Robertson v. Gaston Snow & Ely Bartlett

• Decision Date: 06 April 1989
• Parties: Michael S. ROBERTSON v. GASTON SNOW & ELY BARTLETT.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 344

536 N.E.2d 344

404 Mass. 515

Michael S. ROBERTSON v. GASTON SNOW & ELY BARTLETT.

Supreme Judicial Court of Massachusetts,

Suffolk.

Argued Jan. 4, 1989.

Decided April 6, 1989.

Daniel F. Featherston, Jr., Boston, for plaintiff.

Richard W. Renehan (Charles R. Dougherty, Boston, with him), for defendant.

Before WILKINS, LIACOS, NOLAN, LYNCH and O'CONNOR, JJ.

LYNCH, Justice.

The plaintiff, Michael S. Robertson, claims that the law firm Gaston Snow & Ely Bartlett (Gaston Snow) is liable to him for malpractice, misrepresentation, and a violation of G.L. c. 93A. ¹ The malpractice and misrepresentation counts were tried to a jury. In answering special questions the jury found that: (1) there was an attorney-client relationship between the plaintiff and Gaston Snow; (2) Gaston Snow failed to exercise reasonable care in representing the plaintiff, (3) Gaston Snow's negligence proximately caused the plaintiff to lose his employment; (4) Gaston Snow intentionally or negligently misrepresented a material fact to the plaintiff about the prospects of employment; (5) Gaston Snow failed to disclose to the plaintiff a material fact about the prospects of employment; (6) the plaintiff justifiably relied on either Gaston Snow's misrepresentation or nondisclosure; (7) either the misrepresentation or nondisclosure caused the plaintiff to lose his employment; and (8) the plaintiff suffered $500,000 in damages. The judge, however, found in favor of Gaston Snow on the G.L. c. 93A count, based in part on his finding that there was no attorney-client relationship between the plaintiff and Gaston Snow.

Gaston Snow moved for a judgment notwithstanding the verdict and for a new trial on the malpractice and misrepresentation counts. The judge denied the motion for judgment notwithstanding the verdict because, "[i]f the jury believed all of the plaintiff's testimony and disbelieved all other evidence where conflicting, the plaintiff just passes the [judgment] N.O.V. test...." However, the judge allowed Gaston Snow's motion for a new trial, ruling that the verdict was against the weight of the evidence, and that "the jury failed to exercise an honest and reasonable judgment in accordance with the principles of law applicable to these counts."

The new trial was conducted without a jury on the basis of the transcript from the first trial, the exhibits, certain stipulations and one additional exhibit which had not been introduced at the first trial. ² There was no live testimony. That trial judge found and ruled for Gaston Snow. The plaintiff filed a motion for a new trial "or other appropriate relief." The motion was based, in part, on the fact that the judge issued his decision without first giving the parties the opportunity for final argument. The judge then scheduled a hearing at which both parties presented oral argument, and the plaintiff submitted a supplemental request for findings.

The judge issued a memorandum and order affirming his earlier decision and directed that judgment enter for Gaston Snow. The judge also denied the plaintiff's motion to alter or amend the findings and judgment. The plaintiff appealed, and we transferred the case here on our own motion. We affirm.

On appeal, the plaintiff argues that: (1) the first trial judge abused his discretion in granting Gaston Snow's motion for a new trial, and therefore, the jury verdict in favor of the plaintiff should be reinstated; (2) since the evidence at the second trial was entirely documentary, we should review the case de novo and, based on the de novo review, find Gaston Snow liable; (3) if we do not find in favor of the plaintiff, we should at least grant a new trial because the second judge's failure to allow final argument before rendering his decision violated the plaintiff's due process rights, and (4) the first judge's findings on the G.L. c. 93A claim were clearly erroneous.

The relevant evidence can be summarized as follows. Robertson Factories, Incorporated (old corporation), was founded in 1925 by the plaintiff's father, C. Stuart Robertson (C. Stuart). The old corporation, whose primary business was manufacturing curtains, had as its principal customer Sears, Roebuck & Co. (Sears). The defendant Gaston Snow served as the old corporation's outside counsel from the mid-1970's until the corporate reorganization which took place in 1979. Gaston Snow also represented the plaintiff personally in varous legal matters during the mid-1970's. But, as of 1979, all such representation of the plaintiff had ceased (except for the retention of his will which Gaston Snow had previously drawn).

