Da Costa, et al. v. Vanguard Cleaning Systems, Inc. (Lawyers Weekly No. 09-021-17)
COMMONWEALTH OF MASSACHUSETTS MIDDLESEX, ss. SUPERIOR COURT CIVIL ACTION 15-04743 LUIZ THOMAZ DA COSTA & others[1] vs. VANGUARD CLEANING SYSTEMS, INC. MEMORANDUM OF DECISION AND ORDER ON PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT AND DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT The plaintiffs, Luiz Thomaz Da Costa and others, and the defendant, Vanguard Cleaning Systems, Inc. (“Vanguard”), have filed cross motions for summary judgment seeking a ruling on the plaintiffs’ employment classification status under the laws of Massachusetts and Connecticut in connection with commercial cleaning work which the plaintiffs claim they performed on behalf of Vanguard. G.L. c. 149, § 148B; Conn. Gen. Stat. § 31-222(a)(1)(B). After hearing, and upon review and consideration, the plaintiffs’ cross-motion for summary judgment is ALLOWED, and Vanguard’s cross-motion for summary judgment is DENIED. BACKGROUND The undisputed facts, and any disputed facts viewed in the light most favorable to the non-moving party, are as follows. Additional facts are reserved for discussion below.[2] Vanguard is a corporation headquartered in California that operates a three-tier franchise system selling commercial cleaning services. Vanguard sells licenses to use its name and trademarked Vanguard Cleaning Systems in defined geographic areas to regional master franchisees. Regional master franchisees, in turn, enter into franchise agreements with unit franchisees, which conduct commercial cleaning. [3] Vanguard receives four percent of regional master franchisees’ gross revenue, which consists of payments for commercial cleaning and fees levied on unit franchisees.[4] Vanguard solicits business through national sales bids, and offers quotes to prospective customers on its website; Vanguard’s website forwards cleaning account leads to regional master franchisees. Regional master franchisees implement Vanguard’s commercial cleaning framework. Vanguard provides regional master franchisees with extensive operating instructions, forms, and templates. Vanguard authored the franchise agreements that regional master franchisees and unit franchisees execute, but is a non-signatory to these agreements. Vanguard also drafted the franchise disclosure document, operations manual, cleaning safety manual, and commercial cleaning information manual. Additionally, Vanguard supplies regional master franchisees with accounting software and templates, which include franchise agreements and account acceptance forms. Unit franchisees must meet current and future standards outlined in Vanguard’s operations manual. Vanguard requires that unit franchisees form independent entities to conduct cleaning services. Vanguard prohibits unit franchisees from billing client accounts for cleaning supplies; unit franchisees must purchase their own supplies. Vanguard imposes minimum standard service requirements, along with detailed instructions on how to clean commercial spaces. Vanguard also requires that unit franchisees attend a mandatory training program, and emphasizes that unit franchisees are subject to Vanguard’s quality control standards. Vanguard outlines a series of inspections and oversight methods in its operations manual. For example, Vanguard representatives routinely conduct room-by-room quality control inspections if the client […]
Rush v. FastCAP Systems Corporation, et al. (Lawyers Weekly No. 09-006-17)
1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, so SUPERIOR COURT CIVIL ACTION NO. 2017-02842-BLS2 JACK RUSH, Plaintiff vs. FASTCAP STYSTEMS COPRATION, JOHN COOLEY, JAMES HARRIS, MATTHEW FENSLAU AND RICCARDO SIGNORELLI, Defendants MEMORANDUM OF DECISION AND ORDER ON MOTION FOR TRUSTEE PROCESS ATTACHMENT AND FOR ATTACMENTS OF REAL PROPERTY This action alleges violations of the Massachusetts Wage Act, G.L.c. 149 §148B. Specifically, the plaintiff Jack Rush alleges that the defendant FastCAP Systems Corporation (FastCAP) misclassified and compensated him as an independent contractor when he should have been classified and paid as an employee within the meaning of G.L.c. 149 §148. It then terminated him when he complained about his compensation. Certain individuals are also named as defendants on the grounds that, because they exercised managerial control over FastCAP, they are personally liable for these violations. Cook v. Patient Ed LLC, 465 Mass. 548, 552-553 (2013). The case is now before the Court on the plaintiff’s motion to attach the bank accounts of FastCAP in the amount of $ 594,593, and to attach real property owned by the individual defendants. After hearing and careful review of the parties’ submissions, this Court concludes that, taking into account the likelihood of success on the merits, the balance of equities