Source: http://massachusettslandlords.com/fronk-v-fowler-frivolous-claims/
Timestamp: 2019-04-22 07:01:52+00:00

Document:
December 7, 2009. – March 25, 2010.
Appeals Court, Appeal from order of single justice. Practice, Civil, Frivolous action, Attorney’s fees, Costs, Appeal. Partnership, Agreement, Fiduciary duty. Corporation, Corporate opportunity. Contract, Performance and breach.
Civil action commenced in the Superior Court Department on March 21, 2002.
After review by the Appeals Court, and denial by the Supreme Judicial Court of leave to obtain further appellate review, a proceeding for review of an order awarding attorney’s fees and costs under G.L. c. 231, § 6F, was heard in the Appeals Court by Scott L. Kafker, J., and a motion for an award of certain attorney’s fees and costs on appeal was denied by a panel in the Appeals Court.
The Supreme Judicial Court granted an application for direct appellate review of the order of the single justice and granted leave to obtain further appellate review of the order of the full panel.
Stephen H. Oleskey (Timothy R. Shannon & Mark C. Fleming with him) for the defendants.
Lawrence G. Green (Michael K. Sugrue with him) for the plaintiffs.
were wholly insubstantial, frivolous, and not advanced in good faith.” A single justice of the Appeals Court vacated the award. We granted the defendants’ application for direct appellate review. In addition, we granted the defendants’ application for further appellate review of an order by a full panel of the Appeals Court denying the defendants’ motion for appellate fees and costs under G.L. c. 211A, § 15, and Mass. R.A.P. 25, as appearing in 376 Mass. 949 (1979), arising out of the merits appeal of this case, Fronk v. Fowler, 71 Mass.App.Ct. 502 (2009). We conclude that the plaintiffs’ claims were frivolous and insubstantial. Consequently, we reinstate the fees and costs awarded by the trial judge and we remand to the Appeals Court its decision so that it may exercise its discretion with respect to appellate fees and costs.
1. Background. We draw the following from the findings of fact issued by the judge at the close of the trial. Those findings, having been described as “fully supported in the record,” and affirmed by the Appeals Court, Fronk v. Fowler, supra at 503, are conclusive and “unassailable” in this context. Danger Records, Inc. v. Berger, 444 Mass. 1, 12 n. 11 (2005) (Danger Records ).
a. The limited partnership. In 1984, the defendants, Robert L. Wolff, Jr.; John P. Fowler; and Jeffrey A. Millman, established The Cambridge Company, Inc., for the purpose of engaging in the real estate business. [FN3] Through The Cambridge Company, the defendants identified properties to develop and created individual limited partnerships to acquire them. In 1985 they entered into a purchase and sale agreement to acquire a commercial property located at 23 East Street in Cambridge, a former hot dog factory, which they planned to renovate and lease.
Consistent with their business model, their plan was to form a limited partnership that would assume ownership and management of the property.
Concurrent with their negotiations to purchase the 23 East Street property, the defendants entered lease negotiations with the plaintiffs, Ed Walter, Jack Saltiel, and Robert Fronk, who were the principals of Compumart Corporation. The plaintiffs were interested in leasing three floors of the building for their business operations. Over the course of the negotiations, the plaintiffs expressed interest in acquiring an ownership interest in the limited partnership. The defendants agreed, and in exchange for a fifteen-year lease and a $500,000 letter of credit to be used for project cost overruns, they entered into a limited partnership agreement with the plaintiffs creating the Maple East Associates Limited Partnership (MEALP). The defendants were the general partners of MEALP and held a sixty per cent interest in it. The plaintiffs were limited partners, possessing a forty per cent interest.
[FN4] Throughout the negotiations, the defendants made it clear to the plaintiffs that they would continue to acquire other properties outside the partnership.
“5.3 own, construct, operate, maintain, finance, improve, sell, convey, assign, mortgage or lease any real estate and any personal property necessary, convenient or incidental to the accomplishment of the purposes of the partnership” (emphasis added).
