Project Description

Clients Recover Double Damages From Defendant Landlord And Punitive Damages And Attorney’s Fees Against Bank

Restaurant Owners Recover $1.5 Million from Landlord and Bank on Fraud and Breach of Fiduciary Duty Claims.

Our clients pursued an opportunity to open a restaurant in Boston, Massachusetts. Relying on the landlord’s representations that his licenses were valid, our clients invested $200,000 in restaurant equipment, leasehold improvements and up-front lease payments. But shortly after opening, Boston police officers ordered the new venture shut down because of the landlord’s ongoing dispute with the licensing authorities. Our clients had to close the restaurant.

In the court case that followed, we convinced a jury that the landlord deceived the clients and that the clients’ reliance on the landlord’s representations about the validity of the licenses was reasonable. The jury returned a verdict in favor of the clients for the full amount of their losses, and doubled the damages after finding that the landlord’s misrepresentations were deliberate. The Court also awarded the clients reasonable attorney’s fees.

Having lost the court case, the landlord began to hide his assets in real estate trusts in fraud of the execution. When we sought to satisfy the judgment against the assets in the trusts, the landlord challenged the validity of the execution in several courts, including the Supreme Judicial Court and the Federal Bankruptcy Court. After losing in all forums, and unable to forestall the sheriff’s sale of the home in which he and his family lived, the landlord paid the full amount of the judgment with all accrued interest.

Clients receive significant additional recovery from first mortgage holder

Before the jury returned its verdict in favor of the clients, a bank holding the first mortgage on the real estate that the clients had attached to secure their judgment foreclosed its mortgage and extinguished the attachment. We later discovered that the bank’s foreclosure had produced surplus proceeds, and that the bank had distributed the surplus proceeds to the landlord in disregard of the clients’ lien in order to settle a separate lawsuit between the bank and the landlord.

On the clients’ behalf, we sued the bank for breach of fiduciary duty and violation of Chapter 93A. The trial court granted summary judgment to the clients, finding the bank’s conduct unfair and deceptive and ordering a hearing on whether the bank should pay punitive damages. The bank settled the case before the hearing and agreed to pay the clients $800,000, which included over $500,000 in punitive damages and attorney’s fees. All together, our clients recovered $1.5 million in two separate proceedings against two defendants as a consequence of the $200,000 that they lost in the failed restaurant venture.


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