Beninati v. Borghi

NOTICE: All slip opinions and orders are subject to formal
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15-P-953 Appeals Court

ELIZABETH BENINATI & another1 vs. STEVEN BORGHI & others2 (and
a consolidated case3).

No. 15-P-953.

Suffolk. May 16, 2016. - October 24, 2016.

Present: Agnes, Massing, & Kinder, JJ.

Contract, Construction of contract, Modification. Consumer
Protection Act, Availability of remedy. Practice, Civil,
Attorney's fees. Damages, Attorney's fees.

1
Joseph Masotta. Both plaintiffs sued individually and
derivatively on behalf of Cardio Fitness Group, LLC; One Fitness
Group, LLC; Too Fitness Group, LLC; Tree Fitness Group, LLC;
Fore Fitness Group, LLC; V Fitness Group, LLC; SVN Fitness, LLC;
Snowman Fitness Group, LLC; Nine Fitness Group, LLC; X Fitness
Group, LLC; WOW Massachusetts Fitness Group, LLC; SJBB Fitness,
LLC; Uno Dos Fitness, LLC; WAMP Fitness, LLC; FTN Fitness, LLC;
and Fitness Capital, LLC.
2
Linda Borghi; Harold Dixon; Blast Fitness Group, LLC;
Blast Fitness Cambridge, LLC; Blast Fitness Lawrence, LLC; Blast
Fitness Saugus, LLC; Blast Fitness North Providence, LLC; Blast
Fitness Group Personal Training, LLC; Auburndale Fitness Group
Investment, LLC; 311 Fitness, Inc.; JDM Fitness, Inc.;
CapeCapital, LLC; Work Out World Foxborough, LLC; BFit
Bellingham LLC; KL BFitness LLC; and TL BFitness LLC.
3
Joseph Masotta & others vs. Steven Borghi & another.
 2

Civil actions commenced in the Superior Court Department on
May 24, 2012, and May 14, 2013.

After consolidation, the case was heard by Janet L.
Sanders, J.; a motion for attorney's fees and costs was heard by
her; and entry of final judgment was ordered by her.

John W. Moran (Michael T. Grant with him) for Elizabeth
Beninati.
Charles R. Bennett, Jr., for Steven Borghi.
Max D. Stern for Harold Dixon & others.
Michael S. Marino, for Joseph Masotta & others, was present
but did not argue.

MASSING, J. The plaintiffs, Elizabeth Beninati and Joseph

Masotta, together with defendants Steven Borghi and Linda

Borghi, owned and operated a chain of fitness clubs licensing

the "Work Out World" (WOW) trade name (collectively, WOW New

England).4 While actively involved in the management of WOW New

England, Steven, working with an outside partner, defendant

Harold Dixon, and using WOW New England's inside information and

resources, formed Blast Fitness Group, LLC (Blast), and opened a

chain of similar clubs in the same geographic area, some using

the WOW name, others using the name "Blast Fitness." (We refer

to the defendant clubs that Dixon and Steven controlled as the

Blast clubs or, together with Blast, as the Blast defendants).

4
To avoid confusion with Elizabeth's late husband Anthony
Beninati, we refer to the Beninatis by their first names,
Elizabeth and Tony. We likewise refer to the Borghis by their
first names, Steven and Linda.
 3

After a jury-waived trial on two consolidated complaints,5 a

Superior Court judge found the Borghis and Dixon liable to

Elizabeth, Masotta, and the other WOW New England owners for

breach of fiduciary duty on the plaintiffs' derivative claims

and awarded approximately $4 million in damages. The judge held

as a matter of law, however, that Dixon and the Blast defendants

could not be liable for unfair competition under G. L. c. 93A

because their misconduct involved only aiding and abetting

Steven in the breach of his fiduciary duties. The judge also

upheld corporate votes of the WOW New England companies removing

the Borghis from management, and awarded attorney's fees to

Elizabeth under G. L. c. 156C, § 57, but not Masotta.

On Elizabeth and Masotta's appeal from the judge's ruling

in favor of Dixon and the Blast defendants on the c. 93A claim,

we vacate and remand for further proceedings. On Masotta's

appeal from the denial of his request for reimbursement of

attorney's fees and expenses, and on the Borghis' cross appeal

from the enforcement of their removal, we affirm.

