Opinion
SUCV2014-02070
04-30-2015
Russo & Minchoff et al. [1] v. Savvas Gianasmidis Opinion No. 130424
Filed May 5, 2015
MEMORANDUM OF DECISION AND ORDER ON DEFENDANTS' MOTION TO SET ASIDE DEFAULT
Elizabeth M. Fahey, Justice of the Superior Court.
INTRODUCTION
This action arises from defendant's alleged failure to pay the plaintiff law firm and attorneys for representation in another matter pursuant to defendant's client fee agreements. Russo & Minchoff and attorneys India Minchoff and Stephen Kuzma, the plaintiffs, sued Savvas Gianasmidis (" Gianasmidis"), the defendant, for breach of contract (count I) and injunctive relief (count II). Gianasmidis did not file an answer to the instant complaint and the clerk entered default against him. Before the court is Gianasmidis's Motion to Set Aside All Defaults and for Leave of Court to File a Late Answer.
After a hearing and careful review of the parties' submissions, the defendant's motion to set aside default is DENIED .
BACKGROUND
For purposes of the instant motion, this court accepts as true all well-pleaded factual allegations of the complaint, but disregards conclusions and characterizations asserted therein. See Sisson v. Lhowe, 460 Mass. 705, 706, 954 N.E.2d 1115 (2011); Welch v. Sudbury Youth Soccer Ass'n, 453 Mass. 352, 354, 901 N.E.2d 1222 (2009); Eyal v. Helen Broadcasting Corp., 411 Mass. 426, 429, 583 N.E.2d 228 (1991). The facts alleged in the complaint are set forth as follows, only insofar as they relate to the instant motion.
In February 2009, Gianasmidis retained Russo & Minchoff's legal services in a lawsuit against his sister and brother-in-law in Suffolk Superior Court. The plaintiffs provided Gianasmidis legal services pursuant to two client fee agreements. Under the " 2009 Client Fee Agreement, " Gianasmidis agreed to pay for Minchoff's legal services at a reduced hourly rate, which was to be credited against a 33.3% contingency fee in the event of a recovery. Fee disputes were to be settled by arbitration. Sometime prior to trial, Gianasmidis requested that Kuzma, an attorney from another firm, be retained as Minchoff's co-counsel. Gianasmidis and the plaintiffs then entered into the " 2011 Client Fee Agreement, " which provided for a 40% contingency fee in the event of recovery. After the trial concluded, a jury rendered a verdict in Gianasmidis's favor. In December 2013, Gianasmidis reached a settlement with the defendants in that case in which they conveyed three properties in Roslindale, MA to him: 37-39R Farquhar Street, 4412 Washington Street, 74 Birch Street as well as a property in Greece.
Gianasmidis et al. v. Palangas et al., Suffolk Superior Court, Docket No. 2007-05442.
Subsequently, Gianasmidis failed to appear at Minchoff's office for a scheduled appointment; since then he has mostly failed to return her telephone calls and emails. Once she reached him, he insisted that the contingent fee should be the 33.3% rate provided for by the 2009 Client Fee Agreement, rather than the 40% fee provided in the 2011 Client Fee Agreement. Gianasmidis has not paid Minchoff or Kuzma under either agreement.
On June 27, 2014, the plaintiffs filed a complaint setting forth claims for breach of contract (count I) and injunctive relief (count II). At 3:00 p.m. on July 2, 2014, Suffolk County Deputy Sheriff Michael Finn served the Summons & Restraining Order & Complaint (" Summons") by " leaving [it] at the last and usual place of abode of Savvas Gianasmidis, 37-39R Farquhar Street Roslindale, MA and by mailing [first] class to the above address on [July 3, 2014.]" The Summons stated that Gianasmidis was required to serve an answer to the complaint within twenty days of receiving the complaint and failure to do so would result in judgment by default for the relief demanded in the complaint. The Summons indicated that a hearing in the instant action would be held at the Suffolk County courthouse in courtroom 1015 on Monday, July 7, 2014, at 2:00 p.m. Gianasmidis did not file an answer or appear at the hearing.
On November 28, 2014, Kuzma filed a request for default upon the clerk of the court pursuant to Mass.R.Civ.P. 55(a). Almost seven months after the complaint was filed, on February 6, 2015, Gianasmidis filed the instant motion to set aside all defaults and file a late answer. On March 11, 2015, the clerk of the court entered default against Gianasmidis. Gianasmidis's Motion to Set Aside All Defaults and File a Late Answer was heard on April 14, 2015.
