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Superior Court - Middlegpx
Docket Number 2281C 2278 L2
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COMMONWEALTH OF MASSACHUSETTS
MIDDLESEX, ss SUPERIOR COURT DEPARTMENT.
OF THE TRIAL COURT
ERIC W. HANSON a/k/a RICK HANSON,
Individually and derivatively on behalfof
SR VENTURES, LLC,
CIVIL ACTION NO. 2281CV02278
Plaintiff,
Vv.
RECEIVED
9/7/2022
SR VENTURES, LLC, JOHN F. GALLANT, |
KRISTEN ERVIN, MICHAEL CONLEY and
GALLANT & ERVIN, LLC,
'
Defendants. '
VERIFIED SECOND AMENDED COMPLAINT AND
DEMAND FOR TRIAL BY JURY
Plaintiff, Eric W. Hanson, by his undersigned counsel, brings this action individually and
derivatively on behalf of SR Ventures LLC, against the defendants, SR Ventures, LLC, John F.
Gallant, Kristen Ervin, Michael Conley and Gallant & Ervin, LLC, and states as follows:
INTRODUCTION
1 This action is brought by Eric W. Hanson, individually, against SR Ventures,
LLC, John F. Gallant, Kristen Ervin and Michael Conley, for fraud, misrepresentations and
unfair and deceptive acts and practices, among other claims, in procuring from Mr. Hanson on
May 23, 2019, the payment of $133,000, as allegedly due from Mr. Hanson’s son as a capital
GALLAGHER &
contribution in SR Ventures, LLC. As set forth more fully below, unbeknownst to Mr. Hanson —
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THE GASLIGHT BUILDING but known to Attorney Gallant and SR Ventures LLC — Mr. Hanson’s son had paid $50,000 of
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his capital contribution to the LLC before his death. Upon discovering the overpayment, Mr.
Hanson demanded return of the overpayment from the LLC but Attorney Gallant, counsel to the
LLC as well as a manager ofthe LLC, had wrongly removed the funds from SR Ventures, LLC’s
checking account to Gallant & Ervin LLC’s IOLTA account, has refused to return the $50,000
overpayment.
This action is also brought by Mr. Hanson, a member of the LLC since June 25, 2020,
derivatively on behalf of SR Ventures, LLC for the wrongful distribution of the LLC’s assets to
its members in or about April 2022 in anticipation of the LLC’s dissolution despite known
claims in excess of sums reserved in violation of Delaware Law and in breach of the LLC’s
Operating Agreement.
PARTIES
2. Plaintiff, Eric W. Hanson a/k/a Rick Hanson (“plaintiff’ or “Rick”), is a resident
of the State of New Hampshire and is the father of Eric P. Hanson (“Eric”), who is deceased,
having passed away on June 8, 2018.
3 Defendant, SR Ventures, LLC (“SRV”), is a limited liability company duly
organized under the laws of the State of Delaware, with a principal place of business at 116 John
Street, Suite 105, Lowell, Middlesex County, MA 01852.
4 Defendant, John F. Gallant (“Attorney Gallant”), is a resident of Chelmsford,
Middlesex County, Massachusetts and is and was, at all relevant times, a manager and member
of SRV.
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5 Defendant, Kristen Ervin is a resident of Chelmsford, Middlesex County,
Massachusetts and, on information and believe, has been, since the death of her spouse, Timothy
Ervin, in 2018, a member of SRV.
6 Defendant, Michael Conley (“Conley”), is a resident of the State of Florida and is
and was, at all relevant times, a manager and member of SRV.
7 Defendant, Gallant & Ervin, LLC (“Gallant & Ervin”), is a limited liability
company duly organized under the laws of the Commonwealth of Massachusetts, with a
principal place of business at One Olde North Road, Suite 103, Chelmsford, Middlesex County,
MA 01824.
8 Attorney Gallant is and was, at all relevant times, an attorney, partner and
manager of Gallant & Ervin. Gallant & Ervin is and has been since its creation legal counsel to
SRV. Funds belonging to SRV were improperly transferred by Attorney Gallant from SRV’s
account to Gallant & Ervin’s IOLTA account and a portion of those funds remain in Gallant &
Evin’s IOLTA account. Attorney Gallant, as partner and manager of Gallant & Ervin, caused
other funds belonging to SRV to be transferred from its IOLTA account to SRV members in
violation of applicable law and SRV’s Operating Agreement.
9 Timothy Ervin (“Attorney Ervin’) was a Manager and Member of SRV and an
attorney and manager of Gallant & Ervin until his death on February 21, 2018.
JURISDICTION AND VENUE
10. This Court has subject matter jurisdiction pursuant to (a) M.G.L. c. 212, §§ 3 and
4 and Standing Order of the Supreme Court, dated July 17, 2019, effective January 1, 2020, as
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COUNSELLORS AT LAW| this is a civil action seeking damages in excess of $50,000, (b) M.G.L. c. 214, §§ 1 and 3, which
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provides for jurisdiction in the Superior Court over matters of equity, and (c) M.G.L. c. 231A, §
1, which provides for jurisdiction in the Superior Court with respect to claims for declaratory
judgment.
11. Venue is proper in this Court pursuant to M.G.L. ¢. 223, § 1 because one or more
defendants reside in or have a principal place of business in Middlesex County, Massachusetts.
DERIVATIVE CLAIMS
12. From and after June 25, 2020, Rick was a member of the LLC.
is. Rick objected to the LLC’s proposed distribution of its assets in advance of
dissolution and demanded that such proposed distribution not be made but, despite such
objection and demand, Attorney Gallant and Conley, as Managers of the LLC, caused the LLC to
distribute funds to Attorney Gallant, Kristen Ervin and Conley as Members.
14. Rick has not made a formal demand on Attorney Gallant and Conley to institute
suit on behalfof the LLC against themselves in connection with the improper and illegal
distribution because such demand would be futile since Gallant and Conley, are the managers of
the LLC, to whom has been delegated such authority, and all Members making capital
contributions except Rick, have received distributions that they will not want to return.
FACTS
15. SRV was formed on August 25, 2010 for the general business purpose of
manufacturing, distilling, importing and exporting, selling, distributing and marketing Jamaican
Rum and related products, and to engage in any activities directly or indirectly related or
incidental thereto, and to engage in any other activity in which a limited liability company
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16. Eric, Attorneys Gallant and Ervin, and Conley were Managers of SRV at the time
of its formation, while Eric, Gallant, Attorney Ervin and Conley were the original Members of
SRV. The foregoing entered into an Operating Agreement on or about September 30, 2010.
17. Attorney Ervin and Eric continued to be Managers of SRV until their respective
deaths.
18. On or about October 10, 2012, the Operating Agreement was amended to add
Cedella and Rohan Marley and Brian Conley as Members and Cedella Marley as a Manager but
no capital contribution was made by the foregoing to SRV.
19. Eric, Attorney Gallant, and Attorney Ervin were signatories on SRV’s bank
account.
20. The bookkeeper for SRV was Kristen Ervin, wife of Attorney Ervin.
21. Attorneys Gallant and Ervin, individually and as Managers of SRV, were aware
of the financial transactions of SRV as each had access to the bank account and the books of
SRV.
22. Conley and Eric each agreed to make a capital contribution of $133,000 to SRV,
while Attorneys Gallant and Ervin each agreed to pay $66,500.
