Contract – Band members – Abuse of process

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Where a plaintiff founder of a musical group has moved to dismiss counterclaims asserted by the defendant former group member, the motion must be denied, as the defendant has adequately stated claims of breach of contract, breach of the implied covenant of good faith and fair dealing, violation of G.L.c. 93A and abuse of process.

Viable counterclaim

“… In relevant part, the Settlement Agreement provides that:

“1. By the execution hereof, the parties acknowledge that [defendant Barry] Goudreau is no longer, and he has ceased to be, a partner in Boston, and as such shall have no interest, right nor title to the name ‘BOSTON,’ nor to any recording royalties, performing rights royalties, performance income, copyright interests or payments, or financial interest therein, except as provided herein. …

“2D. The Name ‘BOSTON’: The parties hereto expressly agree that Goudreau may use the term ‘Formerly of Boston’ for and in conjunction with any biographical usage with respect to future performances, but except to this extent, Goudreau shall have no other interest, right or title to the name ‘BOSTON.’ Without limiting the foregoing, Goudreau may not use the name ‘BOSTON’ for or in conjunction with any advertisement or promotion. …

“Goudreau seeks a declaration from this Court that ‘his accurate description of himself, and by others, as a ‘former member of BOSTON,’ and as a ‘former original member of BOSTON,’ does not violate or infringe any of [plaintiff Donald Thomas] Scholz’s rights in the BOSTON marks.’ … In addition, Goudreau seeks a declaration that the Settlement Agreement does not prohibit Goudreau or others from referring to him as ‘formerly of BOSTON, original member.’ …

“… Goudreau argues that describing himself as ‘an original member of BOSTON,’ he would merely be ‘us[ing] the name to provide accurate historical information.’ … Thus, given these allegations and the parties’ ongoing dispute regarding Goudreau’s representations in the wake of the Settlement Agreement, Goudreau has stated a plausible claim for declaratory judgment. Accordingly, the Court denies Scholz’s motion to dismiss Count I of Goudreau’s counterclaims. …

“… Goudreau argues that Scholz’s litigiousness has interfered with a specific provision under the Settlement Agreement by which the parties ‘expressly agree’ that they would permit Goudreau to use the phrase ‘Formerly of Boston.’ … Put another way, Goudreau argues that even when he attempts to refer to himself as ‘formerly of Boston’ within the bounds of the Settlement Agreement, Scholz has failed to live up to his end of the bargain by allowing him to do so. …

“Goudreau alleges that this conduct rises to the level of a breach of contract claim. … That is, he alleges that Scholz has failed to honor his contractual obligations including the promise that Goudreau be free to state publicly that he was formerly with the band. The Court, accepting all of the allegations in the counterclaim as true as it must at this juncture, cannot say that these allegations fail to state a facially plausible claim for breach of contract. The Court denies Scholz’s motion to dismiss Count II. …

“In this case, Goudreau alleges that Scholz has repeatedly commenced or threatened to commence meritless litigation in bad faith. … By doing so, Goudreau alleges, Scholz has prevented Goudreau from enjoying the fruits of the contract, namely, permitting Goudreau to refer to himself as a former member of BOSTON. … As Goudreau has alleged that Scholz has injured his rights to ‘receive the fruits of the contract,’ … the Court denies Scholz’s motion to dismiss Count III. …

“… For the same reasons discussed above as to the breach of the implied covenant claim, the Court concludes that Goudreau has stated a 93A claim where Goudreau alleges unfair and deceptive acts by Scholz and substantial injury as a result of these acts. …

“Finally, Scholz has moved to dismiss Goudreau’s final counterclaim for abuse of process. … Scholz makes two arguments in support of his motion: first, because the tort of abuse of process requires the actual use of ‘process,’ Scholz’s alleged threats to sue Goudreau are not actionable; and second, Goudreau has failed to identify any ‘collateral benefit’ that Scholz seeks to obtain through the use of judicial process. …

“The Court dispenses with the first of these arguments as it is unsupported by the record; Goudreau has not only alleges that Scholz has threatened to sue him, but also contends that Scholz has allegedly commenced at least lawsuits in court (in addition to this case) involving similar allegations. … Indeed, under Massachusetts law, the concept of ‘process’ is broad enough to include ‘the mere institution of a civil action to achieve a collateral purpose other than winning the lawsuit.’ …

“Goudreau’s allegations also support the inference that Scholz’s litigation strategy aims to further a purpose other than winning the lawsuit. Driving a competitor out of business through baseless litigation constitutes a collateral benefit for an ulterior or illegitimate purpose in the context of an abuse of process claim. … This is exactly what Goudreau has alleged. …”

Scholz v. Goudreau (Lawyers Weekly No. 02-736-13) (13 pages) (Casper, J.) (USDC) (Civil Action No. 13-10951-DJC) (Dec. 26, 2013).

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