Greenleaf Arms Realty Trust I, LLC v. New Boston Fund, Inc.

In 2003, Joseph and Faye Baglione (husband and wife) entrusted $1.3 million — proceeds derived from a sale of income property — with New Boston Fund, Inc. (New Boston Fund), a locally-based investment management firm. New Boston Fund had promised them an investment vehicle to shelter the monies from gains taxes, as permitted by § 1031 of the Internal Revenue Code. 26 U.S.C. § 1031. That plan went awry, and the Bagliones incurred tax liabilities and fees in excess of $300,000. Litigation ensued (first lawsuit). After some months of negotiation, the Bagliones and all named defendants in the…