Posts tagged "Company"

Central Ceilings, Inc. v. Suffolk Construction Company, Inc., et al. (Lawyers Weekly No. 11-036-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

15-P-1117                                       Appeals Court

CENTRAL CEILINGS, INC.  vs.  SUFFOLK CONSTRUCTION COMPANY, INC. & others.[1]

No. 15-P-1117.

Suffolk.     October 7, 2016. – March 29, 2017.

Present:  Agnes, Maldonado, & Desmond, JJ.

Contract, Construction contract, Subcontractor, Damages.  Damages, Breach of contract, Attorney’s fees.  Practice, Civil, Attorney’s fees, Discovery.

Civil action commenced in the Superior Court Department on October 3, 2006.

read more

Posted by Stephen Sandberg - March 29, 2017 at 6:26 pm

Categories: News   Tags: , , , , , , , ,

Ramirez v. Commerce Insurance Company (Lawyers Weekly No. 11-022-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

16-P-59                                         Appeals Court

WRBASY RAMIREZ[1]  vs.  COMMERCE INSURANCE COMPANY.

No. 16-P-59.

Suffolk.     November 7, 2016. – March 7, 2017.

Present:  Cypher, Massing, & Sacks, JJ.

Motor Vehicle, Insurance.  Insurance, Motor vehicle insurance, Replacement, Construction of policy.  Contract, Insurance, Construction of contract.  Evidence, Replacement cost.

Civil action commenced in the Superior Court Department on February 21, 2014.

read more

Posted by Stephen Sandberg - March 8, 2017 at 12:07 am

Categories: News   Tags: , , , , , ,

Ramirez v. Commerce Insurance Company (Lawyers Weekly No. 11-022-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

16-P-59                                         Appeals Court

WRBASY RAMIREZ[1]  vs.  COMMERCE INSURANCE COMPANY.

No. 16-P-59.

Suffolk.     November 7, 2016. – March 7, 2017.

Present:  Cypher, Massing, & Sacks, JJ.

Motor Vehicle, Insurance.  Insurance, Motor vehicle insurance, Replacement, Construction of policy.  Contract, Insurance, Construction of contract.  Evidence, Replacement cost.

Civil action commenced in the Superior Court Department on February 21, 2014.

read more

Posted by Stephen Sandberg - March 7, 2017 at 8:31 pm

Categories: News   Tags: , , , , , ,

The Gillette Company v. Provost, et al. (Lawyers Weekly No. 11-023-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

16-P-42                                         Appeals Court

THE GILLETTE COMPANY  vs.  CRAIG PROVOST & others.[1]

No. 16-P-42.

Suffolk.     October 13, 2016. – March 7, 2017.

Present:  Wolohojian, Carhart, & Shin, JJ.

“Anti-SLAPP” Statute.  Privileged Communication.  Practice, Civil, Motion to dismiss, Interlocutory appeal.

Civil action commenced in the Superior Court Department on January 16, 2015.

A special motion to dismiss was heard by Janet L. Sanders, J.

read more

Posted by Stephen Sandberg - March 7, 2017 at 4:56 pm

Categories: News   Tags: , , , , ,

Roger v. Centerline Holding Company, et al. (Lawyers Weekly No. 12-020-17)

