Opinion
18-P-199
03-15-2019
NATIONAL LUMBER COMPANY v. ROYAL TAX LIEN SERVICES, LLC.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, National Lumber Company (National), appeals from a Superior Court judge's allowance of the defendant, Royal Tax Lien Services, LLC's (Royal), motion to dismiss National's complaint, which alleged claims for declaratory relief and G. L. c. 93A damages arising out of Royal's attempts to collect and foreclose on a municipal tax lien on property owned by National. Royal, which is in the business of acquiring delinquent municipal tax liens, purchased the tax lien on National's real property from the town of Hopkinton (town). Before National initiated its Superior Court action, Royal had filed an action against National in Land Court, under G. L. c. 60, to foreclose on its right to redeem that same lien. National filed an answer to Royal's Land Court complaint, and subsequently moved to amend its answer to assert "a counterclaim for declaratory relief and related relief." After a hearing, a Land Court recorder issued an order denying National's motion. The next day, National filed its complaint against Royal in the Superior Court, asserting facts substantially similar to those alleged by National in its proposed Land Court counterclaim.
At oral argument, counsel for both parties reported that the hearing was not recorded. Royal's counsel disputes the account of the hearing set forth in National's brief, particularly statements allegedly made by the Land Court recorder as to her rationale for her ruling. Absent agreement by the parties on what transpired at the hearing, see Mass. R. A. P. 8 (d), as amended, 378 Mass. 932 (1979), we are unable to credit representations of counsel.
Although National named the town as a party in its Superior Court complaint, the town is not a party to this appeal. The parties moved jointly to dismiss National's claims against the town without prejudice in Superior Court.
Thereafter, National elected to pay Royal the full amount that Royal claimed National owed, plus interest. Upon National's payment, Royal moved to withdraw its Land Court action, which the Land Court allowed without objection by National. Royal then moved to dismiss National's Superior Court complaint, arguing that National was collaterally attacking the Land Court's order denying National's motion to amend its answer to add a counterclaim. The Superior Court judge allowed Royal's motion to dismiss, agreeing with Royal that "the Land Court had already denied [National's] motion to amend its answer and add counterclaims raising the same issues raised in this action in the Superior Court. Essentially, [National] seeks to collaterally attack the Land Court ruling in the Superior Court. This it cannot do."
On appeal, National argues that its Superior Court complaint did not constitute an impermissible collateral attack on the Land Court's order, and that National had a right to litigate its claims for declaratory judgment and damages in the Superior Court. We disagree and affirm.
Discussion. 1. Propriety of appeal. We begin by expressing our view that "it appears that [National] has attempted to obtain review of the interlocutory order, in the absence of judicial approval, by stipulating to the dismissal of the underlying [Land Court] action." Institution for Sav. in Newburyport & its Vicinity v. Langis, 92 Mass. App. Ct. 815, 818 (2018). The Land Court recorder's denial of National's motion to amend its answer to assert a counterclaim against Royal was an interlocutory order, from which there was no right of appeal. See Hudson v. Superintendent, Mass. Correctional Inst., Concord, 480 Mass. 1038, 1038 (2018) (interlocutory order denying motion to amend complaint appealable only by order of single justice). National stipulated -- by not objecting -- to Royal's voluntary dismissal of the underlying Land Court action, while at the same time reserving its right to pursue those very same counterclaims in the Superior Court by filing its complaint the day after the Land Court recorder's order denying National's motion to amend. In doing so, National set in motion "temporary 'finality' to permit an interlocutory appeal" of that Land Court order -- in the event of a dismissal of its Superior Court action, it could appeal from the ensuing judgment of dismissal. Institution for Sav. in Newburyport & its Vicinity, supra. "We caution against any future attempts to obtain review in this fashion" because it "would effectively undermine the judicial gatekeeper function intended to limit such appeals." Id. National's appeal, therefore, is subject to dismissal. Nevertheless, as we proceeded in Institution for Sav. in Newburyport & its Vicinity, supra at 819, "because the matter has been fully briefed, we put aside our doubts and exercise our discretion to address the merits" of National's appeal.
We further add that National's Superior Court action now before us was likely void ab initio given the pendency of the prior Land Court action. See Mass. R. Civ. 12 (b) (9), as amended, 450 Mass. 1403 (2008); Lyons v. Duncan, 81 Mass. App. Ct. 766, 770-771 (2012) (rule 12 [b] [9] "provides for the dismissal of a second action in which the parties and the issues are the same as those in a prior action still pending in a court of the Commonwealth. The rule prohibits the long-barred practice of claim-splitting"). In its motion to dismiss National's Superior Court action, Royal did not press this defense, presumably because by the time it presented its motion, the Land Court action had been dismissed.
2. Collateral attack. A proscribed "collateral attack" by a party on a prior judgment, order, or decree in an action between the same parties mirrors the "principles which also form the basis for the familiar doctrine of res judicata." Old Colony Trust Co. v. Porter, 324 Mass. 581, 586 (1949). "The term res judicata describes doctrines by which a judgment has a binding effect in future actions. It comprises both claim preclusion (also known as 'merger' and 'bar') and issue preclusion (also known as 'collateral estoppel')." Petrillo v. Zoning Bd. of Appeals of Cohasset, 65 Mass. App. Ct. 453, 456-457 (2006), quoting Jarosz v. Palmer, 436 Mass. 526, 530-531 n.3 (2002). See Kobrin v. Board of Registration in Med., 444 Mass. 837, 843-844 (2005); Green v. Brookline, 53 Mass. App. Ct. 120, 123 n.5 (2001).