5
Elizabeth filed a suit in the Superior Court on behalf of
herself and derivatively on behalf of the WOW New England
corporations, alleging numerous counts including breach of
fiduciary duty, breach of contract, and violation of G. L.
c. 93A, § 11. By the time of trial, Masotta, who had originally
been named as a defendant, had realigned as a plaintiff with
Elizabeth. Elizabeth and Masotta also filed a second complaint
to enforce corporate votes removing the Borghis as managers of
WOW New England, and the cases were consolidated for trial.
 4

Background. We state the uncontested facts as set forth in

the judge's thoughtful and comprehensive memorandum of decision,

based on the testimony she heard and the nearly one thousand

exhibits she reviewed during a twenty-day bench trial. We

reserve some disputed factual issues for later discussion.

WOW New England began as a single club in Randolph in 1999.

Elizabeth's husband, Anthony Beninati (Tony), and Steven opened

the first club, with Masotta receiving an ownership interest in

exchange for doing the build-out work. A year later, the trio

opened a second club in Norwood. Early on, they decided to

license the WOW name from WOW Licensing LLC (WOW Licensing).

The licensing agreement, with a stated term of five years,

specified that WOW Licensing would not grant the rights to the

WOW name to any other entity within five miles of the WOW New

England clubs.

Between 1999 and Tony's untimely death from a rare and

apparently incurable disease in 2005, Tony, Steven, and Masotta

opened ten more health clubs in New England, eight of which were

still in operation at the time of trial. Each club entered into

the same licensing agreement with WOW Licensing. Steven was

responsible for scouting new locations, Masotta oversaw

construction of the new clubs, and Tony ran the day-to-day

business. Steven's wife Linda took an active role in running

the clubs as a salaried employee. While Tony was alive,
 5

Elizabeth did not actively participate in the management of the

clubs.

Each club was owned and operated through a separate limited

liability company, with discrete operating agreements and

varying ownership percentages allocated among the three majority

owners, as well as assorted minority investors. However,

attention to corporate niceties was lax, and eight of the clubs

were opened without written operating agreements. In December,

2004, just a month before Tony's death, WOW New England's

accountant drew up written operating agreements for the eight

LLCs, and an updated agreement for one of the other clubs. The

eight new agreements referred to "Anthony (Elizabeth) Beninati"

as one of the members. For the first time, the agreements

included noncompetition clauses -- Tony, Steven, and Masotta

would open new clubs either together or not at all.

After Tony's death in 2005, Elizabeth began to play an

active role in the management of WOW New England. By 2006, she

was signing equipment finance agreements, advertising contracts,

and leases; handling personnel matters such as schedules and

pay, employment policies, and approval of employees'

expenditures; and helping to develop the clubs' Web site. For

all major decisions, Elizabeth and Steven were equals, with

Masotta casting the deciding vote on upper management decisions

when the two disagreed.
 6

For three years following Tony's death, no new clubs were

opened. Then, between 2008 and 2010, four new health clubs were

launched. Following the template of the original clubs, each

was owned by a separate corporation and each paid an annual fee

to WOW Licensing, though neither the operating nor licensing

agreements were ever committed to writing. During this time,

the five-year licensing agreements between the original clubs

and WOW Licensing began to expire. Although the licensing

agreements were never renewed in writing, both WOW Licensing and

WOW New England operated as if they were still in effect -- the

annual fee was paid, the name was used, and the five-mile

geographic limitation was respected.

However, starting in 2010, Elizabeth, Steven, and Masotta

increasingly disagreed about the direction of WOW New England.

Steven, who had already opened a series of WOW-licensed clubs in

Minnesota by himself, wanted greater expansion than his

partners. In the fall of 2010, Steven met defendant Dixon, a

businessman interested in the health club industry. In January,

2011, Steven and Dixon formed Blast Fitness Group, LLC, which,

along with another Dixon-controlled entity, would ultimately

come to own and operate thirteen health clubs in Massachusetts

and Rhode Island, in direct competition with WOW New England.

Dixon first became involved with WOW New England as a

"consultant," hired and paid personally by Steven, not by WOW
 7

New England. Steven arranged, at Dixon's request, for Dixon to

have direct access to proprietary and confidential WOW New

England information such as membership data, revenue

spreadsheets and projections, profit and loss statements, and

performance reports, as well as employee training manuals,

payroll data, vendor information, and the expertise and

experience of WOW New England employees. Steven and Dixon

ultimately used this information in running the Blast clubs, and

many of the WOW New England staff would come to work for Blast,

even while still on the WOW New England payroll.