1
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
CIVIL ACTION
NO. 2015-01120 BLS1
STEPHEN D. ROGER
vs.
CENTERLINE HOLDING COMPANY
and
CENTERLINE GP HOLDINGS LLC, CENTERLINE GP DISPOSTIONS LLC, CCL ACQUISTIONS II LLC, and CCL DISPOSITIONS II LLC, Nominal Defendants
MEMORANDUM OF DECISION AND ORDER ON
THE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
In this action, the plaintiff, Stephen D. Roger, seeks a declaratory judgment concerning his rights under two limited liability company agreements (the Agreement[s]) governing two Delaware limited liability companies: nominal defendants Centerline GP Holdings LLC and Centerline GP Dispositions LLC ( respectively, GP Holdings and GP Dispositions, or, collectively, the GP companies). The GP companies each have two members: Roger and defendant Centerline Holding Company (CHC); Roger and CHC each hold a 50% interest in each of the companies.1 As relevant to this litigation, the Agreements are identical. Roger seeks a declaration that, under the Agreements, (i) management decisions require the vote of both members and (ii) he has a right to access to all of the GP companies’ records necessary to exercise his management rights.
1It is not apparent why CCL Acquisitions II LLC and CCL Dispositions II LLC are parties to this action and no relief is ordered with respect to them.
2
PROCEDURAL ISSUES AND RELATED LITIGATION
This case is before the court on Roger’s motion for summary judgment. CHC has filed an opposition to that motion and also a motion under Mass.R.Civ.P. 56(f) in which it asserts that: “this case remains in its early stages, and much work remains to be done before summary adjudication is remotely appropriate . . . the parties have not yet deposed any of the more than 12 witnesses that they have collectively identified as having knowledge material to the dispute. . . .”
The court disagrees.
First, it may be noted that this case was filed on April 16, 2015; on August 15, 2016, the court entered a scheduling order (jointly proposed by the parties) which called for fact discovery to be completed by March 31, 2017; to date, neither party has taken any depositions; and, notably, CHC elected not to take any discovery in the three months and one half months that passed between the date the summary judgment motion was served on it and the date of the hearing on that motion. The Rule 56(f) motion might have been more convincing if it had been supported by discovery demonstrating that material, disputed facts existed.
The court finds that, as the case has developed, the issues presented by the Amended Complaint (the Complaint) can be resolved based upon a few clearly undisputed facts and a review of the Agreements. The controlling question raised by the Complaint is whether each of the two members of the GP companies can independently manage the business of the companies or whether management decisions require a majority vote of the members, which, under the present membership, requires the vote of both remaining members. While factual issues may exist regarding whether, in the past, CHC caused the GP companies to act without Roger’s
3
consent, Roger has explicitly stated that he does not seek damages as a result of any prior unilateral actions, nor is he asking that any prior act be rescinded or undone. The relief that Roger requests is entirely prospective. A resolution of any factual dispute concerning historic conduct is not material to any remaining material issues in this litigation.
The existence of a present dispute, i.e., an actual controversy, concerning the meaning of the Agreements is clearly established by the parties’ pleadings. See Entergy Nuclear Generation Co. v. Dep’t of Envtl, Protection, 459 Mass. 319, 325 (2011). Roger asserts “that all actions taken by the Members require the consent of a majority of the Members.” CHC contends that: “Actions that may be taken by ‘each of the Members’ may still be taken by a member individually. Thus, to the extent that CHC has caused [the GP companies] to take actions in the ordinary course of their business, it has not violated any right of Roger.” (emphasis in CHC’s pleading).
The court notes that a related case between the same parties is pending in the Delaware Court of Chancery: Centerline Holding Co. v. Roger, No. 12015-CB (the Delaware action). CHC filed the Delaware action on February 18, 2016. In it, CHC alleges that it (or certain employees of an affiliate of CHC) properly exercised rights granted them under the Agreements to purchase Roger’s membership interests in the GP companies by notices delivered to him on December 9, 2015. Although Roger disputed the valuation of his interests set out in the notice, the Agreements require the parties to arbitrate valuation, if they disagree on the number. Among other relief, CHC asked the Court of Chancery to declare that Roger no longer owns membership interests in the GP companies and to compel Roger to arbitrate the value (i.e., purchase price) of these interests. In his answer to CHC’s complaint Roger asserted that CHC did not have right to call his interests and, in any event, the notice was defective. Roger moved, in Delaware, to
4
dismiss or stay the Delaware action, which was filed more than a year after the Massachusetts case. The Court of Chancery denied the motion, explaining that the issue presented in the Delaware action—whether CHC had acquired Roger’s membership interests—was not raised by the Complaint in the Massachusetts case and did not have to be raised as a compulsory counterclaim in that case. It is this court’s understanding that although the Delaware action has been pending for some time, CHC has apparently only recently filed a motion for judgment on the pleadings, and CHC’s counsel informed the court at the hearing on Roger’s motion for summary judgment that the motion for judgment on the pleadings is scheduled to be heard in the Court of Chancery on February 14, 2017.
While this court could decide the question of whether CHC has properly exercised a right to purchase Roger’s membership interests, as the parties have addressed this issue in their summary judgment pleadings and it is certainly implicated by the pending motion, this court notes, as did the Chancellor in the Delaware action, that the Massachusetts complaint was not amended to address the purchase notice delivered to Roger after his action was commenced. This court will, therefore, defer to the Court of Chancery, which is scheduled to decide this issue in only two weeks.
At oral argument on the summary judgment motion, this court asked whether any ruling it might enter regarding Roger’s rights as a member of the GP companies would be academic, if the Court of Chancery held that his interests had been acquired by CHC. His counsel responded that the issue of who controlled the GP companies might affect the value of Roger’s interests. The court then asked CHC’s counsel whether CHC planned to argue in an arbitration that Roger’s alleged limited ability to participate in the management of the GP companies reduced
5
the value of his interests, i.e., that some manner of discount for lack of control should be applied. Counsel asked for time to consult with his client on this question and report back to the court.
CHC did, thereafter, file a report with the court, but the report did not answer the question raised at oral argument. Rather, it went on for multiple pages explaining that the GP companies were holding companies. And, even though the GP companies held majority interests, directly or indirectly, in the downstream operating companies, the operating agreements of these subsidiary companies deprived the GP companies of the ability to control management of the operating companies. The degree of management and control that the GP companies can exert over any downstream affiliates is manifestly not an issue before this court. Rather, the question is whether, as a member of the GP companies, Roger has or had a right to participate in management of the GP companies equivalent to that of CHC and whether his consent is necessary for any management decision. As CHC did not answer the question of whether it would assert its interpretation of the Agreements in an arbitration concerning the value of Roger’s membership interests, this court finds that the resolution of the dispute concerning each members right to participate in the management of the GP companies is necessary, even if the Court of Chancery finds that CHC has properly exercised its rights to acquire Roger’s interests.
FACTUAL BACKGROUND
The following undisputed facts are drawn from the summary judgment record.
Roger was an executive officer of Centerline Capital Group, Inc. (CCG), which was an indirect subsidiary of CHC, from 2003 until December 11, 2013. CHC, through its subsidiaries, developed affordable housing projects that provided tax benefits to institutional investors. The
6
affordable housing projects were owned by lower tier local partnerships. CHC and its affiliated companies were referred to as the Centerline Group.
GP Holdings was formed in 2003 and GP Dispositions in 2005, in each case to hold, directly or indirectly, general partner interests in local affordable housing projects that CHC or its affiliates had acquired when the underlying project’s general partner had defaulted on its obligations. The original members of the GP companies were employees of the Centerline Group. The Agreement governing GP Holdings and GP Dispositions was amended and restated several times, and, by the end of 2008, each company had five members, none of which was Roger. By May 1, 2011, several members had withdrawn, Roger had become a member, and Roger and an individual named Robert Levy, were the sole remaining members, each owning 50% of the membership interests.
