The 1st U.S. Circuit Court of Appeals affirmed the dismissal of a putative class action against the firm's client, the former President of Mt. Ida College, that was filed after the school’s closure in May 2018.
The court ruled that the complaint failed to allege a viable claim against the school’s former President, Barry Brown, and the other defendants, including alleged breach of fiduciary duty and fraudulent misrepresentation.
Howard M. Cooper and Elizabeth E. Olien of Todd & Weld represent former President Brown in the lawsuit.
The lawsuit raised several issues, including whether Mount Ida sufficiently disclosed its financial status to its students in the months prior to the school’s closure.
The 1st Circuit ruled that as a matter of law the college’s officers and directors acted appropriately, did not mislead anyone, and made truthful public filings and statements about the school’s financial condition.
The 1st Circuit also found that the defendants owed no fiduciary duty to students, stating, “Massachusetts law firmly establishes that there is no such fiduciary duty between Mount Ida’s officers or trustees and Mount Ida’s students on the claims here.”
Instead, the statutory fiduciary duty imposed on officers and directors is owed to the college, the court found.
The college closed in May 2018 after extraordinary efforts to save it failed at the 11th hour due to circumstances beyond the control of the College’s leadership. Following the school’s closure, the Massachusetts Attorney General’s Office launched a year-long investigation that resulted in a decision not to take any action against anyone.
“We trust that this brings all legal matters to an end,” said Ms. Olien, counsel for former President Brown.