Significantly, Linda was one of the employees who worked

for both WOW New England and Blast. Although Linda was

originally a salaried employee of WOW New England, the 2004 WOW

operating agreements named Linda as manager. Nonetheless, she

played no role in the business between 2006 and late 2010.

However, after the creation of Blast she began attending

meetings with Steven, Dixon, and other investors regarding the

Blast clubs, and Dixon recruited her to be Blast's director of

club operations. While employed at Blast, Linda remained in

close contact with WOW New England employees, and upon Steven's

or Dixon's request, she would obtain access to WOW New England's

confidential information and provide it to Blast

representatives. She returned to WOW New England after being

named its chief operating officer in the fall of 2011, but
 8

continued her relationship with Blast, funneling information

from WOW New England to Blast.

When Blast was formed, neither Elizabeth nor Masotta was

aware of its existence. Nor were they aware that in 2011,

Steven, with Dixon's knowledge and active encouragement,

negotiated and executed a separate licensing agreement between

WOW Licensing and Blast, granting Blast the exclusive right to

use the WOW name in New England. Although the agreement

included a provision providing for payment to WOW Licensing of

WOW New England's licensing fee for 2011, it superseded any

agreements WOW New England had with WOW Licensing. Steven --

again with Dixon's knowledge, active encouragement, and

assistance6 -- also signed a lease for a property in Foxborough

that would later become the site of a Blast club, using one of

the WOW New England clubs as a guarantor. Blast continued to

expand, first with a management agreement for three Gold's Gyms

-- an opportunity that had first been presented to WOW New

England, but that Elizabeth and Masotta had rejected. Steven

and Dixon eventually changed the name of the three former Gold's

Gyms to WOW, informing Elizabeth and Masotta that profits for

those clubs would not be shared with WOW New England and that

any agreements regarding those clubs (which copied those of WOW

6
Dixon was aware, as early as 2011, that Steven had agreed
not to compete with the other principals of WOW New England.
 9

New England) were confidential and separate from WOW New

England. Nonetheless, Steven arranged for the three clubs to be

advertised on WOW New England's Web site.

In 2011, the parties hired attorneys to look into the

brewing disputes. The parties and their attorneys began meeting

in May, 2011, in an attempt to forge an agreement allowing for

the continued expansion by Steven and Dixon, with Elizabeth and

Masotta participating in some fashion. In addition, they worked

to revise the operating agreements for the existing WOW New

England clubs. After extensive negotiations, as well as a side

agreement among Masotta, Dixon, and Steven, the agreements were

signed by Masotta, Steven, and some of the other WOW New England

minority owners -- but not Elizabeth. However, the parties made

no efforts to comply with some of the more significant terms of

the 2011 agreements, such as gross revenue payouts, which had

been offered in exchange for abolishing the territorial

restriction on competition.

In the summer of 2011, as litigation became more likely,

Dixon began to take various steps to distance himself from

Steven. Starting in August, 2011, Dixon decreased Steven's

ownership percentage in the Blast clubs. By 2013, Steven was

limited to an ownership interest in only six clubs in New

England out of sixty that Blast operated nationwide. Dixon also

negotiated an agreement between WOW Licensing and a Dixon-
 10

controlled entity for exclusive use of, and sublicensing rights

to, the WOW name in New England. Dixon then increased the

licensing fee of the WOW New England clubs from $4,000 yearly to

$4,000 monthly; Linda signed the new licensing agreement on

behalf of WOW New England. Although Dixon backed off within a

month, reinstating the old fee, in a new agreement Dixon gave

WOW New England permission to use the WOW name, terminable with

thirty days' notice.