In November, 2013, a private investor, who the parties refer to as the “Hunt Companies,” acquired the Centerline Group (which included CHC) and, as part of that acquisition, Robert Levy assigned his membership interests in the GP companies to CHC. At that point, the two 50% members of the GP Companies were Roger and CHC. As noted above, Roger’s employment with a Centerline Group company terminated on December 11, 2013. On December 9, 2015, Roger received notice that his membership interests were being called. Also as explained above, the question of whether that notice caused Roger no longer to be a member of the GP companies will soon be addressed in the Delaware action.
The current versions of the Agreements were last amended and restated as of December 31, 2008. The provisions necessary to address the issues raised in this litigation are found in Article III: Rights, Duties and Liabilities of the Members. The relevant sections are as follows:
7
3.1 (a) Each of the Members shall have the right to and are hereby vested with the full, exclusive and complete right, power and discretion to operate, manage and control the affairs of the Company and to make all decisions affecting the Company affairs.
3.1 (b) The Members shall have full, exclusive and complete discretion to manage and control the business and affairs of the Company, to make all decisions affecting the business and affairs of the Company and to take all such actions as they deem necessary or appropriate to accomplish the purpose of the Company as set forth herein. The Members shall be the sole persons with the power to bind the Company, except and to the extent that such power is expressly delegated to any other person by the Members. No such delegation shall cause and Member to cease to be a Member of the Company. There shall not be a “manager” (within the meaning of the Delaware Act) of the Company.
3.1 (c) The Members shall have the right to designate one or more persons as officers of the Company to carry out any powers of the Members to the fullest extent permitted by law. Until removed from office by he action of the Members, each of the Members shall be officers of the Company holding the office of Executive Vice President. Any action of the foregoing officers, acting singly, shall bind the Company.
3.1 (f) Except as provided in Section 5.2 and Section 6.62, all actions to be taken by, or which require the approval or consent of, the Members hereunder shall be taken only with the consent of the Members holding a majority of the Membership Interests held by the members obtained at a meeting held in person or by telephone upon two days written notice to all of the members. The Members may act without a meeting if the action taken is approved in advance in writing by a majority of the Members; provided however, that if any Member shall deliver to the Company in writing a request for written notice of any actions to be taken by the Members without a meeting, then any such action shall not constitute an approved action of the Company unless each member has obtained two days prior written notice of the purpose request for consent to such action. Notice of the foregoing may be provided by U.S. mail, overnight delivery, hand delivery, email or facsimile.
The Agreements have traditional merger clauses establishing that the Agreements are integrated and supersede any prior understandings of the parties.
2Section 5.2 provides that all members must consent to dissolution. Section 6.6 is a savings clause if any provision of the Agreement is found invalid. Neither addresses any issue relevant to this case.
8
DISCUSSION
Under Delaware law, “[l]imited liability company agreements are contracts and must be interpreted as such.” RED Capital Inv. L.P. v. RED Parent LLC, 2016 Del. Ch. Lexis 25, at *5 (Del. Ch. Feb. 11, 2016). In consequence, the “[Agreements are] interpreted using standard rules of contract interpretation which require a court to determine from the language of the contract the intent of the parties. Waggoner, 581 A.2d at 1134. In discerning the intent of the parties, the [Agreements] should be read as a whole and, if possible, interpreted to reconcile all of the provisions of the document. Warner Communications Inc. v. Chris-Craft Indus., Inc., Del.Ch., 583 A.2d 962, 967, aff’d, Del.Supr., 567 A.2d 419 (1989).” Kaiser Aluminum Corp. v. Matheson, 681 A.2d 392, 395 (Del. Supr. 1996). Further, “[i]f no ambiguity is present, the Court must give effect to the clear language of the [Agreements]. Johnston v. Tally Ho, Inc., Del.Super., 303 A.2d 677, 679 (1973). A contract is not rendered ambiguous simply because the parties do not agree upon its proper construction. Rather, a contract is ambiguous only when the provisions in controversy are reasonably or fairly susceptible of different interpretations or may have two or more different meanings.” Rhone-Poulenc Basic Chems. Co. v. American Motorists Ins. Co., Del.Supr., 616 A.2d 1192, 1196 (1992).” Id.
In the present case, as it relates to the rights of the Members to manage the GP companies, the Agreements have only one reasonable interpretation.
CHC argues that because Section 3.1 (a) provides that “[e]ach of the Members shall have the right to and are hereby vested with the full, exclusive and complete right, power and discretion to operate, manage and control the affairs of the Company and make all decisions affecting the Company affairs” it is apparent that “each member individually has the right to manage [the GP companies]. Consent of a majority is not required.” (emphasis in CHC brief).
9
CHC goes on to assert that “any possible doubt” that the Agreements must be interpreted in this manner “is dispelled by Section 3.1 (c).” It then quotes the following sentences from that Section: “Until removed from office by the action of the Members, each of the Members shall be officers of the Company holding the office of Executive Vice President. Any action of the foregoing officers, acting singly, shall bind the Company.”
CHC’s interpretation is untenable. First, each Member cannot possibly have an exclusive right individually to manage and bind the GP companies. When the Agreements were last restated, the GP companies each had five members, each with a 20% interest in the companies. In Section 3.1 (b), the Agreements expressly state that there will be no “manager.” Five Members cannot possess exclusive rights individually to bind the Companies. Such a provision would be internally inconsistent. And, notably, the very next section of the Agreements provides that: “The Members shall have full, exclusive and complete discretion to manage and control the business and affairs of the Company, to make all decisions affecting the business and affairs of the Company and to take all such actions as they deem necessary or appropriate to accomplish the purpose of the Company as set forth herein.” (Emphasis added.) In other words, these management rights reside exclusively and collectively in the Members. Section 3.1 (f) then explains how the Members will make their management decisions: “all actions to be taken by . . . the Members hereunder shall be taken only with the consent of the Members holding a majority of the Membership Interests held by the members obtained at a meeting held in person or by telephone upon two days written notice to all of the members.” The Section goes on to provide a mechanism for the Members to act without a meeting, as long as there is advance notice of the proposed action and no Member objects.
10
CHC’s reliance on Section 3.1 (c) to support its contention that each Member individually can make any management decision by himself is misguided. Section 3.1 (c) is the type of language commonly used to address the right of third parties to rely on the act of a Member to bind the Company, i.e., a third party need not ask for a certificate establishing the Members’ vote before it can rely upon the act of a Member to bind the Company.
While Section 3.1 (a) may be inartfully drafted when it refers to “each” member having an “exclusive” right, in context it is clear that each Member has the right to manage the affairs of the GP companies, subject to the equivalent rights of the other Members to participate in management and the clearly stated directive that: the Members exercise their rights by voting and a vote of the majority of the interests is required for the Members to act. The interpretation proffered by CHC would allow each Member, regardless of the percentage interests in the GP companies that he owned, to independently bind the Company. Two or more Members could take mutually inconsistent actions at the same time. CHC’s proposed interpretation of the Agreements is not a “reasonable” one and not consistent with the other clearly stated sections of Article III.
Roger also seeks a declaration concerning his right to review the GP companies’ records. The court need not address the question of whether CHC permitted him appropriate access to records in the past. On a prospective basis, he is entitled to review all records pertaining to any proposed action that the Members may wish to take so that he can make an informed judgment in voting his interests.
11
ORDER
For the foregoing reasons the plaintiff’s motion for summary judgment is ALLOWED as follows: the Court declares that: (i) all decisions affecting the business and affairs of GP Holdings and GP Distributions and all actions necessary or appropriate to accomplish the purpose of these companies requires the consent of the Members holding a majority of the Membership Interests in each company, such consent to be obtained in the manner set out in Section 3.1 (f) of the Agreements; and (ii) Roger shall be provided with access to all records of GP Holdings and GP Decisions, on reasonable notice, necessary for him to exercise his management rights, so long as he is a Member of the companies. Final judgment to enter declaring these rights.
________________________
Mitchell H. Kaplan
Justice of the Superior Court
Dated: February 3, 2017

