Feloni v. Coco

Full title: JOHN FELONI, Plaintiff, v. PETER M. COCO, FRANK A. CIERI, and OLDE CENTER…

Court: UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

Date published: Mar 4, 2019

CIVIL ACTION NO. 16-12178-GAO (D. Mass. Mar. 4, 2019)

Opinion

CIVIL ACTION NO. 16-12178-GAO

03-04-2019

JOHN FELONI, Plaintiff, v. PETER M. COCO, FRANK A. CIERI, and OLDE CENTER VENTURES, INC., Defendants.

BOWLER, U.S.M.J.

REPORT AND RECOMMENDATION RE: DEFENDANTS' MOTION TO DISMISS PLAINTIFF JOHN FELONI'S SECOND AMENDED COMPLAINT
(DOCKET ENTRY # 75) BOWLER, U.S.M.J.

Pending before this court is a motion to dismiss filed by defendants Peter M. Coco ("Coco"), Frank A. Cieri ("Cieri"), and Olde Center Ventures, Inc. ("OCVI").¹ (Docket Entry # 75). Plaintiff John Feloni ("Feloni") opposes the motion. (Docket Entry # 77). After conducting a hearing on October 26, 2018, this court took the motion (Docket Entry # 75) under advisement.

1 Coco, Cieri, and OCVI are collectively referred to as "defendants."

PROCEDURAL BACKGROUND

Feloni filed this action on October 25, 2016. (Docket Entry # 1). In a second amended complaint, he seeks damages against defendants for "knowingly" and "purposefully" conspiring to obtain money from plaintiff "through false representations, fraud, deceit, threats, intimidation, coercion and other improper and illegal means." (Docket Entry # 73, ¶¶ 69-70, 116). The second amended complaint sets out the following claims: (1) violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c) ("section 1962(c)") (Count I); (2) conspiracy to violate RICO, 18 U.S.C. § 1962(d) ("section 1962(d)") (Count II); (3) violation of "Massachusetts Usury Statutes"² (Count III); (4) breach of contract (Count IV); (5) fraud (Count V); (6) intentional misrepresentation (Count VI); (7) negligent misrepresentation (Count VI);³ (8) breach of the covenant of good faith and fair dealing (Count VII); and (9) use of force to collect a debt (Count VIII).⁴ (Docket Entry # 73, pp. 9-18).

2 The second amended complaint (Docket Entry # 73, ¶¶ 89-97) does not provide a citation to the "Massachusetts Usury Statutes."

3 The second amended complaint designates two separate counts as "Count VI." The remainder of the counts follow this numeric error.

4 Count VIII raises a claim only against Coco and Cieri.

Defendants seek a dismissal under Fed. R. Civ. P. 12(b)(6) ("Rule 12(b)(6)") on the ground that Feloni's claims were adjudicated in prior litigation between the parties and are thus barred by the doctrine of res judicata, also known as claim preclusion. (Docket Entry # 75). They further argue that claim preclusion bars any new claims Feloni seeks to pursue because Feloni failed to raise them as compulsory counterclaims in the prior state court action pursuant to Mass. R. Civ. P. 13(a). (Docket Entry # 75). Additionally, defendants contend the applicable statutes of limitations bar all of the claims in the second amended complaint. (Docket Entry # 75).

STANDARD OF REVIEW

To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain "enough facts to state a claim to relief that is plausible on its face" even if actual proof of the facts is improbable. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Miller v. Town of Wenham, 833 F.3d 46, 51 (1st Cir. 2016). The "standard is 'not akin to a "probability requirement," but it'" requires, "'more than a sheer possibility that a defendant has acted unlawfully.'" Saldivar v. Racine, 818 F.3d 14, 18 (1st Cir. 2016) (internal citations omitted); Feliciano-Hernández v. Pereira-Castillo, 663 F.3d 527, 533 (1st Cir. 2011). "[A]ll reasonable inferences" are drawn "in the pleader's favor." Sanders v. Phoenix Ins. Co., 843 F.3d 37, 42 (1st Cir. 2016). Though "a court must accept as true all of the factual allegations contained in a complaint, that doctrine is not applicable to legal conclusions." Padmanabhan v. Hulka, 308 F. Supp. 3d 484, 490 (D. Mass. 2018), (citing Ashcroft v. Iqbal, 556 U.S. 662 (2009)), appeal filed, No. 18-1301 (April 11, 2018). "In determining whether a complaint crosses the plausibility threshold, 'the reviewing Court [must] draw on its judicial experience and common sense.'" García-Catalán v. United States, 734 F.3d 100, 103 (1st Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. at 679). "Threadbare recitals of the legal elements which are supported by mere conclusory statements do not suffice to state a cause of action." Padmanabhan v. Hulka, 308 F. Supp. 3d at 490 (citing Ashcroft v. Iqbal, 556 U.S. 662); see also In re Ariad Pharms., Inc. Sec. Litig., 842 F.3d 744, 750-51 (1st Cir. 2016); Sec. and Exch. Comm'n v. Tambone, 597 F.3d 436, 442 (1st Cir. 2010) (where factual allegations in "complaint are too meager, vague, or conclusory to remove the possibility of relief from the realm of mere conjecture, the complaint is open to dismissal").

"Accordingly, a complaint does not state a claim for relief when the well-pled facts fail to warrant an inference of any more than the mere possibility of misconduct." Padmanabhan v. Hulka, 308 F. Supp. 3d at 490 (citing Ashcroft v. Iqbal, 556 U.S. at 678-80); see also In re Ariad Pharms., Inc. Sec. Litig., 842 F.3d at 750). "If the facts in the complaint are sufficient to state a cause of action, a motion to dismiss the complaint must be denied." Padmanabhan v. Hulka, 308 F. Supp. 3d at 490; see Nollet v. Justices of the Trial Court of The Commonwealth of Mass., 83 F. Supp. 2d 204, 208 (D. Mass. 2000).

"Exhibits attached to the complaint are" also "properly considered part of the pleading 'for all purposes,' including Rule 12(b)(6)." Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008) (internal citations omitted). This court may also "consider matters of public record and facts susceptible to judicial notice." United States ex rel. Winkelman v. CVS Caremark Corp., 827 F.3d 201, 208 (1st Cir. 2016). "It is well-accepted that federal courts may take judicial notice of proceedings in other courts if those proceedings have relevance to the matters at hand." Kowalski v. Gagne, 914 F.2d 299, 305 (1st Cir. 1990); see, e.g., Bluetarp Fin., Inc. v. Matrix Constr. Co., Inc., 709 F.3d 72, 78 n.4 (1st Cir. 2013) (taking judicial notice of related state court cases). Accordingly, the Rule 12(b)(6) record includes the state court filings attached to defendants' supporting and supplemental memoranda.

FACTUAL BACKGROUND

I. Facts in Second Amended Complaint ⁵

5 Because defendants raise issues of claim preclusion, the factual background is divided into the facts in the case at bar and the claims and facts in two prior, related state court actions.

Faloni is a resident of Somerville, Massachusetts. (Docket Entry # 73, ¶ 1). Coco and Cieri are residents of North Andover, Massachusetts. (Docket Entry # 73, ¶¶ 2, 3). OCVI is a registered Massachusetts corporation whose sole officers and directors are Coco and Cieri. (Docket Entry # 73, ¶¶ 6, 92). OCVI's principal place of business is in Peabody, Massachusetts. (Docket Entry # 73, ¶ 4). Prior to the inception of OCVI, Coco and Cieri were "the sole officers and directors of Don Guido Realty, LLC" ("DGRT"). (Docket Entry # 73, ¶ 7). They established DGRT "to handle real estate transactions." (Docket Entry # 73, ¶ 8). DGRT's "declared business operations did not include lending money" for interest or otherwise. DGRT, Coco, and Cieri "were not registered" or approved usury lenders in Massachusetts. (Docket Entry # 73, ¶¶ 8, 9). Nonetheless, they lent money to Feloni for a number of years. (Docket Entry # 73, ¶ 10).

On September 15, 2003, Feloni borrowed $62,500 from DGRT which was due and payable in six months ("2003 DGRT loan"). (Docket Entry # 73, ¶¶ 11, 12) (Docket Entry # 73-1, pp. 2-4, 14-15). Feloni's father-in-law, John T. Miles ("Miles"), co-signed the promissory note and granted a mortgage to DGRT on his primary residence. (Docket Entry # 73, ¶ 13) (Docket Entry # 73-1, pp. 6-12). In addition, Miles and Feloni signed "'Loan Inducement Affidavits'" ("Inducement Affidavits"), which stipulate that both Miles and Feloni "waive their rights to contest the reasonableness of the loan, fees and costs . . .." (Docket Entry # 73, ¶ 15) (Docket Entry # 73-1, pp. 14-15). Further, the Inducement Affidavits state that if the loan is unpaid and no subdivision or refinancing agreements are entered into by May 9, 2004, the loan must either be repaid in full plus interest or, Miles would be "obligated . . . to transfer the . . . property to Don Guido for $1.00." (Docket Entry # 73, ¶ 16) (Docket Entry # 73-1, pp. 14-15).

"Thereafter, Coco, Cieri and [DGRT] made several other loans to [Feloni]." (Docket Entry # 73, ¶ 18). "In connection with these loans, [DGRT's] counsel" issued Feloni two checks, one to deposit and the other to cash and immediately turn over to Coco. (Docket Entry # 73, ¶ 19). The second check accounted for "'costs'" from Feloni to DGRT "which exceeded 20% of the loan amount." (Docket Entry # 73, ¶ 19). "Coco and Cieri also demanded that payments be made in cash and not checks." (Docket Entry # 73, ¶ 20).

When Feloni fell behind on loan payments, "[d]efendants began to aggressively attempt to collect the money due" via intimidation and threats. (Docket Entry # 73, ¶¶ 22, 23). Cieri and Coco reminded Feloni they were "licensed gun owners" and threatened to foreclose on Miles' home. (Docket Entry # 73, ¶¶ 23, 24). Feloni, however, managed "to effectuate a refinance of Miles' home with another lender" and pay off the 2003 DGRT loan. (Docket Entry # 73, ¶¶ 25, 26).

In late 2007, the attorney representing Cieri, Coco, and DGRT had his law license suspended due to "various illegal mortgage and lending practices" made on behalf of DGRT. (Docket Entry # 73, ¶ 27). After this suspension, DGRT was dissolved. (Docket Entry # 73, ¶ 28).

