Business Litigation Cases

Commercial Landlord Tenant Dispute – $300,000 Recovery for our Client:
In 2008, our clients were sued by a former commercial tenant for constructive eviction, fraud in inducing the tenant to agree to take the space in the first instance and damages. We answered for the landlord and counterclaimed for the loss of rental income the tenant’s departure had caused. This became a somewhat complex case due to the tenant’s claims that renovations to the building in which they leased a floor exposed employees to undue noise and that they were exposed to hazardous substances when exterior lead was removed by licensed contractors. Due to the poor economic situation, commercial rental properties were suffering generally in the Providence area, thus our client’s duty to mitigate or avoid further losses by doing everything it could to rent the space to another tenant were unsuccessful. (Damaged parties are generally required to do everything they reasonably can to limit their losses.) After nearly three (3) years of litigation, the former tenant agreed to settle the matter and all claims have been dismissed. Our client has voiced satisfaction with the result. Commonwealth Land Title Ins. Co. v. M.S.I. Holdings, LLC, et al (U.S. District Court for the District of Rhode Island, docket number 08-cv-217-SJM-LDA, May, 2011).

Favorable Ruling in Alleged Usurious Loan/Civil RICO Case:
Judge Silverstein of the Providence County Superior Court ruled in our clients’ favor this week, finding that 45 Shawmut, LLC and one of its members, Ronnie Ramos, did not make a usurious loan and did not violate the state’s Racketeer Influenced Corrupt Organization statute in a transaction they made with Tracey Spetelunas and her husband. The court found that Ms. Spetelunas’ testimony that she did not know that she sold her home was not worthy of belief and dismissed all of the couple’s claims against our clients. This decision followed a five (5) day bench (non-jury) trial that took place last September. In a related case our clients’ counterclaims against the Rhode Island Attorney General for defamation and interference with the business of 45 Shawmut and Mr. Ramos were also challenged in the State Superior Court, but Judge Hurst denied the Attorney General summary judgment. The Attorney General has applied to the Supreme Court for a writ of certiorari but that request was denied. (Updated, May, 2009).

Massachusetts Appeals Court Upholds Superior Court Judgment in ‘Borrowed Servant’ Case:
In this case we represented a Connecticut painting company (“Custom Spray”) and its insurance company. Custom Spray loaned 2 of its painters and an assistant to a Springfield area Tennis & Racquet Club (“the Club”). While painting under the direction of the Club’s foreman, gusting winds carried paint particles far and wide. This caused damage to more than 300 automobiles and businesses. Acting on complaints, the West Longmeadow Police asked the foreman to stop painting, but he refused. Eventually scores of people whose property had been damaged made claims. The Club had no insurance, so it told everyone that Custom Spray and its insurer were responsible. When our clients took exception to this, dozens of small claims and other actions were commenced. We filed a Declaratory Judgment action, asking that the Superior Court declare that our clients were not responsible due to the “borrowed servant” doctrine. Following a non-jury trial, a Superior Court judge agreed. The Club appealed, but the Appeals Court in Boston rejected their effort to overturn the previous ruling. So it was declared that Custom Spray is not responsible when the right to control its workers rested with the Club and that its insurer had no obligation to cover any damages. Excelsior Insurance Co., et al v. Leo J. Shapiro, et al, 66 Mass.App.Ct. 1103; 845 N.E.2d 1223 (April 24, 2006).

Federal Court in Worcester Grants Summary Judgment Against Robinson-Patman Act and Related Claims:
Having had a difficult time operating its retail petroleum gas station, the plaintiff signed a mutual termination agreement under the Petroleum Marketing Practices Act. Apparently remorseful about this, it later claimed that the agreement was induced by fraud and misrepresentation. It also asserted that our client violated the federal Robinson-Patman Act by having allegedly engaged in “discriminatory pricing”. John Reilly was successful in demonstrating that the plaintiff was fully aware and received valuable consideration for terminating its agreement. And we proved that the plaintiff lacked any evidence of “discrimination” in the wholesale prices of its tankwagon loads of petroleum products. The United States Bankruptcy Court for the Western Division of Massachusetts agreed and granted summary judgment. There was no appeal. Great Road Service Center, Inc. v. Sunoco, Inc. No. 98-4179-HJB.

