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COMMONWEALTH OF MASSACHUSETTS
ESSEX, ss. SUPERIOR COURT
CIVIL ACTION
NO. 1677CV01419
SABA HASHEM!
Ns.
STEPHEN L. D’ANGELO & OTHERS?
MEMORANDUM AND ORDER ON DEFENDANTS STEPHEN.L. D’ANGELO AND
D’ANGELO LAW GROUP, LLC’S MOTION FOR [PARTIAL] SUMMARY JUDGMENT
The plaintiff, Saba Hashem, brought this civil action against his former law partner,?
Stephen L. D’ Angelo, Esquire; the law firm they founded, D’Angelo & Hashem, LLC
(“D’ Angelo & Hashem”); and D’Angelo’s new law firm, the D'Angelo Law Group, LLC
(“D'Angelo Law Group”), alleging that, in establishing the new firm, D’ Angelo unlawfully
deprived him of fees he earned before his suspension from the practice of law on December 29,
2015. Hashem also claims that D’ Angelo deliberately deprived D’Angelo & Hashem of
settlement proceeds in cases that originated with their firm in order to shift the burden of paying
an employment discrimination claim against the Hashem and the firm onto Hashem alone. The
' Individually and as a member of and derivatively on behalf of D’Angelo and Hashem, LLC
? D'Angelo Law Group, LLC, and D’Angelo and Hashem, LLC
3 The plaintiff notes in his Response to the Statement of Undisputed, Material Facts of Stephen
L. D’Angelo and D’Angelo Law Group, LLC’s Motion for Summary Adjudication, that the two
“were not law partners but members of a limited liability company.” Response to Statement of
Undisputed Material Facts at p. 1, para. 1. The plaintiff is no doubt correct that the firm was a
limited liability company and not, formally, a partnership in the interests of clarity and
conciseness, however, the court uses the term partner. The term is used here in its colloquial,
rather than its technical, legal sense.
40defendants respond that Hashem’s sole recourse is recovery in quantum meruit for work he did
on cases before his suspension. The defendants argue that they are therefore entitled to judgment
as a matier of law as to all the Complaint’s counts, except Count Four (quantum meruit).4 The
court concludes that the defendants have not met their burden of demonstrating that they are
entitled to judgment as a matter of law as to the plaintiff's claims — both personal and on behalf
of D’Angelo & Hashem — in Count One, which alleges a breach of fiduciary duty. There are also
disputed issues of fact as to Counts Four (quantum meruit), Five (accounting), and Six (equitable
relief). The defendants’ Motion for Summary Adjudication is therefore ALLOWED IN PART,
as to Counts Two (interference with advantageous business and contractual relationships) and _
Three (conversion) and DENIED IN PART, as to Counts One (breach of fiduciary duty), Four
(quantum meruit), Five (accounting), and Six (equitable relief).
Facts®
In 2000, the plaintiff, Hashem, and defendant Stephen L. D'Angelo formed a law firm,
D’Angelo & Hashem. The firm primarily handled plaintiffs’ personal injury matters and also had
4 In the Plaintiff's Memorandum in Opposition to the Motion for Summary Judgment of Stephen
L. D’Angelo and D’Angelo Law Group, LLC (“Opposition”) (Paper No.77.8), Saba Hashem
concedes that summary judgment in favor of the defendants is appropriate as to Counts Two
(interference with advantageous business and contractual relationships) and Three (conversion)
of the Verified Second Amended Complaint (Paper No. 26). See Opposition (Paper No. 77.8) at
p. 10. Additionally, the plaintiff acknowledges that the accounting sought in Count Five “has
already taken place.” Opposition at p. 16 n.9, The court is uncertain as to where this
acknowledgment leaves the cause of action for an accounting, To the extent the accounting
sought has been conducted, the plaintiff should dismiss this count voluntarily. If it has not been
done, the defendants have not met their burden of establishing that there are no material facts in
dispute and that they are entitled to judgment as a matter of law. See Section III, supra.
5 Facts set out in this section are uncontested, unless otherwise noted in the text. Some additional
facts are set out in the Analysis section as necessary to supply context.3
a significant number of workers” compensation cases. The firm operated continuously until
sometime after Hashem’s arrest on October 13, 2015, and resulting incarceration.’ He resigned
from the firm on December 26, 2015. Affidavit of Saba Hashem (“Hashem Affidavit”) at p. 6,
para, 27. Hashem was suspended temporarily from the practice of law on December 29, 2015,
and, on July 27, 2016, he was suspended for eighteen months. See Jn re Saba B. Hashem, No.
BD-2015-114 (SJC, Spina, J.). That suspension was retroactive to December 29, 2015. See id.
Hashem does not appear to have been reinstated.
D’Angelo represents that he consulted the Board of Bar Overseers (“the BBO”) sometime
after Hashem’s arrest. Affidavit of Stephen L. D’Angelo in Support of Stephen L. D’Angelo and
D’Angelo Law Group, LLC’s Motion for Summary Adjudication (“D’Angelo Affidavit”) at pp.
1-2, paras. 4 -8.8 Bar Counsel reportedly advised D’Angelo that he was required to notify all
D’Angelo & Hashem clients that Hashem had been suspended and that, therefore, the firm was
no longer representing clients. See id., at p. 2, para. 7. He was also told that he “was further
obligated to inform each . . . client[] of his or her or its right to choose alternate[,] successor
6 The record is not clear as to whether the firm handled other types of cases, as well. It appears,
however, that these two areas were the firm’s primary area of focus. In any event, nothing turns
on this issue, Of significance is the structure of fee agreements in these cases. See text, infra.
7 Hashem was arrested on October 13, 2015, and the following day was held without bail .
pending trial. He admitted to sufficient facts on November 24, 2015. Jn re Saba B. Hashem, No.
BD-2015-114 (SIC, Spina, J.).
8 In his affidavit, D’ Angelo explains that he consulted the Board of Bar Overseers (“the BBO”)
“Twjhen Hashem was . . . arrested and suspended from the practice of law.” D’Angelo Affidavit
at p. 2, para. 4. As the arrest happened on October 13, 2015, and the initial suspension from the
practice of law happened on December 29, 2015, it is not clear when in that time D’Angelo
contacted the BBO. Neither party has suggested, and the court can discern no reason, that the
precise date on which D’ Angelo contacted the BBO is significant.counsel.” Jd. at para. 8. D’Angelo represents that he “made every effort” to comply with these
obligations. Jd. at para. 9.°
. It is undisputed that D’Angelo & Hashem ceased operations after Hashem’s arrest. The
record is not entirely clear, however, as to precisely when that happened. The firm did not
dissolve promptly as an LLC. Rather, it was involuntarily dissolved by the Secretary of State on
June 30, 2018. See D’ Angelo Affidavit at p. 3, para. 14.