Therefore, although authorized to acquire real estate “convenient” to the purpose of MEALP, the defendants were also free to continue their separate real estate business.
Finally, § 12.5 of the partnership agreement anticipated that the defendants would use their respective skills to provide services to MEALP but required them to charge “terms and conditions which [were] not materially less favorable to the partnership than the terms and conditions which would be available from unrelated parties,” that is, market rates.
On the same day that MEALP was formed, the defendants obtained a $5.3 million mortgage on its behalf, guaranteeing the debt personally. [FN5] Consistent with the partnership agreement, MEALP paid Fowler’s firm for its role in securing the mortgage. The fees paid were “in accordance with industry standards.” MEALP also paid fees to Millman for his services as architect and project manager. Again, the fees were market rate. Pursuant to its fifteen-year lease with MEALP, the plaintiffs’ company moved into 23 East Street in January, 1986. However, in December, 1986, the plaintiffs’ company went bankrupt and defaulted on its lease. It vacated the building in 1987.
[FN6] The default cost MEALP hundreds of thousands of dollars. Nevertheless, the plaintiffs remained limited partners in MEALP.
The defendants continued to manage MEALP over the next decade, saving it from failure several times and successfully refinancing the property to reduce the debt burden by approximately $1.5 million. [FN7] MEALP paid fees to entities related to the defendants for various necessary services over this time, all of which were at or below market rates.
Separately, the defendants also continued to grow their real estate portfolio. In 1994, they created a new investment partnership to acquire two warehouse-type buildings at 9 East Street in Cambridge, and in 1997 they acquired another warehouse at 1 East Street, again through the creation of a separate investment partnership. The defendants did not invite the plaintiffs to participate in either of these ventures.
interests in MEALP and who contributed no time, energy, or capital toward the management of its property–collectively received $921,600 as a result of the sale.
b. Complaint and trial. Notwithstanding the apparently favorable outcome, the plaintiffs filed a complaint against the defendants alleging breach of contract, breach of fiduciary duty, fraud and misrepresentation, misappropriation of business opportunity, and restitution. [FN10] The judge organized the contentions in the complaint into three categories. The first category consisted of the plaintiffs’ contention that the defendants denied them an opportunity to participate in the 1 and 9 East Street properties (business opportunity claim). In support of this claim, the plaintiffs asserted that the defendants were required to afford them the opportunity both under the terms of the partnership agreement and in accordance with their fiduciary duties as general partners. The second category included the plaintiffs’ contentions that the defendants had charged MEALP excessive fees during their management of the property (related party transactions claim). The third category consisted of the plaintiffs’ contention that the defendants had materially undervalued 23 East Street in the sale to Smith (valuation claim).
fiduciary duty with respect to such opportunities because the parties had shaped that duty in the terms of the partnership agreement and, regardless, the purchase of 1 and 9 East Street properties was not a business opportunity of MEALP because it was not related to the limited purpose of the partnership. See Durfee v. Durfee & Canning, Inc., 323 Mass. 187, 198 (1948) ( “acquisition of the property must be … within the corporate purpose”); Haseotes v. Cumberland Farms, Inc., 284 F.3d 216, 228 (1st Cir.2002), citing Durfee v. Durfee & Canning, Inc., supra (“Normally, a corporate opportunity is thought of as a business or investment opportunity within the sphere of, or somehow related to, the corporation’s own activities”). The judge further found that because the business opportunity in question, had it existed, would have belonged to MEALP and not the limited partners, the claim could only have been brought derivatively on behalf of the partnership, not on behalf of the limited partners themselves. See Smyth v. Field, 40 Mass.App.Ct. 625, 629 (1996). With regard to the plaintiffs’ related party transactions claim, the judge found that all of the fees were reasonable.
c. Direct appeal. The plaintiffs appealed to a full panel of the Appeals Court, which affirmed the decision of the judge. Fronk v. Fowler, 71 Mass.App.Ct. 502 (2008).
