Judge Kazanjian, sitting in the Massachusetts Business Litigation Session, allowed a plaintiff board member’s motion for a preliminary injunction. Judge Kazanjian’s order reinstated the plaintiff to the board of directors and restrained the other board members from taking any action to interfere or prevent the plaintiff from performing duties of a board member.
In Cheek v. McCoy, et al., Raymond Cheek, Jr., sued members of the board of a cooperative housing corporation. To become a board member, Cheek had to become a shareholder by paying a buy-in fee. He did that. He was then elected to the board. A few months later, the board removed Cheek as a board member, citing Cheek’s failure to pay his first month’s rent and security deposit. He had paid both. After Cheek moved for a preliminary injunction, Judge Kazanjian conducted a three-day evidentiary hearing.
Judge Kazanjian’s analysis focused on the likelihood of success on the merits of Cheek’s claims for injunctive and declaratory relief, damages for breach of contract, intentional interference with contractual relations, and civil conspiracy. Finding Cheek’s testimony credible, Judge Kazanjian ruled that Cheek was wrongfully removed from the board. His removal had been premised on “unfounded reasons,” namely failure to pay his first month’s rent and security deposit.
Judge Kazanjian disagreed with the defendants’ claim that Cheek was ineligible to serve as a board member for failure to fill out a subscription agreement. According to Judge Kazanjian “it is simply not credible that he was removed because he did not fill out a subscription agreement since that was not the stated reason at the time.”
Regarding irreparable harm, Judge Kazanjian found that without a preliminary injunction, Cheek “will suffer irreparable harm because he will be prevented from participating as a Board member despite there being likelihood that he will succeed on the merits that he was wrongfully removed from the Board.” Quoting U.S. District Court Judge Joseph L. Tauro, Judge Kazanjian wrote that “‘one of the most sacred rights of any shareholder is to participate in corporate democracy.’”
Regarding the balance of harms, Judge Kazanjian ruled that the balance of harms favored Cheek because the defendants “ha[d] not articulated any harm they would suffer” if Cheek were reinstated as a board member.
You can read the decision here.
Suffolk Superior Court
Docket Number: 2384CV01748-BLS1
Case Name: Cheek v. McCoy, et al.
Date of Decision: October 10, 2023
Judge: Hélène Kazanjian
PartnerSara Lonks Wong is a partner in Nutter’s Litigation Department. She focuses her practice on business litigation, intellectual property litigation (with particular interest in copyright and trademark law), complex commercial ...
PartnerEric P. Magnuson co-chairs Nutter’s Business Litigation practice group. Blending practicality with tenacity and strategic thinking, Eric helps clients solve legal challenges so that his clients can focus on what they do ...
RSS FeedBlog Editors
Senior Editor, Co-Chair, Business Litigation Practice Group
Partner