supports the denial of these motions, for the following reasons. Whether seeking an attachment of real property or an attachment of funds by way of 2 trustee process, plaintiff must establish a reasonable likelihood that he will recover judgment against the defendant in an amount at least equal to the amount sought to be attached; he must further demonstrate that there is no liability insurance available that could satisfy any possible judgment. See Rules 4.1 and 4.2, Mass.R.Civ.P. Although there is no explicit requirement that the Court balance the relative harms to the parties, the Rules are based on the idea that there must be a need for the relief requested; moreover, because it is equitable nature, the Court can and should take into account the relative equities in denying or allowing the requested relief. In the instant case, FastCAP makes out a compelling case that a trustee process attachment would have a serious impact on its business. The Company is in the business of developing cutting edge power systems and has ongoing contracts with NASA and U.S. Department of Energy, with sales to top oilfield service companies. See Affidavit of Matthew Fenselau. With seventeen full time employees and the financial backing of a Boston investment firm, FastCAP is optimistic about its future. An attachment of its bank accounts, however, could cause FastCAP’s financial backing to be withdrawn and could trigger claims by other individuals and entities. If on the other hand, no attachment issues, the harm […]
Casella Waste Systems, Inc., et al. v. Steadfast Insurance Company (Lawyers Weekly No. 09-008-17)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION No. 2016-2521 BLS 1 CASELLA WASTE SYSTEMS, INC. et al1 vs. STEADFAST INSURANCE COMPANY MEMORANDUM AND ORDER ON STEADFAST INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT This is an insurance coverage dispute between a company engaged in the landfill business and its insurer. The insurer, defendant Steadfast Insurance Company, issued a policy called Z Choice Pollution Liability (the “Policy”) to plaintiff, Casella Waste Systems, Inc., naming Casella and its subsidiary, Southbridge Recycling & Disposal Park, Inc. (“SRDP”), as insureds. The Policy covers claims made against the insureds during the Policy period of April 30, 2015 to June 15, 2016. Following notification by Casella in October 2015 to the Massachusetts Department of Environmental Protection (“DEP”) of the detection of pollution flowing from Casella’s property to neighboring property, a claim by DEP, as defined in the Policy, arose. Casella sought insurance coverage for the claim. Steadfast denied coverage. Casella sued for breach of contract, violation of G.L. c. 93A and for a declaration of coverage. Steadfast now moves for a summary judgment declaring there is no coverage under the Policy. For the reasons described below, summary judgment must be denied because there are material issues of fact that 1 Southbridge Recycling & Disposal Park, Inc. 1 are genuinely in dispute. BACKGROUND The following facts are taken from the parties’ Statement of Undisputed Material Facts and Responses Thereto (“SUMF”), supplemented by documents and affidavits in the summary judgment record. The coverage at issue under the Policy is what was provided under Coverage C: Cleanup Costs – New Pollution Event. Under Coverage C, Steadfast is obligated to pay “cleanup costs” to the extent resulting from a “new pollution event” that migrates beyond the boundaries of a “covered location” if that “new pollution event” is first “discovered” during the policy period. The obligation to pay includes “cleanup costs” that the insured is legally obligated to pay resulting from a third-party “claim.” The Policy also contains an exclusion from coverage for a “known pollution event.” The words in quotes are defined terms in the Policy. Casella seeks to be reimbursed and indemnified by Steadfast for all past and future cleanup costs incurred on account of a claim by DEP. There is no dispute that (i) Casella incurred cleanup costs, as defined, (ii) arising from migration of pollution from a covered property, as defined, and (iii) Casella received and reported to Steadfast a claim, as defined, coming from DEP. The dispute between the parties that is the crux of this lawsuit is whether the DEP claim resulted from a “new pollution event” that first commenced in the Policy period and was not known by Casella prior to the commencement […]
