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16-P-639 Appeals Court

CHRISTIAN BAKER & others1 vs. WILMER CUTLER PICKERING HALE AND 

DORR LLP & others.

2

No. 16-P-639.

Suffolk. February 13, 2017. - July 21, 2017.

Present: Kafker, C.J., Carhart, & Desmond, JJ.3

Limited Liability Company. Fiduciary. Corporation, 

Stockholder, Close corporation. Attorney at Law, Fiduciary 

duty, Attorney-client relationship. Conspiracy. Consumer 

Protection Act, Trade or commerce. Practice, Civil, Motion 

to dismiss, Consumer protection case.

Civil action commenced in the Superior Court Department on

May 28, 2015.

Motions to dismiss were heard by Kenneth W. Salinger, J.

Dana Alan Curhan for the plaintiffs.

 

1 W. Robert Allison and Blake P. Allison, as trustee of the 

W. Robert Allison 2003 Irrevocable Trust.

2 Gunderson Dettmer Stough Villeneuve Franklin & Hachigian 

LLP, Gary R. Schall, and Emma Eriksson Broomhead.

3 Justice Carhart participated in the deliberation on this 

case prior to his retirement.
2

Erin K. Higgins (Kathleen R. O'Toole also present) for 

Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP & 

another.

Richard M. Zielinski for Wilmer Cutler Pickering Hale and 

Dorr LLP & another.

KAFKER, C.J. Minority members of a Massachusetts limited 

liability company seek to hold the company's attorneys liable 

for their involvement in an alleged "freeze-out" orchestrated by

and on behalf of the majority members. According to the 

minority members, the majority members secretly retained the 

attorneys, one of whom is the daughter of a majority member, to, 

at least ostensibly, represent the closely held company. The 

attorneys then worked behind the scenes to assist the majority 

in merging the company with and into a newly created Delaware 

limited liability company, all for the purpose of eliminating 

significant protections afforded minority members under the 

Massachusetts company's operating agreement. By the time the 

attorneys' involvement came to light, the majority members had 

unfettered control of the resulting entity, with a new operating 

agreement that extinguished the minority's rights to, among 

other things, participate in management, access the company's 

records, and prevent dilution of their interests. The minority 

members, the plaintiffs in this action, responded by asserting

claims against the attorneys and their respective law firms for 

breach of fiduciary duty, aiding and abetting tortious conduct, 
3

civil conspiracy, and violation of G. L. c. 93A. The matter now 

comes before this court for de novo review after a judge of the

Superior Court, acting on motions filed by the defendants,

dismissed the plaintiffs' claims against the attorneys and their 

law firms for failure to state a claim upon which relief can be 

granted. See Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974). For 

the reasons discussed below, we reverse the portion of the 

judgment dismissing those claims.

The Supreme Judicial Court has stated that counsel for a 

close corporation can owe a fiduciary duty to individual 

shareholders. See Schaeffer v. Cohen, Rosenthal, Price, Mirkin, 

Jennings & Berg, P.C., 405 Mass. 506, 513 (1989) (Schaeffer). 

Whether such a fiduciary relationship exists in a particular 

case is largely a question of fact. Here, taking the facts 

alleged as true, and drawing all reasonable inferences therefrom 

in favor of the plaintiffs as nonmoving parties, we conclude 

that they have alleged enough to plausibly suggest that the 

defendants, acting as counsel for a limited liability company

governed by an operating agreement providing significant 

minority protections, owed them a fiduciary duty. As the

plaintiffs further allege that the defendants secretly worked to 

eliminate those protections, we conclude that they have done 

"enough to raise a right to relief [on their claim for breach of 

fiduciary duty] above the speculative level." Iannacchino v. 
4

Ford Motor Co., 451 Mass. 623, 636 (2008), quoting from Bell 

Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). We reach the 

same conclusion as to the claims alleging that, by their 

actions, the defendant attorneys knowingly aided and abetted and 

conspired with the majority members in breaching the majority's

fiduciary duties to the plaintiffs. We also conclude that the

G. L. c. 93A claim was dismissed prematurely.

Background. The following facts are derived from the first 

amended complaint (complaint) filed by the plaintiffs, W. Robert 

Allison (Allison), Christian Baker (Baker), and Blake P. 

Allison, as trustee of the W. Robert Allison 2003 Irrevocable 

Trust (Allison family trust). On January 28, 2000, Allison and 

Elof Eriksson (Eriksson) organized Applied Tissue Technologies, 

LLC, as a Massachusetts limited liability company (ATT-MA or 

company) for the purpose of developing and marketing wound 

therapy technologies. At the time of formation, Allison and 

Eriksson acquired twenty-five and seventy-five percent 

membership interests in the company, respectively. 