Elizabeth filed the first of the two consolidated actions

in May, 2012. The Borghis and Masotta successfully filed a

motion to have their legal fees paid by one of the WOW New

England entities, as provided by the operating agreements,

conditioned on repayment if they were found to have breached

their fiduciary duties. The cost of the litigation, and the

significant, though ultimately temporary, licensing fee

increase, prompted Elizabeth and Masotta to send out notices to

the members of the fourteen WOW New England companies of a

meeting of the corporations. At the meeting, which convened on

April 2, 2013, thirteen of the fourteen companies voted to

remove the Borghis as managers of WOW New England. (Steven held

a majority interest in the fourteenth club.) Still, Steven

maintained an ownership interest in WOW New England. The

Borghis refused to acknowledge their removal, arguing that

Elizabeth did not hold a voting interest in the companies.
 11

Elizabeth and Masotta filed a second action seeking to enforce

the vote.

After trial, the judge ruled that Elizabeth was a full

voting member of the WOW New England companies, that the 2011

amended and restated operating agreements were void, and, on the

derivative claims, that the Borghis, aided and abetted by Dixon,

breached their fiduciary duties. However, the judge found no

violation of G. L. c. 93A, reasoning that the statute does not

apply to internal corporate disputes. The judge awarded WOW New

England damages totaling approximately $4 million and required

Dixon to pay to WOW New England until December 31, 2017, five

percent of the revenue of any health club he had opened in the

New England area between April 30, 2013, and July 9, 2014. In

addition, the judge enjoined the defendants from using the WOW

trade name anywhere in New England or receiving any benefit of

the agreement with WOW Licensing, enjoined Steven from opening

or operating competing health clubs within fifty miles of any

WOW New England club as long as he remains a member of WOW New

England and for one year thereafter, and enjoined Dixon from

opening any new health clubs in New England until January 1,

2016. The judge also ordered WOW New England to reimburse

Elizabeth for attorney's fees and litigation expenses under

G. L. c. 156C, § 57, denied Masotta's request for the same,

ordered the Borghis to reimburse WOW New England for attorney's
 12

fees that were paid on their behalf during the litigation, and

ordered Masotta to reimburse WOW New England for the attorney's

fees he incurred while aligned as a defendant in the case.

Discussion. 1. Removal of the Borghis from management of

WOW New England. The Borghis challenge the judge's

determination that the members of WOW New England validly voted

to remove them from their management positions. Their removal

hinged on Elizabeth's status as a voting member of the

corporations. The judge concluded that Elizabeth possessed a

voting membership interest in ten of the WOW New England

entities even though eight of the operating agreements refer to

her only once, and two of the operating agreements refer only to

Tony.7

As a threshold matter, we agree with the judge's

determination that the eight operating agreements referring to

"Anthony (Elizabeth) Beninati" as a member are facially

ambiguous, a question of law subject to de novo review on

appeal. Browning-Ferris Indus., Inc. v. Casella Waste Mgmt. of

Mass., Inc., 79 Mass. App. Ct. 300, 307 (2011). "An ambiguity

arises from language susceptible of different meanings in the

eyes of reasonably intelligent persons." Ibid. The fact that

the agreements begin by listing "Anthony (Elizabeth) Beninati"

7
The Borghis did not contest Elizabeth's status as a full
voting member of the four WOW New England companies that had no
written operating agreement.
 13

as a member, but then apportion a percentage share to "Anthony

Beninati" and are signed only by Anthony Beninati, creates an

ambiguity regarding the meaning of the insertion of

"(Elizabeth)" in the beginning. While we must construe the

agreements based on "a fair construction of the contract as a

whole and not by special emphasis upon any one part," Kingstown

Corp. v. Black Cat Cranberry Corp., 65 Mass. App. Ct. 154, 158

(2005) (quotation omitted), by the same token "every word is to

be given force so far as practicable." MacDonald v. Hawker, 11

Mass. App. Ct. 869, 872-873 (1981) (quotation omitted). We do

not view the insertion of "(Elizabeth)" into the list of members

as meaningless.

"Once a contract is determined to be ambiguous, the court

is free to look to extrinsic evidence . . . in order to give a

reasonable construction in light of the intentions of the

parties at the time of formation of the contract." President &

Fellows of Harvard College v. PECO Energy Co., 57 Mass. App. Ct.

888, 896 (2003). "Any findings by the trial judge, especially

upon matters of credibility, will receive usual deferential

review under the 'clearly erroneous' standard of Mass.R.Civ.P.

52(a), as amended, 423 Mass. 1402 (1996)." Browning-Ferris, 79

Mass. App. Ct. at 307-308. "It is the appellant's burden to

show that a finding of fact is clearly erroneous." Demoulas v.

