Opinion
20-P-1400
01-20-2022
Azim NASIR & another v. BOSTON NEUROBEHAVIORAL ASSOCIATES, LLP, & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The defendants appeal from an order allowing the plaintiffs' special motion to dismiss the defendants' abuse of process counterclaim, and from an order awarding attorney's fees and costs to the plaintiffs. See Benoit v. Frederickson, 454 Mass. 148, 152 (2009) (interlocutory appeal permitted from allowance or denial of anti-SLAPP special motion to dismiss). Concluding that the defendants have failed to demonstrate that the judge abused her discretion or otherwise erred, we affirm.
The appeals were consolidated in this court.
Background. The plaintiffs brought the underlying action for breach of contract and other related claims against the defendants, essentially claiming that the defendants failed to compensate them for work they performed. The thirteen-page single-spaced complaint recited in fulsome detail the factual bases for the plaintiffs' claims, the specific amount sought in damages, and attached a copy of the contract at issue (executive agreement).
The defendants answered and counterclaimed asserting, among other things, a counterclaim for abuse of process. In support of their counterclaims, the defendants alleged that they had terminated the executive agreement after the plaintiffs failed to perform as required. Thereafter (as alleged in the defendants' counterclaim), the plaintiff Nasir made "myriad statements to other members of the closely-knit Pakistani community to the effect that" the defendant Munir had defrauded and cheated him. Nasir allegedly also called Munir "dishonest, untrustworthy, and dishonorable." Nasir allegedly also instructed his friends and relatives to post negative reviews about the defendants. The defendants also asserted that they offered to provide documentation to show that they owed nothing further to the plaintiffs, and that they offered to provide those materials to a third-party auditor of Nasir's choosing. Nasir allegedly did not respond to these offers. Instead, he collaborated with another "spurned former business associate of Munir" to coordinate the timing of this suit "in order to cause the maximum amount of financial strain and disruption" and reputational harm to the defendants. The defendants also claimed that Nasir had verbally acknowledged that the plaintiffs' claims against the defendants lacked merit and that his purpose in bringing suit was to disrupt the defendants' business and to cause them to expend legal fees in defending against the claims.
Pursuant to the anti-SLAPP statute, G. L. c. 231, § 59H, the plaintiffs filed a special motion to dismiss the abuse of process counterclaim, which was allowed after a hearing. The judge also awarded attorney's fees, as required by the statute. This interlocutory appeal followed.
The defendants have failed to include a copy of the plaintiffs' special motion to dismiss counterclaim count VI, the memorandum in support of that motion, the defendants' opposition to that motion, or the plaintiffs' reply memorandum in the record appendix. The defendants have not even included a complete copy of their answer and counterclaims. Nor have they provided the transcript of the hearing. See Mass. R. A. P. 18, as appearing in 481 Mass. 1637 (2019).
Discussion. The anti-SLAPP statute allows a party to bring a special motion to dismiss in "any case in which a party asserts that the civil claims, counterclaims, or cross claims against said party are based on said party's exercise of its right of petition under the constitution of the United States or of the commonwealth." G. L. c. 231, § 59H. As relevant here, a party's "exercise of its right of petition" includes "any written or oral statement made before or submitted to a legislative, executive, or judicial body." Id. A judge "shall" grant the special motion "unless the party against whom such special motion is made shows that: (1) the moving party's exercise of its right to petition was devoid of any reasonable factual support or any arguable basis in law and (2) the moving party's acts caused actual injury to the responding party." Id.
The Supreme Judicial Court has held that this statutory language creates a two-step burden-shifting test for evaluating a special motion to dismiss, under which, first, the special movant must "make a threshold showing through the pleadings and affidavits that the claims against it are ‘based on’ the petitioning activities alone and have no substantial basis other than or in addition to the petitioning activities." Duracraft Corp. v. Holmes Prods. Corp., 427 Mass. 156, 167-168 (1998) (Duracraft ). At this first stage, "a special movant must demonstrate that the nonmoving party's claims are solely based on its own petitioning activities." Blanchard v. Steward Carney Hosp., Inc., 477 Mass. 141, 159 (2017) (Blanchard I ). "A special movant's motivation for engaging in petitioning activity does not factor into whether it has met its threshold burden." 477 Harrison Ave., LLC v. JACE Boston, LLC, 477 Mass. 162, 168 (2017), citing Office One, Inc. v. Lopez, 437 Mass. 113, 122 (2002). The "key inquiry here is whether ‘the only conduct complained of is ... petitioning activity.’ " Id., quoting Fabre v. Walton, 436 Mass. 517, 524 (2002), S.C., 441 Mass. 9 (2004).