On November 6, 2015, D’Angelo formed the D’Angelo Law Group. According to
Hashem’s affidavit, as of that date, D'Angelo & Hashem had “at least one hundred” personal
injury clients who had executed contingent fee agreements with the firm, and “approximately
twenty-five” workers’ compensation clients. Hashem Affidavit at p. 3, para. 14. The record is not
clear as to the nature of the fee agreements in the workers’ compensation cases. “Many” of these
clients “chose to sign a new contract with D’ Angelo Law Group, LLC.” D’Angelo Affidavit at p.
3, para. 10. The record does not establish how many clients elected to be represented by the
D’Angelo Law Group and how many opted for other counsel. The D’Angelo Law Group
subsequently recovered contingency fees from clients who had been represented by D’Angelo &
Hashem before it ceased to operate. See Hashem Affidavit at pp. 4-6, paras. 17-24.
PROCEDURAL HISTORY
Hashem filed this lawsuit on September 16, 2016. On November 25, 2016, the defendants
filed a Notice of Removal to the United States District Court for the District of Massachusetts,
Eastern Division. See Saba Hashem, Individually, and as a Member of, and derivatively on
behalf of D’Angelo and Hashem, LLC vy. Stephen L. D'Angelo et al, Civil Action No: 1:16-cv-
? In his affidavit, D' Angelo avers that “[e]ach client was properly presented with the option of
transferring their [sic] case to D’Angelo aw Group, LLC],] under the direction of [D’Angelo] . . .
or of choosing other counsel.” D’Angelo Affidavit at pp. 2-3, para. 9.12383-IT. Extensive litigation ensued there, including apparently voluminous discovery.
Additionally, Jennifer M. Carrion, a plaintiff with an employment discrimination judgment
against both Hashem individually and D’Angelo & Hashem, was permitted to intervene in the
United States District Court case.!° The case was remanded to this court on January 24, 2019.
See Order of Remand, Hashem v. D'Angelo, No: 1:16-cv-12383-IT (Paper No. 7). Defendants
Stephen L. D'Angelo and the D’Angelo Law Group, LLC, filed this Motion for Summary
Adjudication on September 18, 2019. A hearing scheduled for October 22, 2019, was postponed
at the request of the parties. The hearing in this matter was held on January 7, 2020.
Analysis
A party is entitled to summary judgment pursuant to Mass. R. Civ. P. 56(c) if there is no
genuine dispute of material fact and the party is entitled to judgment as a matter of law, See
Boazova v. Safety Ins. Co., 479 Mass. 233, 237 (2012). The moving party bears “the burden of
initially showing that there is an absence of evidence to support the case of the nonmoving party
shouldering the burden of proof at trial.” Kourouvacilis v. General Motors Corp., 410 Mass. 706,
711 (1991). The moving party can meet this burden by “demonstrat[ing], by reference to material
described in Mass. R. Civ. P. 56(c), unmet by countervailing materials, that the party opposing
the motion has no reasonable expectation of proving an essential element of that party’s case.”
Id, at 716. If the moving party meets its initial burden, the burden shifts to the non-moving party
to provide specific facts to demonstrate that there is a genuine issue of material fact. See
Drakopoulos v. U.S. Bank Nat. Ass’n, 465 Mass. 775, 777-778 (2013). A court reviewing a
motion for summary judgment must “draw all reasonable inferences in the light most favorable
10 For an account of the course of the intervention plaintiff's case, refer to the court’s
Memorandum and Order on Stephen L. D’Angelo and D’Angelo Law Group, LLC’s Motion for
Summary Judgment and Request for Hearing, also issued on April 7, 2020.to the nonmoving party.” Id., quoting Premier Capital, LLC v. KMZ, Inc., 464 Mass. 467, 474-
475 (2013).
I, Recovery of attorney’s fees by a lawyer suspended from the practice of law: general
principles -
An attorney who is suspended from the practice of law can recover “in quasi contract” for
the reasonable value of the attomney’s services “when the services are not involved in the
unprofessional conduct occasioning disciplinary action.” Kourouvacilis v. Amer. Fed. of State,
County and Mun. Empls., 65 Mass. App. Ct. 521, 531 (2006) (dicta), quoting Stein v. Shaw, 6
N.J. 525, 527 (1951). If an attorney’s representation governed by a contingent fee agreement is
terminated, the attorney may recover only in quantum meruit, unless the termination is by the
client and in bad faith, in which case, the attorney might be entitled to recover under the
contingent fee agreement. See Opert v.Melios, 415 Mass. 634, 636-637 (1993) (absent bad faith
by client, only recovery available under contingent fee by discharged attorney is in quantum
meruit), See also Zabin v. Picciotto, 73 Mass. App. Ct. 141, 151 (2008) (attorney can recover in
quantum meruit arising out of a contingent fee agreement), citing Liss v. Studeny, 450 Mass.473,
478 (2008).
An attorney who is a member of a limited liability company engaged in the practice of
law in Massachusetts must be a lawyer in good standing of the Massachusetts bar and/or the
licensing authority of any jurisdiction in which the lawyer is “actively engaged in the practice of
law.” SJC Rule 3:06(2)(a). An attorney who ceases to be eligible to be an owner must dispose of
the attorney’s “shares or other ownership interests [in the LLC] as soon as reasonably possible
[thereafter] ... .” SJC Rule 3:06(2)(b). When a member of an LLC resigns, the member is
entitled to receive any outstanding distribution provided for by a written operating agreement. G.
L. ¢. 156C, § 32. In the absence of a governing provision in a written operating agreement, “aresigning member [of an LLC] is entitled to receive, within a reasonable time after resignation,
the fair value of [the member’s] limited liability company interest as of the date of resignation.”
Ja.
At the heart of the defendants’ position is the claim that, because Hashem’s suspension
from the practice of law resulted in the demise of D'Angelo & Hashem, he forfeited his right
under G. L. ¢. 156C, § 32, to the fair value of his interest in the firm as of the date of his
resignation. The defendants cite no authority for this specific proposition. Instead, the defendants
argue that, because Hashem’s suspension from the practice of law voided contingent fee
agreements to which he was a party and because all of the firm’s fee agreements were
contingent, Hashem was entitled to no distribution.
This argument, however, takes a too narrow and therefore incomplete view of the
situation. The defendants’ argument begins with the premise that Hashem’s suspension from the
practice of law required that D’Angelo & Hashem be disbanded. It is not clear that this is the
case. The defendants cite no authority for the proposition that D’Angelo & Hashem could not
have become a one-member LLC.!! More fundamentally, Hashem’s resignation from the firm on
December 26, 2015, should have triggered payment to him — within a reasonable time — of the
value of his ownership share.'? See G. L. c. 156C, § 32. Valuing that share might have taken
'l In that event, the reconstituted LLC certainly would have had to notify clients that they were
free to select new counsel, as apparently happened here.