Demoulas Super Mkts., Inc., 424 Mass. 501, 509 (1997).
 14

We discern no clear error in the judge's factual

determination that the parties meant for Elizabeth to possess a

voting membership, upon Tony's death, in the eight clubs

governed by these operating agreements. Ample evidence was

presented to establish that in anticipation of his death from a

terminal illness, Tony instructed WOW New England's accountant

to draft operating agreements to reflect that he held his

interests jointly with Elizabeth. Steven and Masotta

considered, but rejected, holding their interests jointly with

their spouses. Moreover, after Tony's death, the others treated

Elizabeth as a full voting member, never questioning her status

until litigation appeared imminent. The judge considered

conflicting evidence, such as estate tax returns treating Tony's

WOW New England ownership interests as being held individually

rather than jointly with Elizabeth. The judge determined, on

balance, that the parties intended these agreements to reflect

that Elizabeth would assume Tony's place after his death. Where

differing inferences can be drawn from the evidence, and a

reasonable view of the evidence supports her findings, we defer

to the trial judge. Buster v. George W. Moore, Inc., 438 Mass.

635, 642-643 (2003).

The judge did not abuse her discretion in considering the

hearsay statements attributed to Tony. In any civil case, "a

declaration of a deceased person shall not be inadmissible in
 15

evidence as hearsay or as private conversation between husband

and wife, as the case may be, if the court finds that it was

made in good faith and upon the personal knowledge of the

declarant." G. L. c. 233, § 65, as appearing in St. 1943,

c. 232, § 1. See Eastern Paper & Box Co. v. Herz Mfg. Corp.,

323 Mass. 138, 144 (1948) (declarations of deceased person

regarding terms of oral contract within scope of statute). See

also Mass. G. Evid. § 804(b)(5)(A) (2016). We review the

admission of such statements under the abuse of discretion

standard, see Tufankjian v. Rockland Trust Co., 57 Mass. App.

Ct. 173, 179 (2003), and we find no such abuse here. The

evidence was sufficient to indicate that Tony made the

statements based on personal knowledge and in good faith at a

time when he and his partners were memorializing the nature of

their ownership interests in anticipation of Tony's death.

Indeed, Tony's statements came years before litigation was even

a possibility, and he had no reason to fabricate the statements.

See ibid.

Likewise, the judge did not err in concluding that the two

operating agreements that did not refer to Elizabeth were

amended by the conduct of the parties to substitute Elizabeth

for Tony. Modification or waiver of the terms of a contract may

be inferred from the conduct of the parties. See Porter v.

Harrington, 262 Mass. 203, 207 (1928); Cambridgeport Sav. Bank
 16

v. Boersner, 413 Mass. 432, 439 (1992). The judge found ample

evidence in the witnesses' testimony and documentary evidence

regarding these two companies that the parties treated Elizabeth

as a full partner and never adhered to the provisions

differentiating between voting and nonvoting membership. See

Samia v. Central Oil Co. of Worcester, 339 Mass. 101, 109 (1959)

(accepting master's finding that stockholder acquired shares in

partnership, in the absence of formal instrument, where the

parties' business activities were "characterized by the utmost

informality," and "where, to do equity among the parties, undue

emphasis cannot fairly be placed upon strict compliance with

corporate formalities"); Trager v. Schwartz, 345 Mass. 653, 659

(1963) (finding waiver of restrictions on stock transfer by

conduct in small family corporation "conducted without

overemphasis on corporate formalities").

Nor did the judge err in setting aside the amended

operating agreements finalized in June, 2011, without

Elizabeth's consent, stripping her of her voting membership.

The judge determined that "[m]anifest justice and fairness

require that this Court not recognize [the June 2011 operating

agreements] as binding." The agreements were entered into after

Dixon and Steven had, among other things, formed their

partnership to launch a competing business, usurped the WOW

trade name, and traded on access to proprietary and other
 17

confidential WOW New England information. At the time the

agreements were signed, Masotta was unaware of the full extent

of Dixon and Steven's actions, and as the judge found, Masotta's

consent to the operating agreements "was essentially paid for"

by a side agreement in which he was to receive a $10,182.07

payoff. The judge determined Steven and Masotta to have

conflicts of interest disqualifying them from voting to amend

the operating agreements and found that the June, 2011, amended

agreements could not stand. See JRY Corp. v. LeRoux, 18 Mass.

