Recent Massachusetts Decisions Break New Ground

Public Policy Voids Indemnification Clause

In Crown v. Kobrick Offshore Fund, Ltd., 85 Mass. App. Ct. 214 (2014), a stock subscription agreement contained an indemnification clause in favor of the issuer. The defendant/ issuer prevailed on a securities fraud claim, and sought recovery of its legal fees in a counterclaim alleging this indemnification clause. The Appeals Court rejected the issuer's claim even while acknowledging that the issue was one of "uncertainty in Massachusetts, given the dearth of appellate guidance on this issue." After examining Federal and Massachusetts cases, it concluded that Massachusetts public policy aligns with the public policy of the Federal Securities Act as set forth by those federal district courts that have refused to enforce such indemnification provisions.

Litigating the Merits Causes Forfeiture of Personal Jurisdiction Defense Set Forth in Answer

In American Int'l Ins. Co. v. Seuffer, 468 Mass. 109 (2014), the SJC held that a defendant can forfeit a personal jurisdiction defense raised in its answer, by actively participating in a merits defense. Acknowledging that "Massachusetts case law had not squarely addressed the point," the SJC nonetheless concluded that "the weight of precedent fairly put [defendant] on notice that merely asserting the jurisdictional defense in its answer, without more, might be insufficient to preserve the defense." Whether forfeiture has occurred is "fact-sensitive" and several factors "could be relevant:"

the amount of time that has elapsed; the changed procedural posture of the case; the extent of discovery on the merits; and the active engagement of defendant in pretrial litigation activities. Chapter 93A Permits the Recovery of Legal Fees for In-House Counsel's Work

In Holland v. Jachmann, 85 Mass. App. Ct. 292 (2014), the Appeals Court concluded that the trial court has discretion under G.L. c. 93A to award attorneys' fees for legal work performed by in-house counsel. In this case of first impression, the Court noted that the General Counsel "actively participated at all stages of this matter as lead counsel." The Court noted by contrast the case of...