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15-P-1442 Appeals Court

JOSEPH DECROTEAU vs. MICHAEL DECROTEAU & others.1

No. 15-P-1442. December 16, 2016.

Practice, Civil, Standing, Preliminary injunction. Corporation, 

Stockholder. Lis Pendens.

The plaintiff, Joseph DeCroteau, brings this interlocutory 

appeal from a Superior Court judge's orders denying his motions

for a preliminary injunction and for approval of a memorandum of 

lis pendens.2 See G. L. c. 231, § 118, second par. He claims 

that he holds an equitable ownership interest in the property at 

issue in the parties' dispute, such that the judge should have 

allowed both motions. We affirm.

 

1. Background. The plaintiff is a fifty-one percent

shareholder of DeCroteau Corporation, which owns and operates 

the Gaffey Funeral Home located at 43 High Street in Medford 

(the property). The plaintiff is a licensed funeral home 

director who runs and manages the funeral home. The plaintiff's

brothers, Mark and Michael DeCroteau, are minority shareholders 

in DeCroteau Corporation. The property is owned by DBR Realty 

LLC (DBR). DeCroteau Corporation is the tenant of DBR, and Mark 

 

1 Mark DeCroteau and DBR Realty LLC.

2 The request for approval of a memorandum of lis pendens 

was initially filed as an ex parte motion, the denial of which 

is properly before this court on interlocutory review. See 

G. L. c. 184, § 15(d). 
2

and Michael3 are the sole members of DBR. At all times relevant 

to this action, the plaintiff had no legal ownership interest in 

DBR.

 

At the time of its acquisition of the funeral home in 2009, 

DeCroteau Corporation entered into a five-year written lease 

with DBR. The lease expired in 2014, and DeCroteau Corporation 

became a tenant at will when it failed to exercise an option to 

renew contained in the lease. In 2015, DBR listed the property 

for sale. In response, the plaintiff filed a verified complaint

in Superior Court against Mark, Michael, and DBR (collectively,

the defendants) seeking, inter alia, equitable relief to 

restrain the defendants from any attempt to sell the property.4 

In addition, the plaintiff filed motions for (1) a preliminary 

injunction prohibiting the defendants from marketing, 

transferring, or encumbering the property without prior court 

authorization, and (2) approval of a memorandum of lis pendens 

relating to the property. Following a nonevidentiary hearing,

the judge denied both motions.

 

2. Discussion. a. Preliminary injunction. The plaintiff 

sought to enjoin the defendants "from taking any action to 

market, transfer or encumber" the property, arguing that he has 

an equitable ownership interest, and that Mark and Michael have 

breached their fiduciary duty to him in endeavoring to sell the 

property, thus jeopardizing his livelihood and putting the 

corporation's existence at risk. The judge disagreed, ruling 

that "the plaintiff has not established a s[u]bstantial 

likelihood of success on the merits of his claim that he has 

[an] ownership interest in the [property]." See Packaging 

Indus. Group, Inc. v. Cheney, 380 Mass. 609, 616-617 (1980). We 

discern no abuse of discretion in the judge's decision.

 

 

3 We refer to the individual defendants by their first names 

to avoid confusion.

4 The verified complaint alleges eight counts. Six counts 

were brought against all defendants: violation of G. L. c. 93A,

§§ 2 and 11; tortious interference with advantageous business 

relations; constructive trust; resulting trust/equitable title;

unjust enrichment; and injunctive relief/equitable estoppel. 