The first-stage inquiry may pose difficulties where, as here, the claim subject to the special motion to dismiss is one of abuse of process because "an actionable abuse of process claim will always be, at least in part, based on a special movant's petitioning activities." 477 Harrison Ave., LLC, 477 Mass. at 169. This does not mean, however, "that an abuse of process claim will always be solely based on a special movant's petitioning activities." Id., citing Fabre, 436 Mass. at 524 n.10. The question to be answered when the special movant has sought dismissal of an abuse of process claim is "whether the [nonmoving party] alleges that the [special movant] engaged in any conduct germane to [the nonmoving party's] abuse of process claim, apart from [the special movant's] invocations of process, which can provide a ‘substantial basis’ for [the nonmoving party's] claim." Id. Subsequent misuse of process that is not itself petitioning activity "may thus provide a nonpetitioning basis for a nonmoving party's abuse of process claim." Id.
If the special movant satisfies its first-stage burden, then "the burden shifts to the nonmoving party" to show that the special movant's petitioning activity had no reasonable basis in law or fact, and that the special movant's petitioning activity caused actual damage to the nonmoving party. 477 Harrison Ave., LLC, 477 Mass. at 168. At this stage, "[t]he critical determination is not whether the petitioning activity in question will be successful, but whether it contains any reasonable factual or legal merit at all." Wenger v. Aceto, 451 Mass. 1, 7 (2008). It is not enough for the nonmoving party to show that the special movant's petitioning activity was "based on an error of law"; rather, the nonmoving party must show "that no reasonable person could conclude that there was [a basis in law]" for the petitioning activity. Baker v. Parsons, 434 Mass. 543, 555 n.20 (2001). The nonmoving party must make this showing by a preponderance of the evidence. Id. at 553-554.
The nonmoving party should submit verified pleadings or affidavits to make the showing that the special movant's petitioning activity lacks any reasonable basis in fact and law; the nonmoving party may not rely on conclusory allegations. See Adams v. Whitman, 62 Mass. App. Ct. 850, 858 (2005). Despite some earlier language suggesting the contrary, see Benoit v. Frederickson, 454 Mass. at 154 n.7, the motion judge should assess the credibility of the parties' affidavits and examine the merits of the special movant's challenged petitioning activity in order to determine whether it has any reasonable basis in fact and law. See Van Liew v. Stansfield, 474 Mass. 31, 40-41 (2016) (examining merits of plaintiff's application for antiharassment order against defendant); Gillette Co. v. Provost, 91 Mass. App. Ct. 133, 137-139 (2017) (examining merits of defendant's counterclaims against plaintiff). From the incomplete record before us, it does not appear that the defendants submitted any affidavits addressing the factual bases of the plaintiffs' claims, nor were the counterclaims verified.
If the nonmoving party cannot show that the special movant's petitioning activity had no reasonable basis in law and fact, the nonmoving party may nonetheless satisfy the second stage of the Duracraft test and defeat the special motion to dismiss "by demonstrating in the alternative that each challenged claim does not give rise to a ‘SLAPP’ suit." Blanchard I, 477 Mass. at 160. To satisfy this augmented second stage of the Duracraft test, the nonmoving party "must establish, such that the motion judge may conclude with fair assurance, that its primary motivating goal in bringing its claim, viewed in its entirety, was ‘not to interfere with and burden [the special movant's] ... petition rights, but to seek damages for the personal harm to [it] from [the] [special movant's] alleged ... [legally transgressive] acts." Blanchard I, supra, quoting Sandholm v. Kuecker, 2012 IL 111443, ¶ 57 (Ill. 2012).
In making the determination whether the nonmoving party's claim was not brought with the primary goal of chilling the special movant's petitioning activity, the judge should "assess the totality of the circumstances pertinent to the nonmoving party's asserted primary purpose in bringing its claim," including "[t]he course and manner of proceedings, the pleadings filed, and affidavits ‘stating the facts upon which the liability or defense is based.’ " Blanchard I, 477 Mass. at 160, quoting G. L. c. 231, § 59H. A "necessary but not sufficient factor in this analysis" is "whether the nonmoving party's claim at issue is ‘colorable or ... worthy of being presented to and considered by the court.’ " Id., quoting L.B. v. Chief Justice of the Probate & Family Court Dept., 474 Mass. 231, 241 (2016).