In or around 2008, defendants agreed to assist Feloni in building a new business, HOTUB, LLC ("HOTUB"). (Docket Entry # 73, ¶¶ 29, 30). Feloni, Coco, and Cieri frequently spoke over the telephone to discuss the business of HOTUB. (Docket Entry # 73, ¶ 33). During these calls, Coco and Cieri represented they had considerable financial contacts, including "a strong relationship with a banker at Lawrence Savings Bank." (Docket Entry # 73, ¶¶ 33, 34, 35). Beginning in 2008, Cieri and Coco "began lending money to the Plaintiff personally and through [OCVI]." (Docket Entry # 73, ¶ 32). From 2008 to 2010, they loaned Feloni a total of $165,000. (Docket Entry # 73, ¶¶ 36, 38).

On April 17, 2008, Coco personally loaned plaintiff $7,000 ("Coco note 1"). (Docket Entry # 73-1, p. 17) (Docket Entry # 76-8, p. 72). Coco note 1 was a zero-interest loan contingent upon payment by June 15, 2008. (Docket Entry # 76-8, p. 72). If the loan was not repaid on or before June 15, 2008, a 20% interest rate would apply from April 17, 2008 until full payment of the principal. (Docket Entry # 76-8, p. 72).

On April 24, 2008, Coco loaned Feloni $8,000 ("Coco note 2"). (Docket Entry # 73-1, p. 17) (Docket Entry # 76-8, p. 73). Coco note 2 provided the same repayment requirements and penalties as Coco note 1. (Docket Entry # 76-8, p. 73). On April 24, 2008, Feloni and Coco also signed a "Security Agreement and Assignment of Rights and Interest" ("security agreement"), by which Feloni "pledg[ed] and assign[ed]" a "one-half (1/2)" interest in "the Assignor's present and future, right, title and ownership interest in [the corporation known as] . . . Ribert and Robert, LLC."⁶ (Docket Entry # 76-8, pp. 75-76).

6 In a related state court case and as a means to avoid summary judgment on a usury claim, Feloni filed an affidavit in which he stated that the company's "estimated future value" exceeded $5,000,000. (Docket Entry # 76-8, p. 35). Defendants filed this related state court case in state court and seek to use it to bar the claims in this case based on res judicata. Olde Center Ventures, Inc. v. Feloni, Docket Entry No. 1677CV00627 ("the Essex case").

On January 19, 2010, OCVI loaned $33,000 (which included $3,000 interest) to Feloni. (Docket Entry # 73, ¶ 38) (Docket Entry # 76-8, p. 80). Feloni signed a promissory note ("OCVI note 1"), in which he agreed to the following conditions: (1) the total amount due in 30 days; and (2) a 20% interest rate per annum for the duration of the loan. (Docket Entry # 76-8, p. 80). Feloni signed a "Loan Pledge Agreement" ("loan pledge"), in which he agreed to grant Coco 5% of any distribution made to Feloni by Campus Entertainment, LLC for the years 2010 to 2011, "not to be less than $5,000 per year, regardless of whether there is a distribution or not." (Docket Entry # 76-8, p. 81). The loan pledge additionally grants Coco the first right of refusal for any Campus Entertainment, LLC equity sales. (Docket Entry # 76-8, p. 81). Further, handwritten on the loan pledge is the following:

I, John Feloni, understand that Olde Center Ventures is registered with the Attorney General's Office of MA for usury. All of the proceeds will be used for Campus Entertainment, LLC and not for personal use.

(Docket Entry # 76-8, p. 81).

On March 17, 2010, OCVI loaned $70,000 to Feloni.⁷ (Docket Entry # 73, ¶ 38). Feloni signed a "Balloon Promissory Note" ("OCVI note 2") promising to pay OCVI $100,000 in principal and $334 interest per day by May 20, 2010. (Docket Entry # 76-8, p. 87). OCVI note 2 states that the "[p]rincipal of $30,000 was delivered to John Feloni on January 19th [2010] with $3,000 interest due separate from that stated above. The other $70,000 was delivered to John Feloni on March 17, 2010." (Docket Entry # 76-8 p. 87).

7 Documents filed by defendants in this action and in the related state court case include a March 1, 2010 check Feloni issued to Coco in the amount of $33,000. (Docket Entry # 76-8, p. 85).

On May 14, 2010, OCVI loaned $50,000 to Feloni. (Docket Entry # 73, ¶ 38). On the same date, Feloni signed a second balloon promissory note ("OCVI note 3") in the amount of $200,000. (Docket Entry # 73, ¶ 36) (Docket Entry # 73-1, p. 17) (Docket Entry # 76-8, p. 89). According to OCVI note 3, this balloon note combined the amounts owed from OCVI note 2⁸ with the two Coco notes, as well as $35,000 in interest due. (Docket Entry # 73, ¶ 38) (Docket Entry # 73-1, p. 17) (Docket Entry # 76-8, p. 89). OCVI note 3 required Feloni to pay the principal of $200,000 "on or before June 30, 2010." (Docket Entry # 73-1, p. 17) (Docket Entry # 76-8, p. 89). In the event of non-payment, OCVI note 3 levied a 5% monthly interest rate after June 30, 2010. (Docket Entry # 73, ¶ 43) (Docket Entry 73-1, p. 17) (Docket Entry # 76-8, p. 89). OCVI note 3 also required the transfer of a 5% stake in Feloni's business, HOTUB, LLC (2.5% stakes to Cieri and to Coco). (Docket Entry # 73, ¶ 45) (Docket Entry # 73-1, p. 17).

8 In a prior refinancing, OCVI note 2 incorporated the payments due under OCVI note 1. (Docket Entry # 76-8, p. 87).

Defendants did not advance the full amount of the $50,000 loan to Feloni. Rather, they "withheld excessive fees and costs in excess of 20% of the loan amount." (Docket Entry # 73, ¶ 39). Defendants then charged additional, "excessive interest." (Docket Entry # 73, ¶ 39).

"[P]rior to May 10, 2010," Feloni made payments to defendants on previously advanced amounts that "were not accounted for in [OCVI note 3]." (Docket Entry # 73, ¶ 40). "[F]rom September to December 2010," Feloni made cash and check payments to Coco and Cieri "in excess of $70,000" due to "Coco's and Cieri's continued threats, pressure and demands."⁹ (Docket Entry # 73, ¶ 41).

9 In an affidavit Feloni filed in the Essex case (and filed by defendants in this action), Feloni lists seven payments of $10,000 and one payment of $20,000 from September to December 2010. (Docket Entry # 76-8, p. 38).

If Feloni was unable to make his payments "in the form of substantial amounts of cash, . . . [d]efendants would threaten [Feloni]." (Docket Entry # 73, ¶ 49). "For example, Coco threatened to destroy [Feloni's] business by the use of his strong business contact at the Lawrence Savings Bank."¹⁰ (Docket Entry # 73, ¶ 50).

10 In the Essex case, Feloni filed an affidavit in opposing a summary judgment motion in which he attests that defendants in this action demanded $250,000 on OCVI note 2 in January 2011 even though OCVI note 3 seemingly included the amounts from the prior notes. (Docket Entry # 76-8, p. 39). Feloni also defended himself against summary judgment in the Essex case by stating in the same affidavit that defendants demanded $118,000 on OCVI note 3 in April 2015. (Docket Entry # 76-8, p. 39).

Purportedly in retribution for failing to make payments on the promissory notes, Coco "reported [Feloni] and an unrelated company, WonderWorld Entertainment, LLC ('WWE'), to the SEC for alleged questionable fundraising efforts." (Docket Entry # 73, ¶ 51). The report resulted in an SEC investigation that "caused substantial financial, professional and emotional stress on [Feloni]," who "performed consulting work for WWE." (Docket Entry # 73, ¶¶ 52-53). Ultimately, Feloni and WWE were "cleared of any wrongdoing." (Docket Entry # 73, ¶ 54).

Meanwhile, Coco made "defamatory statement[s]" regarding Feloni to his business partner, Steven Merola ("Merola"). (Docket Entry # 73, ¶¶ 57, 58). These statements led to "a breakdown of their previous business relationship which," resulted in litigation between Feloni and Merola.¹¹ (Docket Entry # 73, ¶¶ 57, 58). Ultimately, Feloni and Merola entered into a confidential settlement agreement. (Docket Entry # 73, ¶¶ 58-60).

11 The second amended complaint depicts the litigation as between Feloni and Merola. (Docket Entry # 73, ¶¶ 57, 58). In an answer and counterclaim Feloni filed as a reach and apply defendant in an action described below, Feloni describes this litigation as between him and Metropolitan Capital, LLC. (Docket Entry # 76-10, p. 4, ¶ 5). The discrepancy is not material to the resolution of the pending motion to dismiss in this action.

In a separate matter, OCVI and Richard Cohen ("Cohen") sued Merola and others ("the Merola suit") using the same counsel that previously represented Feloni in his lawsuit against Merola. (Docket Entry # 73, ¶¶ 56, 59) (Docket Entry ## 76-9, 76-10). In the Merola suit, OCVI and Cohen named Feloni as a reach and apply defendant in the amount of the prior confidential settlement. (Docket Entry # 73, ¶¶ 59-60) (Docket Entry # 76-10). "Defendants' counsel represented in open court that . . . [d]efendants did [not have] any interest in [Feloni] and therefore, no conflict of interest existed." (Docket Entry # 73, ¶ 63). "[T]hrough counsel," however, defendants "subpoenaed [Feloni's] bank records without [Feloni's] knowledge and without notice and/or an opportunity to object." (Docket Entry # 73, ¶ 62). They also "sought to depose [Feloni] to elicit . . . testimony on the record" of the amount of the confidential settlement. (Docket Entry # 73, ¶ 61). Two weeks after being named a reach and apply defendant in the Merola suit, "[d]efendants sued [Feloni] in a separate action," i.e., the Essex case. (Docket Entry # 73, ¶ 64).

II. Prior Claims

A. The Essex Case ¹²

12 Defendants argue that the claims in the case at bar constitute compulsory counterclaims that Feloni should have brought in the Essex case. (Docket Entry # 75) (Docket Entry # 76, pp. 10-12).

On April 27, 2016, defendants in the case at bar filed the Essex case against Feloni in Massachusetts Superior Court (Essex County) for breach of a written promissory note, seeking damages in the amount of $759,250. (Docket Entry # 76-1, pp. 3-9) (Docket Entry # 76-2). The factual basis for the Essex case arises out of the same five notes Feloni seeks to litigate in the case at bar. As alleged in the Essex case, from 2008 to 2010, Coco and Cieri personally and through OCVI made a total of five loans to Feloni set out in a number of promissory notes. (Docket Entry #73, ¶ 32) (Docket Entry # 73-1 p. 17). The principal of these loans totaled $165,000. The five loans consisted of the following transactions: (1) the April 17, 2008 loan by Coco of $7,000 to Feloni, i.e., Coco note 1; (2) the April 24, 2008 loan by Coco of $8,000 to Feloni, i.e., Coco note 2; (3) the January 19, 2010 loan by OCVI of $30,000 to Feloni, i.e., OCVI note 1; (4) the March 17, 2010 loan by OCVI of $70,000 to Feloni, i.e., OCVI note 2; and (5) the May 14, 2010 loan by OCVI of $50,000 to Feloni, i.e., OCVI note 3. (Docket Entry # 73 ¶ 38) (Docket Entry # 73-1 p. 17).