Suffolk Construction Company, Inc. v. Benchmark Mechanical Systems, Inc., et al. (Lawyers Weekly No. 12-045-17)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT. 1384CV01463-BLS2 ____________________ SUFFOLK CONSTRUCTION COMPANY, INC. v. BENCHMARK MECHANICAL SYSTEMS, INC. and READING CO-OPERATIVE BANK ____________________ MEMORANDUM AND ORDER ALLOWING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT This case arises from Suffolk Construction Company’s mistaken payment of monies to Benchmark Mechanical Systems rather than to Benchmark’s lender, Reading Co-Operative Bank. Suffolk had hired Benchmark as a subcontractor on a large construction project. Benchmark secured a line of credit by assigning to the Bank all money that Benchmark stood to collect from Suffolk under its subcontract. Suffolk mistakenly made payments totaling $ 3,822,500.49 to Benchmark instead of to the Bank. Benchmark held and spent those monies, rather than forward them to the Bank. After Benchmark went out of business, the Bank sued Suffolk. The Supreme Judicial Court ordered Suffolk to pay the Bank the full amount it should have paid under Benchmark’s assignment. See Reading Co-Operative Bank v. Suffolk Constr. Co., 464 Mass. 543, 557 (2013). With statutory interest included, Suffolk paid the Bank a judgment totaling $ 7,640,907.45. Suffolk brought this action seeking to recover the surplus held by the Bank that was left after the Bank deducted its reasonable costs of collection and the principal and interest owed by Benchmark from the amount paid by Suffolk. In addition, Suffolk asserted common law claims against Benchmark seeking to recover the $ 3,822,500.49 in subcontract payments that Suffolk was compelled to pay a second time to the Bank. The Supreme Judicial Court recently held that Suffolk had stated viable claims against the Bank, but that its claims against Benchmark are barred by the applicable statute of limitations. See Suffolk Constr. Co. v. Benchmark Mechanical Systems, Inc., 475 Mass. 150 (2016). Suffolk now moves for summary judgment as to its right to collect the surplus of roughly $ 1.35 million being held by the Bank. The Court will ALLOW this motion. – 2 – This resolves all remaining claims. Suffolk and the Bank report that they have settled Suffolk’s claim that the Bank’s costs of collection were unreasonable, and that this settlement will take effect if the Court were to rule (as it does) that Suffolk is entitled to receive the full surplus amount that the Bank owes to Benchmark. The SJC has held that under the circumstances of this case Suffolk is entitled to equitable subrogation as against Benchmark, meaning that it may “stand in Benchmark’s shoes as to the surplus” held by the Bank. Suffolk Constr., 475 Mass. at 156. This holding is the law of the case, is binding on all parties, and may not be reconsidered now that the case has been remanded to the Superior Court. See City Coal Co. of Springfield, […]
NetScout Systems, Inc. v. Hohenstein (Lawyers Weekly No. 12-015-17)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT. 1784CV00373-BLS2 ____________________ NETSCOUT SYSTEMS, INC. v. CARL HOHENSTEIN ____________________ MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION FOR RECONSIDERATION OF ITS REQUEST FOR A PRELIMINARY INJUNCTION A week ago the Court decided a motion by NetScout Systems, Inc., for a preliminary injunction that would enforce non-competition and other covenants (the “Agreement”) that Carl Hohenstein entered into when he was employed by Danaher Corporation’s subsidiaries. In support of its motion, NetScout argued and presented evidence that Danaher had assigned to NetScout all of Danaher’s rights under Hohenstein’s non-competition agreement. The Court concluded, based on NetScout’s own evidence, that Hohenstein’s obligations under the disputed provisions of his non-competition agreement expired on July 14, 2016, one year after Hohenstein’s employment with any Danaher subsidiary ended. The Court therefore denied NetScout’s motion to the extent that it sought to enforce the non-competition and non-solicitation covenants, but allowed the other relief sought without any opposition by Hohenstein.1 1. Reconsideration. NetScout seeks reconsideration with respect to enforcement of the non-competition and non-solicitation covenants based on a new legal theory as to why it is entitled to enforce the Agreement. When it first sought a preliminary injunction, NetScout filed an affidavit by its Director of Human Resources to explain why NetScout was entitled to enforce Danaher’s rights under the Agreement. She stated that Hohenstein had been employed by a Danaher subsidiary called Fluke Networks and that “[o]n July 14, 2015, NetScout acquired Danaher’s communications business, which included Fluke 1 At oral argument, Hohenstein said he did not contest the issuance of an injunction that would bar him from using or disclosing any NetScout proprietary information, helping to develop products or services that would compete with NetScout’s offerings, helping to hire away NetScout’s employees or contractors, or interfering in any relationship with NetScout’s vendors. – 2 – Networks.” The HR Director did not say that Fluke Networks, Inc., had