"2 The defendants seem to argue by implication that Hashem’s resignation from the firm under
the impending threat of disciplinary action should not be viewed as a resignation under G. L. c.
156C, § 32. The defendants cite no authority for that proposition, and the court cannot find any.
The argument is in tension with the strong dicta in Kourouvacilis v. Amer. Fed. of State, County
and Mun. Empls., 65 Mass.-App. Ct. 521, 531 (2006). In that case, the Appeals Court rejected, in
dicta, the motion judge’s view that an attorney required to withdraw from a case because of
suspension did not withdraw for good cause. The Kourouvacilis reasoning, albeit in (strong)more time than in a less complex situation. Likely critical to the valuation of Hashem’s interest
would have been factors such as: 1) how many clients chose to be represented by the successor
entity; 2) how many clients chose to be represented by other firms; 3) the recoveries ultimately
obtained in the cases of retained clients; 4) the extent of Hashem’s contribution to those
recoveries before his resignation from the firm; and 5) D’Angelo’s contribution to those
recoveries both before and after Hashem’s resignation from the firm. See Decolator, Cohen &
DiPrisco v. Lysaght, Lysaght & Kramer, 304 AD.2d 86, 92 (Sup. Ct., App. Div. 1* Dept. NY
2003) (awarding firm percentage of contingency fee “based on the proportionate share of the
overall services it performed before the disbarment of its principles” did not result in fee sharing
with disbarred lawyers). That it might have taken some time and effort to determine the value to
D’Angelo & Hashem of each contingency fee — and that the determination of. Hashem’s
contribution to each recovery might be a complicated undertaking — does not justify denying
Hashem the value of his contribution to the recovery.
TI. Count I: Breach of Fiduciary Duty
D’Angelo begins his argument for summary judgment with the observation that “[i]t is
extremely difficult to comprehend exactly what the [p]laintiffs are alleging for claims” as to the
alleged breach of fiduciary duty. Memorandum of Law in Support of Defendants Stephen L.
D’Angelo and D’Angelo Law Group, LLC’s Motion for Summary Judgment at p. 16. The court
disagrees. In fact, the plaintiffs’ argument on this point is quite simple. Hashem claims that, as a
departing member of D’ Angelo & Hashem, he was entitled to be paid his share of the LLC’s
value at the time the firm ceased operations and that D’ Angelo violated his fiduciary duty both to
the firm and to Hashem in failing to pay him.
dicta, would dictate that an attorney required by disciplinary action to cease association with an
LLC must be seen as having resigned for purposes of G. L. c. 156C, § 32.Hashem tes that, as one of two owners of a law firm organized as a limited liability
corporation, he was entitled to expect a relationship “of trust, confidence, and absolute loyalty.”
Selmark Assocs., Inc. v. Ehrlich, 467 Mass. 525, 536 (2014), quoting Donahue v. Rodd
Electrotype, 367 Mass. 578, 587 (1975). That is because “the close corporation bears striking
resemblance to a partnership.”!3 Donahue, 367 Mass. at 586. Hashem thus alleges that, in failing
to compensate him for his financial interest in the firm at the time he was forced to leave it,
D’Angelo violated his obligation of absolute loyalty.
The defendants rely heavily on the code of legal ethics. As another court has observed in
a similar context, “[a]lthough . . . [the defendants] ha[ve] framed the issue in terms of ethical
considerations, what is before {the court] . . . is nothing more than a fee dispute.” Decolator, 304
AD.2d at 86, 87 (Sup. Ct., App. Div. 15* Dept. NY 2003) (predecessor law firm, whose principals
were disbarred, entitled to recover according to percentage of recovery and were not limited to
rate for hours worked). The defendants correctly observe that, once he was suspended from the
practice of law, Hashem could not be a member of an LLC engaged in the practice of law, see
SIC Rule 3:06(2)(a), or recover contingent fees. See Opert, 415 Mass. at 636-637 (absent bad
faith by client, only recovery available under contingent fee by discharged attorney is in quantum
meruit).
From this solid position, the defendants move to less firm ground when they argue that
these ethical constraints preclude Hashem from recovering the value of his ownership share of
the LLC at the time that he was suspended from the practice of law. The defendants contend that
8 Although Donahue v. Rodd Electrotype, 367 Mass. 578, 587 (1975) does not specifically
address the limited liability form of incorporation, there can be no doubt from its analysis of the
structure of close corporations that its holding applies as much to an LLC as to any other form of
close corporation.10
Hashem is limited, instead, to recovery in quantum meruit. Indeed, there can be no question in
this case that Hashem is entitled to recover in quantum meruit. The defendants’ argument,
however, ignores that, in Count J, Hashem is nor seeking to recover a contingent fee, as the
ethical canons make clear that, as a suspended lawyer, he may not do. Rather, he is seeking to
recover the value of his ownership share of the LLC at the time he resigned from it, to which he
is entitled under G. L.¢. 156C.
The defendants’ implicit argument that the Massachusetts code of legal ethics abrogates
the provisions of G. L. c. 156C is without support in Massachusetts law. The specific issue of the
interaction between the prohibition on a suspended (or disbarred) lawyer recovering settlements
under contingent fee agreements and the statute on limited liability companies appears to be one
of first impression in Massachusetts. The parties have drawn the court’s attention to no
controlling authority, and the court has not been able to locate any. In Kourouvacilis, 65 Mass.
App. Ct. at 528, the Appeals Court, in dicta, rejected the position that a suspension or disbarment
on grounds unrelated to the client’s interest in the case constituted an unwarranted withdrawal
from the case, depriving the disciplined attorney of a right of recovery. The Kourouvacilis court,
however, did not address the question of the interaction between the code of legal ethics and the
law of limited liability companies.
The court therefore takes guidance from authority in New York. In Decolator, 304 AD.2d
at 91, in a similar situation, the Appellate Division of the New York Supreme Court rejected the
proposition that a predecessor law firm “forfeited its right to any fee for the services it rendered
[under a contingent fee agreement] by virtue of its misconduct, i.¢., the disbarment of its
principals . . . .” The Decolator court went on to note that “[a] lawyer forfeits his entire fee due
to misconduct only where the misconduct relates to the representation for which fees areHW
sought.” id. See Kourowvacilis, 65 Mass. App. Ct. at 531 (dicta) (suspended attorney can recover
“in quasi contract” for reasonable value of attorney’s services “when the services are not
involved in the unprofessional conduct occasioning disciplinary action”), quoting Stein, 6 N.J. at
527. Finally, the Decolator court rejected the “argument that any fees recovered by [the
predecessor firm] . . . are to be calculated on a quantum meruit basis, which [the defendant]
construes to mean an hourly rate, and not on a percentage of the contingency fee.” Decolator,
304 A.2d at 91. See also Zabin, 73 Mass. at 151 (court “may look to the terms of the underlying
contract to help determine appropriate recovery under quantum meruit”), quoting Liss v.