Mass.R.Civ.P. 55(b) provides " [w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter his default."
DISCUSSION
The question before this court is fairly straightforward: whether Gianasmidis has demonstrated good cause to set aside the entry of default. Massachusetts Rules of Civil Procedure Rule 55(a) provides that a defendant failing to answer a complaint in timely fashion shall be defaulted. Rule 55(c) provides that " [f]or good cause shown the court may set aside an entry of default and, if a judgment has been entered, may likewise set it aside in accordance with Rule 60(b)." Rule 55(c)'s good cause standard is applicable when the defaulting party seeks relief prior to the entry of default judgment. Broome v. Broome, 40 Mass.App.Ct. 148, 152, 662 N.E.2d 224 (1996). The court's decision on a motion to remove default is within " the sound discretion of the trial judge and will not be reversed on appeal save for abuse" of discretion. Cicchese v. Tape Time Corp., 28 Mass.App.Ct. 72, 74, 546 N.E.2d 384 (1989), citing Burger Chef Syss., Inc. v. Servfast of Brockton, Inc., 393 Mass. 287, 289, 471 N.E.2d 77 (1984) (noting deference given to the trial judge's decision " because he is the person most familiar with the circumstances of the case and is in the best position to evaluate the good faith and credibility of the parties").
It is well-settled that, in order to obtain relief from entry of default pursuant to Rule 55(c), the defaulting " party must show both a good reason to remove the default and also the existence of meritorious claims or defenses." Clamp-All Corp. v. Foresta, 53 Mass.App.Ct. 795, 806, 763 N.E.2d 60 (2002), citing Berube v. McKesson Wine & Spirits Co., 7 Mass.App.Ct. 426, 430-31, 388 N.E.2d 309 (1979). In determining if good cause exists, courts have considered whether the defaulting party's error is chargeable to the defaulting party's legal representative rather than to the defaulting party himself, whether the defaulting party deliberately or strategically disregarded procedural rules, and the potential prejudice to the opposing party. See Continental Data Corp. v. Old Colony Group Leasing, Inc., 1993 Mass.App.Div. 44, 46 (1993). In addition, a motion judge applying the good cause standard should consider a defaulted party's Rule 55(c) motion for removal in light of the promptness of the defaulting party's motion to vacate the default, the length of the resulting delay, the cause of the default, and the merits of the defaulted party's defenses to the plaintiff's claims. See e.g., Bissanti Design/Build Group v. McClay, 32 Mass.App.Ct. 469, 470, 590 N.E.2d 1169 (1992); Cicchese v. Tape Time Corporation, 28 Mass.App.Ct. 72, 74-75, 546 N.E.2d 384 (1989); Coady v. Stack, 1995 Mass.App.Div. 135, 136 (1995).
The court will not find good cause to set aside a default where the defendant's motion consists only of self-serving and conclusory statements. See e.g., Bissanti Design/Build Group, 32 Mass.App.Ct. at 470 (noting trial judge was not obliged to accept defendants' self-serving statement that they believed an answer had been filed or conclusory assertions that they had valid defenses); National Grange Mut. Ins. Co. v. Walsh, 27 Mass.App.Ct. 155, 157, 535 N.E.2d 1277 (1989); Coady, 1995 Mass.App.Div. at 136 (noting pro se party's " assertion of a lack of procedural information is at best unpersuasive given the specific guidance and advice provided by the court on several occasions").
Gianasmidis argues that he is entitled to relief pursuant to Mass.R.Civ.P. 60(b)(3) because the plaintiffs misrepresented facts regarding his intention to pay attorneys fees, communications regarding arbitration, and about when he was served a document. Gianasmidis also argues that relief should be granted pursuant to Mass.R.Civ.P. 60(b)(6) because he was not aware of the proceedings in the instant matter and was therefore unable to exercise his right to defend himself against the plaintiffs' claims. Gianasmidis fails to point to any authority indicating that this court should rely on the Mass.R.Civ.P. 60(b) standard rather than the Mass.R.Civ.P. 55(c) good cause standard. Accordingly, this court applies the good cause standard below. See MPV, Inc. v. Department of Revenue, 26 Mass.App.Ct. 932, 932, 525 N.E.2d 442 (1988) (" The distinction between the entry of a default under Mass.R.Civ.P. 55(a) . . . and a default judgment under rule 55(b) must be carefully observed"); Continental Data Corp., 1993 Mass.App.Div. at 45 (Rule 60(b) standard did not apply where no default judgment was entered).