The Appeals Court largely adopted the judge’s reasoning with regard to the valuation and related party transactions claims. Id. at 511-512. On the business opportunity claim, however, the Appeals Court expanded the rationale supporting the judge’s decision. Specifically, the court cited a recently decided case, Chokel v. Genzyme Corp., 449 Mass. 272, 278 (2007) (Chokel ), and its predecessor, Blank v. Chelmsford Ob/Gyn, P.C., 420 Mass. 404, 408 (1995) (Blank ), for the proposition that parties may shape their fiduciary duties by the terms of a partnership agreement. [FN14] Thus, based on different cases but affirming the same proposition, the Appeals Court held that the partnership agreement explicitly freed the defendants from any fiduciary obligation to offer the 1 and 9 East Street properties to the partnership. Fronk v. Fowler, supra at 507-508. The Appeals Court otherwise agreed with the judge that the 1 and 9 East Street properties were not related to the purpose of MEALP and that the defendants had not breached the partnership agreement’s terms. Id. at 509-511. The court did not address the question whether the plaintiffs’ fiduciary business opportunity claim should have been brought derivatively.
mandates the award of reasonable counsel fees and other costs and expenses.” Masterpiece Kitchen & Bath, Inc. v. Gordon, 425 Mass. 325, 330 (1997).
The defendants also petitioned the Appeals Court for appellate fees and double costs in accordance with to G.L. c. 211A, § 15, and rule 25. *FN20+ Unlike awards under § 6F, the Appeals Court has considerable discretion over when to award appellate fees and costs, even if it concludes that the appeal was frivolous. [FN21] See Masterpiece Kitchen & Bath, Inc. v. Gordon, supra at 329-330; Avery v. Steele, 414 Mass. 450, 455 (1993).
On December 16, 2008, both a panel of the Appeals Court and the single justice determined that the plaintiffs’ business opportunity claim was not frivolous and therefore that awards under G.L. c. 231, § 6F, and G.L. c. 211A, § 15, were not warranted.
We begin with our review of the decision of the single justice vacating the judge’s award of fees and costs under G.L. c. 231, § 6F. We then proceed to review the decision denying appellate fees and costs by the Appeals Court.
entire record). In this case, for example, the single justice reviewed the judge’s § 6F findings of fact and her trial findings of fact, as well as relevant portions of the trial record and limited briefing by the parties.
MEALP’s purpose to the acquisition and management of a single property. Second, he concluded that the plaintiffs’ fiduciary business opportunity claim, while unmeritorious, had been based on unsettled law, the uncertainty of which gave the plaintiffs a reasonable belief that their claim had a chance of success. Both conclusions were errors of law.
A claim is frivolous if there is an “absence of legal or factual basis for the claim,” Demoulas Super Mkts., Inc. v. Ryan, 70 Mass.App.Ct. 259, 267 (2007), and if the claim is “without even a colorable basis in law.” Lewis v. Emerson, 391 Mass. 517, 526 (1984). The proper vantage point for evaluating whether a claim is frivolous is from the time the claim was brought and over the course of the litigation. See id. In this case, both the breach of contract and fiduciary duty bases of the plaintiffs’ business opportunity claim were frivolous from the inception of the litigation.
purpose of MEALP. See Durfee v. Durfee & Canning, Inc., 323 Mass. 187, 197-199 (1948); Haseotes v. Cumberland Farms, Inc., 284 F.3d 216, 228 (1st Cir.2002). Nothing about the addition of three adjacent warehouses promoted the purpose of MEALP. Moreover, the defendants were not required to make convenient acquisitions; the partnership agreement merely authorized them to do so. The plaintiffs sought to transform a permissive grant of authority into a contractual requirement.
