Supreme Court

Bertucci v. Watkins

• Case number: 23-0329
• Legal category: Procedure-Appellate
• Subtype: Waiver
• Set for oral argument: October 2, 2024

Case Summary

These cross-petitions raise issues of briefing waiver and whether fiduciary duties are owed among business partners.

Bertucci and Watkins founded several companies to develop low‑income housing projects. After many years of working together, Bertucci came to suspect that Watkins was misappropriating the companies’ funds and sought an accounting. Because of the dispute, certain company profits were placed in escrow, and eventually, Watkins sued for their distribution. Bertucci counterclaimed on behalf of himself and derivatively on behalf of the companies for theft and breach of fiduciary duty. Watkins maintains that Bertucci, now deceased, orally approved compensating Watkins with the allegedly misappropriated funds. The parties filed competing motions for summary judgment, and the trial court granted Watkins’ motion.

The court of appeals, sitting en banc, reversed. First, it held that Bertucci waived his appeal of the summary judgment on the derivative claims by failing to brief them. The court concluded fact issues precluded summary judgment on Bertucci’s individual claims. The court also held that Watkins’ testimony that Bertucci orally approved of the transactions should have been excluded under the Dead Man’s Rule, which precludes testimony by a testator against the executor in a civil proceeding. Both parties filed petitions for review.

Bertucci argues that his brief should have been liberally construed so that appeal of the derivative claims was not lost by waiver. He also argues that the trial court erred in admitting an auditor’s report into evidence, alleging that it is unverified and unreliable. Watkins argues that he is entitled to summary judgment on the breach of fiduciary duty claim because, as limited partners in a partnership, Watkins did not owe Bertucci a fiduciary duty as a matter of law. Watkins further argues that the statute of limitations has run on Bertucci’s claims because the discovery rule does not apply. Finally, Watkins argues that his testimony about Bertucci’s oral approvals was corroborated and therefore admissible under the Dead Man’s Rule. The Supreme Court granted both petitions for review. 

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