Opinion ID: 196166
Heading Depth: 2
Heading Rank: 2

Heading: Matteucci

Text: 18 Brinkley Co. alleges a breach of the fiduciary duty Matteucci owed as an officer of Athena. The district court ruled that Matteucci owed no fiduciary duty, since the corporate existence of Athena had been terminated before Matteucci first discussed with Griswold his plans to move over to Charles River with Athena's last two clients, Hanson and Nazareth. 6 19 Brinkley Co. contends on appeal that the district court disregarded evidence that Matteucci breached his fiduciary duty to Athena by arranging for the incorporation of Charles River prior to the dissolution vote on Athena. It points to an affidavit by an Athena shareholder, stating that he would have opposed dissolution had he known of Matteucci's plans. 20 A corporate officer owes a fiduciary duty, Wartski v. Bedford, 926 F.2d 11, 13 (1st Cir. 1991) (applying Massachusetts law), to accord the utmost good faith and loyalty to the corporation. Meehan v. Shaughnessy, 535 N.E.2d 1255, 1263 (Mass. 1989) (citations omitted). Yet this fiduciary duty is not breached simply by secretly setting up a new firm during [the fiduciary's] tenure ... 'provided that in the course of such arrangements [the fiduciary] do[es] not otherwise act in violation of [his] fiduciary duties.'  Id. at 1264 (quoting Chelsea Indus. v. Gaffney, 449 N.E.2d 320, 326 (Mass. 1983)). Rather, the corporate officer's duty is to refrain from actively competing with his employer during the tenure of his employment. Chelsea Indus., 449 N.E.2d at 326. 21 The scope of a corporate officer's duty not to compete was outlined in Meehan, where law partners in Parker, Coulter, Dailey & White (Parker Coulter) planned and structured a competing law firm while still partners in Parker Coulter. Meehan, 535 N.E.2d at 1257-59. The SJC nonetheless held that there had been no breach of their fiduciary duty. Id. at 1264. The SJC further held that the fact that the defendant partners had induced Parker Coulter employees to join the breakaway firm did not suffice to establish liability in the absence of specific losses resulting from this claimed breach. Id. at 1264 n.4. At the same time, the SJC held that the defendant partners' secret solicitation of Parker Coulter's clients was an actionable breach of their fiduciary duty. Id. at 1265. The latter showing was not made in the instant case. 22 There is no record evidence that Matteucci informed either Hanson or Nazareth of the impending move to Charles River until after Athena had been dissolved and Matteucci was no longer in its employ. Moreover, there is not a scintilla of evidence supporting Brinkley Co.'s allegation that Athena might yet have been transformed into a viable concern. On the contrary, Athena's debt exceeded its assets by almost a million dollars and it had sustained serious operating losses during its last three fiscal years. Due to the projected decline in gross income resulting from Hanson's announced cutbacks, Athena's future prospects were grim to say the least. Thus, Athena's vote of dissolution and Matteucci's resignation were anything but the untoward developments posited by Brinkley Co. 23 Accordingly, the district court judgment is affirmed. Double costs are awarded to the Looney & Grossman defendants only, pursuant to Fed. R. App. P. 38.