Subsequently, Allison and Eriksson both created, and assigned a 

portion of their interests to, trusts for the benefit of their 

families -- the Allison family trust and the Elof Eriksson 

Irrevocable Trust-2003 (Eriksson family trust). By the time of 

the events at issue, Allison and the Allison family trust owned 

a combined 22.5% interest in ATT-MA, Eriksson and the Eriksson
5

family trust a combined 75.5% interest, and Baker, a former key 

employee of the company, a 2% interest. Given their combined 

24.5% interest, the plaintiffs are collectively referred to in 

the complaint, and at times herein, as the "minority members." 

At the time ATT-MA was formed, Allison and Eriksson also 

adopted an operating agreement to govern the company's affairs

(ATT-MA agreement), which provided, in pertinent part, that:

1. All members have exclusive discretion in the management 

and control of ATT-MA's business;

2. All members are entitled to participate in management 

of ATT-MA by a vote proportionate to their interest;

3. The agreement cannot be amended without the unanimous 

written consent of Eriksson and Allison;

4. The agreement cannot be amended to alter the percentage 

interest of any member without the consent of each member 

adversely affected by such an amendment;

5. Members are entitled to examine ATT-MA's books and 

records at reasonable times;

6. Once having paid an initial capital contribution, no 

member could be required to make any further capital 

contributions or loans to the company; and

7. To the extent that any member did advance any further 

funds, it was to be treated as a loan. 

The ATT-MA agreement further provided that each member owed a

duty of utmost loyalty and good faith in the conduct of ATT-MA's

affairs.4

 

4 There is no copy of the ATT-MA agreement in the record.
6

By early 2012, ATT-MA was facing a financial shortfall, but 

Allison and Eriksson could not agree how to address it. 

Eriksson was prepared to contribute additional funds to the 

company, but while he had done so in the past in the form of 

loans, he was now demanding additional equity in return. Under 

the ATT-MA agreement, such a contribution would require the 

consent of Allison and any other members whose interests would 

be diluted. Allison, meanwhile, believed the company would be 

better served by hiring new management and developing a business 

plan. Thus, he was prepared to agree to dilute his interest 

only if the additional capital was provided by outside investors 

who were bringing new management to the company.

Around this time, Eriksson, with ATT-MA's chief executive 

officer, Karl Proppe, privately urging him to gain "control" of 

the company, reached out to the defendant Emma Eriksson 

Broomhead (Broomhead), an attorney at the defendant law firm of 

Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP 

(Gunderson). Broomhead is also Eriksson's daughter, and the two 

had a longstanding attorney-client relationship. Broomhead, in 

turn, introduced her father to another attorney at Gunderson, 

the defendant Gary Schall (Schall), who had experience working 

with emerging companies. On February 14, 2012, Proppe, in his 

capacity as chief executive officer (CEO), signed an agreement 

engaging Gunderson as counsel for the company. The agreement 
7

expressly provided that Gunderson would not represent any 

individual members of ATT-MA. Approximately two months later, 

Schall relocated his practice to the defendant law firm Wilmer 

Cutler Pickering Hale and Dorr LLP (WilmerHale). At that time, 

WilmerHale, like Gunderson, provided in its engagement agreement 

with ATT-MA that the firm would be representing only the 

company. 

According to the complaint, Broomhead and Schall were aware 

that ATT-MA was a closely held company, whose members owed each 

other the duty of utmost loyalty and good faith. They were also 

familiar with the ATT-MA agreement and the protections it 

afforded to minority members. Indeed, they immediately set 

about devising and presenting a plan to Eriksson to both 

circumvent those protections and eliminate the minority members.

5

All the while, according to the complaint, Broomhead and Schall 

deliberately concealed their engagement by ATT-MA, as well as 

their actions on behalf of Eriksson, from Allison and the other 

minority members. 

Broomhead's and Schall's original plan was for Eriksson to 

offer to buy Allison's membership interest in ATT-MA, and if 

that failed, to sell the company to a new entity controlled by 

 

5 Broomhead's handwritten notes from an early meeting with 

Eriksson and Schall reflect that they discussed two options: 

(1) "get rid of [Allison and Baker]"; or (2) "liquidate/sell" 

ATT-MA and start the company anew.
8

Eriksson. In furtherance of that plan, Broomhead, Schall, 

Eriksson, and Proppe secretly hired and worked with an appraiser 

to put a value on ATT-MA that could be used as the basis for the

buyout offer. Schall then drafted an electronic mail message

(e-mail) for Erikson to send to Allison, detailing the offer. 

Noting that the draft was written in his "style," Schall advised

Eriksson to change it to reflect his own style before sending it 

to Allison. Eriksson did so and on May 6, 2012, e-mailed the 

offer to Allison and suggested they meet on May 10 to discuss 

it. 