Based on the foregoing facts, defendants asserted the following causes of action in the Essex case: (1) "Breach of the Note - Loan Agreement"¹³ ("Essex Count I"); (2) "Breach of the Note - Security Agreement" ("Essex Count II"); and (3) "Breach of the Note - Coco Ownership Interest" ("Essex Count III").¹⁴ (Docket Entry # 76-1, pp. 5-6).

13 The above loan agreement refers to the May 14, 2010 note, previously identified as OCVI note 3. (Docket Entry # 76-1, p. 4, ¶ 6).

14 Defendants in the case at bar indicate that they intend to dismiss the counts against HOTUB thereby leaving only Count I against Feloni. (Docket Entry # 76, p. 5).

On June 3, 2016, Feloni, proceeding pro se, filed an answer and 11 counterclaims in the Essex case. (Docket Entry ## 76-2, 76-3). The 11 counterclaims consist of the following: (1) intentional tortious interference (Essex Counterclaim 1); (2) privacy violations and bank fraud (Essex Counterclaim 2); (3) usury (Essex Counterclaim 3); (4) illegal mortgage lending in violation of Massachusetts General Law chapter 255(e) and (f) (Essex Counterclaim 4); (5) predatory lending (Essex Counterclaim 5); (6) breach of contract (Essex Counterclaim 6); (7) fraud¹⁵ (Essex Counterclaim 7); (8) breach of the implied covenant of good faith and fair dealing (Essex Counterclaim 8); (9) money laundering and "criminal enterprise activity" in violation of Massachusetts General Law chapters 267A, 271A (Essex Counterclaim 9); (10) defamation (Essex Counterclaim 10); and (11) chapter 93A violations (Essex Counterclaim 11). (Docket Entry, # 76-3, pp. 9-12).

15 The answer refers to this counterclaim as "Count VI" and the remaining counterclaims follow this numeric error. (Docket Entry # 76-3, pp. 11-12).

On July 15, 2016, defendants in this case moved to dismiss all of the 11 counterclaims under Mass. R. Civ. P. 12(b)(6). (Docket Entry # 76-2, p. 3) (Docket Entry # 76-4). Still proceeding pro se, Feloni filed an opposition. (Docket Entry # 76-5). On November 7, 2016, the trial court entered an order in the Essex case dismissing the counterclaims except for the usury and chapter 93A counterclaims, i.e., Essex counterclaims 3 and 11 respectively. (Docket Entry ## 76-2, 76-6).

On November 3, 2016, defendants (plaintiffs in the Essex case) filed a motion for reconsideration seeking dismissal of Feloni's remaining counterclaims for usury and chapter 93A violations. (Docket Entry # 76-7). On April 26, 2017, the trial court allowed dismissal of the chapter 93A counterclaim and denied dismissal of the usury counterclaim. (Docket Entry # 76-7) (Docket Entry # 76-2, p. 5). On July 30, 2018, defendants in this case moved for summary judgment against Feloni on Essex Count I for breach of the note and the remaining counterclaim for usury. (Docket Entry # 76-2, p. 6) (Docket Entry # 76-8, p. 3-4). Represented by counsel, Feloni filed an opposition that same day. (Docket Entry # 76-2, p. 6). On August 29, 2018, the trial court in the Essex case allowed in part and denied in part the motion, dismissing the sole remaining counterclaim for usury and denying summary judgment in OCVI's favor on Essex Count I for breach of the note. (Docket Entry # 80-1). On September 19, 2018, Feloni filed a motion to reconsider the trial court's August 28, 2018 dismissal of the usury counterclaim. (Docket Entry # 86, p. 2). On November 10, 2018, the trial court denied Feloni's motion to reconsider. (Docket Entry # 86-1). B. Reach and Apply Action

As previously indicated OCVI and Cohen, as plaintiffs in the Merola suit, named Feloni as a reach and apply defendant in March 2016. See Olde Center Ventures, Inc. v. Metropolitan Capital LLC, Essex Superior Court, Docket No. 1577 CV 01476. (Docket Entry # 76-9, p. 9) (Docket Entry ## 76-10, p. 5, ¶ 13). Proceeding pro se, Feloni filed three counterclaims against OCVI for: (1) intentional tortious interference (Count I); (2) privacy violations and bank fraud (Count II); and (3) frivolous actions (Count III). (Docket Entry # 76-10).

On August 14, 2017, the trial court in the Merola suit allowed a motion for summary judgment against Feloni and dismissed all three of Feloni's counterclaims. (Docket Entry # 76-11). The trial court stated that the reach and apply claim against Feloni did "not make him an 'opposing party' under Mass. R. Civ. P. 13 because the counterclaims "do not arise out of the [same] subject matter of the reach and apply claim." (Docket Entry # 76-11). The trial court also determined that counts I and II were "barred by judicial estoppel" and referenced the decision rendered by the trial court in the Essex case. (Docket Entry # 76-11). Finally, the court in the Merola suit determined that Count III of Feloni's counterclaims was "legally deficient." (Docket Entry # 76-11).

DISCUSSION

Defendants move to dismiss all nine counts in the second amended complaint. They contend that Feloni's claims are barred by the doctrine of res judicata, also known as claim preclusion, as well as the applicable statutes of limitation.¹⁶ (Docket Entry ## 75, 76). Feloni opposes dismissal on the basis of claim preclusion because the RICO claims were not compulsory counterclaims and the state court in the Essex case lacked jurisdiction to adjudicate the new RICO claims. (Docket Entry # 77). Feloni further contends that the three identical claims (usury, breach of contract, and fraud) as well as the four remaining claims (intentional and negligent misrepresentation, breach of the covenant of good faith and fair dealing, and use of force to collect a debt) arise out of the RICO claims. Because Feloni could not assert the RICO claims in the Essex case, he reasons that he "could not properly plead proper facts sufficient to support" the three identical claims, which include and demonstrate the RICO violations, and the four remaining claims, which arise out of the RICO claims, thereby avoiding claim preclusion.¹⁷ (Docket Entry # 77, p. 7). As to the statute of limitations argument, Feloni maintains that the claims are timely. (Docket Entry # 77, pp. 1, 8-13).

16 Massachusetts law refers to res judicata as encompassing claim and issue preclusion. See DeGiacomo v. City of Quincy, 63 N.E.3d 365, 368-69 (Mass. 2016) (addressing res judicata, which encompasses claim and issue preclusion). Because defendants' argument raises the former, this court will refer to the argument as seeking to apply claim preclusion rather than res judicata.

17 At the October 26, 2018 hearing, Feloni asserted that the state court did not allow him to amend to bring a RICO claim. Neither the docket in the Essex case nor the docket in the reach and apply action reflect a motion to amend filed by Feloni. (Docket Entry ## 76-2, 76-9).

I. Claim Preclusion

Defendants, who are plaintiffs in the Essex case, maintain that Feloni brought or should have brought the nine claims in this action in the Essex case. (Docket Entry ## 75, 76). Defendants submit that Count III (usury), Count IV (breach of contract), and Count V (fraud) are identical to the corresponding counterclaims in the Essex case and are thus subject to preclusion. (Docket Entry # 76, p. 10). Defendants further argue that claim preclusion bars the six new claims because they arise out of the same transaction or series of transactions or they otherwise constitute compulsory counterclaims in the Essex case pursuant to Mass. R. Civ. P. 13(a) thereby rendering these claims subject to claim preclusion. (Docket Entry ## 75, 76, 80, 86). Overall, defendants assert that claim preclusion bars Feloni from litigating claims that arise out of the same factual allegations previously adjudicated in the Essex case. (Docket Entry # 76).

"Pursuant to 28 U.S.C. § 1738, judicial proceedings of the several states 'shall have the same full faith and credit in every court within the United States.'" Padmanabhan v. Hulka, 308 F. Supp. 3d at 490 (D. Mass. 2018). "Under that full-faith-and-credit mandate, federal courts must 'give preclusive effect to a state-court judgment if the state court itself would.'" Padmanabhan v. Hulka, 308 F. Supp. 3d at 490. Accordingly, Massachusetts claim preclusion law applies.

In Massachusetts, claim preclusion "'prevents relitigation of all matters that were or could have been adjudicated in the action.'" Kobrin v. Bd. of Registration in Med., 832 N.E.2d 628, 634 (Mass. 2005) (internal citations omitted). It "is based on '[c]onsiderations of fairness and the requirements of efficient judicial administration,' which 'dictate that an opposing party in a particular action as well as the court is entitled to be free from attempts to relitigate the same claim.'" DeGiacomo v. City of Quincy, 63 N.E.3d at 368-69 (addressing "res judicata") (internal citation omitted); Santos v. United States Bank Nat'l Ass'n, 54 N.E.3d 548, 554 (Mass. App. Ct. 2016) (claim preclusion is based on premise "that the party to be precluded has had the incentive and opportunity to litigate the matter fully in the first lawsuit"); see also Anderson v. Phoenix Inv. Counsel of Boston, Inc., 440 N.E.2d 1164, 1167 (Mass. 1982).

"Massachusetts courts apply res judicata in a thoroughly conventional way." Andrew Robinson Int'l, Inc. v. Hartford Fire Ins. Co, 547 F.3d 48, 54 (1st Cir. 2008). The doctrine of claim preclusion "'makes a valid, final judgment conclusive on the parties and their privies, and prevents relitigation of all matters that were or could have been adjudicated in the action.'" Korbin v. Bd. of Registration in Med., 832 N.E.2d at 634 (emphasis added) (internal citations omitted). Moreover, the doctrine applies even where a litigant is "prepared in a second action to present different evidence or legal theories to support his claim." Charlette v. Charlette Bros. Foundry, Inc., 793 N.E.2d 1268, 1277 (Mass. App. Ct. 2003). "[F]ederal and Massachusetts law . . . apply similar three-element tests for claim preclusion." RFF Family P'ship, LP v. Ross, 814 F.3d 520, 531 n.8 (1st Cir. 2016).