23. On December 16, 2010, Attorneys Gallant and Ervin made a combined capital
contribution of $133,000 to SRV.
24. On July 21, 2011, Conley made a capital contribution of $133,000 to SRV.
25, On November 26, 2012, Eric made a capital contribution of $50,000 to SRV from his
personal funds.
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26. Following Eric’s death on June 8, 2018, Attorney Gallant, individually and as
Manager of SRV, led Rick to believe that Eric still owed his $133,000 capital contribution to
SRV and represented to Rick that if Rick made the contribution, SRV would be dissolved and
wound up and its remaining funds would be distributed to the Members.
27. Rick agreed to make good on Eric’s capital contribution and deposited $133,000
into SRV’s bank account on May 23, 2019.
28. At the time Rick paid $133,000 to make good on Eric’s capital contribution, he was
unaware that Eric had already paid $50,000 toward his capital contribution.
29. Rick was neither a member or manager of SRV or otherwise obligated in any
fashion to SRV.
30. Rick had no legal obligation to pay Eric’s capital contribution or any other debts
or obligations of Eric following his death in 2018.
31. Rick never agreed to be responsible for any other debts or obligations of Eric and
never agreed to reimburse SRV or its investors for any monies they claim Eric misappropriated
or misused.
32. On May 31, 2019, Attorney Gallant, who was the then sole remaining signatory
on SRV’s bank account transferred $169,019 from SRV’s bank account to Gallant & Ervin,
thereby taking possession of same. Approximately $2,500 remained in SRV’s bank account.
33. On June 25, 2020, the personal representative of Eric’s estate transferred Eric’s
interest in SRV to Rick and Rick became a member of SRV.
34. After acquiring Eric’s interest in SRV in June 2020 from his daughter-in-law,
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COUNSELLORS AT LAW Jennifer Hanson, as personal representative of Eric’s estate, Rick reviewed SRV’s records and
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discovered that Eric had paid $50,000 of his capital contribution in 2012, which was incorrectly
labeled as a debenture.
35. Kristen Ervin had identified all of the capital contributions made by Attorneys
Gallant and Ervin, Conley and Eric in the books and records of SRV as “Debenture.”
36. In June or July 2020, Rick notified Attorney Gallant that he had discovered that
he had overpaid Eric’s capital contribution by the $50,000 that Eric had previously paid in 2012
and requested that the $50,000 overpayment be returned to him before any distribution to the
Members per the Operating Agreement were made.
375 Attorney Gallant and SRV did not respond and the funds were not returned.
38. On March 18, 2022, Rick emailed Attorney Gallant and provided a spreadsheet
reconstructing SRV’s account (deposit and debits), demonstrating that Rick overpaid Eric’s
capital contribution by $50,000. Rick demanded a refund of the overpayment and questioned
Attorney Gallant’s action in taking possession of $169,019 immediately upon receiving his
check for $133,000.
39. Attorney Gallant refused to return the overpayment, taking the position that what
remained should be paid one-third to himself and Kristen Ervin, one-third to Conley and one-
third to Rick after payment of dissolution and accounting expenses. Attorney Gallant asserted
that Rick was not entitled to return of the $50,000 because Eric (a) had allegedly misused SRV’s
funds by using SRV funds for other ventures including Klin Groupe, LLC and its subsidiaries
(“Klin”), and (b) Eric had misused and misappropriated funds from Klin.
40. However, based on the reconstructed accounting provided by Rick to Attorney
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COUNSELLORS AT LAW Gallant, all of SRV’s funds are accounted for.
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Al. Attorney Gallant also asserted that Rick had promised to pay all monies allegedly
misappropriated by Eric back, which was false and not supported by any writing. Instead, all
emails between Attorney Gallant and Rick are consistent with Rick’s agreement to make good on
Eric’s capital contribution. Attorney Gallant claimed that in reliance on Rick’s promise to pay
all of Eric’s debts that SRV did not commence suit against Eric’s Estate. Attorney Gallant
threatened to assert counterclaims against Rick based on all of Eric’s alleged misdoings with
respect to Klin in any suit brought by Rick seeking repayment of his $50,000 overpayment and
bring “unfavorable publicity of all of these events, not to the entities, but to the Hanson family.”
42. Eric, Conley, and Attorneys Gallant and Ervin, together with approximately 45
other persons, were investors in and members of Klin, a Delaware limited liability company
formed on February 23, 2005. While some of the managers and members of Klin were managers
and members of SRV, Klin and SRV are separate entities with different ownership and their own
governing documents and books and records.
43. Attorney Gallant, an attorney admitted to practice law in Massachusetts, knew or
reasonably should have known that there is no reasonable basis to assert any alleged claims
involving Klin or Eric against Rick.
44, Rick had no legal obligation to make good on any debts or obligations of Eric
following his death in 2018 and the matter is governed by and subject to the statute of frauds.
45. Klin previously asserted claims against Eric’s Estate in 2019 for alleged
misappropriations and/or misdoings and then voluntarily dismissed same.
46. The one-year statute of limitations for claims against Eric’s Estate expired in
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47. Attorney Gallant has also admitted that Rick’s promise to pay Eric’s investment
in SRV “were not promises to pay debts of Eric” and that “no one is trying to hold Rick
responsible for the monies taken from this entity by his son.”
48. Despite the foregoing, Attorney Gallant and SRV continued to refuse to return the
$50,000 to Rick even though it was clearly an overpayment of the capital contribution due from Erilc
Instead, Attorney Gallant claimed that he had never received any evidence that Eric personally paid
the $50,000 capital contribution as opposed to sourcing from Klin or another company. Attorney
Gallant represented that Kristen Ervin had stated to him that the books and records of SRV, that sh
had kept, were not accurate and that she recalled these particular funds coming from a Klin entity.
49. Rick then procured and provided to Attorney Gallant evidence that the $50,000, in
fact, sourced from a personal account belonging to Eric and his wife.
50. Upon providing such proof to Attorney Gallant, he admitted that he knew that Eric
had made the $50,000 capital contribution, stating “We were aware of the 50,000.00 payment by
Eric.”
$1. Yet Attorney Gallant and SRV continue to fail and refuse to return the $50,000
overpayment to Rick.
523 Rick would not have paid the entire $133,000 to SRV had Attorney Gallant and
SRV disclosed to him in advance that Eric had already paid $50,000.
53. That Attorney Gallant and SRV were aware of this, is evidenced by Attorney
Gallant’s transfer of $169,000 from SRV’s checking account (over which he had signatory
authority) into his law firm’s attorney IOLTA account shortly after Rick’s deposit of the
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$133,000 so that he could exercise complete control over SRV’s funds and the $50,000
overpayment should Rick discover the mistake and want his money back.
54. On April 15, 2022, Rick caused a demand for relief, pursuant to M.G.L. Chapter
93A, to be served on Attorney Gallant, individually and as Manager of SRV. In response,
Attorney Gallant and SRV continue to refuse to repay the entire $50,000 overpayment to Rick.
55. Attorney Gallant had advised that, if Rick was not in agreement with the
disbursement of the remaining funds, he would retain $50,000.00 in the Gallant & Ervin account
and distribute the balance of the undisputed funds, one-third to himself and Kristen Ervin, one-
third to Conley and one-third to Rick. Rick objected to this, notifying Attorney Gallant and
Conley in writing of his objection on March 30, 2022 as such would not leave the LLC with
sufficient funds to defend this litigation and pay a likely judgment that Rick would receive in this
case.