read more

Posted by Stephen Sandberg - March 6, 2017 at 7:28 pm

Categories: News   Tags: , , , , , ,

Anderson, et al. v. National Union Fire Insurance Company of Pittsburgh PA, et al. (Lawyers Weekly No. 10-022-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

SJC-12108

ODIN ANDERSON & others[1]  vs.  NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA & others.[2]

Middlesex.     October 6, 2016. – February 2, 2017.

Present:  Gants, C.J., Botsford, Lenk, Hines, Gaziano, & Lowy, Budd, JJ.

Consumer Protection Act, Insurance, Unfair or deceptive act, Offer of settlement, Damages.  Insurance, Settlement of claim.  Damages, Consumer protection case, Interest, Punitive.  Interest.  Judgment, Interest.  Practice, Civil, Judgment, Damages, Interest.

read more

Posted by Stephen Sandberg - February 2, 2017 at 6:14 pm

Categories: News   Tags: , , , , , , , , ,

Turra v. Deutsche Bank Trust Company Americas, trustee, et al. (Lawyers Weekly No. 10-020-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

SJC-12075

SANDRO TURRA  vs.  DEUTSCHE BANK TRUST COMPANY AMERICAS, trustee,[1] & another.[2]

January 30, 2017.

Mortgage, Foreclosure.  Notice, Foreclosure of mortgage.  Real Property, Mortgage.

The plaintiff, Sandro Turra, commenced this action against Deutsche Bank Trust Company Americas, as trustee for RALI 2007QS7, care of GMAC Mortgage, LLC (Deutsche Bank), seeking a declaration that Deutsche Bank’s foreclosure of the mortgage on his home was invalid and seeking to quiet title to the property.  A judge in the Superior Court allowed Deutsche Bank’s motion to dismiss the complaint, and Turra appealed.[3]  The appeal raises a single issue:  whether a foreclosing mortgagee’s failure to comply with G. L. c. 244, § 15A, by failing to send the postforeclosure notices required by the statute, renders the foreclosure void.  We conclude, as did the trial court judge, that it does not, and we therefore affirm.

read more

Posted by Stephen Sandberg - January 30, 2017 at 6:41 pm

Categories: News   Tags: , , , , , , , , ,

Morgan v. Massachusetts Homeland Insurance Company (Lawyers Weekly No. 11-005-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

16-P-216                                        Appeals Court

ANTHONY G. MORGAN  vs.  MASSACHUSETTS HOMELAND INSURANCE COMPANY.

No. 16-P-216.

Hampden.     November 9, 2016. – January 20, 2017.

Present:  Kafker, C.J., Kinder, & Lemire, JJ.

Consumer Protection Act, Class action, Insurance.  Practice, Civil, Class action, Consumer protection case.  Motor Vehicle, Insurance.  Insurance, Motor vehicle insurance, Settlement of claim, Regulation, Amount of recovery for loss.  Words, “Actual cash value,” “Retail book value.”

read more

Posted by Stephen Sandberg - January 20, 2017 at 3:24 pm

Categories: News   Tags: , , , , , , ,

Kiribati Seafood Company, LLC v. Crovo (Lawyers Weekly No. 12-162-16)