We review the judge's ruling on a special motion to dismiss made pursuant to G. L. c. 231, § 59H, for "an abuse of discretion or error of law." Blanchard v. Steward Carney Hosp., Inc., 483 Mass. 200, 203 (2019) (Blanchard II ). Cf. Reichenbach v. Haydock, 92 Mass. App. Ct. 567, 572 (2017) (applying de novo review to first prong and abuse of discretion to second prong).
Applying the legal principles we have set out above to the case at hand, the defendants have failed to demonstrate that the judge abused her discretion in dismissing the abuse of process counterclaim. As to the first prong of the Duracraft analysis, the foundation of the counterclaim is the plaintiffs' filing of the underlying complaint for breach of contract. Indeed, that is the sole "process" that is the basis for the claim. The defendants' allegations that the plaintiffs' had an "ulterior and illegitimate purpose" in bringing the suit because they allegedly did not respond to the defendants' offer to hire an independent auditor and engage in settlement negotiations, that Nasir cast aspersions on the defendants' reputation, and that the plaintiffs timed the suit to exert maximum pressure are not the sort of acts that have been found to create liability for abuse of process. There is no suggestion that the plaintiffs made, or attempted to make, subsequent use of the breach of contract action in order to obtain an improper advantage outside of the proceeding, such as to extort the defendants or to force them to settle another lawsuit on more favorable terms. Where, as here, the initiation of process alone could not support an abuse of process counterclaim, and the defendants' counterclaim rested on no conduct besides the plaintiffs' petitioning activity in bringing suit, the judge was correct in determining that the abuse of process counterclaim was based solely on the plaintiffs' petitioning activity. See Fabre, 436 Mass. at 523 (where abuse of process claim was based on defendant's application for c. 209A order against plaintiff, and plaintiff's complaint "simply recount[ed] and complain[ed] of [defendant's] conduct in bringing and testifying at the 209A proceedings," defendant met her burden at first stage of Duracraft test); Adams v. Whitman, 62 Mass. App. Ct. 850, 857 (2005) (plaintiff's negligence claim against defendant, standing alone, could not support actionable abuse of process claim, and so defendant's abuse of process counterclaim was based solely on plaintiff's petitioning activity).
The elements of the tort of abuse of process are that "(1) ‘process’ was used; (2) for an ulterior or illegitimate purpose; (3) resulting in damage." Gutierrez v. Massachusetts Bay Transp. Auth., 437 Mass. 396, 407 (2002), S.C., 442 Mass. 1041 (2004), quoting Datacom Interface, Inc. v. Computerworld, Inc., 396 Mass. 760, 775-776 (1986). A claim for abuse of process will lie where process is used as "a form of coercion to obtain collateral advantage, not properly involved in the proceeding itself," such as "the surrender of property." Powers v. Leno, 24 Mass. App. Ct. 381, 383-384 (1987), quoting Cohen v. Hurley, 20 Mass. App. Ct. 439, 442 (1985). It is the "subsequent misuse of the process, though properly obtained, [which] constitutes the misconduct for which the liability is imposed." Kelley v. Stop & Shop Cos., 26 Mass. App. Ct. 557, 558 (1988), quoting Restatement (Second) of Torts § 682 comment a (1977).
Our case law does support the idea that "initiating process alone can at times be so coercive and promoting of ulterior advantage that it supports an abuse of process claim," and in such a case, such a coercive ulterior purpose might be a substantial nonpetitioning basis that would defeat a special motion to dismiss. Adams, 62 Mass. App. Ct. at 855. But the facts of this case do not rise to that level. Cf. Reardon v. Saad, 262 Mass. 345, 347-348 (1928) (abuse of process claim would lie for attachment, where jury could find attachment intended to coerce factory owner to settle claim against her on debt that claimant knew was incurred by different party); American Velodur Mental, Inc. v. Schinabeck, 20 Mass. App. Ct. 460, 467 (1985), cert. denied, 475 U.S. 1018 (1986) (evidence supported elements of abuse of process claim where lawsuit for possession of house, filed by corporation controlled by husband, necessarily exerted pressure on wife to settle divorce proceedings on terms more favorable to husband); Carroll v. Gillespie, 14 Mass. App. Ct. 12, 26 (1982) (sustaining abuse of process claim where car repair shop owner swore out criminal fraud and forgery complaint against customer for purpose of pressuring customer to pay repair bill).