Most important, however, was the fact that the plaintiffs were urging an interpretation that placed the utmost importance on a provision of the agreement that was explicitly “subject to all other provisions” of the agreement (emphasis added). One of those provisions was an express understanding that the defendants could engage in “any other business or investment, including the ownership of or investment in real estate,” and that “neither the partnership nor any of the partners thereof shall have any rights” in such businesses or investments (emphasis added).
judge also found that the plaintiffs offered no evidence that they believed or could have believed that the defendants were required to do anything more than they did. These facts were grounded in the evidence adduced at trial or, more accurately, the plaintiffs’ inability to adduce any evidence. There was no basis to withdraw or amend these findings under G.L. c. 231, § 6G, and the single justice committed an error of law in concluding that the plaintiffs’ claim had any basis in law or fact. As a matter of law, their business opportunity claim based on the language of the partnership agreement was frivolous.
The same holds true for the single justice’s conclusion that the plaintiffs’ fiduciary claim was not frivolous because the law was not “well settled” when the plaintiffs brought their claim in 2002. See Pirie v. First Congregational Church, 43 Mass.App.Ct. 908, 910 n. 3 (1997); Strand v. Hubbard, 27 Mass.App.Ct. 684, 687-688 (1989). By his logic, it was not clear until 2007 that “[w]hen a director’s contested action falls entirely within the scope of a contract between the director and the shareholders, it is not subject to question under fiduciary duty principles” but, rather, is governed by the terms of the contract. Chokel, supra at 278. He stated further that the application of this principle to contracts between general partners and limited partners in a limited partnership required an extension of Chokel informed by Delaware law. See Fronk v. Fowler, supra at 507-508, citing Sonet v. Timber Co. L.P., 722 A.2d 319, 322 (Del.Ch.1998) (“principles of contract preempt fiduciary principles where the parties to a limited partnership have made their intentions to do so plain”).
Without question, the decision of the Appeals Court in this case is the clearest statement to date in Massachusetts that the contours of fiduciary duties in a limited partnership are subject to contract. However, the proper inquiry with regard to the frivolousness of the plaintiffs’ fiduciary business opportunity claim is whether the claim had a basis in law in 2002, that is, before Chokel.
Chokel did not announce a new rule of law; rather, it affirmed a long-standing rule in Massachusetts that “[w]hen a director’s contested action falls entirely within the scope of a contract between the director and the shareholders, it is not subject to question under fiduciary duty principles.” Chokel, supra, citing Blank, supra at 408. It relied on Blank, supra, which stated that fiduciary duties in a close corporation “do not arise when all the stockholders in advance enter into agreements concerning” those duties. Id. (dealing with fiduciary duties with respect to rights on termination and stock purchase). That holding, in turn, had origins dating even earlier. In Donahue v. Rodd Electrotype Co. of New England, Inc., 367 Mass. 578, 598 n. 24 (1975) (Donahue ), we said that stockholder duties to one another can be altered by provisions in a close corporation’s articles of organization, the corporate bylaws, or a stockholder agreement. Similarly, in Evangelista v. Holland, 27 Mass.App.Ct. 244, 248-249 (1989), the Appeals Court said that “[q]uestions of good faith and loyalty do not arise when all the stockholders in advance enter into an agreement” regarding those duties. It has likewise been clear for some time that the doctrine of the Chokel, Blank, Evangelista, and Donahue cases applies to limited partnerships. For example, Blank recalled that “a close corporation resembles a partnership.” Id., citing Donahue, supra at 587. See JRY Corp. v. LeRoux, 18 Mass.App.Ct. 153, 166 (1984).