Allison responded to Eriksson's offer by e-mail on May 8, 

2012, copying Proppe and Eriksson's wife, Gudrun Eriksson, who 

were the trustees of the Eriksson family trust. Allison, who 

remained unaware of Broomhead's and Schall's involvement, 

declined the offer and expressed a desire to work to maximize 

ATT-MA's value so that he could sell his interest at a later 

time, under more favorable circumstances. Allison further 

reminded the majority members of several of the minority 

protections in the ATT-MA agreement and suggested that all 

members meet to address the issues facing the company. In 

response, Eriksson cancelled the proposed May 10 meeting and 

threatened to dissolve ATT-MA. 

Eriksson then began working in secret with Proppe, 

Broomhead, and Schall to effectuate an alternative plan that was
9

outlined in a written memorandum drafted by Schall on May 9, 

2012. The plan relied upon the provisions of G. L. c. 156C, 

§ 60, which authorizes a Massachusetts limited liability company 

to merge with another business entity upon the vote of members 

owning more than fifty percent of the company, unless the 

company's operating agreement provides otherwise. Since the 

ATT-MA agreement was silent on the issue of mergers, the plan 

called for Eriksson to use his majority position and merge ATTMA into a new entity. As detailed in Schall's memorandum, the 

merger would also allow the majority to, among other things, 

terminate the ATT-MA agreement; install Eriksson and Proppe as 

the board of directors of the "new" entity; convert Eriksson's 

outstanding loans to ATT-MA into preferred stock in the new 

entity, while simultaneously converting all existing membership 

interests into common stock; and allow Eriksson to make future 

contributions in return for additional preferred stock. 

Regarding Allison, the memorandum suggested that the merger 

would eliminate his "ability to interfere with company 

operations" and, as additional funds were invested in the new 

entity over time, reduce him to "a smaller and smaller ownership 

position." 

On May 25, 2012, Eriksson, Proppe, Broomhead, and Schall 

created a new Delaware limited liability company, also called 

Applied Tissue Technologies, LLC (ATT-DE). Then, without 
10

holding a meeting or securing the unanimous written consent of 

all members, as required under the ATT-MA agreement,6 Eriksson, 

Proppe, and Gudrun Eriksson executed various documents prepared 

by the attorneys to effectuate the merger. One of the documents 

was a new operating agreement (ATT-DE agreement), which 

eliminated all of the minority protections provided in the ATTMA agreement, including the minority's rights to participate in 

management, access information, and prevent dilution of their 

interests. The ATT-DE agreement further eliminated the 

provision requiring members to act with utmost good faith and 

loyalty in the conduct of ATT-DE's affairs.7

On the evening of May 29, 2012, Eriksson and Proppe, having 

accomplished everything necessary to effectuate the plan, met 

with Allison and informed him for the first time about the 

merger. They further advised Allison to contact Schall, who was

identified for the first time, if he wanted copies of the new 

ATT-DE agreement and other documents. Only after Allison 

secured copies from Schall a few days later did he learn of the 

full extent of the actions that had been taken. Over the 

 

6 According to the complaint, the ATT-MA agreement provided 

that a meeting could be held only after five days' advance 

notice to all members, unless members waived notice in writing 

or executed a written consent approving of the actions to be 

taken at the meeting. 

7 There is no copy of the ATT-DE agreement in the record.
11

ensuing months, ATT-DE issued additional preferred shares to 

Eriksson, Proppe, and Broomhead's husband. As anticipated in 

Schall's memorandum, the transactions substantially reduced the

interests of Allison and the other minority members. 

Allison initially responded by filing a civil action 

against Eriksson, Proppe, and Gudrun Eriksson in May, 2013, 

asserting claims for breach of contract, intentional 

interference with advantageous business relations, breach of 

fiduciary duty, and civil conspiracy (2013 action). Then, on 

May 28, 2015, while the 2013 action was still pending, Allison 

and the other minority members commenced the present action.8

Standard. In reviewing the allowance of a motion to 

dismiss pursuant to Mass.R.Civ.P. 12(b)(6), we proceed de novo 

and consider the same pleadings as the motion judge. Dartmouth

v. Greater New Bedford Regional Vocational Technical High Sch. 

Dist., 461 Mass. 366, 373 (2012). In so doing, we accept as 

true all factual allegations in the complaint and draw any 

reasonable inferences therefrom in the plaintiffs' favor. See 

Golchin v. Liberty Mut. Ins. Co., 460 Mass. 222, 223 (2011). 

"The ultimate inquiry is whether the plaintiffs alleged such 

 

8 The plaintiffs also asserted claims in this action against 

Eriksson, Proppe, and Gudrun Eriksson, which were dismissed 

pursuant to Mass.R.Civ.P. 12(b)(9), as amended, 450 Mass. 1403 

(2008), due to the pendency of the 2013 action. The plaintiffs 

have not challenged that portion of the judgment.
12

facts, adequately detailed, so as to plausibly suggest an 

entitlement to relief." Greenleaf Arms Realty Trust I, LLC v. 

