DeCroteau v. DeCroteau

• Decision Date: 16 December 2016
• Docket Number: No. 15–P–1442.,15–P–1442.
• Citation: 65 N.E.3d 1217,90 Mass.App.Ct. 903
• Parties: Joseph DeCROTEAU v. Michael DeCROTEAU & others.
• Court: Appeals Court of Massachusetts

90 Mass.App.Ct. 903
65 N.E.3d 1217

Joseph DeCROTEAU
v.
Michael DeCROTEAU & others.¹

No. 15–P–1442.

Appeals Court of Massachusetts.

Dec. 16, 2016.

65 N.E.3d 1218

Adam M. Hamel, Woburn, for the plaintiff.

Jordan L. Shapiro (Eric L. Shwartz with him), Malden, for the defendants.

RESCRIPT.

90 Mass.App.Ct. 903

The plaintiff, Joseph DeCroteau, brings this interlocutory appeal from a Superior Court judge's orders denying his motions for a preliminary injunction and for approval of a memorandum of lis pendens.² SEE G.L. C. 231, § 118, SECOND PAR. he claims that he holds an equitable ownership interest in the property at issue in the parties' dispute, such that the judge should have allowed both motions. We affirm.

1. Background. The plaintiff is a fifty-one percent shareholder of DeCroteau Corporation, which owns and operates the Gaffey Funeral Home located at 43 High Street in Medford (the property). The plaintiff is a licensed funeral home director who runs and manages the funeral home. The plaintiff's brothers, Mark and Michael DeCroteau, are minority shareholders in DeCroteau Corporation. The property is owned by DBR Realty LLC (DBR). DeCroteau Corporation is the tenant of DBR, and Mark and Michael³ are the sole members of DBR. At all times relevant to this action, the plaintiff had no legal ownership interest in

90 Mass.App.Ct. 904

DBR.

At the time of its acquisition of the funeral home in 2009, DeCroteau Corporation entered into a five-year written lease with DBR. The lease expired in 2014, and DeCroteau Corporation became a tenant at will when it failed to exercise an option to renew contained in the lease. In 2015, DBR listed the property for sale. In response, the plaintiff filed a verified complaint in Superior Court against Mark, Michael, and DBR (collectively, the defendants) seeking, inter alia, equitable relief to restrain the defendants from any attempt to sell the property.⁴ In addition, the plaintiff filed motions for (1) a preliminary

65 N.E.3d 1219

injunction prohibiting the defendants from marketing, transferring, or encumbering the property without prior court authorization, and (2) approval of a memorandum of lis pendens relating to the property. Following a nonevidentiary hearing, the judge denied both motions.

2. Discussion. a. Preliminary injunction. The plaintiff sought to enjoin the defendants "from taking any action to market, transfer or encumber" the property, arguing that he has an equitable ownership interest, and that Mark and Michael have breached their fiduciary duty to him in endeavoring to sell the property, thus jeopardizing his livelihood and putting the corporation's existence at risk. The judge disagreed, ruling that "the plaintiff has not established a s[u]bstantial likelihood of success on the merits of his claim that he has [an] ownership interest in the [property]." See Packaging Indus. Group, Inc. v. Cheney, 380 Mass. 609, 616–617, 405 N.E.2d 106 (1980). We discern no abuse of discretion in the judge's decision.

As a threshold matter, the plaintiff brings all of his claims in his individual capacity, alleging that he is the only shareholder of DeCroteau Corporation who actively manages the business and effectuates the mortgage payments, and thus he alone will suffer harm from the marketing or sale of the funeral home. Even if true, the plaintiff has not demonstrated that he has standing to bring most of the claims raised in his verified complaint. DeCroteau Corporation, not the plaintiff, is the tenant of DBR. DeCroteau Corporation, not the plaintiff, owns and operates the funeral home business. Consequently, the plaintiff's claims, other than the count for breach of fiduciary duty brought against Mark and Michael, and the claims regarding the creation of a resulting trust or imposition of a constructive trust, belong to DeCroteau Corporation, an entity separate and distinct from the plaintiff. See Beaupre v. Cliff Smith & Assocs., 50 Mass.App.Ct. 480, 494, 738 N.E.2d 753 (2000). The plaintiff, by contrast, is a mere shareholder in DeCroteau Corporation and does not have standing to assert claims in DeCroteau Corporation's place.⁵ See, e.g., Pagounis v. Pendleton, 52 Mass.App.Ct. 270, 275, 753 N.E.2d 808 (2001) (shareholder in corporate tenant lacked standing to assert claim for

90 Mass.App.Ct. 905

breach of lease).⁶

Although the plaintiff has no interest in DBR, he insists that this court should look beyond the corporate form, because he alleges that he has an "equitable interest" in the property. This argument

65 N.E.3d 1220

is premised on his assertion that his payment of the monthly rent and taxes on the property over the course of many years created a constructive trust or a resulting trust in the property for his benefit. Even assuming that these payments were made by the plaintiff personally, and not by DeCroteau Corporation, they are, in and of themselves, insufficient to establish either a constructive or resulting trust. See Saulnier v. Saulnier, 328 Mass. 238, 240, 103 N.E.2d 225 (1952) (postconveyance payments cannot create a resulting trust unless payments act as "contemplated consideration for the conveyance"); Meskell v. Meskell, 355 Mass. 148, 151, 243 N.E.2d 804 (1969) (fraud or violation of...