In determining that the plaintiffs’ business opportunity claim was not frivolous, the single justice pointed to the rationale used by the full panel of the Appeals Court in rejecting the plaintiffs’ appeal on the merits. Unsurprisingly, that decision made use of Chokel, our most recent articulation of the law on the subject in question. However, the Appeals Court also cited Blank, signaling its awareness of the underlying doctrine. Had we never decided Chokel, the Appeals Court would have had ample authority to hold against the plaintiffs. With respect to the proposition that the rule in Blank and Chokel applies to limited partnerships, the Appeals Court cited a Delaware case, Sonet v. Timber Co. L.P., supra. That proposition was also well founded in Massachusetts law. The law of corporations and the law of partnerships have evolved together. See Blank, supra at 408 (with regard to fiduciary duties, “a close corporation resembles a partnership”); Partnership Equities, Inc. v. Marten, 15 Mass.App.Ct. 42, 48 (1982) (“We have remarked … the affinity of purpose between the limited partnership and the business corporation. The status of a limited partner as analogous to that of a stockholder has not gone unnoted by courts and commentators…. It is appropriate, therefore, to look to cases involving stock subscriptions for assistance in measuring the extent of obligation of a subscriber to a limited partnership” [citations omitted] ). In 2002, a claim that asserted that the unambiguous terms of a partnership agreement had no bearing on the partners’ fiduciary duties had no basis in the law of Massachusetts and was frivolous.
c. Further consideration of the plaintiffs’ case. We turn now to the question whether the remainder of the plaintiffs’ case was wholly insubstantial, frivolous, and not brought in good faith. G.L. c. 231, § 6F. Although the single justice limited his discussion to the language of the partnership agreement, we treat the remaining underlying facts found by the judge as final. See Danger Records, supra at 12-13. From these findings we must determine if the plaintiffs’ claims were frivolous and whether those claims, along with the business opportunity claim, were wholly insubstantial and brought in bad faith. We conclude that they were.
to case and lacked “weight or importance,” and where party had desire to “harass” or cause “needless increase in the cost of litigation”); Lewis v. Emerson, 391 Mass. 517, 526 (1984) (standard met when party raised “defense without even a colorable basis in law [that] represented a significant part of [party’s] defense”); Pollack v. Kelly, 372 Mass. 469, 477 & n. 5 (1977) (standard can be met after party’s “continued use of … delaying tactics in the face of settled law”); Pirie v. First Congregational Church, 43 Mass.App.Ct. 908, 910-911 (1997) (standard met when plaintiff’s claim “relied on a stipulation whose existence was terminated” and where plaintiff stated he would force defendant to litigate); Katz v. Savitsky, 10 Mass.App.Ct. 792, 797 (1980) (standard met when it was “clear from the papers that when the action was brought, neither the plaintiff nor his counsel had had any reason to believe” in validity of claims).
In particular, the “[a]bsence of good faith of a claimant in litigation may be inferred reasonably from circumstances….” Massachusetts Adventura Travel, Inc. v. Mason, 27 Mass.App.Ct. 293, 299 (1989). See Hahn v. Planning Bd. of Stoughton, supra. Here, the inference of bad faith–that the plaintiffs had no reason to believe in the merits of their claims–is fully supported if not inescapable. Claims that are so unmoored from law or fact are the very definition of “frivolous”: “Lacking a legal basis or legal merit; not serious; not reasonably purposeful.” Black’s Law Dictionary 739 (9th ed.2009).
litigants are not entitled to fees because the prospect of paying an opponent’s costs “might unjustly deter those of limited resources from prosecuting or defending suits.” Police Comm’r of Boston v. Gows, 429 Mass. 14, 17 (1999). Section 6F marks an exception to this rule because there is no public policy against deterring frivolous suits such as these. Where, as here, parties lack the legal or factual basis to commence or sustain an action, yet press ahead for reasons related only to obstinance or avarice, the prospect of reimbursing their harassed opponents should cause them to rethink their litigious venture.