Studeny, 450 Mass. 473, 480 (2008).!*
Adopting the reasoning in Decolator and, to a lesser extent, the rationale in
Kourouvacilis, the court concludes that nothing in the code of Massachusetts legal ethics
compels the conclusion that Hashem forfeited the right to be compensated for his ownership
share in D’Angelo & Hashem at the time of his suspension and resulting resignation from the
firm. The defendants therefore are not entitled to judgment on the plaintiff's claim for breach of
fiduciary duty.
III. Hashem’s authority to bring a derivative action on behalf of D’Angelo & Hashem
The Limited Liability Company Act, G. L. c. 156C, § 56, provides for derivative suits by
members of LLCs. Rule 23.1 of the Massachusetts Rules of Civil Procedure requires that the
derivative plaintiff aver that the plaintiff “was a shareholder or member at the time of the
'4 Factors that a court may consider in determining the proper measure of recovery in quantum
meruit in the context of a contingent legal fee include “the customary ones applicable in
measuring a legal fee: the special skills which may have been brought to bear, the complexity of
the case, the size of the case in terms of dollars, the caliber of the services, the fees usually
charged for the work of the kind involved, the time spent, and the success achieved.” Zabin v.
Picciotto, 73 Mass. App. Ct. 141, 151 (2008), quoting Salem Realty Co. v. Matera, 10 Mass.
App. Ct. 571, 576 (1981).12
transaction of which he complains.” Generally, “a party who loses his interest in a corporate
entity loses standing to pursue derivative claims . . ..” Billings v. GTFM, LLC, 449 Mass. 281,
291 (2007). This is true regardless of whether the loss is voluntary or involuntary, as long as the
loss is not the result of fraud or “a reorganization which does not affect [the] plaintiff's
ownership of the business enterprise.” See id. at 292-(parentheses in original), quoting Lewis v.
Anderson, 477 A.2d 1040, 1046 n. 10 (Sup. Ct. Del. 1984). As there is no dispute that Hashem
was a member of the LLC at the time that it ceased to operate, he has satisfied the requirement of
Mass. R. Civ. P. 23.1. It is not clear that Hashem ever lost his ownership share in D’Angelo &
Hashem. When he resigned from the firm in December 2015, Hashem was entitled to be
compensated for the value of his membership, see G.L. c. 156C, § 32, but was not.
The remainder of the defendants’ arguments as to why Hashem may not bring a
derivative action in this case are unpersuasive. The defendants maintain that, because he did not
make a written demand upon D’Angelo & Hashem, and because the futility exception does not
apply, Hashem may not bring a derivative action on the firm’s behalf. There are several
problems with this position. First, the presentment requirement in Mass. R. Civ. P. 23.1 does not
require a written demand, Rather, it requires that the complaint “allege with particularity the
efforts, if any, made by the plaintiff to obtain the action he desires from the directors or
comparable authority . . . and the reasons for his failure to obtain the action or for not making the
effort.” Mass. R. Civ. P. 23.1. See Diamond v. Pappathanasi, 78 Mass. App. Ct. 77, 89 (2010)
(complaint in derivative action must plead with particularity the pre-suit demand or futility of
such demand), citing Harhen v. Brown, 431 Mass. 838, 844 (2000). This, Hashem has done.
The defendants next argue that G. L. c. 156D, § 7.42 (the universal demand requirement)
in effect abrogated the futility exception in Mass. R. Civ. P. 23.1. Chapter 156D, however,13
applies only to public corporations established subject to its provisions. See G. L. c. 156D, § 1.40
(“corporation” defined as “a corporation for profit . . . incorporated under or subject to this
chapter”). It suffices to note that D’Angelo & Hashem was a limited liability company, not a
corporation established under G. L. c. 156D. Rather, as an LLC, it was established under the
provisions of G.L.e. 156C, the Limited Liability Company Act. The defendants cite no
authority for the proposition, nor is there any reason to conclude, that the Legislature, in enacting
G. L. c. 156D, intended the provisions of its section 7.42 to apply to “other entit[ies] . ..
includ[ing] limited partnerships . . . limited liability parmerships . . . [and] limited liability
companies ....” G. L.c. 156D, § 1.40,
Finally, the defendants argue that Hashem does not fairly and adequately represent the
interests of the similarly situated members in enforcing the rights of the LLC. Section 56 of G. L.
c. 156 provides that a suit on behalf of a limited liability corporation may be brought by any
member authorized to sue the corporation by a “vote of members who own more than fifty
percent of the unreturned contributions to the limited liability company... .” G. L. c. 156C, §
56. The statute excludes from the fifty-percent calculation “the vote of any member who has an
interest in the outcome of the suit that is adverse to the interest of the limited liability company.”
dd. See also Williams v. Charles, 84 Mass. App. Ct 328, 332 (2013). Whether defendant
D’Angelo’s interest in the litigation is adverse to the interest of the limited liability company is a
(question of fact and therefore not suitable for resolution on summary judgment. Additionally, the
court notes that section 46(b) of G. L. c. 156C requires that, upon dissolution, a limited liability
corporation has an obligation to “pay or make reasonable provision to pay all claims and
obligations, including all contingent, conditional or unmatured claims and obligations, known to
the limited liability company . .. .” Both at the time that D’Angelo & Hashem ceased operations14
in fall 2015 and when it was involuntarily dissolved in 2018, there was an outstanding judgment
against the firm for discriminating against the plaintiff-intervenor based on her pregnancy. ,
Throughout that period, Hashem also had not been compensated for his ownership share. There
is therefore a substantial basis to conclude that the firm’s failure to either pay or make provision
to pay the judgment — while the firm was in D’Angelo’s sole contro] — rendered D’Angelo’s
interest adverse to the firm’s.!> ,
ORDER .
For the foregoing reasons, the defendants’ Motion for Summary Adjudication is
ALLOWED as to Counts Two (interference with advantageous business and contractual
relationships) and Three (conversion). As to the remaining contested counts, however, the
defendants have not met their burden of establishing that there are no material facts in dispute
and that they are entitled to judgment as a matter of law. As a result, the defendants’ Motion for
Summary Adjudication is DENIED as to Counts One, Four, Five, and Six.
David Deakins
David A. Deakin
Date: April 7, 2020 Associate Justice
'5 The defendants’ argument that Hashem lacks standing based on the case and controversy
requirement of Article IT of the United States Constitution warrants little discussion. There is no
question that, resolving issues of fact in Hashem’s favor, he suffered an “injury in fact’ [that is]
—an invasion of a legally protected interest which is (a) concrete and particularized and (b)
‘actual or imminent,’ not ‘conjectural’ or ‘hypothetical.’” (internal citations omitted). Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992); 112 S.Ct. 2130, 119 L.Ed, 2d 351 (1992).
