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Ace Precision v. FHP Associates

Ace Precision v. FHP Associates

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Published by: gesmer on May 16, 2012
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11/19/2012

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MAR-SO-20IZ
11:49AM
FROM-HAMPDEN
SUPERIOR
COURT
CLERKS
OFFICE
413737
1611
T-250
P.002/014
F-754
HAMPDEN,
ss.
HAMPDEN
OOUNTY
SUPERIOR
COURT
FILED
FEB
2
~
2012
COMMONWEALTH
OF
MASSACHUSETTSSUPERIOR
COURT
CIVILACTION
NO.2009-1084
ACE
PRECISlON,INC.,
v.
FHPASSOCIATES
INC.
&
others
l
FlNDINGS
OF
FACT,RULINGS
OF
LA'V,
ANDORDERFOR
roDGMENT
INTRODUCTION
PlaintifftAcePrecision
Ino.
("Acet')tallegesthatdefendants,
FHP
Associates
Ir.c.
("FHP").fonnerlyknownasSequelSystems,
Inc.
("Sequel"),RoselynParkhurst
t
Leslie
J.
Farrell,
Jennifer
Farrell,
AllisonFarrell-HanniganandUnlimitedManufacturing
Servi4:e
Inc.
("iUMS")
breachedacontract
to
sellcertain
of
Sequel'sbusinessassets
to
Ace
and,
in
so
doing,
interferedwithAce'sadvantageousbusinessrelationships.Acefurtherallegesthatthedefendantsviolatedanon-competitionagreement
by
directlycompetingwithAce.Finally,Ace
claimsthatthedefendants'
conduct
waswillfulandconstitutesanunfairand
deceptive
businesspracticewithinthemeaning
of
G.
L.
c.93A.
The
defendants
respondin
kind,
counterclaiming
thatAce:
(l)
breached
the
asset
purchaseagreement
by
failingto
make
payment
as
promised;(2)interferedwiththedefendants'advantageousbusinessrelationships;
(3)
convertedcertain
of
the
defendants'assetstoits
ownuse;
and
(4)engagedinwillfulunfair
and
deceptive
business
practicewithin
themeaning
of
G.
L.
c.
93A.
A
jury-waived
trial
commencedbefore
nle
on
I
The
other
defendantsareRoselyn
A.
ParkhUnlt,Leslie
1.
Farrell,JenniferM.Farrell,Allison
J.
fllIldl-Hannigan
and
Unlimited
Manufacturing
Service,
Inc.
 
MAR-30-2012
11:50AM
FRroA-HAMPOEN
SUPERIOR
COURTCLERKS
OFFICE
413737
1611
T-250
P.003/014
F-754
Page2Qfl2
February
6,2012.At
theclose
of
the
plaintiffs
case,theallegations
of
breach
of
thenoncompetitionagreementsweredismissedwithoutoppositionastoLeslieFarrell,JenniferFarrenandAllisonFarrell-Hannigan.Thetrialconcluded
on
February13,2012.Forthereasons
that
follow,judgmentwillenterfor
the
defendantsonCountsIandII
of
Acets
Complaint.
As
totheCounterclaims,
judgment
will
enter
forthe
defendants
on
CountIandfordefendantUMS
on
Count
III.
Judgmentwill
enterforAce
on
theremainingCounterclaims.
FINDINGS
OF
FACT
Based
onthe
relevant,credibleevidenceadmittedattrialandthereasonablein1:erencesdrawntherefrom,Ifindthefollowingfacts:
A.T!le
Parties
PriortoApril8,2009,Sequelwasasmall,family-ownedbusinesslocated
in
Lowell,Massachusetts,engaged
in
the
business
of
manufacturinganddistributingvariom.partsandgoodsforsaletocommercialcustomers,theU.S.Department
of
Defenseanditsvariousagencies.SistersRoselynParkhurst,Leslie
Farrell,
JenniferFarrell,
and
AllisonFmmll-HaniganwereallSequelshareholders.VMSisasmallcompany
in
Lowell,Massachusettsoperated
by
Roselyn
Parkhurst
and
her
husbandJamesW.Parkhurst.UMSalsosellspartstocommercialcustomers
ar..d
the
U.
S.Department
of
Defense.
UMS
bas
not
operatedasamachineshop.
It
has
alwaysfunctionedprimarilyas
an
assemblyandpackagingfacility.
VMS
has
no
employeesotherthanRoselynandJames
Parkhurst
PriortoApril8,2009,forapproximately
20
years,
VMS
solditsproductsfromthesamephysioalspaceasSequel.
Some
of
these
productshad
been
previollslymanufacturedandsold
by
ContainerService,Inc.,acompanyownedandoperated
by
thesisters'father,ThomasFarrell.
 
MAR-30-2012
11:50AM
FROM-HAMPDEN
SUPERIOR
COURT
CLERKS
OFFICE
413737
1611
T-250
P.004/014
F-754
Page3
of12
When
ContainerService,Inc.went
out
of
business
in
1988,ownership
of
toolingfor
some
ofits
productline,includingcoupling
assemblies
andfirehandles,was
trallsferred
to
UMS.Ace,aMassachusettscorporationwithaprincipalplace
of
businessinAgawam,Massachusetts,maintainsamachineshopwithapproximately
20
employees.Acemanufacturesandsellsprecision-machined,speciallymanufactured
parts
totheaerospaceindustry.PriortoApril8,2009,
Acehad
limitedexperience
in
sellingpartsto
govenunent
defenseeontractingpurchasers.
B.
The
AssetPurcbaseAgreement
In
March2009,
Ace
and
Sequel
entered
intonegotiationsfor
thesale
of
certainSequelassets.Sequel
had
already
begun
winding
down
itsbusinessandeffectivelyceaseddoing
business
before
the
sale.
On
or
about
April
8,2009,Sequel,
as
Seller,enteredinto
an
"Agreement
for
Purchase
and
Sale
of
CertainAssets"(litheAsset
Purchase
Agreenent")
withAce,
as
Buyer,
in
which
Ace
purchasedcertain"tooling,inventory,assortedfilesand
certain
otherassets
'I
of
Sequel.(Ex.4-
Tabs
1-13).ABill
of
Saleexecuted
by
Sequeland
made
part
of
theAssetFurchaseAgreementprovided
in
relevantpartthatthe
"SELLER
herebysellstheInventory,Tooling
a:nd
otherphysicalassetsdescn'bedabovein
'asis'
and
'whereis'
condition."
The
"physicalassets"included
"the
fileslocated
in
Seller'soffice
at
the
aboveaddressas
of
the
date
hereof."(Ex.4
~
Tab
I-last
page).
The
principals
of
both
Sequel
andAce
were
experiencedandsopmsticat.::dbusinesspeople.
They
negotiated
theAsset
PurchaseAgreement
overtimewith
both
sidesret,resented
by
counsel.Although
Ace's
principal,AntoineElias("Elias")testified
that
he
believedthat
he
was
bUying
Sequel's
<'whole
business,"
theplain
language
of
theagreementstated
othE:1Wise.
Not
onlywere
theassets
limited
to"tooling,inventory,assortedfilesandcertainotherassets,"
but
the

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