Mass.R.Civ.P. 60(b) provides, in part, the following: " [o]n motion and upon such terms as are just, the court may relieve a party . . . from a final judgment, order, or proceeding for the following reasons: . . . (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party . . . or (6) any other reason justifying relief from the operation of the judgment."
II. Gianasmidis' Self-serving and Conclusory Statements
Self-serving and conclusory statements do not establish good cause. See Bissanti Design/Build Group, 32 Mass.App.Ct. at 470; National Grange Mut. Ins. Co., 27 Mass.App.Ct. at 157; Coady, 1995 Mass.App.Div. at 136. See also Hermanson v. Szafarowicz, 457 Mass. 39, 47, 927 N.E.2d 982 (2010) (motion judge was not bound to accept defendant's self-serving statement that the only notice he received of the lawsuit was a March 2007 judgment of dismissal of the plaintiff's complaint, and that he received no additional notice until the sheriff levied his property in August 2007), citing Scannell v. Ed. Ferreirinha & Irmao, LDA, 401 Mass. 155, 159, 514 N.E.2d 1325 (1987) (although corporation's affidavit stated it believed its insurer would defend lawsuit, judge could have inferred from record that corporation's reliance on insurer was unreasonable or that corporation did not rely on insurer).
Gianasmidis contends that he was not aware of the instant proceedings and was unable to exercise his right to defend himself against the plaintiffs' claims. Gianasmidis supports his argument by affidavit, asserting that he did not live at 37-39R Farquhar Street when service was made. He further asserts that he was unaware of the instant proceedings until he received the plaintiffs' December 2014 Request for Default because he moved frequently over " the past seven to eight months" without legally changing his address with the U.S. Post Office. This court does not credit Gianasmidis's self-serving statements because they are contradicted on many points by ample evidence in the record. See Bissanti Design/Build Group, 32 Mass.App.Ct. at 470; Coady, 1995 Mass.App.Div. at 136. Gianasmidis's self-serving statements are considered in detail as follows.
A. Gianasmidis' Allegations that He Moved
In an affidavit dated December 23, 2014, Gianasmidis alleges that he did not live at 37-39R Farquhar Street in Roslindale when Suffolk County Deputy Sheriff Michael Finn served the Summons & Restraining Order & Complaint at that address on July 2, 2014. Gianasmidis asserts that he lived at 3 Eliot Street, Brookline " [o]n or about April 23, 2014" when he filed for divorce from his wife in the Norfolk Family and Probate Court, where he remained until " on or about" April 26, 2014, when he moved to " 37-39 Farquhar Street." He asserts that he moved again " [o]n or about June 23, 2014, " to an apartment he owned at 74 Birch Street in Roslindale, where he resided until " [o]n or about the start of August 2014" when he moved to a single-family apartment at 37R Farquhar Street. Finally, at " the end of November 2014, " he moved to an apartment at " 37-39 Farquhar Street." As a result of moving between addresses, Gianasmidis also asserts in his affidavit that the plaintiffs' Request for Default was " the first any [sic] only document that I have received in relation to [the instant] matter from either Attorney Kuzma or Attorney Minchoff. I have received no other documents in relation to this matter at any of my addresses."
Savvas Gianasmidis v. Stephany Gianasmidis, Norfolk Probate and Family Court Department, Docket No. 14D-0543.
This court notes that, despite all of his alleged moves, Gianasmidis listed his address as 37-39 Farquhar Street on his April 29, 2014 divorce complaint.
This court does not credit Gianasmidis's allegations that he did receive service for the instant suit because he did not reside at Farquhar Street between " on or about" June 23, 2014 and " on or about" August 2014. See Bissanti Design/Build Group, 32 Mass.App.Ct. at 470; Coady, 1995 Mass.App.Div. at 136. This court does not accept this self-serving statement because Gianasmidis merely speculates about where he lived (he provides a range of addresses) and when he lived there (he provides a range of dates). In addition, his allegations are directly contradicted by the record because he was served at 37-39R Farquhar Street on July 18, 2014, for a separate lawsuit pending in the Superior Court, which he responded to by filing an affidavit in July 2014, and an answer in November 2014. Gianasmidis's assertions are unreasonable in light of the fact that he apparently received (and responded to) service made for another action at the same address on July 18, 2014.