56. By letter dated July 6, 2022, Attorney Gallant delivered a check to Mr. Hanson
dated April 12, 2022, in the amount of $39,673.00, purporting to be Mr. Hanson’s “share of
excess monies held in [Gallant & Ervin’s] client’s account.” Mr. Hanson has not accepted
delivery of or cashed the check.
57. Rick, through counsel, made inquiry of Attorney Gallant by email dated July 13,
2022, about the date of issuance to and cashing of checks by other members. In response,
Attorney Gallant represented that checks had been previously issued to and cashed by the other
members, although he failed and refused to identify when those checks were delivered and
cashed.
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58. Payment of such sums represents distribution of all of the assets of the LLC
except the $50,000 overpayment owed to Mr. Hanson and approximately $2,500 needed to pay
an outstanding invoice to the LLC’s accountant and dissolution expenses.
50: After inquiry, Attorney Gallant stated on July 14, 2022 that he and Conley, as
managers of the LLC, would seek “‘at some point” reimbursement of defense costs “from the
monies remaining and funds retained,” although Attorney Gallant has represented that he will not
take defense costs of the suit from the $50,000 in advance of the resolution or determination of
the case.
60. As an experienced lawyer, Attorney Gallant knows that the $2500 (which is
needed to pay other expenses) is not sufficient to defend this litigation and pay any sums (other
than the $50,000 overpayment itself which has been set aside), that may be due to Rick
including, but not limited to, interest and attorneys’ fees.
61. Attorney Gallant also knows that the only funds retained are the $50,000 owed to
Mr. Hanson. It, therefore, appears that Attorney Gallant intends to use the funds owed to Mr.
Hanson to “at some point” pay to defend the suit that Attorney Gallant has forced Mr. Hanson to
bring to procure return of the $50,000. The LLC’s defense costs of the suit, if any, are to be
borne by the LLC and, by its members proportionally. Attorney Gallant has, in bad faith,
attempted to avoid the applicable provisions of the LLC Operating Agreement and applicable
law.
62. Del. Code Ann. Tit. 6, § 18-607(a) provides, in pertinent part, that
A limited liability company shall not make a distribution to a member to the
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COUNSELLORS AT LAW liabilities of the limited liability company ... exceed the fair value of the assets of
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63 Del. Code Ann. Tit. 6, § 18-607(b) provides, in pertinent part,
A member who receives a distribution in violation of subsection (a) of this
section, and who knew at the time of the distribution that the distribution violated
subsection (a) of this section, shall be liable to a limited liability company for the
amount of the distribution.
64. Attorney Gallant and Conley, who according to Attorney Gallant are the only
managers of SRV, knew at the time they authorized and delivered distributions to themselves in
or about April 2022, that unless the $50,000 was voluntarily returned by the LLC to Mr. Hanson,
Mr. Hanson would commence suit, resulting in a probable liability of the Company for additional
funds it would not have if the LLC made a distribution in anticipation of dissolution to its
members.
65. Further, SRV’s Operating Agreement provides at Section 9.3(a) that “After
payment of liabilities owing to creditors, the Board of Managers ... shall set up such reserves as
it deems reasonably necessary for any contingent or unforeseen liabilities or obligations of the
LLC.”
66. Attorney Gallant and Conley, as the Managers, did not act reasonably in failing to
set up any reserve in connection with this litigation and, instead, have acted in bad faith in a
manner intended to deprive Mr. Hanson of the benefits he is entitled to receive as a result of this
litigation. Further, it is not in the LLC’s best interests to distribute the LLC’s assets to its
members in advance of dissolution when known claims exist.
67. Section 6.11.3 of the LLC Operating Agreement provides that no indemnification
shall be provided for any person “with respect to any matter as to which he shall have been
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68. SRV’s Operating Agreement also provides at section 9.03(b) that, upon
liquidation, after payment of liabilities, the Board of Managers “shall cause the remaining net
assets of the LLC to be distributed to and among the Members in the order of priority set forth in
Article IV.” Article IV provides, in pertinent part, that the net proceeds of liquidation shall be
distributed to Members “in proportion to their respective Capital Contributions in an aggregate
amount equal to their aggregate Capital Contributions.”
69. Conley, on the one hand, and Attorney Gallant and Kristen Ervin (collectively),
on the other hand, are not entitled to share equally in any distribution as Rick was wrongly
caused to make capital contributions of $183,000 while Attorneys Gallant and Ervin collectively
contributed $133,000 and Conley contributed $133,000, although Rick objects to the retention of
the excess capital contribution.
70. Attorney Gallant and Conley have breached the provisions of the Operating
Agreement in causing the LLC to make distributions to Gallant, Kristen Ervin and Conley which
are not in accord with the Operating Agreement and violate Delaware law.
CAUSES OF ACTION
COUNTI
(Fraud y. Gallant, SRV, and Gallant & Ervin)
Ws Rick repeats and realleges all of the preceding allegations as if fully set forth
herein.
72. Attorney Gallant, individually and as Manager of SRV and as Manager of Gallant
& Ervin, led Rick to believe that Eric still owed the entire $133,000 capital contribution, failing
GALLAGHER & to disclose to Rick that Eric had, in fact, paid $50,000 toward his total capital contribution of
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COUNSELLORS AT Law
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73. Attorney Gallant, individually and as Manager of SRV and as Manager of Gallant
& Ervin, made false representations of a material fact regarding the amount Eric owed on his
initial investment in SRV.
74. These misrepresentations were made with knowledge of their falsity.
1S. These misrepresentations were made with the intent to deceive Rick.
76. These misrepresentations were made in order to induce Rick to pay $50,000 more
than Eric owed.
77. Rick reasonably relied upon the misrepresentations and acted upon them to his
damage.
78. Attorney Gallant, individually and as Manager of SRV and as Manager of Gallant
& Ervin, also falsely represented to Rick that he lacked sufficient information about Eric’s
$50,000 payment and the source thereof. Attorney Gallant knew the representation was false and
made it anyway for the purpose of discouraging Rick from pursuing the matter. Rick reasonably
relied upon same in requesting that his legal counsel procure proof of Eric’s payment, which
resulted in Rick having to incur unnecessary legal fees.
79. As a direct and proximate result of Attorney Gallant’s misrepresentations and
fraud, Rick has been caused to suffer great damage, all of which was reasonably foreseeable by
Attorney Gallant, SRV and Gallant & Ervin.
WHEREFORE, plaintiff, Eric W. Hanson, demands judgment against defendants, John
Gallant, Gallant & Ervin, LLC, and SR Ventures, LLC, in the amount of his damages, together wit
interest, costs, and attorneys’ fees, and such other relief as this Court deems just and proper.
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COUNT II
(Negligent Misrepresentation v. Gallant, SRV, and Gallant & Ervin)
80. Rick repeats and realleges all of the preceding allegations as if fully set forth
herein.
81. Attorney Gallant, individually and as Manager of SRV and as Manager of Gallant
& Ervin, made misrepresentations of a material fact regarding the amount Eric owed on his
initial investment in SRV.
82. Said misrepresentations were made with knowledge of their falsity or with
recklessness as to their truth or falsehood, which constitutes negligent misrepresentation.
83. Rick reasonably relied upon said negligent misrepresentations as true and paid
$50,000 more than Eric owed.