1
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2014-02851-BLS2
KIRIBATI SEAFOOD COMPANY, LLC,
Plaintiff
vs.
M. DELACY CROVO,
Defendant
MEMORANDUM OF DECISION AND ORDER
ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
Plaintiff Kiribati Seafood Company, LLC (Kiribati) filed this legal malpractice action against defendant M. Delacy Crovo (Delacy) seeking to recover damages flowing from Delacy’s alleged role in violating a Washington state court order against Kiribati. Kiribati’s Amended Complaint asserts both contract-based and negligence-based claims as well a violation of 93A. The case is now before this Court on the defendant’s motion for summary judgment. Specifically, the defendant contends that Kiribati’s claims are barred by the applicable statutes of limitations. This Court agrees, and therefore concludes that the Motion must be ALLOWED.
BACKGROUND
The relevant facts in the summary judgment record, viewed in the light most favorable to Kiribati, are as follows.
Kiribati is a Washington state limited liability company formed in 2000 to own and operate a commercial fishing vessel. Currently, Kiribati is owned by Nicholas Coscia, who holds the majority interest, and a second individual with a minority interest named Steven Ross.
2
In 2000 and 2001, Kiribati refurbished a boat, the MADEE, with the expectation that it would be used in South Pacific commercial fishing operations. In 2001, the MADEE sustained damage due to a rudder failure. It was repaired in Tahiti, but suffered additional damage after a dry dock collapsed. Lawsuits ensued. Moran Windes & Wong, PLLC (MWW), a Seattle based law firm, represented Kiribati in an action brought in Hawaii related to the rudder failure. A French law firm, later acquired by the Paris office of Dechert, LLC (Dechert), represented Kiribati on its claim for damages to the MADEE sustained in the dry dock collapse. Sometime in May 2010, Dechert on behalf of Kiribati, settled the dry dock collapse case, and the proceeds of the settlement (the Settlement Funds) were sent to Dechert. At the time of the settlement, Delacy’s brother Charles Crovo (Charles) was the majority owner of Kiribati, with Coscia holding a minority interest.
Delacy is a Massachusetts attorney who has acted as (or held herself out to be) counsel for Kiribati at various times commencing in 2000. At the heart of this lawsuit is the role she played in the transfer of the Settlement Funds from Dechert to other entities. In a letter dated April 29, 2010 to Dechert’s Paris office (the April 2010 Letter), Delacy stated that she was Kiribati’s corporate attorney and that Charles Crovo was authorized to make all monetary decisions on Kiribati’s behalf. This letter was sent under Delacy’s married name, Marie D. Carlson, with a letterhead that read, “Law Offices of Marie Carlson.” Delacy sent a second letter, again under the name “Marie Carlson,” to Dechert in May 17, 2010 (the May 2010 Letter), again stating that she was Kiribati’s corporate counsel and that, in her legal opinion, Charles Crovo was authorized to receive the Settlement Funds on Kiribati’s behalf. Delacy provided Dechert with the information necessary to deposit the funds in her IOLTA account.
3
On May 19, 2010, Dechert transferred the Settlement Funds to Delacy, who subsequently disbursed the funds to Charles and others.
While these events were taking place, MWW, the Seattle law firm, was looking to get paid its attorney’s fees for representing Kiribati in the separate litigation for damages caused by the rudder failure. On May 25, 2010, MWW filed an action in Washington state court asserting an attorney’s fee lien against the Settlement Funds and, to secure that lien, asked the court to order Kiribati to deposit the funds into the court registry. MMW, PLLC v. Kiribati Seafood Co., et al. Civ. No. 10-2-18839 SEA (King County Superior Court). The Seattle court allowed that motion on June 22, 2010 and ordered that the Settlement Funds be deposited with the court by June 25, 2010 (the June 2010 Order). Kiribati did not comply with that Order.
As a consequence of that noncompliance, MWW filed a motion to strip Charles and Coscia of any authority to act on behalf of Kiribati and to appoint a receiver. The motion alleged that Coscia and Charles, together with others, had engaged in acts of misconduct intended to circumvent the court’s June 2010 Order. In support, MWW alleged that Crovo had “invented a fictitious lawyer named ‘Marie Carlson’ who claimed to be Kiribati’s corporate counsel and wrote up a fictitious certification that Mr. Crovo presented to the Paris Bar Association and the Paris Bank, which caused them to both remove their financial controls on the account and facilitated the payout of the $ 860,000 to Mr. Crovo.” Attached to the motion was the April 2010 Letter from Delacy to the Dechert attorney in Paris. The motion concluded: “The rats are fleeing the ship and the court needs to act before it sinks and irreparably harms the creditors.”
Kiribati filed an opposition to the motion, supported by Delacy’s affidavit dated July 1, 2010. Coscia participated in Kiribati’s opposition to MWW’s motion, which he admitted reading. In her affidavit, Delacy explained that she regularly uses her married name, “Marie D.
4
Carlson,” for her legal work. She stated that that she had disbursed the Settlement Funds to various trusts at the direction of Charles on June 8 and on June 10, 2010. Delacy denied knowing of MMW’s May 25 2010 request that the Settlement Funds be deposited with the court at the time that she disbursed the funds to these other entities.
On July 2, 2010, the Seattle court allowed MWW’s motion to appoint a receiver, finding that Kiribati’s noncompliance with its June 2010 Order placed it in contempt. The court appointed James F. Rigby as receiver of Kiribati and granted him “all the powers necessary to act on behalf of Kiribato” and specifically gave him the authority to obtain custody over the Settlement Funds. Rigby undertook an investigation as to what had happened with the money. On June 29, 2011, he filed a written report with the court stating that the funds had been transferred from Delacy’s IOTA account to Charles personally as well as to companies he controlled. This report was sent to Coscia, among others. On September 2011, Charles paid the Settlement Funds into the Seattle court registry.
The receivership was terminated on June 26, 2013. Coscia took over control of Kiribati together with Ross. Less than a week later, Kiribati sued Dechert here in Massachusetts. See Kiribati et al. v. Dechert, LLP, Civ. No. 13-2393-BLS 2 (Suffolk Superior court). Kiribati alleged that Dechert had committed legal malpractice in releasing the Settlement Funds to Delacy. The case was ultimately dismissed on summary judgment.
