O  T  H  E  R      D  E  C  I  S  I  O  N  S  :

Hoppe v. CMGI, Inc., 20 Mass. L. Rep. 207 2005 Mass. Super. LEXIS 547
(Nov. 14, 2005) (van Gestel, J.).

In this case, the Court interpreted the terms of a severance agreement between CMGI and Hoppe, CMGI’s Chief Information Officer. As a result of the burst of the Internet bubble, CMGI sold off eight of its nine operating subsidiaries. Under the severance agreement, if CMGI terminated Hoppe’s employment for reasons other than for cause and there was a change in control of CMGI, Hoppe, upon executing a release, would be entitled to a lump sum severance equal to two years’ salary, plus other benefits. If there was no change in control of CMGI, Hoppe would be entitled to a one-year severance, paid over time. Initially, Hoppe executed a release and asserted her entitlement to a one-year severance absent a change in control. She subsequently revoked the release and sought a two-year severance, contending that the sale of eight out of nine CMGI subsidiaries constituted a change in control.

Having denied motions for summary judgment due to an ambiguity in the contract, the Court held a jury-waived trial to determine whether there had been a change in control, as that phrase was defined in the contract.

The parties did not dispute that Hoppe was terminated for reasons other than for cause. The contract defined a change in control to include a “sale of all or substantially all of the assets” of CMGI. The contract however, did not define “substantially all.” Hoppe contended that substantially all of the assets of CMGI were sold because eight out of nine of CMGI’s subsidiaries had been sold, resulting in a significant change in the nature of the company’s operations. CMGI countered that “substantially all” meant “all but very few” and the subsidiaries sold accounted for only 28% of the assets on CMGI’s balance sheet. The Court sided with CMGI, relying in substantial part (pun intended) on the comments to the Massachusetts Business Corporation Act, which explained that a sale of several manufacturing lines while retaining one or more lines is normally not a sale of substantially all of the assets. In addition, the Court relied upon a Delaware Chancery Court decision construing the phrase to mean “essentially everything.” The Court declined to consider – because the claim was not before it – whether Hoppe could now execute the release she had revoked in order to obtain the less lucrative severance. 

Daniel Marr & Son Co. v. Coreslab Structures (Conn), Inc., 2005
Mass. Super. LEXIS 545  (Nov. 21, 2005) (van Gestel, J.).

The Plaintiff, Daniel Marr, was a sub-subcontractor to the Defendant, Coreslab, in connection with the construction of One Lincoln Street, a thirty-six story building in Boston. Coreslab, as a subcontractor to the general contractor, was responsible, among other things, for the design and engineering of the pre-cast concrete panels. Daniel Marr’s responsibilities included unloading the panels, attaching them to the building structure and ensuring that the panels were properly aligned.

As is true for even the smallest construction projects, things did not proceed as planned. In the midst of the project, the general contractor directed Coreslab to alter the sequence for erecting the panels. Instead of attaching the panels one floor at a time in a wrap-around fashion, the general contractor instructed Coreslab (who in turn ordered Daniel Marr) to attach the panels by elevation, so that one side of the building was completed at a time. Daniel Marr sued Coreslab, the general contractor (Beacon Skanska Construction Co.) and Liberty Mutual Insurance Company, which had posted a bond upon Daniel Marr filing a mechanics lien. Daniel Marr settled with the GC prior to trial and proceeded against Coreslab and Liberty. Daniel Marr claimed that the out-of-sequence erection of the panels required it to mobilize and 

demobilize its crew and to align the panels repeatedly as sides of the building were complete. Daniel Marr also claimed that Coreslab breached the contract in three additional specific respects. In total, Daniel Marr claimed damages of approximately $1.25 million. The Court found in favor of Daniel Marr.

Of particular interest is the Court’s discussion of Daniel Marr’s burden of proving its damages. Although Daniel Marr sought additional compensation arising out of four separate issues, the Court held that it had specifically proven its damages only with respect to the panel sequencing issue. The Court, however, appeared to award full recovery to Daniel Marr. The Court noted that the changes mandated by Coreslab “made it impossible for Marr to determine its losses on a segregated basis.” The Court held that “when there is an increase in work on a project, the measure of damages to which a a contractor or subcontractor is entitled is the fair price of the additional work” and that Marr was “entitled to recovery for the fair value for the work done.” The Court credited the testimony of one of the losing bidders on the project, who testified that the amount of work spent by Marr was reasonable. The Court held that Marr had satisfied its burden of proving its damages “with a reasonable degree of certainty.”