been merged into NetScout or a subsidiary of NetScout. If that had happened, then of course Hohenstein would still be employed by the same company as before the NetScout/Danaher transaction, and NetScout would be entitled to enforce the Agreement as the legal successor to Fluke Networks. But that is not what NetScout contended. Instead, its HR Director swore that as part of the NetScout/Danaher transaction Hohenstein became a NetScout employee and “Danaher’s rights under the Agreement were assigned to NetScout.” This characterization of the transaction between Danaher and NetScout suggested that NetScout was acquiring selected assets and liabilities of Danaher. As NetScout now recognizes, if whatever Danaher subsidiary that employed Hohenstein had been merged into NetScout or one of its subsidiaries, there would have been no need for Danaher to assign to NetScout its […]
NetScout Systems, Inc. v. Hohenstein (Lawyers Weekly No. 12-014-17)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT. 1784CV00373-BLS2 ____________________ NETSCOUT SYSTEMS, INC. v. CARL HOHENSTEIN ____________________ MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION FOR A PRELIMINARY INJUNCTION NetScout Systems, Inc., seeks a preliminary injunction that would enforce non-competition and other covenants agreed to by Carl Hohenstein when he was employed by Danaher Corporation’s subsidiaries. When NetScout acquired Danaher’s communications business, Hohenstein became a NetScout employee and Danaher assigned its rights under the contract with Hohenstein to NetScout. Eighteen months later, Hohenstein left NetScout to work for a competitor. Hohenstein agrees he was bound by NetScout’s code of business conduct, including its restrictions on the use or disclosure of NetScout’s proprietary information. At oral argument, Hohenstein said he does not contest the issuance of an injunction that would bar him from using or disclosing any NetScout proprietary information, helping to develop products or services that would compete with NetScout’s offerings, helping to hire away NetScout’s employees or contractors, or interfering in any relationship with NetScout’s vendors. But Hohenstein contends that NetScout is not entitled to an injunction that would bar Hohenstein from selling or trying to sell products or services that compete with NetScout. The Court concludes that, although NetScout is entitled to enforce the non-competition agreement assigned to it by Danaher, that contract does not bar Hohenstein from selling or trying to sell products or services that compete with those of NetScout. In any case, the contract provisions that barred Hohenstein from selling products and services that compete with those of Danaher and its subsidiaries lapsed in July 2016, twelve months after Hohenstein’s employment with Danaher subsidiaries came to an end. The Court will therefore deny NetScout’s motion to the extent it seeks to bar Hohenstein from selling products that compete with NetScout’s offerings (covered in paragraphs 2 and 3 of the form of order proposed by NetScout). – 2 – It will allow the motion only to the extent it seeks to protect NetScout’s proprietary information and to obtain other relief that is not opposed by Hohenstein (covered in paragraphs 1, 4, 5, 6, and 7 of the proposed order, which the Court will renumber as paragraphs 1 through 5). 1. Findings of Fact. The Court makes the following findings of fact based on the affidavits submitted by NetScout and Mr. Hohenstein. Hohenstein worked for subsidiaries of Danaher Corporation from January 2001 through July 2015. Throughout this time he was employed at-will, with no fixed contract term. Hohenstein worked for Fluke Networks, Inc., as a sales engineer from September 2004 to April 2014, and as a senior systems engineer through April 2015. He then worked for AirMagnet, Inc. (an affiliated company, also owned by Danaher) as senior systems engineer. In […]
Feeney v. Wave Systems Corp., et al. (Lawyers Weekly No. 12-173-16)
1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT SUCV2015-01938-BLS2 GERARD T. FEENEY, Plaintiff vs. WAVE SYSTEMS CORP., WILLIAM M. SOLMS, & WALTER A. SHEPHARD, Defendants MEMORANDUM OF DECISION AND ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND ON DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT This is an action alleging a failure to pay accrued vacation time in violation of the Massachusetts Wage Act, G.L.c. 149 §148. Plaintiff, a former Chief Financial Officer for Wave Systems Corp. (Wave), has sued not only Wave but two of its officers, CEO and President William M. Solms and CFO Walter A. Shephard. Wave is in bankruptcy, so the claims against it are stayed. Now before the Court are plaintiff’s Motion for Summary Judgment and defendants’ Motion for Partial Summary Judgment. This Court concludes that both motions