Under Massachusetts law, claim preclusion requires three elements: "'(1) the identity or privity of the parties to the present and prior actions; (2) identity of the cause of action; and (3) prior final judgment on the merits.'" RFF Family Partnership, LP v. Ross, 814 F.3d at 531-32 (internal citations omitted).¹⁸ Defendants maintain that all three elements are satisfied. (Docket Entry ## 76, 80, 86). As to the first element, defendants in this action previously brought the Essex case and named Feloni as the defendant. The parties are therefore identical. As to the third element and citing case law, they repeatedly argue that the dismissal of the counterclaims in the Essex case "'operates as a binding adjudication on the merits, with res judicata effect.'" (Docket Entry # 76, p. 9) (internal citation omitted); (Docket Entry # 80, p. 2) (internal citation omitted).¹⁹ Represented by counsel, Feloni does not address defendants' argument except to point out that the dismissal of the usury, breach of contract, and fraud counterclaims in the Essex case was because plaintiff did not properly plead facts to support them.²⁰ (Docket Entry # 77, p. 7). Feloni does not argue the absence of a final judgment and therefore waives this argument. See Vallejo v. Santini-Padilla, 607 F.3d 1, 7 & n.4 (1st Cir. 2010) (noting that "[p]laintiffs did not properly raise their arguments below"); see Curet-Velazquez v. ACEMLA de Puerto Rico, Inc., 656 F.3d 47, 54 (1st Cir. 2011); Coons v. Indus. Knife Co., Inc., 620 F.3d 38, 44 (1st Cir. 2010) ("district court was 'free to disregard' the state law argument that was not developed in Coons's brief").

18 Under federal law, the essential elements of res judicata or claim preclusion are: "'(1) a final judgment on the merits in an earlier proceeding, (2) sufficient identicality between the causes of action asserted in the earlier and later suits, and (3) sufficient identicality between the parties in the two actions.'" Hatch v. Trail King Indust., Inc., 699 F.3d 38, 45 (1st Cir. 2012) (internal citations omitted). With respect to the identicality of the causes of action element, the First Circuit employs a "transactional approach to determine whether the asserted causes of action are sufficiently identical or related for claim preclusion purposes." Airframe Sys., Inc. v. Raytheon Co., 601 F.3d 9, 15 (1st Cir. 2010).

19 The fact that defendants state the third element in a slightly different manner does not detract from the waiver. Moreover, the case law defendants cite sets out the third element as a "prior final judgment on the merits." DaLuz v. Dep't of Corr., 746 N.E.2d 501, 505 (Mass. 2001); New England Power Co. v. Town of Norwood, No. 982650A, 2001 WL 292974, at *5 (Mass. Super. Ct. Feb. 8, 2001).

20 At best, this assertion contends there was no merits determination as opposed to no final judgment. Massachusetts law, however, is to the contrary. See Guinan v. Boston Coll., Civil Action No. 05-10805-DPW, 2006 WL 2987045, at *10 (D. Mass. Sept. 29, 2006) (applying "Massachusetts claim preclusion law" and finding that prior summary judgment in previous action "was a prior final determination on the merits") (internal citation omitted); Mestek, Inc. v. United Pac. Ins. Co., 667 N.E.2d 292, 294 (Mass. App. Ct. 1996) ("[u]nder Massachusetts law, as elsewhere, a dismissal for failure to state a claim, under Mass. R. Civ. P. 12(b)(6), operates as a dismissal on the merits . . . with res judicata effect'") (internal citation omitted); accord Buffalo-Water 1, LLC v. Fid. Real Estate Co., LLC, 111 N.E.3d 266, 273 n.9 (Mass. 2018) (noting that, for res judicata purposes "dismissal under Mass. R. Civ. P. 12 (b)(6) is considered an adjudication on the merits").

Turning to the second element, "[a] claim is the same for res judicata purposes if it is derived from the same transaction or series of connected transactions." Saint Louis v. Baystate Med. Ctr., Inc., 568 N.E.2d 1181, 1185 (Mass. App. Ct. 1991) (internal citations omitted); Dawe v. Capital One Bank, 456 F. Supp. 2d 236, 240 (D. Mass. 2006) (Massachusetts courts use "transactional approach to determine whether two causes of action are the same for purposes of claim preclusion") (internal citation omitted); see Ajemian v. Yahoo!, Inc., 987 N.E.2d 604, 610 (Mass. App. Ct. 2013) (claims are identical for purposes of claim preclusion "if they are based on 'the same transaction, act, or agreement, and seek redress for the same wrong'") (internal brackets and citations omitted), cert. denied, 138 S.Ct. 1327 (2018).

Specifically, Massachusetts courts ask whether the claims "'derive[] from the same transaction or series of connected transactions.'" Dawe v. Capital One Bank, 456 F. Supp. 2d at 240 (internal citation omitted). A shared cause of action is therefore found if the claims derive from "'the same transaction or series of connected transactions.'" Id. (internal citation omitted). It is also well settled that a "failure to plead a compulsory counterclaim bars a party from bringing a later independent action on that claim" and therefore provides an additional means to satisfy the second element. Mancuso v. Kinchla, 806 N.E.2d 427, 433 (Mass. App. Ct. 2004) (emphasis added). In the event the claims in this action constitute compulsory counterclaims in the Essex case, there is no need to address other means to establish the identicality of the causes of action. See, e.g., id. at 434-39 (not relying on compulsory counterclaim analysis as basis to find claim preclusion because parties did not address it and proceeding to analyze claim preclusion principles).

Massachusetts Rule of Civil Procedure 13(a) ("Rule 13(a)") defines a compulsory counterclaim as a claim that "arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not either require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction." Mass. R. Civ. P. 13(a) (emphasis added). Examining the second amended complaint reveals the identity of the causes of action underlying each of the claims vis-à-vis the counterclaims in the Essex case. See Massaro v. Walsh, 884 N.E. 2d 986, 990 (Mass. App. Ct. 2008) ("[c]omparison of the complaints reveals that the doctrine of claim preclusion applies"). A. Counts III, IV, V

Defendants initially contend that counts III (usury), IV (breach of contract), and V (fraud) are barred because the court in the Essex case adjudicated identical claims. (Docket Entry # 76, p. 10). Feloni contends that because these claims arise out of the RICO and conspiracy to commit RICO claims, they could not have been asserted or adjudicated in the Essex case and are therefore not subject to claim preclusion.²¹ (Docket Entry # 77, pp. 7-8).

21 Although Feloni did not include a RICO claim as a counterclaim in the Essex case, the answer and counterclaim contain a passing reference to a "[v]iolation of the RICO statute." (Docket Entry # 76-3, p. 13).

Assuming for purposes of this subpart only that Feloni could not bring either of the two RICO claims in the Essex case, he nevertheless did bring usury, breach of contract, and fraud claims arising out of the same series of loan transactions with the supposedly usurious interest rates, improper equity concessions, as well as incorrect and excessive or fraudulent amounts in the Essex case. The omission, if any, of facts in the Essex case that support the RICO claims in the case at bar does not provide a sufficient basis to avoid a preclusion of the usury, breach of contract, and fraud claims in this action. Furthermore, and notwithstanding Feloni's argument that these claims "arise out of" the RICO claims, claim preclusion applies even when a litigant such as Feloni presents different evidence in the second action. See RFF Family P'ship, LP v. Ross, 814 F.3d at 531 n.8; Bagley v. Moxley, 555 N.E.2d 229, 232 (Mass. 1990) ("[c]laim preclusion applies 'even though the claimant is prepared in a second action to present different evidence or legal theories to support his claim'") (citation omitted); accord Massaro v. Walsh, 884 N.E.2d 986, 990 (Mass. App. Ct. 2008). Accordingly, the usury, breach of contract, and fraud claims have the requisite identity with the usury, breach of contract, and fraud claims in this case.

Finally, Feloni's pro se status at the time of the Mass. R. Civ. P. 12(b) dismissal does not avoid the application of claim preclusion. In general, although pro se pleadings and filings are liberally construed, "'pro se status does not insulate a party from complying with procedural and substantive law.'" Lemos v. Bank of Am., 132 F. Supp. 3d 261, 263 (D. Mass. 2015) (quoting Ahmed v. Rosenblatt, 118 F.3d 886, 890 (1st Cir. 1997)); see Estelle v. Gamble, 429 U.S. 97, 106 (1976); accord Erickson v. Pardus, 551 U.S. 89, 94 (2007); see also Padmanabhan v. Hulka, 308 F. Supp. 3d at 496 (pro se status "does not relieve [a plaintiff] of the obligation to meet procedural requirements established by law . . . [and] [e]ven a pro se complainant is required to describe the essential nature of the claim") (citations omitted). The same principle applies in Massachusetts Superior Court. See Mass. R. Civ. P. 8(f); Mmoe v. Commonwealth, 473 N.E.2d 169, 172 (Mass. 1985) ("[a]lthough some leniency is appropriate in determining whether a pro se complaint meets the requirements of those rules, . . . the rules bind a pro se litigant as they bind other litigants") (internal citations omitted). B. Remaining Claims

Defendants submit that because Feloni's remaining claims in the second amended complaint are rooted in the same "'transactions or series of connected transactions'" in the Essex case, claim preclusion bars these remaining claims. (Docket Entry # 76, pp. 10-11) (internal citations omitted). Defendants also argue that claim preclusion bars the remaining claims (the RICO violations, intentional and negligent misrepresentation, breach of the covenant of good faith and fair dealing, and the use of force to collect a debt) because they are compulsory counterclaims under Rule 13(a) in the Essex case. (Docket Entry # 76, pp. 10-11 ).

Feloni counters that the RICO claims are not barred because "the state court does not have jurisdiction to hear violations of RICO and conspiracy to commit RICO pursuant to §§ 1962 and 1964" and, as such, Feloni's "claims arising out of the violations of such statutes were not compulsory in the Superior Court." (Docket Entry # 77, p. 7). Feloni also argues that the remaining claims "arise out of" the RICO claims, which he could not assert in the Essex case due to the lack of jurisdiction. Hence, Feloni "could not properly plead facts sufficient to support such claims." (Docket Entry # 77, pp. 7-8).

Feloni's argument regarding the state court's jurisdiction of the RICO counts runs counter to established Supreme Court precedent as articulated in Tafflin v. Levitt, 493 U.S. 455 (1990). The Court in Tafflin v. Levitt held that "state courts have concurrent jurisdiction to consider civil claims arising under RICO." Id. at 467. Indeed, the Court in Tafflin had "full faith in the ability of state courts to handle the complexities of civil RICO actions, particularly since many RICO cases involve asserted violations of state law, such as state fraud claims, over which state courts presumably have greater expertise." Id. at 465. Feloni's argument that the Essex court did not have jurisdiction to adjudicate the RICO claims is therefore unavailing. Feloni's related contention that the RICO claims were not compulsory counterclaims because Rule 13(a) requires that the court have the power to give relief on the claims, Mass. R. Civ. P. 13(a), is equally misplaced because the Essex court has concurrent jurisdictional power with federal courts to adjudicate the RICO claims. See id. at 467.