3. G. L. c. 211A, § 15, and Mass. R.A.P. 25. The Appeals Court denied the defendants’ motion for appellate fees and costs under G.L. c. 211A, § 15, and rule 25. It did so in part because it agreed with the decision of the single justice that the plaintiffs’ business opportunity claim was not frivolous. We have determined that decision to be incorrect as a matter of law. However, an award of appellate fees is not required by § 15 or rule 25 in the same way it is required by § 6F. See Masterpiece Kitchen & Bath, Inc. v. Gordon, 425 Mass. 325, 329-330 (1997); Avery v. Steele, 414 Mass. 450, 455 (1993). Consequently, the conclusion that the plaintiffs’ claims were frivolous merely triggers the discretion of the Appeals Court, and accordingly, we remand its order for further consideration.
4. Conclusion. The order of the single justice is reversed and the order of the judge awarding fees and costs is reinstated. The case is remanded to the Appeals Court for further consideration of its order pursuant to G.L. c. 211A, § 15, and Mass. R.A.P. 25.
FN1. Jack Saltiel and Maila L. Walter.
FN2. Jeffrey A. Millman; Robert Lee Wolff, Jr.; The Cambridge Company, Inc.; and Maple Leaf Cambridge Corporation.
FN3. The defendants each brought expertise to the venture. Robert Wolff was a real estate developer with experience working for a mortgage banking firm and a major real estate development firm. John Fowler was a mortgage broker. He founded his own firm, Fowler, Goedecke, Ellis & O’Connor, that specialized in pairing commercial lenders with real estate ventures. Jeffrey Millman was an experienced architect and project manager.
FN4. Although Walter, Saltiel, and Fronk were the original limited partners of Maple East Associates Limited Partnership (MEALP), Ed Walter is not a party to this action. In 1998, Walter transferred his interest in the partnership to his wife, Maila Walter. Maila Walter, along with Fronk and Saltiel, are the plaintiffs in the present action. However, for the sake of clarity, Ed Walter is included in the term “plaintiffs” for events prior to 1998.
A fourth limited partner, Stephen Schein, was added in 1986. However, he did not participate in this litigation.
The defendants’ original company, The Cambridge Company, Inc., is also a named defendant in this case although it was not a general or limited partner of MEALP.
FN5. The plaintiffs provided no personal guarantees on the loan.
FN6. In addition to the plaintiffs’ lease default, the judge found no evidence that the $500,000 letter of credit posted by the plaintiffs for project cost overruns was ever drawn on.
FN7. As a condition of refinancing the property, the defendants resigned as general partners of MEALP and were replaced in 1996 by a “bankruptcy remote corporation” called the Maple Leaf Cambridge Corporation, also a named defendant in this case.
FN9. Charles E. Smith Residential Realty LP had valued the 23 East Street property, for development purposes, at $3.6 million.
FN10. The complaint also sought an accounting, but the plaintiffs did not pursue it.
FN11. The judge dismissed the business opportunity claim prior to trial but addressed it at length in her findings of fact and conclusions of law issued after the trial.
FN12. The judge also found that the statute of limitations had run on several of the transactions included in the complaint.
because of its substantial flaws. The plaintiffs then admitted that they could not offer any testimony that the sale price of 23 East Street was unreasonable.
FN14. The judge had relied on a series of Superior Court decisions for that proposition.
FN15. The defendants also filed a motion for costs and fees pursuant to G.L. c. 261, but the judge found that the motion was time barred.
“Upon motion of any party in any civil action in which a finding, verdict, decision, award, order or judgment has been made by a judge or justice or by a jury, auditor, master or other finder of fact, the court may determine, after a hearing, as a separate and distinct finding, that all or substantially all of the claims, defenses, setoffs or counterclaims, whether of a factual, legal or mixed nature, made by any party who was represented by counsel during most or all of the proceeding, were wholly insubstantial, frivolous and not advanced in good faith.
The court shall include in such finding the specific facts and reasons on which the finding is based.
FN17. On February 26, 2007, the judge set forth her calculation of fees and costs. Her detailed decision and order fulfilled the requirement that she “specify in reasonable detail the method by which the amount of the award was computed and the calculation thereof.” G.L. c. 231, § 6F, fourth par. The parties do not contest her calculations.
amend any finding or reduce or rescind any award when in its judgment the facts so warrant.
