## Facts

- In 1988, attorneys Donald Lubin, Philip J. Crowe, Jr., and Andrew C. Meyer, Jr. formed a professional corporation to practice law: Lubin & Meyer, P.C.
- Each of the three attorneys was a shareholder of the corporation.
- The corporation purchased and owned “key-man” life insurance policies on each shareholder, naming the corporation as beneficiary.
- The corporation and the shareholders executed a stock redemption agreement providing that, upon a shareholder’s death, the corporation would purchase the deceased shareholder’s interests in the corporation; the agreement stated that the purchase price for “any and all” interests (including the estate’s) would be satisfied by payment of the life-insurance death benefit.
- In 1990, Lubin died, and the corporation received the death benefit proceeds on his life.
- The corporation did not immediately pay the proceeds to Lubin’s estate; instead, it demanded that the estate sign a release of any claims it might assert against the corporation.
- The estate, through Nancy M. Lubin as administratrix, refused to sign the proposed release.
- The corporation filed an action in Superior Court seeking a declaratory judgment that the redemption agreement itself operated as a final settlement that cut off further claims by the estate once the contract price was paid.
- The estate disputed that reading and asserted additional theories for recovery, including breach of contract (including the redemption agreement and an employment arrangement), quantum meruit, and breach of fiduciary duty, and sought additional payments such as dividends or other post-death compensation.
- The case was tried without a jury. The trial judge concluded that payment of $2 million under the agreement satisfied the corporation’s obligations and extinguished the estate’s claims.
- The dispute arose in the setting of a law practice organized as a professional corporation, implicating Massachusetts ethical rules (including S.J.C. Rule 3:06) limiting nonlawyer participation in law-practice profits.

## Issues

1. Whether the stock redemption agreement, read as a whole, required that payment of the agreed amount funded by life insurance fully satisfied the deceased shareholder’s estate’s interests and claims against the corporation and the surviving shareholders.
2. Whether the estate could recover additional sums (such as dividends, bonuses, or other compensation) or proceed on alternative theories such as quantum meruit and fiduciary duty after the corporation performed the redemption agreement.
3. How the professional-corporation and ethics rules for attorney shareholders (including S.J.C. Rule 3:06) affect an estate’s ability to claim ongoing participation in a law firm’s earnings.

## Decision

- The Supreme Judicial Court of Massachusetts affirmed the judgment that, once the corporation paid the contractual purchase price (described in the record as $2 million), the estate’s claims were extinguished.
- The court construed the stock redemption agreement as a single, bargained-for arrangement designed to liquidate the deceased shareholder’s interests upon death through an insurance-funded buyout, rather than as a narrow price term for stock alone.
- The court rejected the estate’s effort to obtain additional recovery—whether labeled dividends, compensation, unjust enrichment, or fiduciary-duty damages—because those theories sought payments beyond what the agreement provided and would give the estate a continuing stake in the firm’s post-death earnings.
- The court treated the life-insurance proceeds as corporate property used to fund the corporation’s contractual redemption obligation; the estate’s entitlement was limited to the amount fixed by the agreement.
- The court also relied on the professional-corporation ethics framework to reject any interpretation that would allow the estate, as a nonlawyer holder, to share in ongoing law-practice profits contrary to S.J.C. Rule 3:06.

## Legal Principles

- Contract interpretation looks to the agreement as a whole and to the evident purpose of the transaction, not isolated clauses.
- When parties adopt an express contract governing payment upon a specified event (here, a shareholder’s death), quasi-contract remedies such as quantum meruit are generally unavailable to obtain different or additional compensation for the same subject matter.
- In a law firm organized as a professional corporation, an estate may have limited, temporary rights connected to administration of the decedent’s shares, but it is not thereby entitled to dividends or a continued share of profits from the ongoing practice of law when that would conflict with S.J.C. Rule 3:06 and fee-splitting limits.
- Corporate-owned life insurance used to fund a redemption is typically a financing mechanism for the corporation’s buyout duty; absent a separate promise, the estate has no independent right to insurance proceeds beyond the contract price.
- Appellate review of a bench trial gives weight to supported factual findings that inform the meaning and function of the parties’ agreement.

## Conclusion

Lubin & Meyer, P.C. v. Lubin holds that a law firm’s insurance-funded stock redemption agreement can operate as a final buyout of a deceased shareholder’s interests: once the firm paid the contract amount, the estate could not pursue additional contract, fiduciary, or quantum meruit claims or seek dividends or other post-death participation in the firm’s earnings, particularly given Massachusetts ethics rules for professional corporations of lawyers.


Lubin & Meyer, P.C. v. Lubin, 693 N.E.2d 136 (1998)