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Appeals court weighs contract-versus-tort framing in embezzlement claim by condominium investor
Summary
The panel heard arguments about whether claims that a manager diverted LLC funds are contract breaches under an operating agreement or torts for conversion, and whether the tort statute of limitations bars part of plaintiff's recovery.
The Appeals Court heard argument on March 18, 2025, in 24P492, Cranberry Commons Condominium LLC v. Barbagallo and others, a dispute about whether alleged embezzlement by a manager constitutes a breach of the operating agreement, an implied covenant violation, or an independent tort for conversion, and the resulting statute-of-limitations consequences.
Plaintiff counsel Richard Joyce told the panel that the facts are undisputed: the operating agreement named Peter Barbagallo as manager, and "it’s undisputed that he took the money. 100% everybody with the facts are agreed. That money was taken from the company and put in his personal pocket for his benefit." Joyce asserted those acts…
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