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Listen to this articleWhere a counterclaim for conversion has been asserted alleging that the plaintiffs knowingly included false representations in a complaint they filed in U.S. District Court, the counterclaim is barred by the litigation privilege and dismissal is also warranted under the anti-SLAPP statute, as the counterclaim is based solely on the plaintiffs’ petitioning activities and the defendants have failed to demonstrate there was no reasonable factual support or arguable legal basis for those petitioning activities.
“… On January 17, 2025, Zoo Gym Investments, LLC and Edward J. Baroody (collectively, the ‘Zoo Counter-Plaintiffs’) filed the Answer to Amended Complaint, Affirmative Defenses, and Amended Counterclaims (the ‘Amended Counterclaim’) (Paper #14), against Elizabeth Beninati, Steve Borghi, and Joseph Masotta (collectively, the ‘Defendants-in-Counterclaim’), asserting counterclaims for fraud in the inducement (Counterclaim III); intentional misrepresentation (Counterclaim IV); negligent misrepresentation (Counterclaim V); promissory estoppel (Counterclaim VI); conversion (Counterclaim VII); and violation of G. L. c. 93A (‘Chapter 93A’) (Counterclaim VIII). …
“The Defendants-in-Counterclaim are the majority members and managers of Fitness Capital, LLC, which is the entity that manages the fitness facilities that operate under the tradename WOW! Work Out World (‘WOW’). …
“At some point, the relationship between the Zoo Counter-Plaintiffs and the Defendants-in-Counterclaim began to breakdown, and the Zoo Counter-Plaintiffs decided not to follow through with [an asset purchase agreement (APA)]. The Defendants-in-Counterclaim issued a notice of default, but they received no response form the Zoo Counter-Plaintiffs. Thus, on July 17, 2024, the Defendants-in-Counterclaim filed an action (the ‘Federal Lawsuit’) against the Zoo Counter-Plaintiffs in the United States District Court for the District of Massachusetts (the ‘District Court’), alleging, among other things, that the Zoo Counter-Plaintiffs had breached the APA.
“In the Amended Counterclaim, the Zoo Counter-Plaintiffs allege that a number of key facts included in the complaint filed in the Federal Lawsuit were knowingly false, including: (1) the data of the APA; the accuracy of the APA; (3) the responsibility of the Zoo Counter-Plaintiffs to provide a deposit; and (4) certain conversations and/or communications the Zoo Counter-Plaintiffs had with the Defendants-in-Counterclaim (the ‘Legal Misrepresentations’). More significantly, the Zoo Counter-Plaintiffs allege that, in the Federal Lawsuit, the Defendants-in-Counterclaim filed a request for an ex-parte trustee process attachment in the amount of $150,000, which relied upon both the WOW Misrepresentations and the Legal Misrepresentations. And that, based on these false representations, the District Court issued the requested attachment, preventing them (the Zoo Counter-Plaintiffs) from accessing their assets while the attachment was in place. …
“The Defendants-in-Counterclaim argue that the Zoo Counter-Plaintiffs’ claim for conversion (Counterclaim VII) should be dismissed under the Anti-SLAPP Statute because it is entirely based on their legitimate petitioning activity, and the Zoo Counter-Plaintiffs cannot establish that this petitioning activity was devoid of any reasonable factual support or any arguable basis in law. As set forth below, the court is persuaded that the Defendants-in-Counterclaim are correct. …
“Here, the Defendants-in-Counterclaim have successfully shown that the Zoo Counter-Plaintiffs’ claim for conversion is based on their petitioning activities and has no substantial basis other than those activities. In the Amended Counterclaim, the Zoo Counter-Plaintiffs allege that the Defendants-in-Counterclaim converted their funds by submitting the WOW Misrepresentations and the Legal Misrepresentation in the Federal Lawsuit to obtain an ex-parte attachment of their assets in the amount of $150,000. In the court’s view, there can be little doubt that the filings the Defendants-in-Counterclaim made in the District Court fall squarely within the broad definition of petitioning activity set forth above. …
“In this case, the Zoo Counter-Plaintiffs have failed to show by a preponderance of the evidence that the petitioning activities of the Defendants-in-Counterclaim lacked any reasonable factual support or arguable legal basis. …
“Because the Defendants-in-Counterclaim have established that the Zoo Counter-Plaintiffs’ claim for conversion is based solely on their petitioning activities, and the Zoo Counter-Plaintiffs have failed to demonstrate there was no reasonable factual support or arguable legal basis for these petitioning activities, the Anti-SLAPP Motion will be allowed. …
“In the 12(b)(6) Motion, the Defendants-in-Counterclaim argue that, pursuant to the litigation privilege, they are entitled to dismissal of the Zoo Counter-Plaintiffs’ claim for conversion and so much of their Chapter 93A claim as relies upon the WOW Misrepresentations and the Legal Misrepresentations. The Zoo Counter-Plaintiffs argue that the litigation privilege does not apply in this case because they are not alleging that the WOW Misrepresentations and/or the Legal Misrepresentations are actionable in and of themselves. Rather, they are alleging that these misrepresentations are evidence of misconduct, i.e., conversion and unfair and deceptive trade practices, and the litigation privilege does not extend to claims where conduct, not speech, is the basis for liability. The court finds the Zoo Counter-Plaintiffs’ argument unconvincing. …
“Applying the above principles to the current matter, it seems clear that the litigation privilege bars any claim asserted against the Defendants-in-Counterclaim based on the WOW Misrepresentations and/or the Legal Misrepresentations, which they submitted in the Federal Lawsuit. The Defendants-in-Counterclaim were party to that action, and the misrepresentations were submitted during the course of that litigation. And the veracity or falsity of the misrepresentations is of little note. … The Zoo Counter-Plaintiffs’ argument regarding conduct versus speech is without merit, given the SJC’s rejection that there should be a distinction ‘between communications made during the litigation process and conduct occurring during the litigation process.’
“Because the litigation privilege bars any claim based upon the WOW Misrepresentations and/or the Legal Misrepresentations made in the Federal Lawsuit, the 12(b)(6) Motion will be allowed.”
SJBB Fitness LLC, et al. v. Zoo Gym Investments, LLC, et al. (Lawyers Weekly No. 12-047-25) (13 pages) (Dunigan, J.) (Essex Superior Court) (Civil Action No. 2477CV01053) (Oct. 15, 2025).
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