As noted above, defendants argue that the RICO claims "arise out of the transaction or occurrence" raised in the Essex case counterclaims and in fact are "based on the exact same fact pattern alleged in the Counterclaims" and as such should have been brought as compulsory counterclaims under Rule 13(a). (Docket Entry # 76, pp. 3, 10-12). The phrase "'transaction or occurrence'" in Rule 13(a) is broadly interpreted "'in a sense to effectuate the settlement in one proceeding of controversies so closely connected as appropriately to be combined in one trial in order to prevent duplication of testimony, to avoid unnecessary expense to the parties and to the public, and to expedite the adjudication of suits.'" Keystone Freight Corp. v. Bartlett Consol., Inc., 930 N.E.2d 744, 748-49 (Mass. App. Ct. 2010) (analyzing transactional approach with respect to compulsory counterclaims under Rule 13(a)) (internal citations omitted).

A "[compulsory] counterclaim need not rest on precisely identical facts or pose identical allegations." Id. at 749 (internal citation omitted) (finding logical relationship between existing claims and prior claims in previous action such that former were compulsory inasmuch as two cases involved same debt between same parties); see also In re Iannochino, 242 F.3d 36 (1st Cir. 2001) (holding that suit for professional malpractice was compulsory counterclaim to earlier award of fees in bankruptcy to debtor's attorney). Rather, there must be a "'logical relationship' between" the existing claims here and those in the Essex case such that "claim[s] that the former clearly should have been added as compulsory counterclaims to [Feloni's] answer in the [Essex case]." Mancuso v. Kinchla, 806 N.E.2d at 433; see, e.g., Pumpelly v. Cook, 106 F.R.D. 238, 239 (D.D.C. 1985) (finding logical relationship between existing and prior claims inasmuch as both cases involved same four agreements and same participants alleging breach of agreements).

In the Essex case, Feloni had ample opportunity to contest the factual issues concerning the transactions with defendants surrounding the Coco and OCVI notes, which he seeks to relitigate in this action. In fact, the second amended complaint acknowledges the "long-standing effort, pattern and practice to prey upon [Feloni]." (Docket Entry # 73, ¶ 69). The claims in both actions arise out of disputed loan transactions conducted by the parties encompassed in the OCVI and Coco notes as well as the 2003 DGRT loan. Both the Essex case and the current dispute arise out of the same transactions or occurrences as each action involves the business relationship and loan transactions between Feloni, Coco, Cieri, OCVI, and DGRT.

The logical relationship between the remaining claims in the action and those in the Essex case is evident by the overlapping allegations in the Essex counterclaims and the remaining claims in the case at bar, all of which involve the same loan transactions and business dealings of the parties. Like the facts set out in the second amended complaint, the transactions and occurrences in the Essex case include that defendants entered into loans with Feloni with fraudulent and incorrect amounts and used threats to enforce full and immediate payments of one or more of the loans. Defendants purportedly used Feloni's financial situation as leverage in order to make Feloni accept usurious interest rates as high as 20% on the loans. The onerous terms of OCVI note 3 required Feloni to transfer 5% interest in HOTUB to Coco and Cieri. Facts in the Essex case that support the predatory lending, money laundering and criminal activity, bank fraud, tax fraud, and privacy violations arise out of the same lending practices, deceptions, and conspiracy alleged in the second amended complaint in this action. Feloni's affidavit in the Essex case supplements these factual allegations and corresponds to allegations in the second amended complaint. Hence, the logical relationship between the RICO claims and the other remaining claims in this action and various counterclaims in the Essex case render the former compulsory counterclaims under Rule 13(a). They also do not require the presence of any third parties over which the Essex court could not acquire jurisdiction. In fact, all of the parties in this action are subject to the jurisdiction of the Massachusetts Superior Court.²²

22 According to the complaint, Coco, and Cieri are both Massachusetts residents. Prior to dissolution, DGRT was a registered Massachusetts trust. OCVI is a registered Massachusetts Corporation with its principal place of business in Peabody, Massachusetts.

Turning to defendants' transactional argument, the remaining claims (including the RICO claims) also arise out of the same transaction or series of connected transactions such that claim preclusion applies. The remaining claims in this action and the counterclaims in the Essex case derive out of the same loan transactions, the same business relationships, and the same agreements. Adhering to Massachusetts' transactional approach, the fact that Feloni presents additional facts, all of which inevitably arise out of the purportedly fraudulent loan transactions, agreements and the party's business relationship in this action does not avoid preclusion. See Charlette v. Charlette Bros. Foundry, Inc., 793 N.E.2d at 1277; Bagley v. Moxley, 555 N.E.2d at 231-32. Fairness and efficient judicial administration fully support preclusion of the remaining claims. See generally DeGiacomo v. City of Quincy, 63 N.E.3d at 368-69.

In sum, under either the Massachusetts transactional approach or the Rule 13(a) compulsory counterclaim analysis all three elements of claim preclusion are satisfied for all of the claims in the case at bar. See RFF Family P'ship, LP v. Ross, 814 F.3d at 531-32.

II. Statute of Limitations

Defendants also move to dismiss the claims as time barred because Feloni knew, or should have known, of the alleged injuries by defendants, and thus the causes of action began to accrue outside the statute of limitations. (Docket Entry ## 75, 76). Feloni argues that all the claims are timely due to the application of the discovery rule. (Docket Entry # 77). Feloni filed this action on October 25, 2016. (Docket Entry # 1).

Statutes of limitations serve to "assure fairness to defendants" by preventing the "trying [of] stale claims when a plaintiff has slept on his rights." Corliss v. City of Fall River, 397 F. Supp. 2d 260, 267-68 (D. Mass. 2005). "'Affirmative defenses, such as the statute of limitations, may be raised in a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), provided that the facts establishing the defense [are] clear on the face of the plaintiff's pleadings.'" Monsarrat v. Zaiger, 286 F. Supp. 3d 253, 256 (D. Mass. 2017) (internal citation omitted). "Where the dates included in the complaint show that the limitations period has been exceeded and the complaint fails to sketch a factual predicate that would warrant the application of either a different statute of limitations period or equitable estoppel, dismissal is appropriate.'" Id. (quoting Santana-Castro, 579 F.3d at 113-14) (internal citation omitted).

When evaluating a Rule 12(b)(6) motion, the court must "accept the factual allegations in the plaintiff's complaint as true, construe reasonable inferences in their favor, and 'determine whether the factual allegations in the plaintiff's complaint set forth a plausible claim upon which relief may be granted.'" Id. (internal citation omitted). Although Massachusetts law sets out the applicable limitations period for each claim, "determining when claims accrue '"has long been the product of judicial interpretation."'" Cambridge Plating Co., Inc. v. Napco, Inc., 991 F.2d 21, 25 (1st Cir. 1993) (internal citations omitted). Where, as here, this court's jurisdiction is based on a federal question, 28 U.S.C. § 1331, "federal rules determine when the [federal] claim[s] accrue[] because 'the cause of action is created by federal law,' even if the statute of limitations is set by reference to state law." Quality Cleaning Products R.C., Inc. v. SCA Tissue N. Am., LLC, 794 F.3d 200, 205 (1st Cir. 2015) (quoting Cantor Fitzgerald Inc. v. Lutnick, 313 F.3d 704, 710 (2d Cir. 2002)); see also Heinrich ex rel. Heinrich v. Sweet, 49 F. Supp. 2d 27, 36-37 (D. Mass. 1999) ("[d]etermining when a cause of action 'accrues' in a federal question case such as the Bivens action is a matter of federal law"); Carreras-Rosa v. Alves-Cruz, 127 F.3d 172, 174 (1st Cir. 1997) (holding that "[a]lthough the limitations period is determined by state law" for analogous section 1983 actions, "the date of accrual is a federal law question"). Conversely, for state law claims brought "under supplemental jurisdiction, federal law supplies the applicable procedural rules and state law supplies the substantive rules of decision." Lawless v. Steward Health Care Sys., LLC, 894 F.3d 9, 21 (1st Cir. 2018); accord Philibotte v. Nisource Corp. Servs. Co., 793 F.3d 159, 165 (1st Cir. 2015) ("[i]n 'exercising supplemental jurisdiction over a state law claim,' we apply 'state substantive law' as that law has been applied by the state's highest court") (quoting Barton v. Clancy, 632 F.3d 9, 17 (1st Cir. 2011)). "A state's rules providing for the start and length of the statute of limitations is substantive law." Cantor Fitzgerald Inc. v. Lutnick, 313 F.3d at 710; see also Quality Cleaning Products R.C., Inc. v. SCA Tissue N. Am., LLC, 794 F.3d at 205 (relying on Cantor as authority for applicable accrual rules for statute of limitations in federal question and diversity cases). Massachusetts law therefore supplies the accrual rules for counts III through VIII. A. Counts I and II

Defendants argue that the causes of action in counts one (RICO) and two (conspiracy to commit RICO) began to accrue between 2003 and 2007, when Feloni was first injured by the "improper conduct arising from a loan made by Don Guido Realty, LLC." (Docket Entry # 76, p. 13). Defendants point to the complaint, highlighting the facts therein that defendants "'aggressively attempt[ed] to collect the money due,'" levied "'additional and excessive interest and fees,'" and threatened and intimidated Feloni with respect to the various 2003 through 2007 DGRT loans as well as the May 2010 OCVI Note 3. (Docket Entry # 76, p. 13) (Docket Entry # 73, ¶¶ 19, 22-23, 38-50). Feloni argues that the 2003 injury occurred to Feloni's father-in-law as opposed to Feloni. (Docket Entry # 77, p. 8). He asserts that his cause of action arose out of the 2008 to 2010 loans, and he was put on notice of this injury in January 2014 when defendants "revived their illegal threats, coercion, retaliation and intimidation by reporting the Plaintiff and his business to the SEC for alleged violations without just cause." (Docket Entry # 77, p. 9) (Docket Entry # 73, ¶¶ 51-54).

Civil liability under RICO "requires a named defendant to have participated in the commission of two or more predicate crimes within the compendium described in 18 U.S.C. § 1961(1)." Miranda v. Ponce Fed. Bank, 948 F.2d 41, 45 (1st Cir. 1991); World Depot Corp. v. Onofri, Civil Action No. 16-12439-FDS, 2017 WL 6003052, at *6 (D. Mass. Dec. 4, 2017) ("[a] 'pattern of racketeering activity' requires, at a minimum, two related predicate acts committed within ten years of one another") (quoting 18 U.S.C. § 1961(5)); accord McLarnon v. United States, Civil Action No. 09-10049-RGS, 2009 WL 1395462, at *4 (D. Mass. May 19, 2009). Claims for violation of civil RICO and conspiracy to violate civil RICO are subject to a four-year statute of limitations. See Padmanabhan v. Hulka, 308 F. Supp. 3d at 494; Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 152 (1987). When appropriate, the limitations period for RICO claims is subject to tolling under the discovery rule. See Rotella v. Wood, 528 U.S. 549, 553 (2000); Padmanabhan v. Hulka, 308 F. Supp. 3d 494.

