Howard M. Cooper and Alycia Kennedy recently obtained the first known ruling in Massachusetts applying the Commonwealth's breach of contract statute of limitations despite a choice-of-law provision in a corporate operating agreement stating that Delaware law controls all disputes related to the agreement.
Superior Court Judge Kenneth W. Salinger found that the choice-of-law provision did not expressly state that Delaware's statutes of limitations would apply.
Accordingly, the judge applied the functional approach to Massachusetts statutes of limitations and held that the Commonwealth has a greater connection to the litigation than Delaware, and in so doing denied the defendants' motions to dismiss various counts in the complaint.
Mr. Cooper and Ms. Kennedy represent the plaintiff, who alleges that the defendants – former business associates – breached the operating agreement, stole intellectual property, and usurped business opportunities belonging to a Delaware limited liability company they had formed.
The firm's client alleges that the defendants froze him out by claiming the company had no value as a going concern, then dissolving the company and transferring its assets to a newly formed competitor company.
The parties all lived and worked in Massachusetts during the relevant time period, and executed the operating agreement in Massachusetts. The contract was allegedly breached through conduct in Massachusetts, including the transfer of assets to the newly formed Massachusetts corporate entity.