Patel v. Ferullo

82 Mass.App.Ct. 1120

978 N.E.2d 106

Badresh PATEL

v.George C. FERULLO.

No. 11–P–1891.

Appeals Court of Massachusetts.

November 9, 2012.

OPINION TEXT STARTS HEREBy the Court (MEADE, SIKORA & WOLOHOJIAN, JJ.).

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

The plaintiff appeals from the dismissal of his amended complaint pursuant to Mass.R.Civ.P. 12(b)(6), 365 Mass. 755 (1974). We affirm in part and reverse in part.

We recite in broad summary the well-pleaded facts, together with the reasonable inferences that can be drawn from them. Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008). Badresh Patel alleges that he is the successor in interest to 947 Newport Convenience & Gas, LLC (LLC), which holds a judgment against 947 Newport Avenue, Inc. (Inc.) and one of its principals, James Sauro. Sauro had individually guaranteed the postclosing payments owed by Inc. to LLC for the purchase of LLC's assets. Inc. and Sauro failed to make the required payments, so LLC sued and obtained a judgment by agreement in an action filed in the Bristol County Superior Court (Bristol action). Sauro and Inc. were the only defendants in the Bristol action. George C. Ferullo (the defendant here) was not a party to the Bristol action, and no one appears to have sought to implead him despite the fact that before the Bristol action was terminated by agreement, Patel learned that he (Ferullo) was also a principal of Inc. and had—during the pendency of that action—transferred to a third party all of Inc.'s assets. Although Ferullo was not a party to the Bristol action, he controlled Inc.'s defense, instructing Inc.'s lawyer to stop defending against the litigation after Inc.'s assets had been alienated. The correspondence from Inc.'s attorney, as well as his affidavit (both attached to the amended complaint), together with the chronology of events, and the allegations of the amended complaint permit the inference that Ferullo alienated Inc.'s assets in order to make Inc. judgment proof and that, once that was accomplished, he instructed counsel to cease defending against the Bristol action. In the current action, Patel sues Ferullo individually, seeking to hold him liable for the unpaid debt owed by Inc. As the motion judge correctly held, counts I (liability as joint venturer), II (liability as partner), and III (liability as owner) all fail as a matter of law because-even accepting as true that Ferullo was a principal in Inc. and/or a partner/joint venturer with Sauro–Patel provides no legal theory under which Ferullo would owe a duty to him as a third party for debts owed under instruments to which he (Ferullo) was not a party. Moreover, we agree with the motion judge that the allegations do not suffice to support a claim that Inc.'s corporate veil should be pierced to reach Ferullo individually. See My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 614, 618–620 (1968); Scott v. NG U.S. 1, Inc., 450 Mass. 760, 767 (2008).

We also agree with the motion judge that counts IV (wrongful sale of secured assets and...