Mass. Appeals Court addresses Planet Fitness Ex-CFO Award Verdict In Twist Invoking NH Substantive Law

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PDP Team
June 12, 2022
2 min

Mass. Appeals Court addresses Planet Fitness Ex-CFO Award Verdict In Twist Invoking NH Substantive Law

PDP Team
June 12, 2022
5 min read
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Conway v. Planet Fitness Holdings, LLC

Case Details

Case Text Link

Citation: Conway v. Planet Fitness Holdings, LLC, No. 20-P-136 (Mass. App. Ct. May. 27, 2022)


Date Published: May 27, 2022

Case Opinion

The Appeals Court of Massachusetts recently addressed a choice of law issue as to the calculation of prejudgment interest on a Massachusetts (Mass.) jury verdict award in a case involving a contractual clause that invoked New Hampshire substantive law. In the Superior Court, a jury awarded the plaintiff $5 million in damages after finding that the defendants had committed fraud and made negligent representations that induced her to settle her wrongful termination claim against them. Following trial, the plaintiff moved for prejudgment interest under the Mass. prejudgment interest statute (M.G.L. c. 231, § 6B).

Although he had found that Mass. had the most significant relationship to the parties and events, the trial judge agreed with the defendants that NH's prejudgment interest statute applied. As a result, the plaintiff was awarded $2.5 million less in prejudgment interest than she would have been entitled to under Mass. law.

Prior to trial, the judge had directed the plaintiff to choose whether she was seeking rescission of her settlement agreement with the defendants or was accepting that she had settled and was instead pursuing her tort claims relating to the settlement agreement. The plaintiff chose the latter and pursued her tort claims, including fraud, negligent misrepresentation and breach of the covenant of good faith and fair dealing. Although the plaintiff had sought application of Mass. substantive law to the trial issues, the judge applied NH law in accordance with a clause in the underlying settlement agreement stating that "any dispute arising out of [the] agreement's was governed by NH law.

On appeal, the Appeals Court looked to the plain language of that clause and held that prior caselaw found such arising out of language to be expressly self-limiting and not applicable to tortious conduct. Thus, the Court held that the clause did not apply to claims, like this plaintiff's claims, alleging that fraudulent conduct induced the execution of a contract. Thereafter, the Court undertook a choice of law analysis and concluded that Mass. had a greater interest at stake as the state where the more consequential fraudulent and deceitful conduct occurred. The Court also looked to the purpose of a prejudgment interest statute and concluded that Mass. has the stronger interest in seeing the plaintiff compensated for the delay in obtaining her money since she is a Mass. resident. Accordingly, the prejudgment interest portion of the amended judgment was vacated and the matter remanded for calculation under the Mass. statute.

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