App. Ct. 153, 167-168 (1984) (disqualifying general partner's

self-serving vote as violative of fiduciary duty owed other

general partners). We discern no clear error of fact or abuse

of discretion.

Accordingly, Elizabeth had the status of a full voting

member when she and Masotta called the April 2, 2013, meeting of

the WOW New England membership and voted to remove the Borghis

as managers. The judge did not err in enforcing the vote to

remove the Borghis.8

8
The Borghis also dispute the judge's determination of
Steven's ownership interest in two of the entities, FTN Fitness
(forty percent) and WAMP Fitness (forty-five percent). The
Borghis point to the companies' 2012 tax returns, prepared by
Steven's accountant, showing Steven's interests as 41.25 percent
and 50.25 percent, respectively. As these two clubs did not
have written operating agreements, the determination of
ownership interests rested on the testimony and evidence
presented at trial. The judge's findings were consistent with
the Borghis' answer to the verified complaint and Elizabeth's
 18

2. Dixon and the Blast defendants' liability under G. L.

c. 93A. "[Section] 11 of G. L. c. 93A was intended to refer to

individuals acting in a business context in their dealings with

other business persons and not to every commercial transaction

whatsoever." Manning v. Zuckerman, 388 Mass. 8, 10 (1983), and

cases cited. It provides a cause of action for those "engaged

in the conduct of any trade or commerce" who suffer damages "as

a result of the use or employment by another person who engages

in any trade or commerce of an unfair method of competition or

an unfair or deceptive act or practice." G. L. c. 93A, § 11, as

amended by St. 1986, c. 363, § 1. Although the protections

provided by G. L. c. 93A, § 11, are broad, the statute is not

intended "to cover employment contract disputes between

employers and the employees who work in the employer's

organization, []or to disputes between members of that

organization arising out of the employment relationship."

Manning, 388 Mass. at 12.

The plaintiffs do not challenge the judge's ruling that the

Borghis could not be liable under G. L. c. 93A because the

statute does not apply to intracorporate disputes. However, the

plaintiffs contend that the judge erred in finding that Dixon

testimony; the Borghis have not shown the judge's findings to be
clearly erroneous. See New England Canteen Serv., Inc. v.
Ashley, 372 Mass. 671, 675 (1977); Williams v. B & K Med. Sys.,
Inc., 49 Mass. App. Ct. 563, 567 (2000).
 19

and the Blast defendants9 could not be liable under G. L. c. 93A,

§ 11, for the same reason, "[b]ecause any wrongdoing by Dixon is

only as a result of his aiding and assisting the Borghis in

breaching their fiduciary and contractual obligations that they

owed WOW New England." We agree with the plaintiffs. While

c. 93A is inapplicable to employee-employer disputes, Dixon and

the Blast defendants were never employees of WOW New England.10

See Peggy Lawton Kitchens, Inc. v. Hogan, 18 Mass. App. Ct. 937,

940 (1984). Moreover, our cases have explicitly rejected the

suggestion that, because an employee cannot be held liable to

the company under G. L. c. 93A, outsiders who participate with

the employee "in a violation of his duty of loyalty" may not be

liable under G. L. c. 93A. See Augat, Inc. v. Aegis, Inc., 409

Mass. 165, 172 (1991).

In Hanover Ins. Co. v. Sutton, 46 Mass. App. Ct. 153

(1999), defendant Sutton, an officer of the plaintiff

corporation, helped form a competing corporation, codefendant

IPI, during the course of his employment, and diverted a

9
The judge's finding on this issue was brief, and mentioned
only defendant Dixon. However, she specifically referenced
count XXV of the complaint, which named, among other defendants,
both Dixon and the Blast defendants.
10
The trial judge found that "[a]lthough Steven Borghi did
hire [Dixon] as a consultant, the evidence showed that Borghi
paid him personally for any services he rendered and that
whatever services he did perform were not for the benefit of WOW
New England but to advance his and Borghi's own separate
business interests."
 20

corporate opportunity from his employer to IPI. The trial judge

"explicitly based his conclusion that IPI had violated c. 93A on

his finding that IPI had 'aided and abetted' Sutton in breaching

his fiduciary duty" to the plaintiff corporation. Id. at 173.