84. Rick would not have paid the extra $50,000 but for Attorney Gallant’s negligent
misrepresentations.
85. As a direct and proximate result of Attorney Gallant’s negligent
misrepresentations, Rick has been caused to suffer great damage, all of which was reasonably
foreseeable by Attorney Gallant, SRV and Gallant & Ervin.
WHEREFORE, plaintiff, Eric W. Hanson, demands judgment against defendants, John
Gallant, Gallant & Ervin, LLC, and SR Ventures, LLC, in the amount of his damages, together wit!
interest, costs, and attorneys’ fees, and such other relief as this Court deems just and proper.
COUNT I
(Money Had And Received y. Gallant, SRV, and Gallant & Ervin)
86. Rick repeats and realleges all of the preceding allegations as if fully set forth
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87. Rick delivered $133,000 to SRV, which was intended and agreed would
constitute payment of Eric’s investment in SRV, which he was led to believe Eric had previously
failed to pay.
88. Rick delivered the $133,000 in reliance on fraudulent and negligent
misrepresentations by Attorney Gallant, individually and as Manager of SRV and Gallant &
Ervin, regarding the amount owed by Eric.
89. Shortly after delivery of the $133,000 to SRV, Attorney Gallant, individually and
as Manager of SRV and as Manager of Gallant & Ervin, transferred the funds from SRV’s
account to the client account of Gallant & Ervin.
90. Gallant & Ervin received the $169,019 in its client trust account.
91. When plaintiff learned that Eric had previously paid $50,000 of his initial
investment in SRV, he asked that the $50,000 overpayment be returned to him.
92. Attorney Gallant, SRV, and Gallant & Ervin did not return the $50,000 to Rick
even though they knew or should have known that it was an overpayment.
93. Attorney Gallant, SRV, and Gallant & Ervin still retain the benefits of the money
received from Rick.
94. Attorney Gallant, SRV, and Gallant & Ervin, therefore, owe Rick $50,000 for
money had and received from Rick.
95. As a result of the foregoing, equity and good conscience requires that Attorney
Gallant, SRV, and Gallant & Ervin repay the money to Rick.
GALLAGHER &
CAVANAUGH LLP
COUNSELLORS AT LAW|
THE GASLIGHT BUILDING.
22 SHATTUCK STREET
LOWELL, MA 01852
978.452.0522
FAX 978.452.0482
16
Date Filed 9/7/2022 2:1: M
Superior Court - Middlegpx
Docket Number 2281C 2278
WHEREFORE, plaintiff, Eric W. Hanson, demands judgment against defendants, John
Gallant, SR Ventures, LLC, and Gallant & Ervin, LLC, in the amount of $50,000, together with
interest, costs, and attorneys’ fees, and such other relief as this Court deems just and proper.
COUNT IV
(Conversion v. Gallant, SRV, and Gallant & Ervin)
96. Rick repeats and realleges all of the preceding allegations as if fully set forth
herein.
97. Rick delivered $133,000 to SRV, which was intended and agreed would
constitute payment of Eric’s investment in SRV, which he was led to believe Eric had previously
failed to pay.
98. Rick delivered the $133,000 in reliance on fraudulent and negligent
misrepresentations by Attorney Gallant, individually and as Manager of SRV and Gallant &
Ervin, regarding the amount owed by Eric.
99. Shortly after delivery of the $133,000 to SRV, Attorney Gallant transferred
$169,019 from SRV’s account to the client account of Gallant & Ervin.
100. Attorney Gallant, SRV, and Gallant & Ervin refuse to return $50,000 of the
$133,000 paid to Rick even though they knew or should have known that said $50,000 was an
overpayment.
101. Rick has demanded return of the money to him.
102. Attorney Gallant, SRV, and Gallant & Ervin have refused and continue to refuse
to return the money to Rick even though they know the money belongs to Rick.
GALLAGHER &
CAVANAUGH LLP 103. Attorney Gallant, SRV, and Gallant & Ervin by their conduct, intentionally and
COUNSELLORS AT LAW|
THE GASLIGHT BUILDING| wrongfully exercised ownership, dominion, and control over money belonging to Rick.
22 SHATTUCK STREET
LOWELL, MA 01852
978.452.0522
FAX 978.452.0482
17
Date Filed 9/7/2022 2:1: M
Superior Court - Middledlx
Docket Number 2281C 2278
104. Attorney Gallant, SRV, and Gallant & Ervin, by their conduct, improperly
converted money belonging to Rick without legal justification or privilege.
105. Attorney Gallant, SRV, and Gallant & Ervin have failed to remedy the wrongful
appropriation of Rick’s funds.
106. As a direct and proximate result of Defendants’ conversion, Rick has been
damaged in the amount of $50,000, plus additional damages incurred in his effort to obtain
return of his property, the total amount of which can only be determined at trial.
WHEREFORE, plaintiff demands judgment against defendants, John Gallant, SR Ventures.
LLC, and Gallant & Ervin, LLC, in the amount of $50,000, plus other damages to be determined at|
trial, together with interest, costs, and attorneys’ fees, and such other relief as this Court deems just
and proper.
COUNT V
(Unjust Enrichment y. Gallant, SRV, and Gallant & Ervin)
107. Rick repeats and realleges all of the preceding allegations as if fully set forth
herein.
108. Rick delivered $133,000 to SRV, which was intended and agreed would
constitute payment of Eric’s investment in SRV, which he was led to believe Eric had previously
failed to pay.
109. Rick delivered the $133,000 in reliance on fraudulent and negligent
misrepresentations by Attorney Gallant, individually and as Manager of SRV and Gallant &
Ervin, regarding the amount owed by Eric.