FN19. The single justice who heard the § 6F appeal was also a member of the full panel of the Appeals Court that decided the direct appeal and decided the motion for appellate fees and costs under G.L. c. 211A, § 15.
FN20. Decisions concerning the award of litigation costs follow different appellate paths depending on their origin.
quoting Bailey v. Shriberg, 31 Mass.App.Ct. 277, 282 (1991). A decision pursuant to § 6F made in the Superior Court must be appealed to a single justice of the Appeals Court. G.L. c. 231, § 6G. Appeals from the single justice proceed according to the Massachusetts Rules of Appellate Procedure. Bartlett v. Greyhound Real Estate Fin. Co., 41 Mass.App.Ct. 282, 288-289 (1996). Accord Danger Records, supra at 10-11. Thus, such an appeal may be heard by a full panel of the Appeals Court, Mass. R.A.P. 3(a), as amended, 378 Mass. 927 (1979), or by this court if an application for direct appellate review is granted. Mass. R.A.P. 11(a), as amended, 378 Mass. 938 (1979).
In contrast, according to G.L. c. 211A, § 15, and Mass. R.A.P. 25, as appearing in 376 Mass. 949 (1979), parties may seek appellate costs and fees from the Appeals Court. Appeals from such decisions may be sought by applying for further appellate review. Mass. R.A.P. 27.1, as amended, 426 Mass. 1602 (1998); Masterpiece Kitchen & Bath, Inc. v. Gordon, 425 Mass. 325, 330 n. 11 (1997).
A literal reading of our decision in Danger Records, supra, might imply that our review of the single justice should be limited to those facts that the single justice explicitly “adopted and accepted,” that is, the partnership agreement. See id. However, our holding must be read in light of the language of § 6G. The single justice was not required affirmatively to adopt and accept the judge’s § 6F findings. What matters is that the findings of the judge have “already been subjected to one level of appeal,” Danger Records, supra at 12, and have not been “withdraw*n+ or amend*ed+.” G.L. c. 231, § 6G. Having survived one round of appellate review intact, the § 6F factual findings of the judge are final. Therefore we review the single justice’s decision for abuse of discretion or other errors of law in light of the entire record submitted to him.
FN23. There were two other independent reasons the plaintiffs’ fiduciary business opportunity claim was frivolous.
First, the 1 and 9 East Street properties were not related to the partnership’s purpose; therefore, even apart from the other terms of the partnership agreement, there was no fiduciary duty to offer it to the partnership. Haseotes v. Cumberland Farms, Inc., 284 F.3d 216, 228 (1st Cir.2002), citing Durfee v. Durfee & Canning, Inc., 323 Mass. 187 (1948).
The only relationship the warehouses on the other properties bore to 23 East Street was the potential expansion of parking. However, that end was met by the defendants’ decision to lease extra parking at market rates. The acquisition of three entire warehouse properties just to obtain more parking cannot be said to be related to MEALP’s purpose in a fiduciary sense.
447 (1997), citing G.L. c. 156B, § 46. Thus, “a limited partnership is an entity in whose ‘right,’ and for whose benefit an action may be maintained.” Id. It was well-settled in 2002 that a derivative action was available to the plaintiffs.
(1975) (Donahue ). However, individual suits are not always available. When the alleged wrong committed by a partner harms the partnership rather than another partner individually, the appropriate approach is to file a derivative claim. See Bessette v. Bessette, 385 Mass. 806, 806-807, 809-810 (1982) (stockholder derivative suits).
“There is simply no way to look at this case to conclude that the General Partners had the obligation to the Limited Partners to offer them, as individuals, the opportunity to invest in adjacent property….
FN25. The defendants argued that, in the event we affirmed the single justice with regard to the business opportunity claim, a partial award was still required because the rest of the claims were frivolous. We need not reach that argument today.

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