Starikow v. Gianasmidis, Docket No. 2014-02293.
Moreover, even if he did not live at the address, emails in the record suggests he contacted the resident who did and was informed by her that she had mail for him, including mail from the Suffolk County Sheriff's department. Specifically, Gianasmidis emailed Maja Brewer, legal assistant and secretary at Russo & Minchoff, on July 7, 2014, at 12:36 p.m. and 6:32 p.m., stating the tenant at 37R Farquhar Street " for several years told me today that severL [sic] mail for me was In [sic] her mailbox" and " one of those was from Suffolk sheriff office[.]" These emails acknowledge that Gianasmidis at least received notice of the instant lawsuit. As previously noted, the Suffolk County Deputy Sheriff served the complaint at that address on July 2, 2014 and mailed a second copy to that address the next day.
B. Notice of July 7, 2014 Hearing
The Summons served at 37-39R Farquhar Street indicated that a hearing would be held on Monday, July 7, 2014. Gianasmidis's December 2014 affidavit alleges that " [o]n or about the beginning of July, I received a strange email from an administrative assistant of Attorney Minchoff, who informed me that the room for the hearing had changed. I replied that I was not aware of any hearing and to please explain. No further explanation was given." Gianasmidis also asserts that he first received service for the instant action on December 2, 2014, when he received the plaintiffs' Request for Default. This court concludes that the affidavit is directly contradicted on these points by emails exchanged between Gianasmidis and Russo & Minchoff's staff as discussed below.
Gianasmidis is an attorney, BBO #630479, admitted to practice in the Commonwealth on March 5, 1996. The record indicates a substantial likelihood that Gianasmidis made false statements that he did not receive notice of the hearing. Because of the obligation imposed on this court by Supreme Judicial Court Rule 3:09, a copy of this decision is being sent to the Board of Bar Overseers. Supreme Judicial Court Rule 3:09(D)(2) (" A judge having knowledge of facts indicating a substantial likelihood that a lawyer has committed a violation of the Rules . . . rais[ing] a significant question as to that lawyer's honesty, integrity, trustworthiness, or fitness as a lawyer shall inform the Bar Counsel's office of the Board of Bar Overseers"); see also Commentary (" a judge must report lawyer misconduct that, if proven and without regard to mitigation, would likely result in an order of suspension or disbarment, including knowingly making false statements of fact or law to a tribunal").
The " strange email" Gianasmidis acknowledges receiving was sent by Brewer on July 3, 2014, at 4:41 p.m. Brewer's email advised Gianasmidis that the Monday, July 7, 2014 hearing would be held " in the Suffolk Superior Court, B session, Courtroom 306, and not Courtroom 1015 as listed in the original notice." Gianasmidis replied later that night, at 6:54 p.m., stating " I have no idea of an [sic] hearing. Please elaborate."
The subsequent email exchange between Brewer and Gianasmidis flatly contradicts Gianasmidis's assertion that " [n]o further explanation was given" following his inquiry about the hearing. Brewer replied to Gianasmidis's email on July 7, 2014, at 10:53 a.m., stating " [t]he hearing that is scheduled for 2:00 p.m. today is in regards to the Complaint that was filed by Russo & Minchoff and Stephen J. Kuzma against you. The hearing is with respect to the equitable relief attachment." Gianasmidis replied at 11:38 a.m., asserting that he " received no notice . . . As [Kuzma] knows I have been temporarily residing at 74 birch street #3 roslindale ma 02131 [sic] since mid June 2014. I can not [sic] attend the hearing today. Please reschedule with appropriate notice." This court concludes that these emails conclusively show that Gianasmidis received notice of the date, time, location, and substance of the hearing and related complaint on July 7, 2014.
In sum, this court concludes Gianasmidis received notice of the instant suit as early as July 3, 2014. This court is not inclined to credit Gianasmidis's affidavit insofar as its assertions are contradicted by the record.
