Corporate – Judicial estoppel – Shareholder action

Where a plaintiff has alleged that two attorneys and their law firm assisted in a corporate freeze-out, the plaintiff’s claims are barred by judicial estoppel in light of the position taken by the plaintiff in a prior shareholder action.

“The remaining claims in this case are asserted by Joseph E. Szawlowski in his capacity as Trustee of the Stan and Mary Ellen Szawlowski Family Trust (‘Joseph’ or the ‘Trustee’) against attorneys George Price and Julie Bryan and their law firm Casner & Edwards LLP (the ‘Casner Defendants’). These claims are based on allegations that the Casner Defendants helped to freeze Stanley E. Szawlowski, Jr. (Joseph’s father) and his family trust out of the family potato business by helping Stanley’s surviving brothers amend the owners’ shareholder stock redemption agreement to delete important protections about valuing the ownership interests of a deceased shareholder.

“The Court concludes that Joseph’s claims in this action are barred by judicial estoppel. In a related shareholder lawsuit, which the Court will call the ‘21-21 Shareholder Action,’ Joseph prevailed against Frank Szawlowski, Chester Szawlowski, and the family Companies on Joseph’s claim that the disputed parts of the 2018 amendment are invalid. It would be inequitable, intolerable, and undermine the integrity of the judicial system to permit Joseph to take a directly contrary position in this action as the basis for pressing claims against the Casner Defendants. The Court will therefore exercise its discretion to judicially estop Joseph from asserting claims or arguments that are contrary to the position he successfully pressed in the related action that the relevant parts of the 2018 amendment are not valid.

“If one does not consider the allegations that Joseph is estopped from asserting, the other allegations in Joseph’s complaint do not state any viable claims. The Court will therefore allow the Casner Defendants’ motion for judgment on the pleadings on all remaining claims in this action. …

“Since Joseph E. Szawlowski, as Trustee of the Stan and Mary Ellen Szawlowski Family Trust, prevailed on his claim in civil action 2180CV00021 that paragraphs 4 and 5 of the ‘Amendment to the Shareholder Stock Redemption Agreement for Szawlowski Potato Farms Inc., C & F Farms, Inc., Szawlowski Realty, Inc., J & S Farms, Inc., and Szawlowski Packers LLC and Amendment to the Operating Agreement of Szawlowski Packers LLC’ (dated November 30, 2018) are invalid, the Court exercises its discretion to order that Joseph is judicially estopped, individually and in his capacity as Trustee, from making or pressing any claim or argument to the contrary in this or any other related civil action.”

Szawlowski v. Price, et al. (Lawyers Weekly No. 12-012-25) (19 pages) (Salinger, J.) (Hampshire Superior Court) (Docket No. 2180CV00137) (Feb. 4, 2025).

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