Likewise, there is no question that Hashem’s and the firm’s alleged financial injury is the result
of defendant D’Angelo’s alleged misconduct and “not . . . the result [of] the independent action
of some third party not before the court.” Jd. Finally, there is no question that a favorable
decision by a trier-of-fact would redress both injuries. See id.
'6 Signed electronically because of the COVID-19 public health emergency. See Supreme
Judicial Court Order OE-144, Concerning Electronic Signatures of Judges and Clerks, March
25, 2020, at p. 2.
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COMMONWEALTH OF MASSACHUSETTS ESSEX, ss. SUPERIOR COURT CIVIL ACTION NO. 1677CV01419 SABA HASHEM! Ns. STEPHEN L. D’ANGELO & OTHERS? MEMORANDUM AND ORDER ON DEFENDANTS STEPHEN.L. D’ANGELO AND D’ANGELO LAW GROUP, LLC’S MOTION FOR [PARTIAL] SUMMARY JUDGMENT The plaintiff, Saba Hashem, brought this civil action against his former law partner,? Stephen L. D’ Angelo, Esquire; the law firm they founded, D’Angelo & Hashem, LLC (“D’ Angelo & Hashem”); and D’Angelo’s new law firm, the D'Angelo Law Group, LLC (“D'Angelo Law Group”), alleging that, in establishing the new firm, D’ Angelo unlawfully deprived him of fees he earned before his suspension from the practice of law on December 29, 2015. Hashem also claims that D’ Angelo deliberately deprived D’Angelo & Hashem of settlement proceeds in cases that originated with their firm in order to shift the burden of paying an employment discrimination claim against the Hashem and the firm onto Hashem alone. The ' Individually and as a member of and derivatively on behalf of D’Angelo and Hashem, LLC ? D'Angelo Law Group, LLC, and D’Angelo and Hashem, LLC 3 The plaintiff notes in his Response to the Statement of Undisputed, Material Facts of Stephen L. D’Angelo and D’Angelo Law Group, LLC’s Motion for Summary Adjudication, that the two “were not law partners but members of a limited liability company.” Response to Statement of Undisputed Material Facts at p. 1, para. 1. The plaintiff is no doubt correct that the firm was a limited liability company and not, formally, a partnership in the interests of clarity and conciseness, however, the court uses the term partner. The term is used here in its colloquial, rather than its technical, legal sense. 40defendants respond that Hashem’s sole recourse is recovery in quantum meruit for work he did on cases before his suspension. The defendants argue that they are therefore entitled to judgment as a matier of law as to all the Complaint’s counts, except Count Four (quantum meruit).4 The court concludes that the defendants have not met their burden of demonstrating that they are entitled to judgment as a matter of law as to the plaintiff's claims — both personal and on behalf of D’Angelo & Hashem — in Count One, which alleges a breach of fiduciary duty. There are also disputed issues of fact as to Counts Four (quantum meruit), Five (accounting), and Six (equitable relief). The defendants’ Motion for Summary Adjudication is therefore ALLOWED IN PART, as to Counts Two (interference with advantageous business and contractual relationships) and _ Three (conversion) and DENIED IN PART, as to Counts One (breach of fiduciary duty), Four (quantum meruit), Five (accounting), and Six (equitable relief). Facts® In 2000, the plaintiff, Hashem, and defendant Stephen L. D'Angelo formed a law firm, D’Angelo & Hashem. The firm primarily handled plaintiffs’ personal injury matters and also had 4 In the Plaintiff's Memorandum in Opposition to the Motion for Summary Judgment of Stephen L. D’Angelo and D’Angelo Law Group, LLC (“Opposition”) (Paper No.77.8), Saba Hashem concedes that summary judgment in favor of the defendants is appropriate as to Counts Two (interference with advantageous business and contractual relationships) and Three (conversion) of the Verified Second Amended Complaint (Paper No. 26). See Opposition (Paper No. 77.8) at p. 10. Additionally, the plaintiff acknowledges that the accounting sought in Count Five “has already taken place.” Opposition at p. 16 n.9, The court is uncertain as to where this acknowledgment leaves the cause of action for an accounting, To the extent the accounting sought has been conducted, the plaintiff should dismiss this count voluntarily. If it has not been done, the defendants have not met their burden of establishing that there are no material facts in dispute and that they are entitled to judgment as a matter of law. See Section III, supra. 5 Facts set out in this section are uncontested, unless otherwise noted in the text. Some additional facts are set out in the Analysis section as necessary to supply context.3 a significant number of workers” compensation cases. The firm operated continuously until sometime after Hashem’s arrest on October 13, 2015, and resulting incarceration.’ He resigned from the firm on December 26, 2015. Affidavit of Saba Hashem (“Hashem Affidavit”) at p. 6, para, 27. Hashem was suspended temporarily from the practice of law on December 29, 2015, and, on July 27, 2016, he was suspended for eighteen months. See Jn re Saba B. Hashem, No. BD-2015-114 (SJC, Spina, J.). That suspension was retroactive to December 29, 2015. See id. Hashem does not appear to have been reinstated. D’Angelo represents that he consulted the Board of Bar Overseers (“the BBO”) sometime after Hashem’s arrest. Affidavit of Stephen L. D’Angelo in Support of Stephen L. D’Angelo and D’Angelo Law Group, LLC’s Motion for Summary Adjudication (“D’Angelo Affidavit”) at pp. 1-2, paras. 4 -8.8 Bar Counsel reportedly advised D’Angelo that he was required to notify all D’Angelo & Hashem clients that Hashem had been suspended and that, therefore, the firm was no longer representing clients. See id., at p. 2, para. 7. He was also told that he “was further obligated to inform each . . . client[] of his or her or its right to choose alternate[,] successor 6 The record is not clear as to whether the firm handled other types of cases, as well. It appears, however, that these two areas were the firm’s primary area of focus. In any event, nothing turns on this issue, Of significance is the structure of fee agreements in these cases. See text, infra. 7 Hashem was arrested on October 13, 2015, and the following day was held without bail . pending trial. He admitted to sufficient facts on November 24, 2015. Jn re Saba B. Hashem, No. BD-2015-114 (SIC, Spina, J.). 8 In his affidavit, D’ Angelo explains that he consulted the Board of Bar Overseers (“the BBO”) “Twjhen Hashem was . . . arrested and suspended from the practice of law.” D’Angelo Affidavit at p. 2, para. 4. As the arrest happened on October 13, 2015, and the initial suspension from the practice of law happened on December 29, 2015, it is not clear when in that time D’Angelo contacted the BBO. Neither party has suggested, and the court can discern no reason, that the precise date on which D’ Angelo contacted the BBO is significant.counsel.” Jd. at para. 8. D’Angelo represents that he “made every effort” to comply with these obligations. Jd. at para. 9.