In applying the discovery rule to civil RICO claims, the First Circuit adheres to "'an injury discovery accrual rule starting the clock when a plaintiff knew or should have known of his injury.'" Lares Group, II v. Tobin, 221 F.3d 41, 44 (1st Cir. 2000) (internal citation omitted); Padmanabhan v. Hulka, 308 F. Supp. 3d at 494 (RICO statute of limitations "begins to run . . . 'when a plaintiff knew or should have known of his injury'") (citation omitted); see Rotella v. Wood, 528 U.S. at 555 (criticizing "pattern discovery rule" which "would allow proof of a defendant's acts even more remote from time of trial and, hence, litigation even more at odds with the basic policies of all limitations provisions").²³ Because the initial complaint was filed on October 25, 2016, the RICO claims are time barred unless plaintiff knew or should have known of his injury after October 25, 2012. (Docket Entry # 1).

23 The Court in Rotella did "not decide whether civil RICO allows for a cause of action when a second predicate act follows the injury, or what limitations accrual rule might apply in such a case." Rotella v. Wood, 528 U.S. at 558, n. 4. Here, this issue is not material because even if the triggering event is the second act (rather than the first act) in the "pattern," Feloni's claims remain time barred.

The second amended complaint reflects that "[o]ver a period of at least 18 years, from 2003 to the present, the Defendants, individually and through Don Guido, have participated in" a "long-standing effort, pattern and practice to prey upon the Plaintiff." (Docket Entry # 73, ¶ 69, 76). The second amended complaint further states that defendants engaged in multiple racketeering activities including:

(1) fraud; (2) usury; (3) unlawful loans; (4) unlawful mortgage loans; (5) false pretenses and misrepresentation to induce unlawful loans; (6) unlawful collection activities; (7)

threats, coercion, and intimidation to collect debts; (8) extortion; and (9) deceit.

(Docket Entry # 73, ¶ 78). The facts to support the above include that the May 2010 OCVI Note 3 did not reflect any of the previous payments Feloni had made, it levied a 5% monthly interest rate "well in excess of the statutory amount," and Feloni "did not actually receive the full amount of the alleged funds advanced because the Defendants withheld excessive fees and costs in excess of 20% of the loan amount, and then charged excessive interest in addition." (Docket Entry # 73, ¶¶ 39, 43). The second amended complaint also explicitly states that during the period of September to December 2010, Feloni made "substantial cash payments (in excess of $70,000) and check payments to Coco and Cieri" in response to their "continued threats, pressure and demands." (Docket Entry # 73, ¶ 41). These demands and the "large sums" were "financially crippling" to Feloni and his business. (Docket Entry # 73, ¶ 48).

Accordingly, as of May 14, 2010, when Feloni signed and formally agreed to the provisions of OCVI Note 3, he was reasonably on notice of an injury as the note clearly outlined the usurious interest rate. (Docket Entry # 73-1, p. 17); see Salois v. Dime Sav. Bank of New York, FSB, 128 F.3d 20, 26 (1st Cir. 1997) ("'loan documents notified plaintiffs of the possibility of negative amortization, when it would apply, and how it would work,' so that even 'if Dime had misrepresented the nature of the loans, the loan documents plaintiffs signed would have put them on notice of the fraud'") (quoting district court's opinion) (brackets omitted). Feloni was further put on notice of his injuries when he was confronted by Coco and Cieri's "unlawful collection activities," "threats, pressure and demands for cash payments" during the September to December 2010 period. (Docket Entry # 73, ¶¶ 41, 78); see In re Fiorillo, 494 B.R. 119, 151 (Bankr. D. Mass. 2013) (holding that "the limitations period for a civil RICO action begins to run when a plaintiff knew or should have known of the injury"). Once Feloni knew or should have known of his injuries, the discovery rule no longer tolled the limitations period. Padmanabhan v. Hulka, 308 F. Supp. 3d at 494.

Viewing the allegations in the complaint in the light most favorable to plaintiff, the RICO causes of action began to accrue as soon as he was reasonably on notice of his injury. Here, Feloni was reasonably put on notice by December 2010, at the latest, after signing OCVI Note 3 and suffering from Coco and Cieri's unlawful debt collection practices. (Docket Entry # 73, ¶ 78) (Docket Entry # 73-1, p. 17). Specifically, as in Salois, Feloni was reasonably put on notice of the first predicate act when he signed OCVI Note 3 which incorporated and explicitly stated the usurious interest rates. See Salois v. Dime Sav. Bank of New York, FSB, 128 F.3d at 26; (Docket Entry # 73, ¶ 43) (Docket Entry # 73-1, p. 17). Feloni was put on notice of the second predicate act during the period of September to December 2010 when Coco and Cieri utilized illicit methods to collect on Feloni's debt. See In re Fiorillo, 494 B.R. at 150; (Docket Entry # 73, ¶ 41). As such, Feloni was reasonably on notice of his injuries by December 2010 and therefore the four-year statute of limitations for his RICO causes of action expired prior to the October 25, 2016 filing of this action. B. Counts IV and VII

Defendants contend that Count IV (breach of contract) and Count VII (breach of the covenant of good faith and fair dealing) are also time barred because Feloni was on notice of his injury caused by defendants' breach by September 2010 at the very latest. (Docket Entry # 76, p. 14). In contrast, Feloni contends that the statute began to run in January 2011. (Docket Entry # 77, p. 12).

Under Massachusetts law, breach of contract and breach of covenant of good faith and fair dealing claims each have a six-year statute of limitations. Mass. Gen. Laws. ch. 260, § 2; see Sax v. DiPrete, 639 F. Supp. 2d 165, 172 (D. Mass. 2009) ("[w]here a duty of good faith and fair dealing is alleged to arise from a contractual relationship, a claim for breach of that duty sounds in contract rather than tort"). Statutes of limitation for contract claims "ordinarily accrue[] at the time of breach, or if the breach was 'inherently unknowable,' the claim accrues when the injured party knew or reasonably should have known of the breach." Power Control Devices, Inc. v. Orchid Techs. Eng'g and Consulting, Inc., 968 F. Supp. 2d 435, 445 (D. Mass. 2013) (internal citations omitted); see also Zelby Holdings, Inc. v. Videogenix, Inc., 82 N.E.3d 1067, 1071 (Mass. App. Ct. 2017) ("at common law an action for breach of contract accrues at the time of the breach"). A breach of contract cause of action can begin to accrue "'even though a specific amount of damages is unascertainable at the time of the breach or even if damages may not be sustained until a later time.'" Nortek, Inc. v. Liberty Mut. Ins. Co., 843 N.E.2d 706, 711 (Mass. App. Ct. 2006) (quoting Int'l Mobiles Corp. v. Corroon & Black/Fairfield & Ellis, Inc., 560 N.E.2d 122, 126 (Mass. 1990)); see Callahan v. Wells Fargo & Co., 747 F. Supp. 2d 247, 252 (D. Mass. 2010); see also Riley v. Presnell, 565 N.E.2d 780, 784 (Mass. 1991); Bowen v. Eli Lilly & Co., Inc., 557 N.E.2d at 739, 741-743 (Mass. 1990) (holding that it is only necessary that a plaintiff have notice of their injury and notice of the cause of that injury in order for a cause of action to begin to accrue).

In Massachusetts, contract claims are subject to the discovery rule. See, e.g., Szymanski v. Boston Mut. Life Ins. Co., 778 N.E.2d 16, 20 (Mass. App. Ct. 2002) ("[a]ctions in both contract and tort may be tolled until such time as the plaintiff discovers the facts giving rise to the cause of action") (citing Frank Cooke, Inc. v. Hurwitz, 406 N.E.2d 678, 683 (Mass. App. Ct. 1980)). The discovery rule applies when the "cause of action for breach of contract is not capable of being discovered because it is based on an 'inherently unknowable' wrong." Int'l Mobiles Corp. v. Corroon & Black/Fairfield & Ellis, Inc., 560 N.E.2d at 126. "The inherently unknowable wrong must be incapable of detection by the wronged party through the exercise of reasonable diligence." Int'l Mobiles Corp. v. Corroon & Black/Fairfield & Ellis, Inc., 560 N.E.2d at 126; see Power Control Devices, Inc. v. Orchid Techs. Eng'g & Consulting, Inc., 968 F. Supp. 2d at 443 (holding that plaintiff was aware of the factual basis for the cause of action when plaintiff "knew the identity of the defendant and the nature of the issue"). Thus, a cause of action is tolled until the injured party knows "or should have known of its cause of action." Id. at 446; see Power Control Devices, Inc. v. Orchid Techs. Eng'g & Consulting, Inc., 968 F. Supp. 2d at 441; see also Frank Cooke, Inc. v. Hurwitz, 406 N.E.2d 678, 683 (Mass. App. Ct. 1980) (holding "there are situations in which a cause of action in either contract or tort which is based on an inherently unknowable wrong may not accrue until the person injured knows or in the exercise of reasonable diligence should know the facts giving rise to the cause of action").

The second amended complaint states that in 2008, defendants "agreed to help build [Feloni's] business and to invest money into the new company in exchange for an interest in the new company. (Docket Entry # 73, ¶¶ 29, 30). According to the amended complaint, "Cieri and Coco then began lending money to [Feloni] personally and through OCV[I]." (Docket Entry # 73, ¶ 32). The second amended complaint asserts that "Coco and Cieri breached the agreement by failing to assist the Plaintiff in launching the new business and/or utilizing the Defendants alleged business contacts to help the Plaintiff [Feloni] build the business." (Docket Entry # 73, ¶ 102). Feloni contends that he was put on notice of the breach in January 2011 when defendants "threatened to use their business contacts against the Plaintiff and to ruin the Plaintiff's business." (Docket Entry # 73, ¶ 105). Feloni also notes that "[d]efendants' actions and the loans violated the law and that the [d]efendants were demanding large cash payments which were draining, not helping, the business." (Docket Entry # 77, p. 12).

As in Power Control Devices, Inc., Feloni "was not in a state of 'blameless ignorance'" necessary to toll the limitations period. Power Control Devices, Inc. v. Orchid Techs. Eng'g & Consulting, Inc., 968 F. Supp. 2d at 443 (citations omitted). Instead, defendants' breach was not inherently unknowable because when Feloni signed OCVI Note 3 he was aware that defendants had changed the loan terms, incorporated allegedly usurious interest rates, and neglected to account for prior payments Feloni had made to defendants. (Docket Entry # 73, ¶ 40, 43, 46) (Docket Entry # 73-1, p. 17); see id., Power Control Devices, Inc. v. Orchid Techs. Eng'g & Consulting, Inc., 968 F. Supp. 2d at 443. Because Feloni signed the note on May 14, 2010, he should have been aware of the wrong at that time, or, alternatively, Feloni should have known of the wrong in September 2010 when defendants began aggressively collecting cash payments and harming Feloni's business. (Docket Entry # 73, ¶¶ 41, 48) (Docket Entry # 73-1, p. 17). Thus, Feloni's breach of contract claim is time barred as it was filed after the six-year limitations period expired. Mass. Gen. Laws ch. 260, § 2.