Affirming the judge's ruling on the c. 93A claim, "[w]e

reject[ed] IPI's suggestion that because Sutton, as an employee

of [the plaintiff], could not be liable to [the plaintiff] under

G. L. c. 93A, . . . IPI, too, could not be liable under G. L.

c. 93A." Id. at 174. Similarly, the Borghis' status within WOW

New England does not bar the plaintiffs' c. 93A claims against

Dixon and the Blast defendants. See Manning, 388 Mass. at 10

("Section 11 provides a private cause of action to a person who

is engaged in business and who suffers a loss as a result of an

unfair or deceptive act or practice by another person also

engaged in business") (quotation omitted).

Because the judge believed that c. 93A was inapplicable,

she did not attempt to assess Dixon or the Blast defendants'

culpability under the statute. Whether the defendants violated

c. 93A, and whether they did so "in a wilful or knowing manner

[is] a matter for the [trial] judge. . . . Ultimately, c. 93A

ties liability for multiple damages to the degree of the

defendant's culpability." Kattar v. Demoulas, 433 Mass. 1, 15-

16 (2000). We therefore remand the matter to the judge for a

determination whether Dixon and the Blast defendants violated
 21

c. 93A and, if so, whether single or multiple damages are

warranted.11 See Augat, Inc. v. Aegis, Inc., 417 Mass. 484, 486-

487 (1994); Kattar v. Demoulas, supra.

3. Reimbursement of Masotta's attorney's fees under G. L.

c. 156C, § 57. "Attorneys' fees may be awarded, in the judge's

discretion, to a party who has successfully brought a derivative

action on behalf of a corporation." Coggins v. New England

Patriots Football Club, Inc., 406 Mass. 666, 669 (1990). "Such

'an allowance is discretionary and not a matter of strict

right.'" Ibid., quoting from Commissioner of Ins. v.

Massachusetts Acc. Co., 318 Mass. 238, 243 (1945). A party may

recover such fees only for those claims benefitting the

corporation and not for direct claims benefitting the party

personally. Coggins, supra at 669. We review decisions on

requests for attorney's fees for abuse of discretion, see id. at

672, and a "judge's decision will be reversed only if it is

clearly erroneous." WHTR Real Estate Ltd. Partnership v.

Venture Distrib., Inc., 63 Mass. App. Ct. 229, 235 (2005).

The judge ordered reimbursement of Elizabeth's attorney's

fees and expenses but not Masotta's. In denying Masotta's

11
We recognize the irony that Steven, as a shareholder of
WOW New England, may stand to benefit from any additional
damages that Dixon and the Blast defendants are required to pay.
Any such inequity is a matter between erstwhile partners Steven
and Dixon, and the trial judge is free to take the equities into
account in fashioning any remedy under c. 93A.
 22

request for fees, the judge found that his fees were "incurred

only to prosecute direct claims or, to the extent that Masotta's

counsel participated in the prosecution of the derivative

claims, his participation was unnecessary." "The amount of a

reasonable attorney's fee, awarded on the basis of statutory

authority, . . . is largely discretionary with the judge, who is

in the best position to determine how much time was reasonably

spent on a case, and the fair value of the attorney's services."

Fontaine v. Ebtec Corp., 415 Mass. 309, 324 (1993).

"[I]mportant considerations are the necessity of the services,

the extent to which duplicate or redundant effort was involved,

and the conduct of the party seeking the award of fees." Matter

of the Estate of King, 455 Mass. 796, 807 (2010).

Unlike Elizabeth's application, which specifically

differentiated between the fees attributable to the derivative

suit and discounted for the fees attributable to Elizabeth's

direct claims, Masotta did not identify services performed

solely in pursuit of the derivative suit and did not separate

them from those performed on his personal behalf. "The party

seeking attorney's fees bears the burden of showing that the

amount sought is reasonable." WHTR Real Estate Ltd.

Partnership, 63 Mass. App. Ct. at 235. The judge did not abuse

her discretion in finding that Masotta failed to carry that

burden.
 23

Conclusion. So much of the judgment that ruled in favor of

Dixon and the Blast defendants on the derivative claims under

G. L. c. 93A is vacated, and the matter is remanded for further

proceedings consistent with this opinion. The judgment is

affirmed in all other respects.

The plaintiffs' request for appellate attorney's fees is

denied.

So ordered.