° . It is undisputed that D’Angelo & Hashem ceased operations after Hashem’s arrest. The record is not entirely clear, however, as to precisely when that happened. The firm did not dissolve promptly as an LLC. Rather, it was involuntarily dissolved by the Secretary of State on June 30, 2018. See D’ Angelo Affidavit at p. 3, para. 14. On November 6, 2015, D’Angelo formed the D’Angelo Law Group. According to Hashem’s affidavit, as of that date, D'Angelo & Hashem had “at least one hundred” personal injury clients who had executed contingent fee agreements with the firm, and “approximately twenty-five” workers’ compensation clients. Hashem Affidavit at p. 3, para. 14. The record is not clear as to the nature of the fee agreements in the workers’ compensation cases. “Many” of these clients “chose to sign a new contract with D’ Angelo Law Group, LLC.” D’Angelo Affidavit at p. 3, para. 10. The record does not establish how many clients elected to be represented by the D’Angelo Law Group and how many opted for other counsel. The D’Angelo Law Group subsequently recovered contingency fees from clients who had been represented by D’Angelo & Hashem before it ceased to operate. See Hashem Affidavit at pp. 4-6, paras. 17-24. PROCEDURAL HISTORY Hashem filed this lawsuit on September 16, 2016. On November 25, 2016, the defendants filed a Notice of Removal to the United States District Court for the District of Massachusetts, Eastern Division. See Saba Hashem, Individually, and as a Member of, and derivatively on behalf of D’Angelo and Hashem, LLC vy. Stephen L. D'Angelo et al, Civil Action No: 1:16-cv- ? In his affidavit, D' Angelo avers that “[e]ach client was properly presented with the option of transferring their [sic] case to D’Angelo aw Group, LLC],] under the direction of [D’Angelo] . . . or of choosing other counsel.” D’Angelo Affidavit at pp. 2-3, para. 9.12383-IT. Extensive litigation ensued there, including apparently voluminous discovery. Additionally, Jennifer M. Carrion, a plaintiff with an employment discrimination judgment against both Hashem individually and D’Angelo & Hashem, was permitted to intervene in the United States District Court case.!° The case was remanded to this court on January 24, 2019. See Order of Remand, Hashem v. D'Angelo, No: 1:16-cv-12383-IT (Paper No. 7). Defendants Stephen L. D'Angelo and the D’Angelo Law Group, LLC, filed this Motion for Summary Adjudication on September 18, 2019. A hearing scheduled for October 22, 2019, was postponed at the request of the parties. The hearing in this matter was held on January 7, 2020. Analysis A party is entitled to summary judgment pursuant to Mass. R. Civ. P. 56(c) if there is no genuine dispute of material fact and the party is entitled to judgment as a matter of law, See Boazova v. Safety Ins. Co., 479 Mass. 233, 237 (2012). The moving party bears “the burden of initially showing that there is an absence of evidence to support the case of the nonmoving party shouldering the burden of proof at trial.” Kourouvacilis v. General Motors Corp., 410 Mass. 706, 711 (1991). The moving party can meet this burden by “demonstrat[ing], by reference to material described in Mass. R. Civ. P. 56(c), unmet by countervailing materials, that the party opposing the motion has no reasonable expectation of proving an essential element of that party’s case.” Id, at 716. If the moving party meets its initial burden, the burden shifts to the non-moving party to provide specific facts to demonstrate that there is a genuine issue of material fact. See Drakopoulos v. U.S. Bank Nat. Ass’n, 465 Mass. 775, 777-778 (2013). A court reviewing a motion for summary judgment must “draw all reasonable inferences in the light most favorable 10 For an account of the course of the intervention plaintiff's case, refer to the court’s Memorandum and Order on Stephen L. D’Angelo and D’Angelo Law Group, LLC’s Motion for Summary Judgment and Request for Hearing, also issued on April 7, 2020.to the nonmoving party.” Id., quoting Premier Capital, LLC v. KMZ, Inc., 464 Mass. 467, 474- 475 (2013). I, Recovery of attorney’s fees by a lawyer suspended from the practice of law: general principles - An attorney who is suspended from the practice of law can recover “in quasi contract” for the reasonable value of the attomney’s services “when the services are not involved in the unprofessional conduct occasioning disciplinary action.” Kourouvacilis v. Amer. Fed. of State, County and Mun. Empls., 65 Mass. App. Ct. 521, 531 (2006) (dicta), quoting Stein v. Shaw, 6 N.J. 525, 527 (1951). If an attorney’s representation governed by a contingent fee agreement is terminated, the attorney may recover only in quantum meruit, unless the termination is by the client and in bad faith, in which case, the attorney might be entitled to recover under the contingent fee agreement. See Opert v.Melios, 415 Mass. 634, 636-637 (1993) (absent bad faith by client, only recovery available under contingent fee by discharged attorney is in quantum meruit), See also Zabin v. Picciotto, 73 Mass. App. Ct. 141, 151 (2008) (attorney can recover in quantum meruit arising out of a contingent fee agreement), citing Liss v. Studeny, 450 Mass.473, 478 (2008). An attorney who is a member of a limited liability company engaged in the practice of law in Massachusetts must be a lawyer in good standing of the Massachusetts bar and/or the licensing authority of any jurisdiction in which the lawyer is “actively engaged in the practice of law.” SJC Rule 3:06(2)(a). An attorney who ceases to be eligible to be an owner must dispose of the attorney’s “shares or other ownership interests [in the LLC] as soon as reasonably possible [thereafter] ... .” SJC Rule 3:06(2)(b). When a member of an LLC resigns, the member is entitled to receive any outstanding distribution provided for by a written operating agreement. G. L. ¢. 156C, § 32. In the absence of a governing provision in a written operating agreement, “aresigning member [of an LLC] is entitled to receive, within a reasonable time after resignation, the fair value of [the member’s] limited liability company interest as of the date of resignation.” Ja. At the heart of the defendants’ position is the claim that, because Hashem’s suspension from the practice of law resulted in the demise of D'Angelo & Hashem, he forfeited his right under G. L. ¢. 156C, § 32, to the fair value of his interest in the firm as of the date of his resignation. The defendants cite no authority for this specific proposition. Instead, the defendants argue that, because Hashem’s suspension from the practice of law voided contingent fee agreements to which he was a party and because all of the firm’s fee agreements were contingent, Hashem was entitled to no distribution. This argument, however, takes a too narrow and therefore incomplete view of the situation. The defendants’ argument begins with the premise that Hashem’s suspension from the practice of law required that D’Angelo & Hashem be disbanded. It is not clear that this is the case. The defendants cite no authority for the proposition that D’Angelo & Hashem could not have become a one-member LLC.!! More fundamentally, Hashem’s resignation from the firm on December 26, 2015, should have triggered payment to him — within a reasonable time — of the value of his ownership share.'? See G. L. c. 156C, § 32. Valuing that share might have taken 'l In that event, the reconstituted LLC certainly would have had to notify clients that they were free to select new counsel, as apparently happened here. "2 The defendants seem to argue by implication that Hashem’s resignation from the firm under the impending threat of disciplinary action should not be viewed as a resignation under G. L. c. 156C, § 32. The defendants cite no authority for that proposition, and the court cannot find any. The argument is in tension with the strong dicta in Kourouvacilis v. Amer. Fed. of State, County and Mun. Empls., 65 Mass.