Turning to Count IV, the second amended complaint states that defendants violated their covenant of good faith and fair dealing "by their constant demands for cash, and use of threats, intimidation and coercion to collect alleged amounts due to them." (Docket Entry # 73, ¶ 132). In response to these demands, Feloni began making "substantial cash payments" in September 2010. (Docket Entry # 73, ¶ 41).²⁴ Defendants assert that this claim is time barred because Feloni was aware of the breach and the limitations period ran before Feloni filed the original complaint. (Docket Entry # 76, p. 14).

24 Feloni also made payments to defendants prior to the May 14, 2010 OCVI note 3 that the note did not reflect. (Docket Entry # 73, ¶ 40).

The nature of a breach in a covenant of good faith and fair dealing claim focuses on the performance of the contract. See Uno Rests., Inc. v. Boston Kenmore Realty Corp., 805 N.E.2d 957, 964 (Mass. 2004) ("[t]he Duty of good faith and fair dealing concerns the manner of performance" of the contract, as opposed to the negotiation of its terms). Violating a good faith covenant therefore does not require any explicit breach of the express terms of the contract; instead, "'[t]he essential inquiry is whether the challenged conduct conformed to the parties' reasonable understanding of performance obligations, as reflected in the overall spirit of the bargain, not whether the defendant abided by the letter of the contract in the course of performance.'" Dooling v. James B. Nutter & Co., Inc., 139 F. Supp. 3d 505, 515 (internal citations omitted); Chokel v. Genzyme Corp., 867 N.E.2d 325, 329 (Mass. 2007) (parties must "'remain faithful to the intended and agreed expectations' of the contract") (internal citation omitted). Breach of a covenant of good faith and fair dealing "'occurs when one party violates the reasonable expectations of the other.'" A.L. Prime Energy Consultant, Inc. v. Massachusetts Bay Trans. Auth., 95 N.E.3d 547, 560 (Mass. 2018) (internal citations omitted).

Accepting the facts asserted in the second amended complaint as true, defendants plausibly violated the covenant of good faith and Feloni was put on notice when defendants demanded cash payments from Feloni and used threats and pressure to compel these payments from Feloni beginning in September 2010. (Docket Entry # 73, ¶¶ 41, 132); see OneBeacon Am. Ins. Co. v. Narragansett Elec. Co., 31 N.E.3d 1143, 1152 (Mass. 2015). The second amended complaint states that the "constant" demands for cash "were financially crippling the Plaintiff and impeding upon, instead of helping, the Plaintiff to build the business." (Docket Entry # 73, ¶ 48). The second amended complaint also explicitly states that he entered into business with defendants upon the understanding that defendants would "help [to] build [Feloni's] business and to invest money into the new company." (Docket Entry # 73, ¶ 30). As such, Feloni should have been aware that defendants' actions were contrary to the "reasonable understanding of performance obligations, as reflected in the overall spirit of the bargain." Dooling v. James B. Nutter & Co., Inc., 139 F. Supp. 3d at 515 (internal citations omitted); see RTR Techs., Inc. v. Helming, 707 F.3d 84, 90 (1st Cir. 2013) ("[a] 'plaintiff need not know the extent of the injury . . . for the cause of action to accrue'") (internal citation omitted).

As in Dooling, Feloni knew, or should have known, defendants' actions were contrary to the overall spirit of the bargain when defendants began using "threats, pressure and demands for cash payments." (Docket Entry # 73, ¶ 41). Moreover, Feloni began making "substantial cash payments . . . as a result" of these threats and demands in September 2010. (Docket Entry # 73, ¶ 41). Dooling v. James B. Nutter & Co., Inc., 139 F. Supp. 3d at 515. Because Feloni knew of this breach of good faith no later than September 2010, the discovery rule does not toll the limitations period, regardless of whether Feloni knew the full extent of his injury. See RTR Techs., Inc. v. Helming, 707 F.3d at 90. Accordingly, Feloni needed to bring this action by October 1, 2016 to render the breach of the covenant of good faith and fair dealing timely. Mass. Gen. Laws. ch. 260, § 2. Because Feloni filed the original complaint on October 25, 2016, Count IV is time barred. (Docket Entry # 1). C. Counts V and VI

Defendants next contend that the claims in Count V (fraud) and Count VI (intentional misrepresentation and negligent misrepresentation) are time barred because Feloni was put on notice of his injury resulting from defendants' "fraudulent conduct as early as 2003-2007" or, alternatively, in May 2010. (Docket Entry # 76, p. 15). Feloni argues that "[d]efendant's fraudulent conduct and misrepresentations continued through 2016" and therefore are not time barred. (Docket Entry # 77, p. 12). The second amended complaint describes the fraud and misrepresentations as aimed at enticing Feloni into entering "into illegal loan transactions by promising professional and financial assistance." (Docket Entry # 73 ¶¶ 108, 116). The misrepresentation claim similarly alleges that defendants engaged in various intentional and negligent misrepresentations such as not disclosing the usurious interest rates as well as demanding excessive cash payments with threats and misleading plaintiff to believe defendants "were committed to helping the plaintiff grow his business." (Docket Entry # 73, ¶¶ 116-120, 125-127).

The parties agree that these claims constitute tort claims and are therefore subject to a three-year statute of limitations which may be tolled under the discovery rule. (Docket Entry # 76, p. 15) (Docket Entry # 77, p. 12); see Mass. Gen. Laws ch. 260, § 2A; Passatempo v. McMenimen, 960 N.E.2d 275, 288-89 (Mass. 2012). Because the original complaint was filed on October 25, 2016, the tort causes of action, i.e., Counts V and VI, must have accrued on or after October 25, 2013 to render them timely filed.

Under the discovery rule, "a cause of action accrues when the plaintiff discovers or with reasonable diligence should have discovered that (1) he has suffered harm; (2) his harm was caused by the conduct of another; and (3) the defendant is the person who caused that harm." Harrington v. Costello, 7 N.E.3d 449, 455 (Mass. 2014); see also Evans v. Lorillard Tobacco Co., 990 N.E.2d 997, 1028 (Mass. 2013) ("a claim accrues and the statute of limitations clock commences when a plaintiff knows, or reasonably should have known, 'that [he] has been harmed or may have been harmed by the defendant's conduct'") (internal citation omitted). When applying the discovery rule to a tort claim, "a cause of action accrues when 'an event or events have occurred that were reasonably likely to put the plaintiff on notice that someone may have caused [him] injury.'" Doherty v. Admiral's Flagship Condo. Tr., 951 N.E.2d 936, 940 (Mass. App. Ct. 2011) (internal citation omittted); accord Commonwealth v. Tradition (N. Am.) Inc., 71 N.E.3d 142, 149 (Mass. App. Ct. 2017). A plaintiff is "put on 'inquiry notice' where [he] is informed of facts that would suggest to a reasonably prudent person in the same position that an injury has been suffered as a result of the defendant's conduct." Tradition (N. Am.) Inc., 71 N.E.3d at 150. Once on "inquiry notice" a "plaintiff may not 'rest on [his] rights' and 'ignore[ ] [the] duty to further investigate.'" Town of Princeton v. Monsanto Co., Solutia Inc., 202 F. Supp. 3d 181, 188 (D. Mass. 2016) (internal citation omitted). Thus, "the date when a plaintiff discovers, or any earlier date when [plaintiff] should reasonably have discovered, that [plaintiff] has been harmed or may have been harmed by the defendant's conduct" properly determines when the cause of action begins accruing. Bowen v. Eli Lilly & Co., Inc., 557 N.E.2d 739, 741 (Mass. 1990); accord Doherty v. Admiral's Flagship Condo. Tr., 951 N.E.2d at 940; see, e.g., In re Sheedy, 801 F.3d 12, 20 (1st Cir. 2015) (chapter 93A claim began to accrue when loan transaction closed); Galgana v. Wells Fargo Bank, N.A., Civil Action No. 17-10924-MLW, 2018 WL 1542055, at *3 (D. Mass. March 29, 2018) (holding that cause of action began accruing once plaintiff "'should reasonably have discovered' the harmful terms of the loan").

It is also well settled that a cause of action will accrue, "'even if the plaintiff does not apprehend the full extent or nature of the injury.'" Mehmet Kahveci, P.C. v. Citizens Bank, N.A., Civil Action No. 18-10459-FDS, 2019 WL 343256, at *4 (D. Mass. Jan. 28, 2019) (internal citations omitted), appeal filed, No. 19-1177 (Feb. 19, 2019). "'Accrual of the plaintiff's cause of action is tested, therefore, by what a reasonable person in her position would have known or on inquiry would have discovered at the various relevant times.'" Monteferrante v. Williams-Sonoma, Inc., 241 F. Supp. 3d 264, 273 (D. Mass. 2017).

Simply stated, under the discovery rule, "the three-year statute of limitations period of § 2A does not start to run 'until a plaintiff has first, an awareness of his injuries and, second, an awareness that the defendant caused his injuries.'" Koe v. Mercer, 876 N.E.2d 831, 836 (Mass. 2007) (brackets omitted); see also AA & D Masonry, LLC v. S. St. Bus. Park, 107 N.E.3d 1229, 1234 (Mass. App. Ct. 2018); Pagliuca v. City of Bos., 626 N.E.2d 625, 628 (Mass. App. Ct. 1994); Riley v. Presnell, 565 N.E.2d 780, 784 (Mass. 1991); White v. Peabody Constr. Co., Inc., 434 N.E.2d 1015, 1020-21 (Mass. 1982) (plaintiff only needs "knowledge that an injury has occurred" not the entire body of facts "which must eventually be proved in support of the claim"). An action or actions sufficient to put a plaintiff on notice acts as the maturation date for the claim and subsequent harms stemming from the injury only go towards the severity of the injury, not the date of accrual. See Monteferrante v. Williams-Sonoma, Inc., 241 F. Supp. 3d at 272 ("in determining whether there is a 'continuing violation' that extends the statute of limitations, 'courts must be careful to differentiate between [the unlawful] acts and the ongoing injuries which are the natural, if bitter, fruit of such acts,' "which do not restart the clock") (quoting Gilbert v. City of Cambridge, 932 F.2d 51, 58 (1st Cir. 1991)); see also Pagliuca v. City of Boston, 626 N.E.2d at 628 (stating that defendants' further acts did not constitute a tolling of the statute of limitations as plaintiff was on notice of the facts undergirding cause of action).