Turning to the second prong of the Duracraft analysis, as augmented, the defendants argue that, even if their counterclaim was based solely on the plaintiffs' petitioning activity, it was nonetheless error to allow the special motion to dismiss because the plaintiffs' complaint had no reasonable basis in fact and law, and the filing of the complaint caused actual damage. Based on detailed factual allegations, the complaint asserted claims for breach of contract, breach of the covenant of good faith and fair dealing, intentional misrepresentation, deceit, promissory estoppel, unjust enrichment, and quantum meruit. In essence, all of these claims were based on the alleged breach by the defendants of the executive agreement, which was attached to the plaintiffs' complaint as exhibit A. The defendants did not dispute the existence of the executive agreement, but rather claimed it was the plaintiffs who breached the agreement, leading to the defendants' termination of the agreement. The judge did not abuse her discretion in concluding that the defendants failed to show that "no reasonable person could conclude" that the plaintiffs' claims had a reasonable basis in fact and law. Baker, 434 Mass. at 555 n.20. Indeed, as the motion judge observed, "this case presents a relatively straightforward dispute between the parties about which side breached the [executive a]greement."
In addition, the judge did not abuse her discretion in concluding "with fair assurance" that the defendants' primary motivating goal in the abuse of process counterclaim was not to seek damages for harm caused by the special movants' allegedly transgressive acts, but rather to "interfere with and burden" the petition rights of the special movants (citation omitted). Blanchard I, 477 Mass. at 160. The judge's conclusion that the counterclaim was brought primarily to chill the plaintiffs' petitioning activity is buttressed by her finding that the counterclaim was not "colorable," i.e., that it "offer[ed] [no] reasonable possibility" of resolution in the defendants' favor. Blanchard I, supra at 161, quoting Commonwealth v. Levin, 7 Mass. App. Ct. 501, 504 (1979). The judge reached this conclusion because the counterclaim failed to allege that the plaintiffs had filed suit for any purpose other than to recover damages they claimed were owed under the executive agreement. Thus, it did not appear that the plaintiffs had employed process for some improper ulterior or coercive purpose, and so no claim for abuse of process would lie. See SMS Fin. V, LLC v. Conti, 68 Mass. App. Ct. 738, 747 (2007), quoting Ladd v. Polidoro, 424 Mass. 196, 198 (1997) (for abuse of process claim to lie, "it must appear that the process was used to accomplish some ulterior purpose for which it was not designed or intended, or which was not the legitimate purpose of the particular process employed").
Concluding as we do with respect to the merits of the special motion to dismiss, it follows that the judge did not err in awarding reasonable attorney's fees and costs, which are mandatory to the prevailing party under G. L. c. 231, § 59H. See Hashimi v. Kalil, 388 Mass. 607, 609 (1983) ("The word ‘shall’ is ordinarily interpreted as having a mandatory or imperative obligation"). The plaintiffs requested $7,912.50 in fees, which the judge allowed to the extent of $6,980. The defendants do not quarrel with the legal principle that an award of reasonable fees was mandatory under the statute, but they argue that the award here was excessive because it included two hours of travel time to the hearing on the fee request and 2.1 hours to prepare the fee application and accompanying affidavit. On the record presented, we discern no abuse of discretion in either regard. Specifically, we note that there is no transcript of the hearing on the fee request, and the record does not otherwise show that the hearing was conducted telephonically. Ultimately, the "[d]etermination of a reasonable [attorney's fee] is in the first instance largely committed to the sound discretion of the trial judge, who is in the best position to evaluate the nature of the case, the conduct of the litigation, the amount of time reasonably required to litigate it, and the fair value of the attorney's services." Brady v. Citizens Union Sav. Bank, 91 Mass. App. Ct. 160, 161 (2017).
Separately, pursuant to G. L. c. 231, § 59H, the plaintiffs are entitled to their reasonable appellate attorney's fees and costs for this interlocutory appeal, which they have requested in their brief. Consistent with the procedure set out in Fabre, 441 Mass. at 10-11, the plaintiffs should submit a detailed fee application, together with supporting materials, within fourteen days of the issuance of this decision. The defendants shall submit an opposition, if any, within fourteen days thereafter.
Orders allowing special motion to dismiss count VI of the counterclaim alleging abuse of process and awarding attorney's fees and costs affirmed.