New Boston Fund, Inc., 81 Mass. App. Ct. 282, 288 (2012).

Discussion. 1. Breach of fiduciary duty by attorneys. To 

prevail on their claim for breach of fiduciary duty against 

Broomhead, Schall, Gunderson, and WilmerHale, the plaintiffs 

must show: (1) the existence of a fiduciary duty; (2) breach of 

that duty; (3) damages; and (4) a causal connection between 

breach of the duty and the damages. See Hanover Ins. Co. v. 

Sutton, 46 Mass. App. Ct. 153, 164 (1999). The defendants 

maintain that the plaintiffs have failed to clear the first 

hurdle and plead sufficient facts to plausibly suggest the 

existence of a fiduciary duty. We disagree.

"[T]he relationship between attorney and client, like those 

between trustee and beneficiary, director and corporation, 

guardian and ward, is fiduciary as matter of law." Markell v. 

Sidney B. Pfeifer Foundation, Inc., 9 Mass. App. Ct. 412, 442 

(1980) (Markell). The plaintiffs, however, do not allege that 

they had an express or implied attorney-client relationship with 

Broomhead, Schall, Gunderson, or WilmerHale.

9 To the extent the

 

9 An attorney-client "relationship may be, but need not be, 

express; the relationship can be implied from the conduct of the 

parties." Page v. Frazier, 388 Mass. 55, 62 (1983).
13

defendants may have owed the plaintiffs a fiduciary duty, 

therefore, it did not arise from such a relationship.

Instead, the plaintiffs argue that a fiduciary duty arose 

from the defendants' engagement as counsel for ATT-MA, a closely 

held company10 in which, by law, the shareholders owed each other 

a fiduciary duty of utmost good faith and loyalty. See Donahue

v. Rodd Electrotype Co. of New England, Inc., 367 Mass. 578, 593 

(1975) (Donahue); Pointer v. Castellani, 455 Mass. 537, 549 

(2009) (Pointer).

11 To that end, the Supreme Judicial Court has 

acknowledged, albeit in dictum, that "there is logic in the 

proposition that, even though counsel for a closely held 

corporation does not by virtue of that relationship alone have 

an attorney-client relationship with the individual 

shareholders, counsel nevertheless owes each shareholder a 

fiduciary duty." Schaeffer, 405 Mass. at 513 ("Just as an 

 

10 "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).

11 "Although the corporate form provides . . . advantages 

for the stockholders (limited liability, perpetuity, and so 

forth), it also supplies an opportunity for the majority 

stockholders to oppress or disadvantage minority stockholders. 

The minority is vulnerable to a variety of oppressive devices, 

termed 'freeze-outs,' which the majority may employ." Donahue, 

367 Mass. at 588. "Unscrupulous minority shareholders also may 

do damage to the interests of the majority." Pointer, 455 Mass. 

at 551 n.19.
14

attorney for a partnership owes a fiduciary duty to each 

partner, it is fairly arguable that an attorney for a close 

corporation owes a fiduciary duty to the individual 

shareholders").12 See Cacciola v. Nellhaus, 49 Mass. App. Ct. 

746, 752 (2000) (Cacciola) (discussing Schaeffer and holding 

that claim for breach of fiduciary duty against counsel for 

partnership had been sufficiently pleaded to survive motion to 

dismiss).

13

In Schaeffer, supra, the court took particular note of what 

it described as the "well-reasoned opinion" in Fassihi v. 

Sommers, Schwartz, Silver, Schwartz & Tyler, P.C., 107 Mich. 

App. 509 (1981) (Fassihi). There, Fassihi, a fifty percent 

shareholder in a closely held professional corporation, brought 

a claim for breach of fiduciary duty against counsel for the 

corporation for allegedly assisting the other fifty percent 

shareholder in ousting him from the corporation. In addressing

the claim, the Michigan court first noted:

"Although we conclude that no attorney-client relationship 

exists between plaintiff and defendant, this does not 

necessarily mean that defendant had no fiduciary duty to 

 

12 The court in Schaeffer ultimately concluded that it was 

not necessary to determine whether such a fiduciary duty existed 

in that case. 405 Mass. at 513.

13 In Kurker v. Hill, 44 Mass. App. Ct. 184, 187 (1998), 

this court held that an attorney for an individual shareholder 

in a close corporation does not owe a fiduciary duty to the 

other shareholders.
15

plaintiff. The existence of an attorney-client 

relationship merely establishes a per se rule that the 

lawyer owes fiduciary duties to the client.

"A fiduciary relationship arises when one reposes faith, 

confidence, and trust in another's judgment and advice. 