II. Berube Factors
In order to obtain relief from the entry of default, a defaulting " party must show both a good reason to remove the default and also the existence of meritorious claims or defenses." Clamp-All Corp., 53 Mass.App.Ct. at 806, citing Berube, 7 Mass.App.Ct. at 430-31. Courts have considered the Berube factors applicable to Mass.R.Civ.P. 60(b) in their analysis without explicitly citing Berube . See e.g., Bissanti Design/Build Group, 32 Mass.App.Ct. at 470; Cicchese, 28 Mass.App.Ct. at 74-75; Coady, 1995 Mass.App.Div. at 136; Continental Data Corp., 1993 Mass.App.Div. at 46. In Berube, the Court noted that trial courts must consider the following six factors when reviewing action on motions for relief from default judgment:
This court notes at least one decision applying the Berube factors to an entry of default. United Cas. & Sur. Ins. Co. v. Diminico Elec., (1996) (Sikora, J.) (" The same elements apply to a motion to set aside a default as to a motion for vacating a default judgment under Mass.R.Civ.P. 60(b)(1)"), citing Smith & Zobel, Rules Practice § 55.8 (1988).
(1) whether the offending party has acted promptly after entry of judgment to assert his claim for relief therefrom; (2) whether there is a showing either by way of affidavit, or otherwise apparent on the record, that the claim sought to be revived has merit; (3) whether the neglectful conduct occurs before trial, as opposed to during, or after the trial; (4) whether the neglect was the product of a consciously chosen course of conduct on the part of counsel; (5) whether prejudice has resulted to the other party; and (6) whether the error is chargeable to the party's legal representative, rather than to the party himself; for the courts have been reluctant to attribute to the parties the errors of their legal representatives.Berube, 7 Mass.App.Ct. at 430-31, internal quotation and citation omitted. These factors reflect a conscientious, equitable balancing of the parties' competing interests with the court's administrative concerns, and the ultimate disposition of the motion consistent with the rules' procedural requirements and underlying policies. See MPV, Inc., 26 Mass.App.Ct. at 932. This court concludes that the Berube factors weigh against Gianasmidis.
The promptness of the defaulting party's response and whether the party presents a meritorious claim or defense--the first two Berube factors--are the most important factors in a Rule 55(c) good cause determination. See Cicchese, 28 Mass.App.Ct. at 75. These factors weigh heavily against Gianasmidis. Turning to the first factor, Gianasmidis failed to promptly assert his claim for relief after receiving notice of the default. See id. at 74-75 (no good cause where defendants waited nine months to answer, six months to respond to entry of default). Notably, Gianasmidis has yet to file a proposed answer to the complaint despite receiving notice of the instant suit as early as July 3, 2014. Additionally, the instant motion was filed on February, 6, 2015, over two months after Gianasmidis states he received the plaintiffs' request for default. Concerning factor two, Gianasmidis has not shown that his claim has merit. As discussed above, this court is disinclined to credit Gianasmidis's speculative and contradictory affidavit. Likewise, his motion does not cite any legal authorities suggesting he is entitled to relief from entry of default. In contrast, it is undisputed that he did not pay the plaintiffs their contingency fees under either of the client fee agreements. See Kenney v. Rust, 17 Mass.App.Ct. 699, 702, 462 N.E.2d 333 (1984) (defaulting party's unpersuasive showing appeared disingenuous in light of plaintiff's uncontroverted affidavit).
Gianasmidis only cites to Mass.R.Civ.P. 60(b), but he does not cite any authority stating that rule provides the applicable standard this court should apply.
Three of the four remaining Berube factors also weigh against Gianasmidis. Given that Gianasmidis failed to answer even after directly responding to Brewer's email reminders regarding the July 2014 hearing, his wrongful conduct appears to be wholly the product of his own doing (factors four and six). Finally, at factor five, this court notes that the plaintiffs would be prejudiced if the instant action was revived because Gianasmidis failed to respond to the complaint despite receiving notice as early as July 3, 2014, and has attempted to convey two properties--assets he recovered due to the representation of the plaintiffs and subject to the relief they seek--since he received notice of the instant case.
In April 2014, Gianasmidis listed two properties for sale, 4412 Washington Street and 74 Birch Street, which were part of the settlement he reached when the plaintiffs represented him and he subsequently signed an offer to purchase the properties. Despite his apparent knowledge of the instant case, on November 25, 2014, Gianasmidis filed a motion in the Probate and Family Court in his divorce action to sell the properties. The plaintiffs' instant claim for injunctive relief (count II) seeks a temporary restraining order preventing Gianasmidis from conveying the properties.
Gianasmidis's wrongful conduct--his failure to answer the complaint--occurred prior to any trial (factor three), and thus it does not weigh against him.
CONCLUSION AND ORDER
For the reasons described above, the Defendant's Motion to Set Aside All Defaults and for Leave of Court to File a Late Answer is DENIED . The assessment hearing remains scheduled for May 19, 2015 at 2:00 p.m.