GALLAGHER &
CAVANAUGH LLP 110. Shortly after delivery of the $133,000 to SRV, Attorney Gallant transferred the
COUNSELLORS AT LAW
THE GASLIGHT BUILDING funds from SRV’s ac
Preview
Date Filed 9/7/2022 2:1: M Superior Court - Middlegpx Docket Number 2281C 2278 L2 11 COMMONWEALTH OF MASSACHUSETTS MIDDLESEX, ss SUPERIOR COURT DEPARTMENT. OF THE TRIAL COURT ERIC W. HANSON a/k/a RICK HANSON, Individually and derivatively on behalfof SR VENTURES, LLC, CIVIL ACTION NO. 2281CV02278 Plaintiff, Vv. RECEIVED 9/7/2022 SR VENTURES, LLC, JOHN F. GALLANT, | KRISTEN ERVIN, MICHAEL CONLEY and GALLANT & ERVIN, LLC, ' Defendants. ' VERIFIED SECOND AMENDED COMPLAINT AND DEMAND FOR TRIAL BY JURY Plaintiff, Eric W. Hanson, by his undersigned counsel, brings this action individually and derivatively on behalf of SR Ventures LLC, against the defendants, SR Ventures, LLC, John F. Gallant, Kristen Ervin, Michael Conley and Gallant & Ervin, LLC, and states as follows: INTRODUCTION 1 This action is brought by Eric W. Hanson, individually, against SR Ventures, LLC, John F. Gallant, Kristen Ervin and Michael Conley, for fraud, misrepresentations and unfair and deceptive acts and practices, among other claims, in procuring from Mr. Hanson on May 23, 2019, the payment of $133,000, as allegedly due from Mr. Hanson’s son as a capital GALLAGHER & contribution in SR Ventures, LLC. As set forth more fully below, unbeknownst to Mr. Hanson — CAVANAUGH LLP COUNSELLORS AT LAW THE GASLIGHT BUILDING but known to Attorney Gallant and SR Ventures LLC — Mr. Hanson’s son had paid $50,000 of 22 SHATTUCK STREET LoweLL, MA 01852 978.452.0522 FAX 978.452.0482 Date Filed 9/7/2022 2:1 M Superior Court - Middleqpx Docket Number 2281C 2278 his capital contribution to the LLC before his death. Upon discovering the overpayment, Mr. Hanson demanded return of the overpayment from the LLC but Attorney Gallant, counsel to the LLC as well as a manager ofthe LLC, had wrongly removed the funds from SR Ventures, LLC’s checking account to Gallant & Ervin LLC’s IOLTA account, has refused to return the $50,000 overpayment. This action is also brought by Mr. Hanson, a member of the LLC since June 25, 2020, derivatively on behalf of SR Ventures, LLC for the wrongful distribution of the LLC’s assets to its members in or about April 2022 in anticipation of the LLC’s dissolution despite known claims in excess of sums reserved in violation of Delaware Law and in breach of the LLC’s Operating Agreement. PARTIES 2. Plaintiff, Eric W. Hanson a/k/a Rick Hanson (“plaintiff’ or “Rick”), is a resident of the State of New Hampshire and is the father of Eric P. Hanson (“Eric”), who is deceased, having passed away on June 8, 2018. 3 Defendant, SR Ventures, LLC (“SRV”), is a limited liability company duly organized under the laws of the State of Delaware, with a principal place of business at 116 John Street, Suite 105, Lowell, Middlesex County, MA 01852. 4 Defendant, John F. Gallant (“Attorney Gallant”), is a resident of Chelmsford, Middlesex County, Massachusetts and is and was, at all relevant times, a manager and member of SRV. GALLAGHER & CAVANAUGH LLP COUNSELLORS AT LAW| THE GASLIGHT BUILDING 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 Date Filed 9/7/2022 2:1. M Superior Court - Middlegpx Docket Number 2281C 2278 5 Defendant, Kristen Ervin is a resident of Chelmsford, Middlesex County, Massachusetts and, on information and believe, has been, since the death of her spouse, Timothy Ervin, in 2018, a member of SRV. 6 Defendant, Michael Conley (“Conley”), is a resident of the State of Florida and is and was, at all relevant times, a manager and member of SRV. 7 Defendant, Gallant & Ervin, LLC (“Gallant & Ervin”), is a limited liability company duly organized under the laws of the Commonwealth of Massachusetts, with a principal place of business at One Olde North Road, Suite 103, Chelmsford, Middlesex County, MA 01824. 8 Attorney Gallant is and was, at all relevant times, an attorney, partner and manager of Gallant & Ervin. Gallant & Ervin is and has been since its creation legal counsel to SRV. Funds belonging to SRV were improperly transferred by Attorney Gallant from SRV’s account to Gallant & Ervin’s IOLTA account and a portion of those funds remain in Gallant & Evin’s IOLTA account. Attorney Gallant, as partner and manager of Gallant & Ervin, caused other funds belonging to SRV to be transferred from its IOLTA account to SRV members in violation of applicable law and SRV’s Operating Agreement. 9 Timothy Ervin (“Attorney Ervin’) was a Manager and Member of SRV and an attorney and manager of Gallant & Ervin until his death on February 21, 2018. JURISDICTION AND VENUE 10. This Court has subject matter jurisdiction pursuant to (a) M.G.L. c. 212, §§ 3 and 4 and Standing Order of the Supreme Court, dated July 17, 2019, effective January 1, 2020, as GALLAGHER & CAVANAUGH LLP COUNSELLORS AT LAW| this is a civil action seeking damages in excess of $50,000, (b) M.G.L. c. 214, §§ 1 and 3, which THE GASLIGHT BUILDING| 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 Date Filed 9/7/2022 2:1: M Superior Court - Middlegpx Docket Number 2281C 2278 provides for jurisdiction in the Superior Court over matters of equity, and (c) M.G.L. c. 231A, § 1, which provides for jurisdiction in the Superior Court with respect to claims for declaratory judgment. 11. Venue is proper in this Court pursuant to M.G.L. ¢. 223, § 1 because one or more defendants reside in or have a principal place of business in Middlesex County, Massachusetts. DERIVATIVE CLAIMS 12. From and after June 25, 2020, Rick was a member of the LLC. is. Rick objected to the LLC’s proposed distribution of its assets in advance of dissolution and demanded that such proposed distribution not be made but, despite such objection and demand, Attorney Gallant and Conley, as Managers of the LLC, caused the LLC to distribute funds to Attorney Gallant, Kristen Ervin and Conley as Members. 14. Rick has not made a formal demand on Attorney Gallant and Conley to institute suit on behalfof the LLC against themselves in connection with the improper and illegal distribution because such demand would be futile since Gallant and Conley, are the managers of the LLC, to whom has been delegated such authority, and all Members making capital contributions except Rick, have received distributions that they will not want to return. FACTS 15. SRV was formed on August 25, 2010 for the general business purpose of manufacturing, distilling, importing and exporting, selling, distributing and marketing Jamaican Rum and related products, and to engage in any activities directly or indirectly related or incidental thereto, and to engage in any other activity in which a limited liability company GALLAGHER & CAVANAUGH LLP COUNSELLORS AT LAW| organized under the laws of the State of Delaware may lawfully engage. THE GASLIGHT BUILDING} 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 Date Filed 9/7/2022 2:1} P Superior Court - Middleg.>x Docket Number 2281C 2278 16. Eric, Attorneys Gallant and Ervin, and Conley were Managers of SRV at the time of its formation, while Eric, Gallant, Attorney Ervin and Conley were the original Members of SRV. The foregoing entered into an Operating Agreement on or about September 30, 2010. 17. Attorney Ervin and Eric continued to be Managers of SRV until their respective deaths. 18. On or about October 10, 2012, the Operating Agreement was amended to add Cedella and Rohan Marley and Brian Conley as Members and Cedella Marley as a Manager but no capital contribution was made by the foregoing to SRV. 19. Eric, Attorney Gallant, and Attorney Ervin were signatories on SRV’s bank account. 20. The bookkeeper for SRV was Kristen Ervin, wife of Attorney Ervin. 21. Attorneys Gallant and Ervin, individually and as Managers of SRV, were aware of the financial transactions of SRV as each had access to the bank account and the books of SRV. 22. Conley and Eric each agreed to make a capital contribution of $133,000 to SRV, while Attorneys Gallant and Ervin each agreed to pay $66,500. 