A quarterly summary and brief analysis of significant decisions issued by the Massachusetts Superior Court Business Litigation Session. A service of O’Connor, Carnathan and Mack LLC.		  

March 2006

Volume 2
Number 4
Page 1
 

Summarizing opinions from Oct. 1, 2005 through
Dec. 31, 2005


The Court on Two Occasions Was Forced to Supply a Definition of a Contract’s Controlling Language
 

 
 

 

 

 


 

 

 

 





 
     

F  E  A  T  U  R  E  D     D  E  C  I  S  I  O  N  :

Instrument Industries Trust v. Danaher Corp., 2005 Mass. Super. LEXIS 575
(Nov. 28, 2005) (van Gestel, J.).
     

This case involved a dispute concerning whether the seller (Instrument Industries) was entitled to an earn-out (or additional purchase price) after buyer (Danaher) acquired a third-party (Cleveland Precision Systems). Danaher had agreed to pay additional consideration to Instrument Industries if Danaher merged or consolidated the Instrument Industries business within three years. Danaher contended that Cleveland Precision Systems (CPS) was not merged with or consolidated into Instrument Industries and that Instrument Industries remained a free standing entity as required by the agreement. Instrument Industries countered that CPS’ operations were fused or united with its own and affected its ability as a stand-alone entity to achieve its earnout targets.

After a bench trial, the Court agreed with Instrument Industries. Even though the agreement was some 65 pages long

 


 

 

 

 

 

 



 
and contained 104 definitions, the Court was forced to resort to Black’s Law Dictionary and Delaware law because the agreement did not define “consolidation” or “merger.” The Court noted that if the issue were one of traditional corporate law, Danaher would have prevailed because CPS was not merged with or consolidated into Instrument Industries. The issue, however, was whether “any portion” of the Instrument Industries “business” was consolidated or merged. Applying Black’s Law Dictionary definitions, the Court found that CPS was fused and united with the Instrument Industries business in a general sense and it had an effect on Instrument Industries. The Court found for the plaintiff on its breach of contract claim and for the defendant on plaintiff’s Chapter 93A claim. With respect to the 93A claim, the Court noted that such claims are “ubiquitous.”

 
 

 


 

 

 

 

 





 

 
 
P A G E   1  2  3  4  5