern 
them in common should sufficiently protect both." 
 
See, e.g., In re Gottheiner, 703 F.2d 1136, 1140 (9th Cir. 1983) 
(where debtor owned all shares of corporation and exercised day 
to day control, privity between debtor and corporation existed 
such that he was precluded from raising issue of corporate 
indebtedness, previously litigated in government suit against 
corporation, at his later trial for personal bankruptcy); Fink 
v. Magner, 988 F. Supp. 74, 79 (D. Conn. 1997) (plaintiff, one 
of two shareholders of corporation, was precluded from 
relitigating as individual issues what had been litigated in 
prior suit brought by corporation, in which plaintiff actively 
participated).   
 
The interests of the corporation, management, and 
shareholders of a closely held corporation "generally fully 
coincide."  See Restatement (Second) of Judgments § 59 comment e 
(1982).  "[O]wnership and management are in the same hands," and 
"the owners are quite dependent on one another for the success 
of the enterprise.  Many close[ly held] corporations are really 
27 
 
 
 
partnerships between two or three people who contribute their 
capital, skills, experience and labor" (quotation and citation 
omitted).  Donahue v. Rodd Electrotype Co. of New England, 367 
Mass. 578, 587 (1975).  Moreover, the "public policies 
underlying the doctrine of collateral estoppel, as a bar to 
repetitious litigation, would support a finding of privity 
between a close corporation and its sole or controlling 
stockholder" (quotation and citation omitted).  In re 
Gottheiner, 703 F.2d at 1140.   
Cobble Hill Center LLC is comprised of three owners:  the 
plaintiff and the defendants.18  There is no other owner or 
creditor whose interest was unrepresented in the 2014 action.  
See Aetna Cas. & Sur. Co. v. Kerr-McGee Chem. Corp., 875 F.2d 
1252, 1259 (7th Cir. 1989) ("if estoppel is asserted against the 
corporation based on prior litigation by a shareholder, 
preclusion is only denied where the interests of third parties 
would be unfairly concluded by barring relitigation"); 
Restatement (Second) of Judgments § 53(b) (1982).  Accordingly, 
the interests of Cobble Hill Center LLC were adequately 
represented in the 2014 action, and the plaintiff may be bound 
by that action.  Contrast Massachusetts Prop. Ins. Underwriting 
Ass'n v. Norrington, 395 Mass. 751, 754-755 (1985) (criminal 
 
 
18 See note 6, supra. 
28 
 
 
 
conviction for killing did not preclude beneficiary of victim's 
estate from litigating issue of wrongful death in subsequent 
civil suit because interests of beneficiary were not represented 
in prior criminal case).   
Given this determination of privity, it is clear that the 
issues the plaintiff seeks to raise derivatively also are 
precluded.    
 
 
 
 
 
 
Judgment affirmed.