Where a confidence has been betrayed by the party in the 

position of influence, this betrayal is actionable, and the 

origin of the confidence is immaterial. . . . Furthermore, 

whether there exists a confidential relationship apart from 

a well defined fiduciary category is a question of fact."

(Footnote omitted.) 107 Mich. App. at 514-515. The court then 

went on to note

"the difficulties in treating a closely held corporation 

with few shareholders as an entity distinct from the 

shareholders. Instances in which the corporation attorneys 

stand in a fiduciary relationship to individual 

shareholders are obviously more likely to arise where the 

number of shareholders is small. In such cases . . ., the 

corporate attorneys, because of their close interaction 

with a shareholder or shareholders, simply stand in 

confidential relationships in respect to both the 

corporation and individual shareholders."

Id. at 515-516. Based on Fassihi's assertion that he had 

reposed trust and confidence in the defendant attorney, whose 

only prior involvement with the corporation had been drafting 

the membership agreements, the court held that the claim for 

breach of fiduciary duty was sufficient to survive a motion for 

summary judgment.

14

 

14 See Brennan v. Ruffner, 640 So. 2d 143, 146-147 (Fla. 

Dist. Ct. App. 1994) (suggesting minority shareholders may 

maintain claim for breach of fiduciary duty against counsel for 

close corporation under certain circumstances not presented in 

that case); Collins v. Telcoa Intl. Corp., 726 N.Y.S.2d 679, 684

(N.Y. App. Div. 2001) (minority shareholder in close corporation 

adequately stated claim for breach of fiduciary duty against 
16

As was the case in Michigan according to Fassihi, the 

determination of whether a fiduciary relationship exists outside 

one of the well-defined relationships is largely a question of 

fact in Massachusetts. See Collins v. Huculak, 57 Mass. App. 

Ct. 387, 395 (2003).

15 In the present case, the factual 

allegations regarding the significant protections afforded to 

minority members under the ATT-MA agreement loom large in that

analysis.16 According to the complaint, the ATT-MA agreement

required management decisions to be made collectively, even if 

each member's vote was limited by their proportionate interest 

in the company. The agreement also provided that it could not 

 

company counsel for failing to inform him of impending sale of 

company).

15 In Doe v. Harbor Schs., Inc., 446 Mass. 245, 252 (2006),

the court, reviewing the trial judge's allowance of motions for 

summary judgment, stated that "[w]here the fiduciary 

relationship is not one created by law, the existence of the

relationship ordinarily is a mixed question of law and fact for 

which the party asserting the relationship bears the burden."

16 General Laws c. 156C, the Massachusetts Limited Liability 

Company Act, defines an "operating agreement" as a "written or 

oral agreement of the members as to the affairs of a limited 

liability company and the conduct of its business." G. L. 

c. 156C, § 2(9), inserted by St. 2003, c. 4, § 33. The cochair 

of the task force that drafted the act described it as "the 

document which sets forth specifically how the [limited 

liability company] is organized, how it will operate, and how 

its economic results will be shared. A[ limited liability 

company] operating agreement is roughly analogous to a 

partnership agreement or a corporation's articles of 

organization and by-laws." Parker, The Limited Liability 

Company: An Introduction, 39 Boston Bar J. 8, 9 

(November/December 1995).
17

be amended without the unanimous written consent of both 

Eriksson and Allison. Still further, the agreement provided 

that no member's interest in the company could be diluted 

without that member's consent. In the context of these

allegations, we can see the "logic" in imposing a fiduciary duty 

on counsel for this closely held company to protect minority

rights. See Schaeffer, 405 Mass. at 513.

For their part, the defendants maintain that there are two 

important caveats in the case law that suggest no fiduciary duty 

should be imposed in the instant case. First, they note that 

there is no allegation that the minority members reposed trust 

or confidence in, or even interacted with, Broomhead, Schall, 

Gunderson, or WilmerHale. Second, they suggest that there was 

an actual or potential conflict between ATT-MA and the minority 

members.

