## Facts

- Pederzani and other elected unit-owner trustees of a residential condominium trust (plaintiffs) sued Guerriere, Buscone, and Pyne, former trustees appointed during the developer-control period (defendants).
- Plaintiffs alleged defendants breached fiduciary duties by failing to address substantial deficiencies involving the condominium’s retaining walls and sewage facility.
- Plaintiffs also alleged defendants failed to pursue or collect condominium charges owed by the developer, to the detriment of the condominium trust and unit owners.
- The condominium declaration included an exculpatory provision stating trustees were not liable to unit owners for mistakes of judgment or negligence unless the trustees acted individually with willful misconduct or bad faith.
- Defendants moved for summary judgment, arguing the exculpatory provision and the business-judgment rule insulated them from liability.
- Plaintiffs opposed summary judgment with evidentiary materials aimed at showing bad faith, willful misconduct, or conflicted conduct, and also contended that G.L. c. 260, § 2B (the construction statute of repose) did not bar their fiduciary-duty claims.

## Issues

1. Whether the declaration’s exculpatory provision and the business-judgment rule entitled the former developer-appointed trustees to summary judgment on unit-owner trustees’ breach-of-fiduciary-duty claims.
2. Whether the summary-judgment record raised triable questions that the developer-appointed trustees acted with willful misconduct, bad faith, or self-interest in failing to address construction-related deficiencies and in failing to collect charges allegedly owed by the developer.
3. Whether G.L. c. 260, § 2B barred fiduciary-duty claims against developer-appointed trustees based on their alleged failure, while serving as trustees, to respond to construction-related problems affecting common elements.

## Decision

- The court denied summary judgment for the developer-appointed trustees on the main breach-of-fiduciary-duty theories, finding disputes of fact as to whether the trustees’ conduct fell outside protected good-faith judgment.
- The court ruled the declaration’s exculpatory language did not resolve the case as a matter of law where the plaintiffs’ evidence could support a finding of willful misconduct or bad faith.
- The court determined the business-judgment rule did not require judgment for defendants on this record because that protection depends on honest, good-faith decisionmaking in the unit owners’ interest.
- The court concluded G.L. c. 260, § 2B did not bar the condominium’s fiduciary-duty claims against developer-appointed trustees for failing to address construction deficiencies while acting in a governance role.

## Legal Principles

- Condominium trustees, including trustees appointed during developer control, owe fiduciary duties to the condominium trust and unit owners and must act loyally and in good faith in managing common-affairs responsibilities.
- An exculpatory clause may limit liability for negligence or mistakes of judgment, but it does not foreclose claims supported by evidence of willful misconduct or bad faith; those questions commonly turn on fact disputes.
- The business-judgment rule shields trustee decisions only when made in honest judgment, in good faith, and for the benefit of the unit owners; evidence of conflicted conduct or lack of good faith defeats summary judgment based on that rule.
- The construction statute of repose, G.L. c. 260, § 2B, does not necessarily defeat a condominium’s fiduciary-duty claim against its former trustees when the alleged wrongdoing is the trustees’ governance-related failure to act on known deficiencies, rather than a direct claim for defective design or construction services.

## Conclusion

In *Pederzani v. Guerriere*, the Massachusetts Superior Court declined to end the case on summary judgment because the unit-owner trustees produced evidence from which a factfinder could conclude the former developer-appointed trustees acted in bad faith, with willful misconduct, or with divided loyalties in failing to address serious retaining-wall and sewage-facility problems and in failing to collect charges allegedly owed by the developer; the court also rejected the argument that the construction statute of repose barred these fiduciary-duty claims.


Pederzani v. Guerriere, Civil Action No. 930502A, 1995 WL 1146832 (1995)