23. On December 16, 2010, Attorneys Gallant and Ervin made a combined capital contribution of $133,000 to SRV. 24. On July 21, 2011, Conley made a capital contribution of $133,000 to SRV. 25, On November 26, 2012, Eric made a capital contribution of $50,000 to SRV from his personal funds. GALLAGHER & CAVANAUGH LLP COUNSELLORS AT LAW| THE GASLIGHT BUILDING 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 Date Filed 9/7/2022 2:1}P Superior Court - Middlegpx Docket Number 2281C 2278 26. Following Eric’s death on June 8, 2018, Attorney Gallant, individually and as Manager of SRV, led Rick to believe that Eric still owed his $133,000 capital contribution to SRV and represented to Rick that if Rick made the contribution, SRV would be dissolved and wound up and its remaining funds would be distributed to the Members. 27. Rick agreed to make good on Eric’s capital contribution and deposited $133,000 into SRV’s bank account on May 23, 2019. 28. At the time Rick paid $133,000 to make good on Eric’s capital contribution, he was unaware that Eric had already paid $50,000 toward his capital contribution. 29. Rick was neither a member or manager of SRV or otherwise obligated in any fashion to SRV. 30. Rick had no legal obligation to pay Eric’s capital contribution or any other debts or obligations of Eric following his death in 2018. 31. Rick never agreed to be responsible for any other debts or obligations of Eric and never agreed to reimburse SRV or its investors for any monies they claim Eric misappropriated or misused. 32. On May 31, 2019, Attorney Gallant, who was the then sole remaining signatory on SRV’s bank account transferred $169,019 from SRV’s bank account to Gallant & Ervin, thereby taking possession of same. Approximately $2,500 remained in SRV’s bank account. 33. On June 25, 2020, the personal representative of Eric’s estate transferred Eric’s interest in SRV to Rick and Rick became a member of SRV. 34. After acquiring Eric’s interest in SRV in June 2020 from his daughter-in-law, GALLAGHER & CAVANAUGH LLP COUNSELLORS AT LAW Jennifer Hanson, as personal representative of Eric’s estate, Rick reviewed SRV’s records and THE GASLIGHT BUILDING 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 Date Filed 9/7/2022 2:1: M Superior Court - Middledpx Docket Number 2281C 2278 discovered that Eric had paid $50,000 of his capital contribution in 2012, which was incorrectly labeled as a debenture. 35. Kristen Ervin had identified all of the capital contributions made by Attorneys Gallant and Ervin, Conley and Eric in the books and records of SRV as “Debenture.” 36. In June or July 2020, Rick notified Attorney Gallant that he had discovered that he had overpaid Eric’s capital contribution by the $50,000 that Eric had previously paid in 2012 and requested that the $50,000 overpayment be returned to him before any distribution to the Members per the Operating Agreement were made. 375 Attorney Gallant and SRV did not respond and the funds were not returned. 38. On March 18, 2022, Rick emailed Attorney Gallant and provided a spreadsheet reconstructing SRV’s account (deposit and debits), demonstrating that Rick overpaid Eric’s capital contribution by $50,000. Rick demanded a refund of the overpayment and questioned Attorney Gallant’s action in taking possession of $169,019 immediately upon receiving his check for $133,000. 39. Attorney Gallant refused to return the overpayment, taking the position that what remained should be paid one-third to himself and Kristen Ervin, one-third to Conley and one- third to Rick after payment of dissolution and accounting expenses. Attorney Gallant asserted that Rick was not entitled to return of the $50,000 because Eric (a) had allegedly misused SRV’s funds by using SRV funds for other ventures including Klin Groupe, LLC and its subsidiaries (“Klin”), and (b) Eric had misused and misappropriated funds from Klin. 40. However, based on the reconstructed accounting provided by Rick to Attorney GALLAGHER & CAVANAUGH LP COUNSELLORS AT LAW Gallant, all of SRV’s funds are accounted for. THE GASLIGHT BUILDING 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 Date Filed 9/7/2022 2:1: M Superior Court - Middle x Docket Number 2281C 2278 Al. Attorney Gallant also asserted that Rick had promised to pay all monies allegedly misappropriated by Eric back, which was false and not supported by any writing. Instead, all emails between Attorney Gallant and Rick are consistent with Rick’s agreement to make good on Eric’s capital contribution. Attorney Gallant claimed that in reliance on Rick’s promise to pay all of Eric’s debts that SRV did not commence suit against Eric’s Estate. Attorney Gallant threatened to assert counterclaims against Rick based on all of Eric’s alleged misdoings with respect to Klin in any suit brought by Rick seeking repayment of his $50,000 overpayment and bring “unfavorable publicity of all of these events, not to the entities, but to the Hanson family.” 42. Eric, Conley, and Attorneys Gallant and Ervin, together with approximately 45 other persons, were investors in and members of Klin, a Delaware limited liability company formed on February 23, 2005. While some of the managers and members of Klin were managers and members of SRV, Klin and SRV are separate entities with different ownership and their own governing documents and books and records. 43. Attorney Gallant, an attorney admitted to practice law in Massachusetts, knew or reasonably should have known that there is no reasonable basis to assert any alleged claims involving Klin or Eric against Rick. 44, Rick had no legal obligation to make good on any debts or obligations of Eric following his death in 2018 and the matter is governed by and subject to the statute of frauds. 45. Klin previously asserted claims against Eric’s Estate in 2019 for alleged misappropriations and/or misdoings and then voluntarily dismissed same. 46. The one-year statute of limitations for claims against Eric’s Estate expired in GALLAGHER & CAVANAUGH LP COUNSELLORS AT Law 2019. THE GASLIGHT BUILDING] 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 Date Filed 9/7/2022 2:1. M Superior Court - Middleffex Docket Number 2281C 2278 47. Attorney Gallant has also admitted that Rick’s promise to pay Eric’s investment in SRV “were not promises to pay debts of Eric” and that “no one is trying to hold Rick responsible for the monies taken from this entity by his son.” 48. Despite the foregoing, Attorney Gallant and SRV continued to refuse to return the $50,000 to Rick even though it was clearly an overpayment of the capital contribution due from Erilc Instead, Attorney Gallant claimed that he had never received any evidence that Eric personally paid the $50,000 capital contribution as opposed to sourcing from Klin or another company. Attorney Gallant represented that Kristen Ervin had stated to him that the books and records of SRV, that sh had kept, were not accurate and that she recalled these particular funds coming from a Klin entity. 49. Rick then procured and provided to Attorney Gallant evidence that the $50,000, in fact, sourced from a personal account belonging to Eric and his wife. 50. Upon providing such proof to Attorney Gallant, he admitted that he knew that Eric had made the $50,000 capital contribution, stating “We were aware of the 50,000.00 payment by Eric.” $1. Yet Attorney Gallant and SRV continue to fail and refuse to return the $50,000 overpayment to Rick. 523 Rick would not have paid the entire $133,000 to SRV had Attorney Gallant and SRV disclosed to him in advance that Eric had already paid $50,000. 