Kiribati filed the instant lawsuit against Delacy on September 8, 2014. It alleged that Delacy had committed legal malpractice by failing to comply with the Seattle court’s June 2010 Order. As a consequence of her misconduct, Kiribati alleged that it had been forced to incur attorney’s fees and other costs in connection with the appointment of a receiver and the receiver’s efforts to recover the Settlement Funds.
5
DISCUSSION
Delacy argues that all of the claims asserted against her are time-barred because the statute of limitations began to run on July 2, 2010 when the Seattle court allowed the motion to appoint a receiver for Kiribati. She contends that, as of that date, Kiribati was aware that it sustained some appreciable harm – namely, the attorney’s fees associated with the appointment of the receiver and the fees that would likely be incurred in connection with the receiver’s recovery efforts. The parties agree that a three year statute of limitations applies to Counts I through VIII, which are those claims based on legal malpractice. G.L.c. 260 §4. A four year statute of limitations applies to Count IX alleging a violation of Chapter 93A. . See G.L.c. 260 §5A. This action was filed more than four years after July 2, 2010.
The statute of limitations in a legal malpractice claim begins to run when the client “knows or reasonably should know that he or she has sustained appreciable harm as a result of the lawyer’s conduct.” Lyons v. Nutt, 436 Mass. 244, 247 (2002), quoting Williams v. Ely, 423 Mass. 467, 473 (1996). “Reasonable notice that …a particular act of another person may have been a cause of harm to a plaintiff creates a duty of inquiry and starts the running of the statute of limitations.” Bowen v. Eli Lilly & Co., 408 Mass. 204, 210 (1990). “[I]t is not necessary that the plaintiff client know the full extent of harm or loss or know precisely in what manner and what harmful after-effects flow from the alleged malpractice . . . .” Frankston v. Denniston, 74 Mass. App. Ct. 366, 374, rev. den., 455 Mass. 1102 (2009). “Appreciable harm encompasses the incurring of legal expenses, such as litigation-related expenses in defending against, or advancing, an issue that is central to the alleged legal malpractice.” Id.
Applying those principles to the case before me, this Court concludes that the statute of limitations began to run no later than July 2, 2010, the date when the Seattle court appointed the
6
receiver at MMW’s request. That appointment occurred because Kiribati had failed to comply with the Court order to deposit the settlement money with the court registry. As to the reasons for noncompliance, that was set forth in detail in materials submitted both in support and in opposition to the motion. Based on these materials (and Coscia’s own admission that he was familiar with them), Kiribati clearly knew that Delacy convinced Dechert to wire the Settlement Funds to her IOLTA account and that she then disbursed those funds so as to put Kiribati in violation of the June 2010 Order. No later than July 2, 2010, Kiribati knew that Delacy had caused some appreciable harm to it – harm that would ultimately consist of the attorney’s fees it incurred in connection with that appointment and the recovery of the disbursed monies.
Kiribati maintains that it did not have knowledge or sufficient notice that it was harmed by Delacy’s conduct until Coscia was deposed in 2012. It was only on that later date that Coscia says that he became aware, for the first time, that Delacy conspired with her brother to disburse the Settlement Funds to family members or entities in which Charles Crovo had an interest. Before that (according to Coscia) , he relied on the assurance of his business partners – and on Delacy’s insistence of her innocence in the matter — that the funds had been applied to pay Kiribati’s creditors and that Delacy had done nothing wrong. But Coscia unquestionably knew in July 2010 that MWW was accusing Delacy of misconduct and that her actions led to the violation of the court order and the appointment of a receiver – events which triggered the damages that Kiribati now seeks in this lawsuit. That Coscia did not know precisely where those funds went is irrelevant to the issue of when the statute of limitations began to run.
It is true that once the receiver was appointed, then only the receiver could bring suit on behalf of Kiribati. That did not toll the statute of limitations, however. See Comer of Insurance v. Bristol Mut. Liability Ins. Co., 279 Mass. 325, 325 (1932) (statute of limitations continues to
7
run even after a receiver is appointed). That the receiver did not file suit against Delacy is a decision that is binding on Kiribati, whether Coscia as the current majority owner agrees with that decision or not. The receivership was terminated on June 26, 2013 and Kiribati (with Coscia in control) could have instituted suit then. Indeed, it did file suit against Dechert just one week later. It did not name Delacy as a defendant. Now that it has done so, it is too late.
The appointment of the receiver also undercuts two other arguments that Kiribati makes in opposition to the instant motion. Its first argument relies on the continuing representation doctrine and is based on Kiribati’s contention that Delacy was its lawyer, thus tolling the statute of limitations during that period in which she was corporate counsel. But Delacy ceased to have any authority to act on behalf of Kiribati once the receiver was appointed, and there is no evidence that she later served as Kiribati’s counsel once the receivership was dissolved. The second argument relies on the doctrine of adverse domination: because Coscia was a minority owner until 2012, he contends that he was not in a position to take any action on behalf of Kiribati since Charles held the majority interest. Like Delacy, however, Charles ceased to have any authority to act on behalf of Kiribati once the receiver was appointed. Once the receivership was terminated, Kiribati was controlled by Coscia as majority owner, not Charles. In short, neither doctrine is of assistance to the plaintiff.
CONCLUSION AND ORDER
For all of the foregoing reasons and for other reasons articulated in the defendant’s Memoranda, defendant’s Motion for Summary Judgment is ALLOWED and the Amended Complaint is hereby DISMISSED with prejudice.
______________________________
Janet L. Sanders
Dated: November 18, 2016 Justice of the Superior Court
8