The prohibition on collateral attacks prevents litigants from attempting to undermine one court's ruling in a different court. See Commonwealth v. Wallace, 431 Mass. 705, 707 (2000) ("defendant improperly challenge[d] the validity of the [Superior Court] injunction in his motion to dismiss the [District Court] contempt proceeding"; "[t]he proper method for challenging the injunction was either to exercise his statutory right to seek to modify or vacate the injunction"). See also Okoli v. Okoli (No. 2), 81 Mass. App. Ct. 381, 384 (2012) (affirming Superior Court judge's dismissal of "the present complaint [alleging wife committed breaches of contract regarding promises concerning child support] [because it] was merely a collateral attack on the Probate and Family Court judgment [ordering husband to pay child support], and . . . all claims were barred by collateral estoppel"). Collateral attacks, with limited exceptions, "substantially impair[]" "the finality of judgments." Cohen v. Cohen, 470 Mass. 708, 717 (2015), quoting Harker v. Holyoke, 390 Mass. 555, 558 (1983). See Harker, supra ("By attempting to relitigate in the Superior Court the same claim on which judgment had previously been entered in the Housing Court, the plaintiffs have challenged the Housing Court judgment collaterally. If we were to permit such an attack as a general rule, the finality of judgments would be substantially impaired. This would not be in the best interests of litigants or the public"). See also Wallace, supra (rule prohibiting collateral attack "applies even if a judge's order is erroneous").
Applying these principles to the instant case, we conclude that the judge properly dismissed National's Superior Court complaint because it collaterally attacked the judgment of dismissal of the Land Court action, which followed the recorder's ruling denying National's motion to amend the answer to assert counterclaims. The Land Court "has exclusive jurisdiction of proceedings to foreclose the right of redemption from tax titles under c. 60 . . . . Its decisions or decrees in subject matters within its jurisdiction cannot be attacked collaterally." Bell v. Eames, 310 Mass. 642, 645 (1942). See Tetrault v. Bruscoe, 398 Mass. 454, 460 (1986) ("attack on the integrity of a judgment of registration may only be asserted in Land Court"; Probate and Family Court lacked power to encumber registered land by declaring existence of prescriptive easement).
National's proposed counterclaims against Royal sought a declaratory judgment as to 1) whether "the notice provisions contained in G. L. c. 60, § 2C," sufficiently protected "the substantive and procedural due process rights" of real property owners; 2) whether "Royal's failure to provide notice of its purchase to National within twelve (12) days as required by G. L. c. 60, § 2C (9) invalidate[d] the assignment of the tax lien"; 3) whether "[the town]'s failure to identify past due taxes or tax delinquencies on subsequent real estate tax bills preclude[d] Royal and/or [the town] from collecting further interest and costs on the associated tax lien under G. L. c. 60, § 62"; 4) whether "tax collection [is] a core governmental function that cannot be privatized at all"; and 5) the amount National was required to pay to clear its title to the property. National's Superior Court complaint for declaratory judgment raised these same issues, and added whether "Royal's failure to provide [National] [with a] notice of its acquisition of a tax lien on its property" and Royal's "attempt to collect more monies than were actually owed" violated G. L. c. 93A and caused National damages. Although National's motion to add a counterclaim in the Land Court action did not include a claim under c. 93A, we agree with Royal's assertion in its motion to dismiss that the entire factual basis for National's c. 93A claim was alleged in National's motion to amend the answer to assert a counterclaim in the Land Court.
By statute, the Land Court has exclusive jurisdiction over petitions for "foreclosure of and for redemption from tax titles," and the recorder has the authority to rule on such petitions. G. L. c. 185, §§ 1, 6. See G. L. c. 60, § 64.
A party in National's position who disagrees with a Land Court recorder's ruling has procedural options to obtain review. The aggrieved party may (1) file a motion for reconsideration, (2) petition the Land Court to vacate the recorder's ruling and rehear the matter, or 3) petition "[a] single justice of the appellate court" for interlocutory review of the ruling. Here, after the Land Court recorder denied the motion to add a counterclaim, National elected not to seek review by pursuing any of these procedural options. National chose instead to file a new declaratory judgment action in Superior Court making, in substance, the same factual allegations it unsuccessfully asserted by way of its proposed counterclaim in the Land Court. As the Superior Court judge correctly determined, National's Superior Court action was an attempted collateral attack on the Land Court order denying National's motion to add a counterclaim in the pending Land Court action.
See rule 9 of the Rules of the Land Court (2005).
See G. L. c. 60, §§ 69, 69A.
See G. L. c. 231, § 118.
We are unmoved by National's argument that principals of res judicata have no place here given that the Land Court recorder's order denying its motion to add a counterclaim was not a "judgment." In fact, following the recorder's denial of National's motion, the Land Court action proceeded to the functional equivalent of a judgment of dismissal when National did not oppose the allowance of Royal's motion to withdraw its Land Court complaint. As we have previously noted, National commenced its Superior Court action on September 19, 2014 the day after the Land Court recorder denied National's motion to add a counterclaim on September 18, 2014. At oral argument before us, National conceded the obvious -- that the termination of the Land Court action was necessary to facilitate National's desire to litigate in the Superior Court its challenge to the methods by which the town assessed and collected the taxes on National's property and the manner in which Royal acquired its right to foreclose -- given National's unsuccessful effort to do so in the Land Court action.
Conclusion. For the reasons set forth above, we affirm the Superior Court judge's dismissal of National's complaint.
To the extent that we do not address National's other contentions, "they 'have not been overlooked. We find nothing in them that requires discussion.'" Department of Revenue v. Ryan R., 62 Mass. App. Ct. 380, 389 (2004), quoting Commonwealth v. Domanski, 332 Mass. 66, 78 (1954).
Judgment affirmed.
By the Court (Meade, Sullivan & McDonough, JJ.),
The panelists are listed in order of seniority.
/s/
Clerk Entered: March 15, 2019.