One count, alleging breach of the covenant of good faith and 

fair dealing, was brought against DBR only. Another count, 

alleging breach of fiduciary duty, was brought against Mark and 

Michael only. 
3

As a threshold matter, the plaintiff brings all of his 

claims in his individual capacity, alleging that he is the only 

shareholder of DeCroteau Corporation who actively manages the 

business and effectuates the mortgage payments, and thus he 

alone will suffer harm from the marketing or sale of the funeral 

home. Even if true, the plaintiff has not demonstrated that he 

has standing to bring most of the claims raised in his verified 

complaint. DeCroteau Corporation, not the plaintiff, is the 

tenant of DBR. DeCroteau Corporation, not the plaintiff, owns 

and operates the funeral home business. Consequently, the 

plaintiff's claims, other than the count for breach of fiduciary 

duty brought against Mark and Michael, and the claims regarding

the creation of a resulting trust or imposition of a 

constructive trust, belong to DeCroteau Corporation, an entity 

separate and distinct from the plaintiff. See Beaupre v. Cliff 

Smith & Assocs., 50 Mass. App. Ct. 480, 494 (2000). The

plaintiff, by contrast, is a mere shareholder in DeCroteau 

Corporation and does not have standing to assert claims in 

DeCroteau Corporation's place.5 See, e.g., Pagounis v. 

Pendleton, 52 Mass. App. Ct. 270, 275 (2001) (shareholder in 

corporate tenant lacked standing to assert claim for breach of 

lease).6

 

5 Even assuming, arguendo, that the verified complaint could 

be read to assert claims on behalf of DeCroteau Corporation, the 

argument is unavailing because the case was not brought as a 

derivative action. See, e.g., Bessette v. Bessette, 385 Mass. 

806, 809-810 (1982) (plaintiff shareholder claims belonged to 

the corporation, and could properly be asserted only through 

derivative action). 

6 The plaintiff arguably has standing in his individual 

capacity to bring the claim of breach of fiduciary duty against 

Mark and Michael individually. Shareholders in a close 

corporation owe one another a strict fiduciary duty in the 

operation of the corporation. Donahue v. Rodd Electrotype Co. 

of New England, Inc., 367 Mass. 578, 592-593 (1975). However, 

shareholders do not owe one another this heightened duty in 

matters beyond operation of the corporate enterprise. See 

Adelson v. Adelson, 60 Mass. App. Ct. 753, 767–768 (2004). 

Here, the gravamen of the plaintiff's complaint is that his 

brothers' attempt to sell the property caused him harm 

individually, not that his brothers breached their duty to him 

in a matter of corporate governance. Id. at 768. While we do 

not opine on the ultimate viability of this claim, at this stage 

of the proceedings we cannot conclude that the judge abused her 
4

Although the plaintiff has no interest in DBR, he insists 

that this court should look beyond the corporate form, because 

he alleges that he has an "equitable interest" in the property. 

This argument is premised on his assertion that his payment of 

the monthly rent and taxes on the property over the course of 

many years created a constructive trust or a resulting trust in 

the property for his benefit. Even assuming that these payments 

were made by the plaintiff personally, and not by DeCroteau 

Corporation, they are, in and of themselves, insufficient to 

establish either a constructive or resulting trust. See 

Saulnier v. Saulnier, 328 Mass. 238, 240 (1952) (postconveyance 

payments cannot create a resulting trust unless payments act as 

"contemplated consideration for the conveyance"); Meskell v. 

Meskell, 355 Mass. 148, 151 (1969) (fraud or violation of 

fiduciary duty giving rise to constructive trust must occur at 

time property was transferred). Here, the plaintiff concedes 

that he did not furnish consideration of any kind for the 

purchase of the property. Accordingly, the judge did not err in 

concluding that the claims lacked a substantial likelihood of 

success on the merits, at least for the purposes of obtaining 

injunctive relief.

b. Lis pendens. The plaintiff contends that the judge 

abused her discretion in denying his motion for approval of a 

memorandum of lis pendens, claiming that his complaint alleged a 

claim of right to title in real property. In reviewing the 

denial of such a motion, this court considers whether the motion

judge committed an error of law or abused her discretion in 

applying the standards of G. L. c. 184, § 15. Galipault v. Wash 

Rock Invs., LLC, 65 Mass. App. Ct. 73, 82 (2005).