Regarding the defendants' first argument, it is true in 

Massachusetts that, outside one of the well-defined 

relationships where the duty arises as a matter of law, "a 

fiduciary duty exists when one reposes faith, confidence, and 

trust in another’s judgment and advice." Doe v. Harbor Schs., 

Inc., 446 Mass. 245, 252 (2006) (Doe) (quotation omitted). At 

the same time, "[t]he circumstances which may create a fiduciary 

relationship are so varied that it would be unwise to attempt 

the formulation of any comprehensive definition that could be 
18

uniformly applied in every case." Ibid., quoting from Warsofsky

v. Sherman, 326 Mass. 290, 292 (1950). It is for this reason 

that, as noted above, the determination of whether a fiduciary 

duty exists is largely fact specific. And the factual inquiry 

here is particularly complicated due to the alleged covert 

nature of counsel's actions. On the one hand, there are no 

allegations in the complaint of any personal history or 

interaction between counsel for the company and the minority 

members, but on the other, the complaint does allege that 

counsel should have communicated with the minority members, 

particularly given the terms of the ATT-MA agreement providing 

strong protections of minority rights. Instead of communicating 

with minority members about the proposed actions, counsel 

allegedly took purposeful steps to conceal their activities 

undermining the ATT-MA agreement. Given the protections 

contained in the ATT-MA agreement, the minority members should 

have been able to repose trust and confidence that any counsel 

hired by the company would have communicated and consulted with 

them prior to undoing those protections. See generally Doe, 

supra. In light of those allegations, we cannot conclude, as a 

matter of law, that company counsel did not owe a fiduciary duty 

to the minority members because of the lack of a prior 

relationship and interaction.
19

As to the defendants' second argument, it is also true that 

while an attorney in Massachusetts may owe a duty to a nonclient 

whom the attorney knows, or reasonably should foresee, will rely 

on his or her services, such a duty is less likely to be imposed 

"where an attorney is also under an independent and potentially 

conflicting duty to a client." Robertson v. Gaston Snow & Ely 

Bartlett, 404 Mass. 515, 524 (1989), quoting from Page v. 

Frazier, 388 Mass. 55, 63 (1983). The defendants maintain that 

such an actual or potential conflict existed here between their 

client, ATT-MA, and the minority members due to the disagreement 

between Allison and Eriksson over how to address the company's 

potential financial shortfall.17 Once again, however, the

analysis in this case is complicated by the significant minority 

protections in the ATT-MA agreement, including, for example, the 

requirements that the agreement could not be amended without the 

unanimous written consent of Eriksson and Allison, and that the 

agreement could not be amended to alter the percentage interest 

of any member without the consent of each member adversely 

affected by such an amendment. Consensual decision-making was 

 

17 "As a general proposition, a lawyer employed or retained

by an organization represents the organization acting through 

its duly authorized constituents." Clair v. Clair, 464 Mass. 

205, 215-216 (2013) (quotation omitted). In such a case, the 

attorney "owe[s] a duty to act according to the interests of the 

corporation and not in the interests of a nonclient stockholder, 

director, officer, employee, or other representative of the 

corporation." Id. at 216 (quotation omitted).
20

thereby imposed on important matters despite the obvious 

potential for conflict. The defendants are also alleged to have 

undertaken representation of the company with full knowledge of 

those protections. Accordingly, it can plausibly be inferred 

that the defendants knew, or should have reasonably foreseen, 

that anyone who served as counsel for the company was 

constrained by the operating agreement, and the consensual 

decision-making it imposed on important matters, or at least 

could not act covertly, in concert with the majority members, 

for the very purpose of eliminating those protections. Cf. 

Zimmerman v. Bogoff, 402 Mass. 650, 657 (1988) (Zimmerman) 

("Where the alleged wrongdoer can demonstrate a legitimate 

business purpose for his action, no liability will result unless 

the wronged shareholder succeeds in showing that the proffered 

legitimate objective could have been achieved through a less 

harmful, reasonably practicable, alternative mode of action"). 

Under these circumstances, the potential for conflict does not 

serve as a sufficient basis for us to conclude, as a matter of 

law, that the defendants did not owe a fiduciary duty to ATTMA's minority members.

2. Aiding and abetting; civil conspiracy. The plaintiffs 

also asserted claims for aiding and abetting a breach of 

fiduciary duty and civil conspiracy against Broomhead, Schall, 

Gunderson, and WilmerHale for their participation in the alleged 
21

freeze-out of the minority members by the majority. The 

elements of the tort of aiding and abetting a breach of 

fiduciary duty are: (1) there must be a breach of fiduciary 

duty; (2) the defendants must know of the breach; and (3) the 

defendants must have actively participated or substantially 

assisted in or encouraged the breach to such a degree that they

could not reasonably have been acting in good faith. Arcidi v. 

National Assn. of Govt. Employees, 447 Mass. 616, 623-624 

(2006). The claim for civil conspiracy, meanwhile, similarly 

requires a showing that the defendants (1) knew that the conduct 

of Eriksson and the other majority members of ATT-MA constituted

a breach of fiduciary duty and (2) substantially assisted in or 

encouraged that conduct. See Kurker v. Hill, 44 Mass. App. Ct. 

184, 189 (1998) (Kurker).

18 The defendants now challenge the 

knowledge and substantial assistance elements common to both 

claims and argue that the complaint suggests, at most, that the

attorneys provided Eriksson and the other majority members with 

legal advice that turned out to be wrong.19 Once again, we 

disagree.

 

18 Massachusetts recognizes two forms of civil conspiracy, 

one requiring independent tort liability, the other coercion. 

