Judge Krupp, sitting in the Massachusetts Business Litigation Session, awarded a defendant more than $240,000 in attorneys’ fees, expenses, and interest under G.L. c. 231, § 6F, the Massachusetts statute authorizing fee shifting for frivolous claims.
216-218 Newbury Street Realty LLC sued Tivoli Audio, Inc., seeking declaratory relief about the definition of “gross sales” in the parties’ lease. The complaint alleged “on information and belief” that Tivoli marketed audio equipment over the internet from the leased premises and had more than $500,000 in gross sales.
Judge Krupp found not only that Newbury had no evidentiary basis for those core allegations, but also that the case appeared to be “a vehicle to harass Tivoli into paying” money to Newbury:
Newbury filed this case without an evidentiary basis to believe that the plaintiff’s on-line sales occurred on the Premises or that its sales exceeded $500,000. Tivoli had made extensive disclosures to Newbury before Newbury filed this case. Those disclosures showed that Tivoli’s sales from the Premises did not exceed $30,000. Newbury had no information contradicting Tivoli’s disclosures.
This case did not involve an interpretation of an ambiguous contractual provision. Instead, it was a manufactured dispute based on suspicion that some factual predicate might exist to apply an unambiguous contractual provision for Newbury’s benefit. Litigation cannot be used as a fishing expedition to obtain discovery, or as a tactic to coerce another party to settle in lieu of incurring litigation costs. This case appears to have been designed as a vehicle to harass Tivoli into paying something to Newbury, although Newbury had no basis in fact to bring the action.
Based on those findings, Judge Krupp ruled that Section 6F entitled Tivoli to an award of reasonable attorneys’ fees, other expenses, and interest. Those amounts, according to Judge Krupp, totaled $241,620.30. Judge Krupp also awarded Tivoli $58,548 plus interest on Tivoli’s counterclaim, which sought the return of the security deposit under the lease.
You can read the decision here.
Suffolk Superior Court
Docket Number: Civil No. 21-205-BLS1
Case Name: 216-218 Newbury Street Realty LLC vs. Tivoli Audio, Inc.
Date of Decision: July 17, 2023
Judge: Peter B. Krupp