A quarterly summary and brief analysis of significant decisions issued by the Massachusetts Superior Court Business Litigation Session. A service of O’Connor, Carnathan and Mack LLC.		  

May 2007

Volume 3
Number 4
Page 3
 

Summarizing opinions from October 1, 2006 through
December 31, 2006


Court dissolves LLP and LLC and appoints liquidating trustee
 

 

 
 
 

 

 

 

 

 

 



 
     

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

Rapoza v. Talamo, 2006 Mass. Super. LEXIS 531
(Oct. 10, 2006) (van Gestel, J.).
     

It is not too uncommon for partnerships to operate without any written agreement. As this case demonstrates, by operating a partnership or joint venture absent a written agreement, the parties cede certain control to the courts. In this case, two ophthalmologists formed and operated three businesses, two of which purported to be limited liability companies (LLCs) and the other a limited liability partnership. Each of the entities was owned fifty-fifty. The two doctors agreed to split their practices, but could not agree on how to divide the entities’ other

 

 

 

 

 

 

 
assets. One party filed a complaint to dissolve the entities and appoint a liquidating trustee. The Court found that in the absence of a written agreement the businesses were terminable at the will of either party. In addition, given the circumstances – namely that the doctors had separated their practices – the Court ruled that dissolution was equitable. The Court therefore dissolved the entities and allowed the motion to appoint a liquidating trustee. The Court gave the parties an opportunity to agree on a liquidating trustee, but ruled that it would appoint one itself if the parties could not agree.

 
 

 

 

 

 

 


 


 
 
     
     
 


Court refuses to enforce non-competition agreement clearly designed to apply in different circumstances
 

 

 
 

 

 

 

 

 

 

 


 

Tyler Technologies, Inc. v. Reidy, 21 Mass. L. Rep. 669, 2006 Mass. Super. LEXIS 594
(Oct. 30, 2006) (van Gestel, J.).
     

As a party seeking to enforce a non-competition agreement, generally Judge van Gestel is not a particularly favorable draw. This case is no exception, as Judge van Gestel denied the request for a preliminary injunction enforcing the non-compete.

Reidy was interested in purchasing the company for whom he worked as an employee. As part of his due diligence, he needed to review certain confidential financial documents, which required him to sign a non-competition agreement. Ultimately, Reidy elected not to purchase the company, the company was purchased by the Plaintiff, and Reidy shortly thereafter resigned and started a

 

 

 

 

 

 

 
competing company. In essence, the Court found, based on the language of the agreement, that it was intended to regulate the engagement of a consultant who performed services for the company, not to insure security where a third party seeks records and information in connection with a potential acquisition of the company. Because Reidy was not a “consultant,” the agreement in effect was meaningless, and Plaintiff had not made the requisite showing of likelihood of success on the merits. In addition, the Court denied the request for a preliminary injunction because the only harm allegedly suffered by Plaintiff was money, and not enough of it to threaten Plaintiff’s very existence.
 

 

 

 

 

 



 


 
 
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