See Kurker, 44 Mass. App. Ct. at 188-189. The plaintiffs have 

asserted the former.

19 The defendants do not contend, at least at this stage, 

that the alleged conduct of the majority members did not rise to 

the level of a breach of fiduciary duty. In the 2013 action, a 
22

"An allegation that the [majority members] acted under the 

legal advice of the defendants, without more, is insufficient to 

give rise to a claim that [the] attorney[s are] responsible to 

third persons for the . . . acts of [their] clients." Spinner

v. Nutt, 417 Mass. 549, 556 (1994). The plaintiffs here, 

however, have alleged that Broomhead and Schall (1) were aware 

that they were representing a closely held company where 

majority and minority members owed each other a fiduciary duty; 

(2) were aware of the ATT-MA agreement and the minority rights 

therein; (3) were aware that those rights precluded the majority 

members from taking the steps they desired in connection with 

the company; (4) devised a plan to allow the majority to 

"circumvent" and "evade" those rights; and (5) did so with full 

knowledge that the plan violated not only the operating 

agreement, but also the majority's fiduciary duty to the 

minority. While the facts eventually may establish that the 

defendant attorneys had a good faith belief that the merger they 

devised was well-grounded in the law,20 these allegations are

 

judge, after a jury waived trial, concluded that, in fact, 

Eriksson had breached his fiduciary duty to Allison. The judge 

also noted, however, that it did not appear that Allison had 

acted consistently with his own fiduciary duties to Eriksson. In 

any event, the judgment in the 2013 action is now on appeal 

before this court. See Allison vs. Eriksson, Appeals Court no.

2017-P-0126.

20 It is worth noting that even a merger that is in 

technical compliance with the relevant statute can be subject to 
23

sufficient at this stage to suggest that they acted with 

knowledge that the majority members were breaching their 

fiduciary duty to the minority members and substantially 

assisted in the breach. See Mass.R.Civ.P. 9(b), 365 Mass. 751 

(1974) (knowledge, like other conditions of mind, can be averred 

generally).

As noted above, the plaintiffs also allege that the 

defendant attorneys devised and carried out this plan covertly,

in their capacity as counsel for the company, without ever 

communicating with the minority members, even though the ATT-MA 

agreement, among other things, (1) afforded all members the 

right to participate in management, (2) allowed action to be 

taken only after holding a meeting with advance notice to all 

members, and (3) required Allison's approval for any amendment 

to the ATT-MA agreement. The complaint goes even further,

alleging that the lack of communication was purposeful and 

identifying affirmative steps the defendant attorneys took to 

conceal their involvement from the minority members. Still 

further, the alleged acts and omissions of the defendant 

attorneys are colored by the fact that one of them, Broomhead, 

 

judicial review in the context of a freeze-out, "and the 

dissenting stockholders are not limited to the statutory remedy 

of judicial appraisal where violations of fiduciary duties are 

found." Coggins v. New England Patriots Football Club, Inc., 

397 Mass. 525, 533 (1986).
24

is the daughter of the primary beneficiary of the plan, 

Eriksson. Her husband also allegedly benefited from the plan by

securing preferred shares in ATT-DE after the merger. At the 

rule 12(b)(6) stage, with all reasonable inferences drawn in the

plaintiffs' favor, the allegations are sufficient to suggest 

that the defendant attorneys did not merely provide routine

legal services but rather substantially assisted the majority in 

their breach of fiduciary duty.

3. Chapter 93A. Finally, the plaintiffs allege that by 

participating in the alleged freeze-out of the minority members, 

the defendant attorneys and law firms engaged in unfair or 

deceptive acts or practices in violation of G. L. c. 93A, §§ 9 

and 11. The defendants argue, however, that the claim should be 

dismissed because they were not involved in "trade or commerce," 

a requisite element under both §§ 9 and 11. See G. L. c. 93A, 

§ 2(a) ("[U]nfair or deceptive acts or practices in the conduct 

of any trade or commerce are hereby declared unlawful").21 

"Trade or commerce refers to transactions in a business context, 

which, in turn, is determined by the facts of each case, on 

consideration of the nature of the transaction, the character of 

 

21 While only the defendants need be engaged in "trade or 

commerce" under G. L. c. 93A, § 9, the plaintiffs and defendants 

must be engaged in "trade or commerce" to sustain a claim under 

§ 11. See Frullo v. Landenberger, 61 Mass. App. Ct. 814, 821 

(2004). The defendants have not addressed whether the 

plaintiffs were engaged in trade or commerce.
25

the parties and their activities, and whether the transaction 

was motivated by business or personal reasons." Feeney v. Dell 

Inc., 454 Mass. 192, 212 (2009) (quotations and citations

omitted). This determination is typically for the trier of fact 

and is preferably decided on a fuller record rather than on a 

motion to dismiss. See Brown v. Gerstein, 17 Mass. App. Ct. 

