Michael Walsh

Following earlier summary judgment and Rule 21 rulings, the court determined the appropriate costs award between the parties.

The plaintiff obtained summary judgment against the corporate defendant for misappropriated funds and successfully resisted the individual defendant’s Rule 21 motion challenging the pleadings, but failed on its claim against the individual defendant under Rule 20.

The court held that costs should follow the overall result and rejected the defendants’ argument that costs should be parsed according to individual legal arguments or sub‑issues.

Taking into account the plaintiff’s partial lack of success against the individual defendant, the court reduced the claimed amount and awarded partial indemnity costs.

The two defendants were held jointly and severally liable for the costs award.

The plaintiff franchisor contracted with the corporate defendant to manage and pay utility bills for its stores.

Upon terminating the contract, the plaintiff transferred over $1.3 million to the corporate defendant to pay outstanding bills.

The corporate defendant misappropriated the funds, transferring them to its operating account instead of paying the utilities, and subsequently signed a mutual release without disclosing the misappropriation.

The plaintiff brought a motion for summary judgment for the return of the funds, and the personal defendant moved to dismiss the claims against him.

The court granted summary judgment against the corporate defendant, finding it was unjustly enriched and that the mutual release was vitiated by fraudulent misrepresentation.

However, the court dismissed the claims against the personal defendant, finding no basis to pierce the corporate veil.