 

General Laws c. 184, § 15, inserted by St. 2002, c. 496, 

§ 2, provides, in relevant part, "Upon motion of a party, if the

subject matter of the action constitutes a claim of a right to 

title to real property or the use and occupation thereof or the 

buildings thereon, a justice of the court in which the action is 

pending shall make a finding to that effect and endorse the 

finding upon the memorandum." The language of the statute is 

mandatory, and affords "little discretion to the judge once the 

judge determines that the subject matter of the action concerns 

an interest in real estate." Sutherland v. Aolean Dev. Corp., 

399 Mass. 36, 41 (1987). In other words, the allowance or 

denial of a memorandum of lis pendens hinges on the nature of 

 

discretion in denying injunctive relief on the basis of the 

breach of fiduciary duty claim.
5

the claim, not the merits thereof. See ibid.; Wolfe v. 

Gormally, 440 Mass. 699, 703-707 (2004). See also Shapiro, 

Perlin, and Connors, Collection Law § 6:5 (4th ed. 2015) ("the 

nature of the claim involved is the determinative factor, and 

not the merits of the claim").7

 

Here, the judge denied the lis pendens motion for the same 

reason she denied the request for injunctive relief, i.e., that 

the plaintiff did not demonstrate a substantial likelihood of 

success on the merits of his claim to an ownership interest in 

the property. However, because the verified complaint includes 

a claim for the creation of a "resulting trust/equitable title,"

the nature of which constitutes a claim of right to title to 

real property, Eaton v. Federal Natl. Mort. Assn., 462 Mass.

569, 577 n.10 (2012), the merits of the underlying claims were 

immaterial to the request for a lis pendens. Thus, the denial 

of the motion on that basis was error.

 

We nonetheless affirm the order, and hold that the 

memorandum of lis pendens was properly denied, albeit on a 

separate and independent basis. See Clair v. Clair, 464 Mass. 

205, 214 (2013) ("appellate court may affirm a correct result 

based on reasons that are different from those articulated by 

the judge below"). General Laws c. 184, § 15, dictates, inter 

alia, that the proceedings underlying a request for a memorandum 

of lis pendens must be commenced by a verified complaint. The 

complaint must include a certification by the claimant made 

under the penalties of perjury that "no material facts have been 

omitted therefrom." No such certification was made in the 

instant case. This requirement is not one of mere form. See 

Galipault v. Wash Rock Invs., LLC, 65 Mass. App. Ct. at 82; 

McCann v. McGowan, 71 Mass. App. Ct. 513, 519-520 (2008). See 

 

7 We note that G. L. c. 184, § 15(c), contains a "mechanism 

for expedited removal of an unjustified lis pendens, including 

dismissal of frivolous claims supporting an approved lis 

pendens." Wolfe v. Gormally, 440 Mass. at 705. A special 

motion to dismiss pursuant to § 15(c) "shall be granted if the 

court finds that the action or claim is frivolous because (1) it 

is devoid of any reasonable factual support; or (2) it is devoid 

of any arguable basis in law; or (3) the action or claim is 

subject to dismissal based on a valid legal defense such as the 

statute of frauds." G. L. c. 184, § 15(c). If the court allows 

the special motion to dismiss, it must award the moving party 

"costs and reasonable attorney[']s fees, including those 

incurred for the special motion, any motion to dissolve the 

memorandum of lis pendens, and any related discovery." Ibid. 
6

also Commissioner of Correction v. Superior Ct. Dept. of the 

Trial Ct., 446 Mass. 123, 124 (2006) (clear and unambiguous 

language in statute is conclusive as to legislative intent). In 

view of the serious consequences that may arise from the 

recording of a memorandum of lis pendens, Heller v. Turner Bros.

Constr., Inc., 40 Mass. App. Ct. 363, 365 (1996), strict 

compliance with the statutory prerequisites is required. See 

TPM Holdings, Inc. v. Intra-Gold Indus., Inc., 91 F.3d 1, 4-5

(1st Cir. 1996) (noting requirement of strict compliance with 

lis pendens statutes in other jurisdictions). The omission of 

the certification constituted a material deficiency.

 

Accordingly, the orders denying the plaintiff's motion for 

a preliminary injunction and motion for approval of a memorandum 

of lis pendens are affirmed. 

So ordered.

Adam M. Hamel for the plaintiff.

Jordan L. Shapiro (Eric L. Shwartz with him) for the 

defendants.