Timothy Hladik & others v. LPL Financial LLC & another

Summary

The Massachusetts Appeals Court held that allegations of specific losses from alleged misappropriation of investment funds were sufficient to establish standing and subject matter jurisdiction. The court declined to affirm dismissal for failure to state a claim because the defendants relied on materials outside the pleadings. It vacated the judgment and remanded for the trial judge to decide whether to exclude those materials or convert the motions to dismiss into motions for summary judgment.

Holdings

1. The plaintiffs' allegations that they personally lost specified amounts from their retirement savings because of the defendants' alleged failure to supervise McGonigle were particularized, personal, and nonspeculative, and therefore were sufficient to establish standing and subject matter jurisdiction.
2. The court declined to affirm the dismissal under Rule 12(b)(6) because the Superior Court had not addressed that ground and the defendants' motions relied on matters outside the pleadings.

Questions Presented

1. Whether the plaintiffs alleged sufficiently particularized, personal, and nonspeculative injuries to establish standing and subject matter jurisdiction.
2. Whether the Appeals Court could affirm dismissal under Mass. R. Civ. P. 12(b)(6) when the defendants' motions relied on matters outside the pleadings and the Superior Court had not decided the Rule 12(b)(6) issue.
3. Whether the Superior Court was required to exclude the extra-pleading materials or convert the Rule 12(b)(6) motions into motions for summary judgment.

Disposition

vacated