In
Lubin & Meyer v. John J. Manning, Judge Salinger, sitting in the
Business Litigation Session, ruled that Lubin & Meyer’s claims for breach of fiduciary duty against its former associate, John Manning, survived summary judgment.
According to Judge Salinger, Lubin & Meyer claimed that Manning breached his duty of loyalty to the firm by “continu[ing] to work on cases that the firm had rejected, l[ying] to clients about whether the firm was representing them, and l[ying] to the firm about what he was doing.”
Manning moved for summary judgment, arguing two points: first, that he did not breach his fiduciary duty; second, that the law firm suffered no actual injury. Judge Salinger disagreed with both arguments.
In support of his first argument, Manning claimed that his alleged conduct could not constitute a breach of fiduciary duty under Meehan v. Shaughnessy, a case in which the Supreme Judicial Court (SJC) affirmed the trial court’s ruling that a law firm failed to establish that its lawyers improperly handled cases for their own benefit. Judge Salinger was unpersuaded. “Meehan does not limit the scope of the duty that an associate owes to their law firm,” he wrote, because the case “does not hold than an associate’s improper handling of cases can never constitute a breach of fiduciary duty to a law firm.”
Judge Salinger also disagreed with Manning’s reading of the SJC's decision in Augat, Inc. v. Aegis, Inc. Augat recognizes that “the employee may not take away confidential information or trade secrets, solicit customers while still working for the employer, or use the employer’s funds or other employees for personal gain,” Judge Salinger wrote. But because Augat does not “hold that these are the only possible ways in which an employee may breach their fiduciary duty of loyalty,” Judge Salinger continued, Manning’s alleged misconduct could constitute a breach of fiduciary duty.
Judge Salinger likewise rejected Manning’s no-actual-injury argument. According to Judge Salinger, “Lubin & Meyer has mustered evidence that it incurred substantial expenses to investigate and remedy Manning’s alleged disloyalty and fraud” and “[s]uch costs are recoverable as damages for breach of fiduciary duty.” Judge Salinger also ruled that Lubin & Meyer could pursue equitable forfeiture of “some or all of the salary and benefits that it paid or provided to Manning while he was disloyal, ‘even absent a showing of actual injury’.”
You can review the BLS’s decision
here.
Suffolk Superior Court
Docket Number: 1784CV02352-BLS2
Case Name: Lubin & Meyer, P.C. v. John J. Manning
Date of Decision: May 6, 2022
Judge: Judge Salinger