must be DENIED, except as to the issue of notice raised by the defendants’ motion. Although certain facts in the summary judgment record are undisputed, the record also contains many fact disputes on critical issues. Briefly summarized, the record reveals the following. When Feeney was first hired by Wave in June 1998, the terms of his employment were set forth in an Employment Agreement. In addition to salary, Feeney was entitled to four weeks of vacation “in accordance with such executive benefit plans and policies as have been or may be established by Wave.” Upon termination, Feeney was entitled to be paid for all vacation 2 accrued as of the date of termination. In 2002, however, Wave issued an Employee Handbook which capped vacation pay at a total of 320 hours. There is a dispute of fact as to whether this applied to Feeney. Plaintiff relies heavily on the affidavit submitted by Wave’s former CEO Stephen Sprague in which Sprague states that he decided in or around 2004 not to apply the vacation cap in the Employee Handbook and to permit employees to accrue their vacation time without limitation. However, Solms has submitted a competing affidavit which states that the Handbook controlled and that a vacation cap has been and continued to be applied to employees, including executives like Feeney. Although plaintiff correctly notes that Solms joined the company only in October 2013 and therefore would have no personal knowledge about company policies before that date, there is other evidence in the summary judgment record which backs him up. Specifically, Kathleen Donovan, who worked in the Human Resources Department at Wave and was Wave’s Controller during the relevant time period, states in an affidavit that Sprague never informed her that he was changing what was contained in the Employee Handbook and that it was her understanding that a cap applied. Emails dated in 2007 and 2008 by other […]
Suffolk Construction Company, Inc. v. Benchmark Mechanical Systems, Inc., et al. (Lawyers Weekly No. 10-125-16)
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-12020 SUFFOLK CONSTRUCTION COMPANY, INC. vs. BENCHMARK MECHANICAL SYSTEMS, INC., & another.[1] Suffolk. May 2, 2016. – August 12, 2016. Present: Gants, C.J., Spina, Botsford, Duffly, Lenk, & Hines, JJ.[2] Uniform Commercial Code, Secured creditor. Practice, Civil, Motion to dismiss, Summary judgment, Statute of limitations. Subrogation. Indemnity. Unjust Enrichment. Restitution. Limitations, Statute of. Civil action commenced in the Superior Court Department on April 22, 2013. A motion to dismiss was heard by Christine M. Roach, J.; a motion for judgment on the pleadings was heard by her; cross motions for summary judgment were heard by Janet L. Sanders, J.; and entry of separate and final judgment was ordered by Sanders, J. The Supreme Judicial Court granted an application for direct appellate review. Robert Popeo (Paul J. Ricotta with him) for the plaintiff. Mark W. Corner (Peter H. Sutton with him) for Benchmark Mechanical Systems, Inc. Eric P. Magnuson (Nelson G. Apjohn with him) for Reading Co-Operative Bank. SPINA, J. In Reading Co-Operative Bank v. Suffolk Constr. Co., 464 Mass. 543, 551 (2013) (Suffolk I), we held that “G. L. c. 106, §§ 9-405, 9-607, and 9-608, provide a comprehensive scheme” that allowed Reading Co-Operative Bank (bank) to require Suffolk Construction Company, Inc. (Suffolk), to fully perform its obligations under a collateral assignment of payments under a subcontract between Suffolk and Benchmark Mechanical Systems, Inc. (Benchmark), to secure a debt owed by Benchmark to the bank even if the value of the collateral exceeded the amount owed to the bank. After that decision, Suffolk commenced this action to recover the surplus that resulted after the bank applied that collateral to satisfy Benchmark’s debt, plus costs of collection, pursuant to G. L. c. 106, § 9-608.[3] Suffolk’s equitable claims for implied subrogation and implied indemnification were dismissed under Mass. R. Civ. P. 12 (b) (6) and 12 (c), 365 Mass. 754 (1974). Its common-law claims were dismissed as time-barred under Mass. R. Civ. P. 56, 365 Mass. 824 (1974). Suffolk appealed, and we granted its application for direct appellate review. We now hold that Suffolk’s common-law claims are time barred, but it has stated equitable claims to prevent unjust enrichment and a windfall for which relief can be granted. Background. The following facts, taken mostly from Suffolk I, are undisputed. Benchmark assigned […]
New England Survey Systems, Inc. v. Department of Industrial Accidents (Lawyers Weekly No. 11-076-16)