In April, 1979, at the request of the old corporation, Gaston Snow prepared an analysis for a proposed reorganization of the corporation. The analysis addressed three objectives: (1) to "[p]rovide a predictable income for all current stockholders"; (2) to diversify and increase the liquidity of the assets of the old corporation for estate tax purposes, and (3) to "deploy stock in ongoing management with possibility of substantial leveraged growth." The plan called for the sale of all the old corporation's assets to a new corporation, Robertson Factories, Inc. (new corporation), which would continue to operate the business and would be owned by members of the Robertson family active in the business, and senior, nonfamily members of the old corporation management, including William F. Washburn (Washburn).

In July, 1979, C. Stuart wrote to the plaintiff stating that senior managers at Sears wanted assurances that the plaintiff would not control the new corporation or be the one with whom they would be dealing. C. Stuart told the plaintiff that Sears wanted to work with Washburn, and further that, at the next meeting of the board of directors, Washburn would replace the plaintiff as president. At the next meeting, Washburn was elected president and chief executive officer, the plaintiff was elected chairman of the board, and C. Stuart became chairman of a newly-formed executive committee. Thereafter, the plaintiff wrote to his brother-in-law, Mr. James P. Whitters, III (Whitters), a Gaston Snow partner and a director of the old corporation, expressing concerns about the proposed reorganization.

On October 31, 1979, the plaintiff met with Mr. Richard N. Hoehn (Hoehn) and other Gaston Snow attorneys to discuss the restructuring. At the meeting the plaintiff raised, among other things, the question whether he or anyone else would receive an employment contract with the new corporation. While Hoehn indicated that the subject of an employment contract was reasonable, neither he nor any other attorney ever assured the plaintiff that he would receive an employment contract with the new corporation. At this meeting the plaintiff did not ask Gaston Snow to represent him individually in the restructuring, nor did Gaston Snow offer such representation.

Washburn told the plaintiff that he would have a position within the new corporation commensurate with his abilities, but if nothing could be found for him, the plaintiff would not have a job. He asked Washburn whether he knew of any position on that basis; Washburn told the plaintiff there was nothing at that time.

On November 21, 1979, the plaintiff wrote a memorandum, which was read by Hoehn, detailing his concerns about the reorganization, including the issue of employment contracts for himself, Washburn, and Philip S. Robertson (Philip). After the November 28, 1979, shareholders' meeting, where the board of directors approved the restructuring, C. Stuart asked Washburn about the plaintiff's role in the new corporation. Washburn said that, because the new corporation was not going to be a family-run business, the plaintiff would have to convince the new ownership that he would earn any salary he received, which C. Stuart agreed was fair.

The written agenda for the closing did not include the topic of employment contracts, although the topic was included initially in a Gaston Snow memorandum outlining the sale. The plaintiff requested and received from Gaston Snow a sample employment agreement, which it had prepared for an unrelated transaction involving another client. Although the sample indicated a five-year term, which the plaintiff had suggested in his November 21, 1979, memorandum, several other aspects of the agreement indicated that it was inapplicable to either the plaintiff or the new corporation. The plaintiff never discussed the sample agreement with Hoehn or anyone else at Gaston Snow. Prior to the closing Washburn, the president and chief executive officer of the old corporation, told Hoehn that none of the officers or employees at the new corporation would have employment contracts. Gaston Snow did not disclose this information to the plaintiff.

The closing took place on December 27, 1979. The stockholders of the new corporation were the plaintiff (22.5%), his brother Philip (22.5%), Washburn (22.5%), Whitters (5.25%), and seven other nonfamily members of senior management (27.25%). Thus, Robertson family members (the plaintiff, Philip, and Whitters) owned 50.25% of the new corporation stock. No one raised the issue of employment contracts at the closing.

In January, 1980, Philip Robertson, Whitters, Washburn, and two nonfamily shareholders executed a voting agreement which provided that, for a five-year period, if any three concurred on a candidate for the board of directors, the other two would also vote for that candidate. The agreement did not control the vote of the parties on any other matters. At Washburn's request, Gaston Snow drafted the agreement before the closing. Neither Washburn nor Gaston Snow told C. Stuart or the plaintiff about the agreement. In May, 1980, the directors of the new corporation, on Washburn's recommendation, voted to terminate the plaintiff's employment and to remove him as chairman of the board.

1. The motion for a new trial. It is a well-established principle...