read more

Posted by Stephen Sandberg - December 6, 2016 at 10:04 pm

Categories: News   Tags: , , , , , ,

Everest National Insurance Company v. Berkeley Place Restaurant Limited Partnership (Lawyers Weekly No. 12-155-16)

COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
CIVIL ACTION
No. 2011-1470
EVEREST NATIONAL INSURANCE COMPANY
vs.
BERKELEY PLACE RESTAURANT LIMITED PARTNERSHIP
ORDER ON POST-VERDICT ISSUES AND FOR JUDGMENT
This action was commenced by Everest National Insurance Company as subrogee of three
persons: Timothy J. Barletta (“Timothy”), Barletta Engineering Corporation (“Barletta Corp.”)
and Osprey Equipment Corporation (“Osprey”). The action is one for contribution under G.L. c.
231B, § 1(d ). Everest, as insurer for all three persons, paid a settlement amount to a state trooper
who was seriously injured in a car accident when he was struck from behind by a car driven by
Timothy. Everest asserted in this case that defendant, Berkeley Place Restaurant Limited
Partnership, d/b/a Grill 23 (“Grill 23″), is jointly liable to the state trooper as a result of
negligently serving Timothy alcohol in the hours before the accident. Following a jury verdict in
favor of Everest that determined that Grill 23 is liable as a joint tortfeasor and that the settlement
reached by Everest with the state trooper and his wife was reasonable, the parties address two
issues: (1) how many tortfeasors bear responsibility for a pro rata share of the settlement, and (2)
what amount is Everest entitled to receive as contribution from Grill 23? Both questions involve
application of the contribution statute. For the first question, the court must determine whether
“if equity requires, the collective liability of some as a group shall constitute a single share.” G.L.
1
c. 231B, § 2(b). The second question is whether, under G.L. c. 231B, §1, Everest may obtain
contribution for more than a pro rata share of what it paid in settlement?
FACTS
On Saturday night, September 27, 2008, Timothy attended a private birthday party at the
Grill 23 restaurant in Boston. The person being celebrated was Timothy’s sister-in-law, Laura
Barletta, and the person throwing the party was her husband, Timothy’s brother, Vincent
Barletta. Approximately 40 people attended the party and the guests were, generally, friends and
family of Laura Barletta. The party was held in a function room, separate from the rest of the
restaurant.
There was evidence before the jury sufficient to show that at the party Timothy was
served alcohol after it had been recognized by the Grill 23 manager on duty that Timothy was
visibly intoxicated. Timothy left the party with his girlfriend, got into a motor vehicle, and drove
west on the Mass Pike. Several minutes later, Timothy, while operating under the influence of
alcohol, smashed into the rear of a state police vehicle parked on the edge of the Pike to assist a
stopped car. State Trooper Christopher Martin was inside the state police vehicle. As a result of
the collision, Trooper Martin suffered serious personal injuries. Subsequently, Timothy pleaded
guilty to the criminal charge of operating under the influence of alcohol.
On September 18, 2009, Trooper Martin and his wife commenced a lawsuit against
Timothy, Barletta Corp. and Osprey. The lawsuit alleged the negligence of Timothy as the driver.
The lawsuit also alleged that the vehicle Timothy was driving at the time of the accident was
“owned, controlled and maintained by” Barletta Corp. “and/or” Osprey. Therefore, “as owner(s)
of the vehicle, [the companies] were responsible for the negligent operation, ownership, control
2
and maintenance of the motor vehicle.” Complaint, ¶s 12 and 15.1
On May 3, 2010, the lawsuit commenced by Trooper Martin and his wife was settled. In
connection with the settlement, a Settlement Agreement and Release (the “Release”) was
executed. Exhibit 3. Pursuant to the Release, Everest and Travelers Insurance Company, as
liability insurers of all three of Timothy, Barletta Corp. and Osprey, agreed to pay a total of
$ 3,750,000, present value, to the Martins as part of a structured settlement to be paid over twenty
years. In return, the Martins released Timothy, Barletta Corp. and Osprey from any and all claims
arising out of the accident.2
The evidence at the trial of this case established that at the time of the accident, Timothy
was employed by Barletta Corp. Barletta Corp. was a family business. The president of Barletta
Corp. was Vincent Barletta.
Osprey was a wholly-owned subsidiary of Barletta Corp. Osprey owned the vehicles and
equipment used by Barletta Corp. Certain employees of Barletta Corp., including Timothy, were
provided with cars owned by Osprey. Pursuant to company policy, employees provided with
company cars were allowed to utilize the cars for personal use as well as for company business.
There was no restriction on the use of a company car. Vincent Barletta had no direct involvement
1 The Complaint also alleged that “[u]pon information and belief, at all relevant times
hereto, Timothy Barletta was acting in furtherance of his companies’ business.” Complaint ¶ 7.
Neither party in this lawsuit asserts that Timothy was acting in furtherance of the companies’
business on the night of the accident. The Complaint was not marked as an exhibit to be
submitted to the jury. Instead, the Complaint has been provided to the court by Grill 23, without
objection, for the purpose of its argument regarding how the court should exercise its equitable
discretion under G.L. c. 231B, § 2(b).
2 The Release also released any and all claims against Grill 23 arising from the accident,
and all claims against the insurers under G.L. c. 93A.
3
in supervising the use of company cars. On the night of the accident, Timothy was driving a car
owned by Osprey and provided to him by his employer.
Vincent Barletta testified that, at the birthday party, he had very little contact with
Timothy. He did not see Timothy show any signs of intoxication. To the extent he did observe
Timothy, nothing in his behavior stood out. The testimony from several witnesses confirmed that
Timothy was seated at a table for six to eight people, away from the head table where Vincent
Barletta was seated with his wife. Vincent Barletta had no memory of observing Timothy
consume alcohol. I find Vincent Barletta’s testimony to be credible.
Before the settlement, counsel for Trooper Martin wrote two demand letters to the
insurers. In the first letter (Exhibit 28), counsel stated that “I understand from our conversations
that liability in this matter is admitted (at least for purposes of mediation).” The letter focused
upon the damages suffered by Trooper Martin and requested $ 7,500,000 to settle. The second
letter (Exhibit 29), stated more specifically that “[t]he evidence of clear liability against
[Timothy] Barletta is undisputed.” The rest of the letter focused on damages and the additional
claim that the insurers were acting in violation of G.L. c. 93A and c. 176D by not yet agreeing to
settle. A demand for settlement of $ 11,000,000 was asserted. Neither letter asserted a theory of
liability against Barletta Corp. or Osprey, other than that Timothy was allegedly a “principal” of
those companies.
At trial, Everest called as a witness Robert A. DeLello. Mr. DeLello was counsel on the
Complaint filed for the Martins to commence the lawsuit against Timothy, Barletta Corp. and
Osprey. He continued as counsel to the Martins in connection with the negotiation of the
settlement. As a result of the determination that the question of pro rata shares of tortfeasors is an
4
issue to be decided based upon principles of equity (see G.L. c. 231B, § 2(b)), Mr. DeLello gave
the following testimony to the court, outside of the hearing of the jury.
Mr. DeLello testified that the theory of the Martins’ case against Barletta Corp. and
Osprey was to hold the companies liable under G.L. c. 231, § 85A; that is, as the owner of the
vehicle Timothy was driving on the night of the accident. Mr. DeLello testified that the police
report listed both companies as the owner of the vehicle. While he acknowledged that if the
litigation had not settled he would have taken discovery regarding possible other theories of
liability of the companies such as negligent entrustment or negligent maintenance, his intent was
to hold the companies vicariously liable as the owner(s) of the vehicle. In fact, the Martins’ case
settled before any discovery was taken.
ANALYSIS
Pro Rata Shares
General Laws c. 231B, § 2 provides as follows:
In determining the pro rata shares of tortfeasors in the entire liability (a)
their relative degrees of fault shall not be considered; (b) if equity
requires, the collective liability of some as a group shall constitute a
single share; and ( c) principles of equity applicable to contribution
generally shall apply.
Accordingly, I must decide, using principles of equity, whether Timothy, Barletta Corp. and
Osprey constitute three tortfeasors and, if they do, whether they should be grouped into a single
share. The consequences of that determination are significant to the parties. If Timothy, Barletta