53. That Attorney Gallant and SRV were aware of this, is evidenced by Attorney Gallant’s transfer of $169,000 from SRV’s checking account (over which he had signatory authority) into his law firm’s attorney IOLTA account shortly after Rick’s deposit of the GALLAGHER & CAVANAUGH LLP COUNSELLORS AT LAW THE GASLIGHT BUILDING 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 Date Filed 9/7/2022 2:1: M Superior Court - Middleqbx Docket Number 2281C 2278 $133,000 so that he could exercise complete control over SRV’s funds and the $50,000 overpayment should Rick discover the mistake and want his money back. 54. On April 15, 2022, Rick caused a demand for relief, pursuant to M.G.L. Chapter 93A, to be served on Attorney Gallant, individually and as Manager of SRV. In response, Attorney Gallant and SRV continue to refuse to repay the entire $50,000 overpayment to Rick. 55. Attorney Gallant had advised that, if Rick was not in agreement with the disbursement of the remaining funds, he would retain $50,000.00 in the Gallant & Ervin account and distribute the balance of the undisputed funds, one-third to himself and Kristen Ervin, one- third to Conley and one-third to Rick. Rick objected to this, notifying Attorney Gallant and Conley in writing of his objection on March 30, 2022 as such would not leave the LLC with sufficient funds to defend this litigation and pay a likely judgment that Rick would receive in this case. 56. By letter dated July 6, 2022, Attorney Gallant delivered a check to Mr. Hanson dated April 12, 2022, in the amount of $39,673.00, purporting to be Mr. Hanson’s “share of excess monies held in [Gallant & Ervin’s] client’s account.” Mr. Hanson has not accepted delivery of or cashed the check. 57. Rick, through counsel, made inquiry of Attorney Gallant by email dated July 13, 2022, about the date of issuance to and cashing of checks by other members. In response, Attorney Gallant represented that checks had been previously issued to and cashed by the other members, although he failed and refused to identify when those checks were delivered and cashed. GALLAGHER & CAVANAUGH Le COUNSELLORS AT LAW THE GASLIGHT BUILDING| 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 10 Date Filed 9/7/2022 2:13, P Superior Court - Middlegex Docket Number 2281C 2278 58. Payment of such sums represents distribution of all of the assets of the LLC except the $50,000 overpayment owed to Mr. Hanson and approximately $2,500 needed to pay an outstanding invoice to the LLC’s accountant and dissolution expenses. 50: After inquiry, Attorney Gallant stated on July 14, 2022 that he and Conley, as managers of the LLC, would seek “‘at some point” reimbursement of defense costs “from the monies remaining and funds retained,” although Attorney Gallant has represented that he will not take defense costs of the suit from the $50,000 in advance of the resolution or determination of the case. 60. As an experienced lawyer, Attorney Gallant knows that the $2500 (which is needed to pay other expenses) is not sufficient to defend this litigation and pay any sums (other than the $50,000 overpayment itself which has been set aside), that may be due to Rick including, but not limited to, interest and attorneys’ fees. 61. Attorney Gallant also knows that the only funds retained are the $50,000 owed to Mr. Hanson. It, therefore, appears that Attorney Gallant intends to use the funds owed to Mr. Hanson to “at some point” pay to defend the suit that Attorney Gallant has forced Mr. Hanson to bring to procure return of the $50,000. The LLC’s defense costs of the suit, if any, are to be borne by the LLC and, by its members proportionally. Attorney Gallant has, in bad faith, attempted to avoid the applicable provisions of the LLC Operating Agreement and applicable law. 62. Del. Code Ann. Tit. 6, § 18-607(a) provides, in pertinent part, that A limited liability company shall not make a distribution to a member to the GALLAGHER & CAVANAUGH Lp extent that at the time of the distribution, after giving effect to the distribution, all COUNSELLORS AT LAW liabilities of the limited liability company ... exceed the fair value of the assets of THE GASLIGHT BUILDING the limited liability company... 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 11 Date Filed 9/7/2022 2:1: M Superior Court - Middle x Docket Number 2281C 2278 63 Del. Code Ann. Tit. 6, § 18-607(b) provides, in pertinent part, A member who receives a distribution in violation of subsection (a) of this section, and who knew at the time of the distribution that the distribution violated subsection (a) of this section, shall be liable to a limited liability company for the amount of the distribution. 64. Attorney Gallant and Conley, who according to Attorney Gallant are the only managers of SRV, knew at the time they authorized and delivered distributions to themselves in or about April 2022, that unless the $50,000 was voluntarily returned by the LLC to Mr. Hanson, Mr. Hanson would commence suit, resulting in a probable liability of the Company for additional funds it would not have if the LLC made a distribution in anticipation of dissolution to its members. 65. Further, SRV’s Operating Agreement provides at Section 9.3(a) that “After payment of liabilities owing to creditors, the Board of Managers ... shall set up such reserves as it deems reasonably necessary for any contingent or unforeseen liabilities or obligations of the LLC.” 66. Attorney Gallant and Conley, as the Managers, did not act reasonably in failing to set up any reserve in connection with this litigation and, instead, have acted in bad faith in a manner intended to deprive Mr. Hanson of the benefits he is entitled to receive as a result of this litigation. Further, it is not in the LLC’s best interests to distribute the LLC’s assets to its members in advance of dissolution when known claims exist. 67. Section 6.11.3 of the LLC Operating Agreement provides that no indemnification shall be provided for any person “with respect to any matter as to which he shall have been GALLAGHER & CAVANAUGH LLP adjudicated in any proceeding not to have acted in good faith in the reasonable belief that this COUNSELLORS AT LAW THE GASLIGHT BUILDING action was in the best interests of the LLC.” 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 Fax 978.452.0482 12 Date Filed 9/7/2022 2:1: M Superior Court - Middleglx Docket Number 2281C 2278 68. SRV’s Operating Agreement also provides at section 9.03(b) that, upon liquidation, after payment of liabilities, the Board of Managers “shall cause the remaining net assets of the LLC to be distributed to and among the Members in the order of priority set forth in Article IV.” Article IV provides, in pertinent part, that the net proceeds of liquidation shall be distributed to Members “in proportion to their respective Capital Contributions in an aggregate amount equal to their aggregate Capital Contributions.” 69. Conley, on the one hand, and Attorney Gallant and Kristen Ervin (collectively), on the other hand, are not entitled to share equally in any distribution as Rick was wrongly caused to make capital contributions of $183,000 while Attorneys Gallant and Ervin collectively contributed $133,000 and Conley contributed $133,000, although Rick objects to the retention of the excess capital contribution. 70. Attorney Gallant and Conley have breached the provisions of the Operating Agreement in causing the LLC to make distributions to Gallant, Kristen Ervin and Conley which are not in accord with the Operating Agreement and violate Delaware law. CAUSES OF ACTION COUNTI (Fraud y. Gallant, SRV, and Gallant & Ervin) Ws Rick repeats and realleges all of the preceding allegations as if fully set forth herein. 72. Attorney Gallant, individually and as Manager of SRV and as Manager of Gallant & Ervin, led Rick to believe that Eric still owed the entire $133,000 capital contribution, failing GALLAGHER & to disclose to Rick that Eric had, in fact, paid $50,000 toward his total capital contribution of CAVANAUGH LLP COUNSELLORS AT Law THE GASLIGHT BUILDING| $133,000 despite Attorney Gallant’s admitted knowledge of same. 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 13 Date Filed 9/7/2022 2:13 P Superior Court - Middleflex Docket Number 2281C 2278 73. Attorney Gallant, individually and as Manager of SRV and as Manager of Gallant & Ervin, made false representations of a material fact regarding the amount Eric owed on his initial investment in SRV. 74. These misrepresentations were made with knowledge of their falsity. 