558, 570-571 (1984) (Gerstein); Schinkel v. Maxi-Holding, Inc., 

30 Mass. App. Ct. 41, 50 (1991). With this in mind, we conclude 

that while the "trade or commerce" determination is a novel and 

close question in this context, the plaintiffs have alleged 

sufficient facts to plausibly suggest an entitlement to relief. 

See generally Ritchie v. Department of State Police, 60 Mass. 

App. Ct. 655, 663 n.14 (2004) (faced with fact intensive and 

novel theory of recovery, better practice is to deny motion to 

dismiss and allow parties to develop facts through discovery).

In general terms, "the practice of law constitutes 'trade 

or commerce' for purposes of liability under c. 93A." Gerstein, 

17 Mass. App. Ct. at 570. See G. L. c. 93A, § 1(b) ("trade" or 

"commerce" includes the "distribution of any services"). 

Ordinarily, however, "the proper party to assert a c. 93A claim 

against an attorney is a client or someone acting on a client's 

behalf." Tetrault v. Mahoney, Hawkes & Goldings, 425 Mass. 456, 

462 (1997). And, as noted above, the plaintiffs do not claim to 

have had an attorney-client relationship with the defendants. 
26

With that said, the defendants, in the course of their business 

as attorneys, agreed to represent ATT-MA. Integral to that 

engagement was an alleged fiduciary duty owed to the plaintiff 

minority members. While that alleged duty is not the equivalent 

of an attorney-client relationship, we cannot say, especially at 

this early stage, that it is not sufficiently akin to one for 

purposes of satisfying the "trade or commerce" requirements of 

c. 93A. See McCarthy v. Landry, 42 Mass. App. Ct. 488, 491 

(1997) (reversing dismissal of c. 93A claim against attorney for 

estate where nonclient plaintiff-beneficiary of estate 

"allege[d] the existence of at least a duty akin to that in an 

attorney-client relationship").

The defendants suggest that the unfair or deceptive acts or 

practices they are alleged to have engaged in, namely, assisting 

the majority members of ATT-MA in freezing out the plaintiffs, 

involved "principally a private grievance," Zimmerman, 402 Mass. 

at 663, or an "internal business dispute," First Enterprises, 

Ltd. v. Cooper, 425 Mass. 344, 348 (1997) (Cooper), which fall 

outside the conduct of any "trade or commerce" for purposes of 

c. 93A. See, e.g., Linkage Corp. v. Trustees of Boston Univ., 

425 Mass. 1, 23 n.33 (1997) ("intra-enterprise" disputes, which 

include "disputes stemming from an employment relationship, 

disputes between individual members of a partnership arising 

from partnership business, and transactions and disputes between 
27

parties to a joint venture and between fellow shareholders," are 

excluded from c. 93A); Newton v. Moffie, 13 Mass. App. Ct. 462, 

467 (1982) ("trade or commerce" requirement is "intended to 

apply only to dealings between legally separate 'persons' 

engaged in arm's-length transactions, and not to dealings 

between members of a single legal entity like a partnership"

[footnote omitted]). The defendants, however, were not members 

of the entity at issue, ATT-MA, and the fiduciary duty they are 

alleged to have owed the plaintiffs arose from their engagement 

as counsel for the company. The "intra-enterprise" exception to 

the application of c. 93A, therefore, does not readily apply.

The defendants further argue that, even if the "intraenterprise" exception does not apply directly, it applies 

derivatively because they are alleged to have injected 

themselves into an intra-enterprise dispute, not into trade or 

commerce. The cases they cite in support of this proposition, 

however, are distinguishable. See Cooper, 425 Mass. at 347-348; 

Kurker, 44 Mass. App. Ct. at 190-191. Unlike in the present 

case, the defendant attorneys in Cooper and Kurker represented 

other parties and were not deemed to have owed any duty to the 

plaintiffs. Here, once again, the defendants, in the ordinary 

course of their business as attorneys, accepted an engagement as 

counsel for the company, as a result of which they are alleged 

to have owed a fiduciary duty to the plaintiff minority members. 
28

In so doing, it is arguable that the defendants did not merely 

inject themselves into a private dispute, but, rather, engaged 

in unfair or deceptive acts or practices in connection with 

professional services they sold in the marketplace. See Quinton

v. Gavin, 64 Mass. App. Ct. 792, 799 (2005). As such, the 

allegations in the complaint are sufficient to suggest that the 

defendants were engaged in "trade or commerce."

Those portions of the judgment dismissing the plaintiffs' 

claims against WilmerHale, Gunderson, Schall, and Broomhead are 

reversed. The judgment is otherwise affirmed.

So ordered.