Corp. and Osprey constitute a single share then the pro rata apportionment is 50% for Everest’s
insureds and 50% for Grill 23. Grill 23 argues that Everest’s share is on behalf of three
tortfeasors so that Grill 23’s liability for contribution is 25% (as one tortfeasor among four).
5
The parties take disparate positions with respect to which party bears the burden of proof
on this issue. While it is clear that Everest bears the burden to prove that Grill 23 was a
tortfeasor, and that the settlement Everest reached with the Martins was reasonable, the parties
cite no authority with respect to which party has the burden to prove how the court should
exercise its equitable authority under § 2(b). Grill 23 says that Everest must prove a negative; i.e.,
that Barletta Corp. and Osprey were not directly liable for their own active negligence. Logic
suggests, on the other hand, that if Grill 23 wishes the court to find that the corporations are
liable as direct tortfeasors (and not merely liable vicariously as the owner(s) of the vehicle), then
Grill 23 should prove their liability. For purposes of my conclusion based on the evidence in this
case, I assume that Everest bears the burden of proof..
The first question is whether there was sufficient evidence to conclude that Barletta Corp.
and Osprey were tortfeasors. As described above, Mr. DeLello testified that the theory of the
action he commenced on behalf of the Martins against the two corporations was that the
corporations were vicariously liable under G.L. c. 231, § 85A. Under that statute, an evidentiary
presumption is imposed to make the owner of a vehicle liable. “[E]vidence of a [owner’s] ownership of a motor vehicle shifts the burden of persuasion to the [owner] to show that the
driver was not a person for whose conduct the [owner] was legally responsible.” Thompson v.
Auto Credit Rehabilitation Corp., 56 Mass. App. Ct. 1, 5 (2002). The statute “is a rule of
evidence that makes no change in the substantive law of negligence.” Id. The substantive law is
that the driver’s actions may be imputed to the owner if, at the time of the accident, the owner
had the authority and means to control the driver’s conduct. Id. “Like the responsibility of a
principal for the negligence of his agent, or a master for that of his servant, the liability of the
6
registered owner is not joint and several, but derivative.” Gangl v. Ford Motor Credit Co., 37
Mass. App. Ct. 561, 563 (1994). In sum, absent evidence in rebuttal, § 85A makes an owner
vicariously liable for the conduct of the driver. As a practical matter, the statute provides a good
faith basis for a plaintiff to sue the owner of a vehicle involved in an accident caused by the
driver of the vehicle.
Consequently, Grill 23’s argument that the existence of the Martin’s Complaint against
Barletta Corp. and Osprey demonstrates that the corporations were tortfeasors is rejected. The
fact that the corporations were sued was, according to Mr. DeLello, based on vicarious liability.
A party held vicariously liable is not a party who is “jointly liable in tort” as required by G.L. c.
231B, § 1 to be classified as a tortfeasor. Lastly, Mr. DeLello’s testimony that he would have,
absent settlement, pursued discovery to determine if there was a basis to hold the corporations
directly liable as tortfeasors proves nothing.3 He did not conduct discovery and he offered no
evidence to support a claim that the corporations were directly liable.
At the trial of this action there was no evidence, offered by either side, to support a
conclusion that Barletta Corp. or Osprey were directly negligent for their own conduct. Grill 23
argues that Vincent Barletta, as president of Barletta Corp., the parent company of Osprey,
should have stopped Timothy from operating a company vehicle that evening. I am not
persuaded. As described above, there was insufficient evidence to suggest negligence by Vincent
Barletta, and therefore insufficient evidence to find that Barletta Corp. and/or Osprey were
3 Similarly, the fact that the corporations were included as released parties in the
settlement Release does not help Grill 23. Having been named as defendants in the Martin
lawsuit, a lawyer would be guilty of malpractice if he or she did not name the defendants as
parties to be released.
7
tortfeasors.
Under § 2(b), the court may apply equitable principles to “group” tortfeasors into a single
share. I could find little authoritative guidance regarding the exercise of that equitable authority.
The authority apparently applies to the situation where an alleged tortfeasor is only vicariously
liable. See Comment to § 2, Uniform Contribution Among Tortfeasors Act (1955 Revised
Act)(“[I]t invokes the rule of equity which requires class liability, including the common liability
arising from vicarious relationships, to be treated as a single share”). Of course, if a company is
held liable based solely on vicarious liability, the company is not a tortfeasor at all and cannot be
held liable for contribution. Elias v. Unisys Corporation, 410 Mass. 479, 481 (1991)(vicarious
liability arises only by operation of law; it is derivative of the wrongful act of the agent; employer
is not, therefore, a joint tortfeasor under c. 231B). Nevertheless, the Comment makes clear that
vicariously liable parties should be grouped with the actual tortfeasor as a single share.4
In this case, I find that the evidence compels the conclusion that Barletta Corp. and
Osprey were not negligent actors. As a result, as a matter of equity, I group Timothy Barletta,
Barletta Corp. and Osprey as representing a single share of the entire liability for the accident
based upon the negligence of Timothy.
Everest’s Right to Contribution
In order to obtain contribution, the settling tortfeasor must have “agreed while action is
pending against him to discharge the common liability and has within one year after the
4 The Comment also suggests that it is appropriate to “group” tortfeasors into a single
share where, for example, there is allocation of liability between several actors (such as owners
of a building), on the one hand, and a tortfeasor having no connection with the actors, on the
other hand.
8
agreement paid the liability and commenced his action for contribution.” G.L. c. 231B, § 3(d)(2).
The Release (Exhibit 3) indicates that the “Insurers” agreed to pay the Martins in a
structured settlement over twenty years amounts having a present value of $ 3,750,000. “Insurers”
is defined as both Everest and Travelers Insurance Company.
Grill 23 does not challenge the calculation of the present value of what the Insurers
agreed to pay. The agreement to pay the amounts with a present value of $ 3,750,000 triggers the
Insurers right to contribution. LeBlanc v. Logan Hilton Joint Venture, 78 Mass. App. Ct. 699,
711 (2011)(“To preserve a right to contribution against codefendants, that provision [§ 3(d)] requires a settling party either to make payment discharging the common liability of all
defendants, or to agree to make such a payment, and then to pursue the claim for contribution
within a year after the payment”). It was the agreement to pay amounts with a present value of
$ 3,750,000 to the Martins that was put in evidence before the jury, by agreement, for the jury to
determine whether the settlement was “reasonable” under G.L. c. 231B, § 1(c).
Grill 23 does challenge, however, whether Everest may obtain contribution for the
portion of the $ 3,750,000 that was paid by Travelers, not Everest. According to Everest, its
portion of the present value payment, as the excess carrier for the liability of Timothy, Barletta
Corp. and Osprey, was $ 2,787,000. Travelers’ portion was $ 963,000. Grill 23 agrees with that
description of the Insurers respective shares. Bench Memorandum Regarding Legal Framework,
submitted by Grill 23, p.2 (September 13, 2016).
It is readily apparent that Travelers is not a party to this action. Everest presented no
evidence to support an argument that it is an assignee or otherwise the holder of Travelers’ right
of contribution. Indeed, at this late date, Travelers has waived any claim for contribution.
9
The statute, G.L. c. 231B, §1(d), could not be more clear that the right of contribution
runs “to the extent of the amount it has paid in excess of the tortfeasor’s pro rata share of the
common liability.” (Emphasis added). The “it” in that phrase refers to the insurer seeking
contribution. Here, Everest is the only insurer with a claim. Everest paid $ 2,787,000, 50% of
which is in excess because it proved that Grill 23 was jointly liable and that the amount paid in
settlement was reasonable. As a result, Grill 23 is liable to Everest for 50% of $ 2,787,000, or
$ 1,393,500.
CONCLUSION
Based on the verdict returned by the jury, and my findings described herein regarding pro
rata share and the amount recoverable by Everest, judgment shall enter in favor of Everest
against Grill 23 in the amount of $ 1,393,500, plus prejudgment interest.
By the Court,
Edward P. Leibensperger
Justice of the Superior Court
Date: November 7, 2016
10

read more

Posted by Stephen Sandberg - December 6, 2016 at 12:36 am

Categories: News   Tags: , , , , , , , , , , ,

Next Page »