1S. These misrepresentations were made with the intent to deceive Rick. 76. These misrepresentations were made in order to induce Rick to pay $50,000 more than Eric owed. 77. Rick reasonably relied upon the misrepresentations and acted upon them to his damage. 78. Attorney Gallant, individually and as Manager of SRV and as Manager of Gallant & Ervin, also falsely represented to Rick that he lacked sufficient information about Eric’s $50,000 payment and the source thereof. Attorney Gallant knew the representation was false and made it anyway for the purpose of discouraging Rick from pursuing the matter. Rick reasonably relied upon same in requesting that his legal counsel procure proof of Eric’s payment, which resulted in Rick having to incur unnecessary legal fees. 79. As a direct and proximate result of Attorney Gallant’s misrepresentations and fraud, Rick has been caused to suffer great damage, all of which was reasonably foreseeable by Attorney Gallant, SRV and Gallant & Ervin. WHEREFORE, plaintiff, Eric W. Hanson, demands judgment against defendants, John Gallant, Gallant & Ervin, LLC, and SR Ventures, LLC, in the amount of his damages, together wit interest, costs, and attorneys’ fees, and such other relief as this Court deems just and proper. GALLAGHER & CAVANAUGH LP COUNSELLORS AT LAW THE GASLIGHT BUILDING 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 14 Date Filed 9/7/2022 2:1: M Superior Court - Middleqex Docket Number 2281C 2278 COUNT II (Negligent Misrepresentation v. Gallant, SRV, and Gallant & Ervin) 80. Rick repeats and realleges all of the preceding allegations as if fully set forth herein. 81. Attorney Gallant, individually and as Manager of SRV and as Manager of Gallant & Ervin, made misrepresentations of a material fact regarding the amount Eric owed on his initial investment in SRV. 82. Said misrepresentations were made with knowledge of their falsity or with recklessness as to their truth or falsehood, which constitutes negligent misrepresentation. 83. Rick reasonably relied upon said negligent misrepresentations as true and paid $50,000 more than Eric owed. 84. Rick would not have paid the extra $50,000 but for Attorney Gallant’s negligent misrepresentations. 85. As a direct and proximate result of Attorney Gallant’s negligent misrepresentations, Rick has been caused to suffer great damage, all of which was reasonably foreseeable by Attorney Gallant, SRV and Gallant & Ervin. WHEREFORE, plaintiff, Eric W. Hanson, demands judgment against defendants, John Gallant, Gallant & Ervin, LLC, and SR Ventures, LLC, in the amount of his damages, together wit! interest, costs, and attorneys’ fees, and such other relief as this Court deems just and proper. COUNT I (Money Had And Received y. Gallant, SRV, and Gallant & Ervin) 86. Rick repeats and realleges all of the preceding allegations as if fully set forth GALLAGHER & CAVANAUGH LLP COUNSELLORS AT LAW herein. THE GASLIGHT BUILDING| 22 SHATTUCK STREET LowWELL, MA 01852 978.452.0522 Fax 978.452.0482 15 Date Filed 9/7/2022 2:1}P Superior Court - Middle Docket Number 2281C bx 2278 87. Rick delivered $133,000 to SRV, which was intended and agreed would constitute payment of Eric’s investment in SRV, which he was led to believe Eric had previously failed to pay. 88. Rick delivered the $133,000 in reliance on fraudulent and negligent misrepresentations by Attorney Gallant, individually and as Manager of SRV and Gallant & Ervin, regarding the amount owed by Eric. 89. Shortly after delivery of the $133,000 to SRV, Attorney Gallant, individually and as Manager of SRV and as Manager of Gallant & Ervin, transferred the funds from SRV’s account to the client account of Gallant & Ervin. 90. Gallant & Ervin received the $169,019 in its client trust account. 91. When plaintiff learned that Eric had previously paid $50,000 of his initial investment in SRV, he asked that the $50,000 overpayment be returned to him. 92. Attorney Gallant, SRV, and Gallant & Ervin did not return the $50,000 to Rick even though they knew or should have known that it was an overpayment. 93. Attorney Gallant, SRV, and Gallant & Ervin still retain the benefits of the money received from Rick. 94. Attorney Gallant, SRV, and Gallant & Ervin, therefore, owe Rick $50,000 for money had and received from Rick. 95. As a result of the foregoing, equity and good conscience requires that Attorney Gallant, SRV, and Gallant & Ervin repay the money to Rick. GALLAGHER & CAVANAUGH LLP COUNSELLORS AT LAW| THE GASLIGHT BUILDING. 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 16 Date Filed 9/7/2022 2:1: M Superior Court - Middlegpx Docket Number 2281C 2278 WHEREFORE, plaintiff, Eric W. Hanson, demands judgment against defendants, John Gallant, SR Ventures, LLC, and Gallant & Ervin, LLC, in the amount of $50,000, together with interest, costs, and attorneys’ fees, and such other relief as this Court deems just and proper. COUNT IV (Conversion v. Gallant, SRV, and Gallant & Ervin) 96. Rick repeats and realleges all of the preceding allegations as if fully set forth herein. 97. Rick delivered $133,000 to SRV, which was intended and agreed would constitute payment of Eric’s investment in SRV, which he was led to believe Eric had previously failed to pay. 98. Rick delivered the $133,000 in reliance on fraudulent and negligent misrepresentations by Attorney Gallant, individually and as Manager of SRV and Gallant & Ervin, regarding the amount owed by Eric. 99. Shortly after delivery of the $133,000 to SRV, Attorney Gallant transferred $169,019 from SRV’s account to the client account of Gallant & Ervin. 100. Attorney Gallant, SRV, and Gallant & Ervin refuse to return $50,000 of the $133,000 paid to Rick even though they knew or should have known that said $50,000 was an overpayment. 101. Rick has demanded return of the money to him. 102. Attorney Gallant, SRV, and Gallant & Ervin have refused and continue to refuse to return the money to Rick even though they know the money belongs to Rick. GALLAGHER & CAVANAUGH LLP 103. Attorney Gallant, SRV, and Gallant & Ervin by their conduct, intentionally and COUNSELLORS AT LAW| THE GASLIGHT BUILDING| wrongfully exercised ownership, dominion, and control over money belonging to Rick. 22 SHATTUCK STREET LOWELL, MA 01852 978.452.0522 FAX 978.452.0482 17 Date Filed 9/7/2022 2:1: M Superior Court - Middledlx Docket Number 2281C 2278 104. Attorney Gallant, SRV, and Gallant & Ervin, by their conduct, improperly converted money belonging to Rick without legal justification or privilege. 105. Attorney Gallant, SRV, and Gallant & Ervin have failed to remedy the wrongful appropriation of Rick’s funds. 106. As a direct and proximate result of Defendants’ conversion, Rick has been damaged in the amount of $50,000, plus additional damages incurred in his effort to obtain return of his property, the total amount of which can only be determined at trial. WHEREFORE, plaintiff demands judgment against defendants, John Gallant, SR Ventures. LLC, and Gallant & Ervin, LLC, in the amount of $50,000, plus other damages to be determined at| trial, together with interest, costs, and attorneys’ fees, and such other relief as this Court deems just and proper. COUNT V (Unjust Enrichment y. Gallant, SRV, and Gallant & Ervin) 107. Rick repeats and realleges all of the preceding allegations as if fully set forth herein. 108. Rick delivered $133,000 to SRV, which was intended and agreed would constitute payment of Eric’s investment in SRV, which he was led to believe Eric had previously failed to pay. 109. Rick delivered the $133,000 in reliance on fraudulent and negligent misrepresentations by Attorney Gallant, individually and as Manager of SRV and Gallant & Ervin, regarding the amount owed by Eric. GALLAGHER & CAVANAUGH LLP 110. Shortly after delivery of the $133,000 to SRV, Attorney Gallant transferred the COUNSELLORS AT LAW THE GASLIGHT BUILDING funds from SRV’s ac