-App. Ct. 521, 531 (2006). In that case, the Appeals Court rejected, in dicta, the motion judge’s view that an attorney required to withdraw from a case because of suspension did not withdraw for good cause. The Kourouvacilis reasoning, albeit in (strong)more time than in a less complex situation. Likely critical to the valuation of Hashem’s interest would have been factors such as: 1) how many clients chose to be represented by the successor entity; 2) how many clients chose to be represented by other firms; 3) the recoveries ultimately obtained in the cases of retained clients; 4) the extent of Hashem’s contribution to those recoveries before his resignation from the firm; and 5) D’Angelo’s contribution to those recoveries both before and after Hashem’s resignation from the firm. See Decolator, Cohen & DiPrisco v. Lysaght, Lysaght & Kramer, 304 AD.2d 86, 92 (Sup. Ct., App. Div. 1* Dept. NY 2003) (awarding firm percentage of contingency fee “based on the proportionate share of the overall services it performed before the disbarment of its principles” did not result in fee sharing with disbarred lawyers). That it might have taken some time and effort to determine the value to D’Angelo & Hashem of each contingency fee — and that the determination of. Hashem’s contribution to each recovery might be a complicated undertaking — does not justify denying Hashem the value of his contribution to the recovery. TI. Count I: Breach of Fiduciary Duty D’Angelo begins his argument for summary judgment with the observation that “[i]t is extremely difficult to comprehend exactly what the [p]laintiffs are alleging for claims” as to the alleged breach of fiduciary duty. Memorandum of Law in Support of Defendants Stephen L. D’Angelo and D’Angelo Law Group, LLC’s Motion for Summary Judgment at p. 16. The court disagrees. In fact, the plaintiffs’ argument on this point is quite simple. Hashem claims that, as a departing member of D’ Angelo & Hashem, he was entitled to be paid his share of the LLC’s value at the time the firm ceased operations and that D’ Angelo violated his fiduciary duty both to the firm and to Hashem in failing to pay him. dicta, would dictate that an attorney required by disciplinary action to cease association with an LLC must be seen as having resigned for purposes of G. L. c. 156C, § 32.Hashem tes that, as one of two owners of a law firm organized as a limited liability corporation, he was entitled to expect a relationship “of trust, confidence, and absolute loyalty.” Selmark Assocs., Inc. v. Ehrlich, 467 Mass. 525, 536 (2014), quoting Donahue v. Rodd Electrotype, 367 Mass. 578, 587 (1975). That is because “the close corporation bears striking resemblance to a partnership.”!3 Donahue, 367 Mass. at 586. Hashem thus alleges that, in failing to compensate him for his financial interest in the firm at the time he was forced to leave it, D’Angelo violated his obligation of absolute loyalty. The defendants rely heavily on the code of legal ethics. As another court has observed in a similar context, “[a]lthough . . . [the defendants] ha[ve] framed the issue in terms of ethical considerations, what is before {the court] . . . is nothing more than a fee dispute.” Decolator, 304 AD.2d at 86, 87 (Sup. Ct., App. Div. 15* Dept. NY 2003) (predecessor law firm, whose principals were disbarred, entitled to recover according to percentage of recovery and were not limited to rate for hours worked). The defendants correctly observe that, once he was suspended from the practice of law, Hashem could not be a member of an LLC engaged in the practice of law, see SIC Rule 3:06(2)(a), or recover contingent fees. See Opert, 415 Mass. at 636-637 (absent bad faith by client, only recovery available under contingent fee by discharged attorney is in quantum meruit). From this solid position, the defendants move to less firm ground when they argue that these ethical constraints preclude Hashem from recovering the value of his ownership share of the LLC at the time that he was suspended from the practice of law. The defendants contend that 8 Although Donahue v. Rodd Electrotype, 367 Mass. 578, 587 (1975) does not specifically address the limited liability form of incorporation, there can be no doubt from its analysis of the structure of close corporations that its holding applies as much to an LLC as to any other form of close corporation.10 Hashem is limited, instead, to recovery in quantum meruit. Indeed, there can be no question in this case that Hashem is entitled to recover in quantum meruit. The defendants’ argument, however, ignores that, in Count J, Hashem is nor seeking to recover a contingent fee, as the ethical canons make clear that, as a suspended lawyer, he may not do. Rather, he is seeking to recover the value of his ownership share of the LLC at the time he resigned from it, to which he is entitled under G. L.¢. 156C. The defendants’ implicit argument that the Massachusetts code of legal ethics abrogates the provisions of G. L. c. 156C is without support in Massachusetts law. The specific issue of the interaction between the prohibition on a suspended (or disbarred) lawyer recovering settlements under contingent fee agreements and the statute on limited liability companies appears to be one of first impression in Massachusetts. The parties have drawn the court’s attention to no controlling authority, and the court has not been able to locate any. In Kourouvacilis, 65 Mass. App. Ct. at 528, the Appeals Court, in dicta, rejected the position that a suspension or disbarment on grounds unrelated to the client’s interest in the case constituted an unwarranted withdrawal from the case, depriving the disciplined attorney of a right of recovery. The Kourouvacilis court, however, did not address the question of the interaction between the code of legal ethics and the law of limited liability companies. The court therefore takes guidance from authority in New York. In Decolator, 304 AD.2d at 91, in a similar situation, the Appellate Division of the New York Supreme Court rejected the proposition that a predecessor law firm “forfeited its right to any fee for the services it rendered [under a contingent fee agreement] by virtue of its misconduct, i.¢., the disbarment of its principals . . . .” The Decolator court went on to note that “[a] lawyer forfeits his entire fee due to misconduct only where the misconduct relates to the representation for which fees areHW sought.” id. See Kourowvacilis, 65 Mass. App. Ct. at 531 (dicta) (suspended attorney can recover “in quasi contract” for reasonable value of attorney’s services “when the services are not involved in the unprofessional conduct occasioning disciplinary action”), quoting Stein, 6 N.J. at 527. Finally, the Decolator court rejected the “argument that any fees recovered by [the predecessor firm] . . . are to be calculated on a quantum meruit basis, which [the defendant] construes to mean an hourly rate, and not on a percentage of the contingency fee.” Decolator, 304 A.2d at 91. See also Zabin, 73 Mass. at 151 (court “may look to the terms of the underlying contract to help determine appropriate recovery under quantum meruit”), quoting Liss v. Studeny, 450 Mass. 473, 480 (2008).!