Feloni asserts that "[d]efendants' fraudulent conduct and misrepresentations continued through 2016." (Docket Entry # 77, pp. 12-13). Here, as in Monteferrante, the subsequent injuries are the bitter fruit of the initial fraud and misrepresentations and do not serve to "restart the clock." Monteferrante v. Williams-Sonoma, Inc., 241 F. Supp. 3d at 272. The tort-based allegations center around misrepresentations aimed at enticing Feloni to enter into purportedly illegal loan transactions, not disclosing usurious interest rates, and demanding cash payments.

Feloni was reasonably put on notice of the injuries caused by defendants' fraudulent behavior and misrepresentations when he signed the final loan transaction, i.e., OCVI Note 3 on May 14, 2010. (Docket Entry # 73, ¶¶ 38, 39, 41) (Docket Entry # 73-1, p. 17). According to the second amended complaint, OCVI Note 3 "contained several new requirements and conditions that were not contained in the prior transactions." (Docket Entry # 73 ¶ 46). By signing OCVI Note 3, Feloni was reasonably put on notice of the note's discrepancies and usurious interest rates and as such had a duty to reasonably inquire. See Monteferrante v. Williams-Sonoma, Inc., 241 F. Supp. 3d at 273; see also Zamboni v. Aladan Corp., 304 F. Supp. 2d 218, 224 (D. Mass. 2004); Salois v. Dime Sav. Bank of New York, FSB, 128 F.3d at 26. As in Crocker, the usurious interest rates were apparent on the face of the note and as such Feloni had access to the "facts that create[d]" the cause of action at that moment. Crocker v. Townsend Oil Co., 979 N.E.2d 1077, 1084 (Mass. 2012) (quoting Stetson v. French, 72 N.E.2d at 412); (Docket Entry # 73, ¶ 110) (Docket Entry # 73-1 p. 17). In short, Feloni was put on notice that an injury had occurred on May 14, 2010 and that defendants were the cause of the injury. Because he filed this action on October 25, 2016, the fraud, intentional misrepresentation, and negligent misrepresentation claims are therefore time barred under the Massachusetts three-year statute of limitations applicable to such claims in Massachusetts. D. Count VIII

Count VII sets out the use of force to collect a debt claim against Coco and Cieri. The amended complaint alleges that, beginning in 2003 and continuing into 2016, Coco and Cieri, "individually and through Don Guido and OCV," engaged in unlawful debt collection practices including "threats, force and intimidation." (Docket Entry # 73, ¶¶ 135, 136). Defendants argue that Feloni had notice of these alleged unlawful practices prior to October 25, 2012 and the claim is therefore time barred. (Docket Entry # 76, pp. 15-16). Feloni maintains that the various threats occurred as late as 2016. (Docket Entry # 77, p. 13).

In Massachusetts, a claim for the use of force to collect a debt can be pursued as either a common law tort action, with a three-year statute of limitation, or as a consumer protection claim with a four-year statute of limitations. Mass. Gen. Laws ch. 93A §§ 2, 9; Mass. Gen. Laws ch. 260 § 5A. Because the claim is untimely under the longer, four-year limitations period, it is not necessary to decide the matter.²⁵

25 It is therefore also not necessary to address defendants' argument that Federal Debt Collection Practices Act's one-year statute of limitations applies.

For chapter 93A claims, the accrual date "is determined 'by the same principles [that] govern the determination of the underlying actions.'" Fine v. Huygens, DiMella, Shaffer & Assocs., 783 N.E.2d 842, 848 (Mass. App. Ct. 2003) (quoting Schwartz v. Travelers Indem. Co., 740 N.E.2d 1039, 1044 (Mass. App. Ct. 2001)) (additional citation omitted). As previously explained, tort claims accrue at the time of the injury unless tolled by the discovery rule. It is also well settled that the "discovery rule applies in Mass. Gen. Laws ch. 93A actions." Wolinetz v. Berkshire Life Ins. Co., 361 F.3d 44, 47 (1st Cir. 2004) (citing Int'l Mobiles Corp. v. Corroon & Black/Fairfield & Ellis, Inc., 560 N.E.2d at 125-26) (additional citations omitted). As previously explained, the discovery rule tolls a limitations period until the injured party was put on notice of the injury caused by the defendant. See Harrington v. Costello, 7 N.E.3d at 455. Once on notice that he suffered an injury, a plaintiff has a duty to inquire into the nature and cause of the injury. See Town of Princeton v. Monsanto Co., Solutia Inc., 202 F. Supp. 3d at 188; see also Bowen v. Eli Lilly & Co., Inc., 557 N.E.2d at 743 (stating that reasonable notice of a "particular act" by a particular source that may have caused the plaintiff injury "creates a duty of inquiry and starts the running of the statute of limitations").

According to the amended complaint, Feloni "made substantial cash payments (in excess of $70,000) . . . to Coco and Cieri from September 2010 to December 2010 as a result of Coco's and Cieri's continued threats, pressure and demands for cash payments." (Docket Entry # 73, ¶ 41). Feloni reasonably should have been put on notice of the injury he sustained from Coco's and Cieri's actions, regardless of whether he understood the full scope of the damages. See Pagliuca v. City of Boston, 626 N.E.2d at 628. Once Feloni was aware of the fact that he sustained an injury caused by these defendants' use of force to collect a debt, he had a duty to inquire into the cause of action. See Monteferrante v. Williams-Sonoma, Inc., 241 F. Supp. 3d at 273; see also Crocker v. Townsend Oil Co., Inc., 979 N.E.2d at 1084. As such, by December 2010, Feloni was reasonably put on notice of his injury caused Coco's and Cieri's use of force to collect debts. Because Feloni was reasonably put on notice of the injury and its cause by defendants Coco and Cieri by December 2010, the claim is time barred under either the three or the four-year limitations period. Mass. Gen. Laws. ch. 260 §§ 2A, 5A. E. Count III

Count III purports to set out a claim under "Massachusetts usury statutes." (Docket Entry # 73, p. 12) (capitalization and bold-face type omitted). The second amended complaint alleges that defendants "Coco and Cieri, individually and through Don Guido and OCV, lent" him money "on numerous occasions . . . from 2003 through 2010 and charged interest, fees and costs well in excess of the statutory limits." (Docket Entry # 73, ¶ 90). As noted previously, the second amended complaint and Feloni's subsequent filings, do not state explicitly which usury statute(s) apply. (Docket Entry # 73, ¶¶ 89-97).

Under Massachusetts law, usury is criminalized as a "Crime Against Public Policy." See Mass. Gen. Laws ch. 271, § 49; In re Tavares, 298 B.R. 195, 203 (Bankr. D. Mass. 2003). As "a public policy statute, covered by the Code of Massachusetts Regulations, a violation of the Massachusetts usury statute constitutes a per se violation of Chapter 93A." In re Pena, 397 B.R. 566, 577 (B.A.P. 1st Cir. 2008) (stating that "a person engaged in the conduct of trade or commerce who has suffered a loss of money or property as a result of an unfair or deceptive trade practice may bring an action for damages and equitable relief"); see also In re Tavares, 298 B.R. at 203. Accordingly, this court construes the claim as brought under chapter 93A for defendants' usurious business practices with the concomitant four-year limitations period. Mass. Gen. Laws. ch. 260 § 5A.

According to the amended complaint, defendants loaned Feloni money "on numerous occasions . . . from 2003 to 2010 and charged interest, fees and costs well in excess of the statutory limits." (Docket Entry # 73, ¶ 90). The second amended complaint refers to various notes, ranging in dates from September 15, 2003 to May 14, 2010, each of which contains specific details regarding interest rates and payments that were available to Feloni when he signed the notes. (Docket Entry # 73-1, pp. 2-18) (Docket Entry # 73, ¶¶ 11, 32, 36, 38). As also stated in the amended complaint, OCVI Note 3 "required the Plaintiff to pay interest in the amount of five (5%) percent per month after June 30, 2010, well in excess of the statutory amount." (Docket Entry # 73, ¶ 43) (Docket Entry # 73-1, p. 17).

Feloni signed the last of the notes, i.e., OCVI Note 3, on May 14, 2010. (Docket Entry # 73-1, p. 17). Because OCVI Note 3 explicitly states that "interest will accrue at a rate of five percent (5%) per month," Feloni was aware of the injury in the form of usurious payments as of May 14, 2010 or by June 30, 2010 when the interest began to accrue in the event of nonpayment. (Docket Entry # 73-1, p. 17); see also Medeiros v. Countrywide Home Loans, Inc. of Van Nuys, California, Div. of Bank of Am., N.A., Civil Action No. 17-11675-PBS, 2018 WL 4901081, at *6 (D. Mass. July 3, 2018) (chapter 93A claim untimely because "plaintiff knew or should have known about the interest rate and the material terms of the agreement at or around the time he signed the Mortgages"); see also Salois v. Dime Sav. Bank of New York, FSB, 128 F.3d at 26 n. 10 ("'one who signs a writing that is designed to serve as a legal document,'" as this and its enclosure were, "'is presumed to know its contents'") (internal citations omitted).

As in Medeiros, Feloni "knew or should have known" of both his injury, and that defendants' were the cause of said injury, when he signed OCVI Note 3 on May 14, 2010. Medeiros v. Countrywide Home Loans, Inc. of Van Nuys, California, Div. of Bank of Am., N.A., 2018 WL 4901081, at *6; (Docket Entry # 73-1, p. 17). Because OCVI Note 3 contained both the usurious interest rates and identified OCVI as the counterparty, Feloni reasonably knew or should have known of the injury and that defendants were the cause of the injury on May 14, 2010. See Medeiros v. Countrywide Home Loans, Inc. of Van Nuys, California, Div. of Bank of Am., N.A., Civil Action No. 17-11675-PBS, 2018 WL 4901081, at *6; Salois v. Dime Sav. Bank of New York, FSB, 128 F.3d at 26 n. 10; (Docket Entry # 73-1, p. 17). Therefore, Feloni's usury claim is time barred because he brought this action on October 25, 2016, more than four years after the cause of action began to accrue. See Mass. Gen. Laws. ch. 260 § 5A.

Therefore, Feloni's usury claim is time-barred because he brought this action on October 25, 2016, more than four years after the cause of action began to accrue. See Mass. Gen. Laws. ch. 260 § 5A.

CONCLUSION

In accordance with the foregoing discussion, this court RECOMMENDS ²⁶ that the motion to dismiss (Docket Entry # 75) be ALLOWED.

26 Any objection to this Report and Recommendation must be filed with the Clerk of Court within 14 days of receipt of the Report and Recommendation to which objection is made and the basis for such objection. See Fed. R. Civ. P. 72(b). Any party may respond to another party's objections within 14 days after service of the objections. Failure to file objections within the specified time waives the right to appeal the order.

/s/ Marianne B. Bowler

MARIANNE B. BOWLER

United States Magistrate Judge