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-331 Appeals Court NEW ENGLAND SURVEY SYSTEMS, INC. vs. DEPARTMENT OF INDUSTRIAL ACCIDENTS. No. 15-P-331. Suffolk. December 8, 2015. – June 30, 2016. Present: Grainger, Hanlon, & Agnes, JJ. Workers’ Compensation Act, Failure to obtain insurance, Cancellation of insurance. Department of Industrial Accidents. Statute, Construction. Due Process of Law, Administrative hearing. Administrative Law, Judicial review. Civil action commenced in the Superior Court Department on April 26, 2013. The case was heard by Frances A. McIntyre, J., on a motion for judgment on the pleadings. Timothy K. Cutler for the plaintiff. Douglas S. Martland, Assistant Attorney General, for Department of Industrial Accidents. AGNES, J. The Workers’ Compensation Act, G. L. c. 152 (act), provides that whenever the Commissioner of the Department of Industrial Accidents (the department) determines that an employer has not provided the insurance required by law,[1] “a stop work order shall be served on said employer, requiring the cessation of all business operations at the place of employment or job site.” G. L. c. 152, § 25C(1), as amended through St. 1989, c. 341, § 82. The stop work order takes effect upon service on the employer, and remains in effect until the employer satisfies the commissioner that it has obtained the required insurance and paid the $ 100 per day civil penalty for each day it was in violation of the law, beginning with the date of service of the order. § 25C(1) of the act. Section 25C also provides for additional civil and criminal penalties against employers who do not obtain the insurance required by law. See G. L. c. 152, § 25C(5)-(6), (9)-(11). Subsection (10) of § 25C sets forth one of the additional civil penalties that an employer who fails to obtain the insurance required by the act may face. It reads as follows: “(10) In addition to being subject to the civil penalties herein provided, an employer who fails to provide for insurance or self insurance as required by this chapter or knowingly misclassifies employees, to avoid higher premium rates, will be immediately debarred from bidding or participating in any state or municipal funded contracts for a period of three years and shall when applicable be subject to penalties provided for in section fourteen” (emphasis supplied).[2] The issue before us, which is one of first impression, is […]
Galiastro, et al. v. Mortgage Electronic Registration Systems, Inc., et al. (Lawyers Weekly No. 10-023-14)
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‑11299 ANNE-MARIE GALIASTRO & another[1] vs. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., & another.[2] Worcester. October 7, 2013. ‑ February 13, 2014. Present: Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ. Practice, Civil, Motion to dismiss, Retroactivity of judicial holding. Retroactivity of Judicial Holding. Mortgage, Foreclosure, Real estate. Real Property, Mortgage. Consumer Protection Act, Unfair act or practice. Conspiracy. Civil action commenced in the Superior Court Department on March 29, 2010. A motion to dismiss was heard by John S. McCann, J. The Supreme Judicial Court granted an application for direct appellate review. Glenn F. Russell, Jr., for the plaintiffs. Robert M. Brochin (Todd S. Holbrook with him) for Mortgage Electronic Registration Systems, Inc. Nathalie K. Salomon for Harmon Law Offices, P.C. Grace C. Ross, pro se, amicus curiae, submitted a brief. Geoffry Walsh, for National Consumer Law Center, amicus curiae, submitted a brief. DUFFLY, J. We address in this case whether the plaintiffs and others who had appeals pending in the Appeals Court when we decided Eaton v. Federal Nat’l Mtge. Ass’n, 462 Mass. 569, 569 (2012) (Eaton), may pursue claims seeking to invalidate foreclosure proceedings based on our decision in that case.[3] We held in Eaton that a foreclosure by power of sale pursuant to G. L. c. 183, § 21, and G. L. c. 244, §§ 11-17C, is invalid unless a foreclosing party holds the mortgage and also either holds the underlying mortgage note or acts on behalf of the note holder. Id. at 571. We concluded also that the interpretation of “mortgagee” in statutes governing foreclosures under statutory power of sale provisions would have only prospective effect, although we applied our newly announced interpretation to the claims asserted by the plaintiffs in that case. Id. We now extend application of the holding in Eaton to cases such as this one, in which the issue was preserved and an appeal was pending in the Appeals Court on June 22, 2012, the date of the rescript in Eaton. Background.[4] The plaintiffs, Anne-Marie and Joseph Galiastro (Galiastros), obtained a home mortgage loan on July 26, 2006, from Fremont Investment & Loan (Fremont).[5] To secure the obligation, the Galiastros contemporaneously granted a mortgage on the home to defendant Mortgage Electronic Registration Systems, Inc. (MERS), which was described in the mortgage as “a separate corporation that […]
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