* Adopting the reasoning in Decolator and, to a lesser extent, the rationale in Kourouvacilis, the court concludes that nothing in the code of Massachusetts legal ethics compels the conclusion that Hashem forfeited the right to be compensated for his ownership share in D’Angelo & Hashem at the time of his suspension and resulting resignation from the firm. The defendants therefore are not entitled to judgment on the plaintiff's claim for breach of fiduciary duty. III. Hashem’s authority to bring a derivative action on behalf of D’Angelo & Hashem The Limited Liability Company Act, G. L. c. 156C, § 56, provides for derivative suits by members of LLCs. Rule 23.1 of the Massachusetts Rules of Civil Procedure requires that the derivative plaintiff aver that the plaintiff “was a shareholder or member at the time of the '4 Factors that a court may consider in determining the proper measure of recovery in quantum meruit in the context of a contingent legal fee include “the customary ones applicable in measuring a legal fee: the special skills which may have been brought to bear, the complexity of the case, the size of the case in terms of dollars, the caliber of the services, the fees usually charged for the work of the kind involved, the time spent, and the success achieved.” Zabin v. Picciotto, 73 Mass. App. Ct. 141, 151 (2008), quoting Salem Realty Co. v. Matera, 10 Mass. App. Ct. 571, 576 (1981).12 transaction of which he complains.” Generally, “a party who loses his interest in a corporate entity loses standing to pursue derivative claims . . ..” Billings v. GTFM, LLC, 449 Mass. 281, 291 (2007). This is true regardless of whether the loss is voluntary or involuntary, as long as the loss is not the result of fraud or “a reorganization which does not affect [the] plaintiff's ownership of the business enterprise.” See id. at 292-(parentheses in original), quoting Lewis v. Anderson, 477 A.2d 1040, 1046 n. 10 (Sup. Ct. Del. 1984). As there is no dispute that Hashem was a member of the LLC at the time that it ceased to operate, he has satisfied the requirement of Mass. R. Civ. P. 23.1. It is not clear that Hashem ever lost his ownership share in D’Angelo & Hashem. When he resigned from the firm in December 2015, Hashem was entitled to be compensated for the value of his membership, see G.L. c. 156C, § 32, but was not. The remainder of the defendants’ arguments as to why Hashem may not bring a derivative action in this case are unpersuasive. The defendants maintain that, because he did not make a written demand upon D’Angelo & Hashem, and because the futility exception does not apply, Hashem may not bring a derivative action on the firm’s behalf. There are several problems with this position. First, the presentment requirement in Mass. R. Civ. P. 23.1 does not require a written demand, Rather, it requires that the complaint “allege with particularity the efforts, if any, made by the plaintiff to obtain the action he desires from the directors or comparable authority . . . and the reasons for his failure to obtain the action or for not making the effort.” Mass. R. Civ. P. 23.1. See Diamond v. Pappathanasi, 78 Mass. App. Ct. 77, 89 (2010) (complaint in derivative action must plead with particularity the pre-suit demand or futility of such demand), citing Harhen v. Brown, 431 Mass. 838, 844 (2000). This, Hashem has done. The defendants next argue that G. L. c. 156D, § 7.42 (the universal demand requirement) in effect abrogated the futility exception in Mass. R. Civ. P. 23.1. Chapter 156D, however,13 applies only to public corporations established subject to its provisions. See G. L. c. 156D, § 1.40 (“corporation” defined as “a corporation for profit . . . incorporated under or subject to this chapter”). It suffices to note that D’Angelo & Hashem was a limited liability company, not a corporation established under G. L. c. 156D. Rather, as an LLC, it was established under the provisions of G.L.e. 156C, the Limited Liability Company Act. The defendants cite no authority for the proposition, nor is there any reason to conclude, that the Legislature, in enacting G. L. c. 156D, intended the provisions of its section 7.42 to apply to “other entit[ies] . .. includ[ing] limited partnerships . . . limited liability parmerships . . . [and] limited liability companies ....” G. L.c. 156D, § 1.40, Finally, the defendants argue that Hashem does not fairly and adequately represent the interests of the similarly situated members in enforcing the rights of the LLC. Section 56 of G. L. c. 156 provides that a suit on behalf of a limited liability corporation may be brought by any member authorized to sue the corporation by a “vote of members who own more than fifty percent of the unreturned contributions to the limited liability company... .” G. L. c. 156C, § 56. The statute excludes from the fifty-percent calculation “the vote of any member who has an interest in the outcome of the suit that is adverse to the interest of the limited liability company.” dd. See also Williams v. Charles, 84 Mass. App. Ct 328, 332 (2013). Whether defendant D’Angelo’s interest in the litigation is adverse to the interest of the limited liability company is a (question of fact and therefore not suitable for resolution on summary judgment. Additionally, the court notes that section 46(b) of G. L. c. 156C requires that, upon dissolution, a limited liability corporation has an obligation to “pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured claims and obligations, known to the limited liability company . .. .” Both at the time that D’Angelo & Hashem ceased operations14 in fall 2015 and when it was involuntarily dissolved in 2018, there was an outstanding judgment against the firm for discriminating against the plaintiff-intervenor based on her pregnancy. , Throughout that period, Hashem also had not been compensated for his ownership share. There is therefore a substantial basis to conclude that the firm’s failure to either pay or make provision to pay the judgment — while the firm was in D’Angelo’s sole contro] — rendered D’Angelo’s interest adverse to the firm’s.!> , ORDER . For the foregoing reasons, the defendants’ Motion for Summary Adjudication is ALLOWED as to Counts Two (interference with advantageous business and contractual relationships) and Three (conversion). As to the remaining contested counts, however, the defendants have not met their burden of establishing that there are no material facts in dispute and that they are entitled to judgment as a matter of law. As a result, the defendants’ Motion for Summary Adjudication is DENIED as to Counts One, Four, Five, and Six. David Deakins David A. Deakin Date: April 7, 2020 Associate Justice '5 The defendants’ argument that Hashem lacks standing based on the case and controversy requirement of Article IT of the United States Constitution warrants little discussion. There is no question that, resolving issues of fact in Hashem’s favor, he suffered an “injury in fact’ [that is] —an invasion of a legally protected interest which is (a) concrete and particularized and (b) ‘actual or imminent,’ not ‘conjectural’ or ‘hypothetical.’” (internal citations omitted). Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992); 112 S.Ct. 2130, 119 L.Ed, 2d 351 (1992). Likewise, there is no question that Hashem’s and the firm’s alleged financial injury is the result of defendant D’Angelo’s alleged misconduct and “not . . . the result [of] the independent action of some third party not before the court.” Jd. Finally, there is no question that a favorable decision by a trier-of-fact would redress both injuries. See id. '6 Signed electronically because of the COVID-19 public health emergency. See Supreme Judicial Court Order OE-144, Concerning Electronic Signatures of Judges and Clerks, March 25, 2020, at p. 2.