New Hampshire Federal Court Rejects Farmers’ Product Liability Claims:
Our client manufactured a spray insecticide for Agchem Service which, in turn, sold it to farmers for crop insect control. The plaintiffs claimed that their apple orchards were severely damaged when they applied a batch of the spray. They blamed our client, an independent transporter and Agchem for allowing the spray to become “contaminated”. The defendants argued that the plaintiffs either improperly mixed the insecticide or allowed it to be contaminated by their own handling of the product. The United States District Court for the District of New Hampshire granted our client and the other defendants summary judgment, finding that they were not responsible and that the plaintiffs did not prove that there was a “bad apple” among any of the parties. No appeal was taken and the case is closed. James Smith, et al v. Penn Tank Lines, Agchem Service, and Sunoco, Inc. (R&M), No. 00-220-JD.

New Hampshire Federal Court Dismisses State and Federal Sherman Antitrust Counterclaims:
Our client agreed to sell a retail service station to the Chios Realty Group on condition that Chios also enter into an agreement to purchase petroleum goods and services from our client. Chios reneged on its agreement to purchase the goods and services and our client sued to enforce its rights. Chios counterclaimed, alleging that our client violated federal (Sherman Antitrust Act) and state antitrust laws and a state consumer protection law. Chios contended that the agreement to sell the real estate conditioned upon or “tied to” entering into the supply agreement constituted an illegal tying arrangement. But the tying agreement was never concluded and our client lacked appreciable economic power in the relevant market. On our client’s motion to dismiss the counterclaims for lack of standing and failure to state a claim upon which relief could be granted, Judge DiClerico agreed and the counterclaims were dismissed. Sunoco, Inc. v. Chios Realty Group, Inc, No. 99-275-JD (January 5, 2000).

Rhode Island Supreme Court Agrees that Former Dealer Had to Return Loaned Equipment to Petroleum Company Through Writ of Replevin:
Our client loaned certain equipment, including dispenser pumps, to a franchised gasoline service station dealer in Johnston, Rhode Island. The equipment was readily removable without damage to the real estate. The dealer’s landlord had financial troubles. Their lender foreclosed and after an auction sale the property was transferred to defendant by a deed that purported to give defendant “the land and all buildings and improvements thereon”. Defendant refused to return our client’s equipment, claiming that it had become “fixtures”. We applied for a Writ of Replevin (a special method of getting back a party’s improperly held property). The Superior Court ordered that our client should have everything returned, so our client posted the appropriate bond and (with the assistance of a constable) retrieved its equipment. The defendant persisted, appealing to the state Supreme Court. But his obstinacy was for naught and his appeal was rejected. Sun Company, Inc (R&M) v. Sasa, 706 A.2d 1356.

United States District Court – Contract – Gasoline Deliveries – Petroleum Marketing Practices Act – Collection – Lanham Act Trademark Violation – Personal Guarantees:
Our client supplied gasoline and other related products to six (6) retail gasoline station owned or operated by defendant corporation (“the dealer”) Individual defendants had personally guaranteed the debts of the defendant corporation. An account arrearage developed and the dealer stopped operating 3 stations while he surreptitiously “crosshauled” unbranded gasoline and passed it off as our client’s branded product at the remaining 3 locations. Our client terminated the 6 franchise agreements in accordance with the Petroleum Marketing Practices Act (“P.M.P.A.”) and demanded payment of all arrearages. The dealer contended in a counterclaim that our client changed credit terms, declined to sell him gasoline (justifying purchasing it elsewhere), improperly terminated the franchise agreements, and acted in “bad faith”. During this ensuing litigation, John Reilly was able to show a federal jury in Providence, Rhode Island, that the dealer breached its contract by failing to pay for gasoline deliveries, violated the P.M.P.A. (entitling our client to terminate the franchises), and committed Trademark violations pursuant to the Lanham Act by dispensing unbranded gasoline from our client’s branded pump dispensers. After 6 hours of deliberations, the dealer’s counterclaims were rejected and our client awarded $202,165 for unpaid fuel deliveries as well as nominal damages for the Trademark violations. There was no appeal and the judgment was eventually paid in full by the guarantors. Sun Refining & Marketing Company v. F.C.F. Enterprises, et al, Nos. 91-0501T and 92-0131T.