Opinion
No. 14–P–1953.
05-13-2016
Jasmohan SINGH and another v. Jang Bahadur SINGH.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This appeal arises from a dispute over the enforcement of a settlement agreement (agreement) between the plaintiffs, Jasmohan Singh and Jasleen Kaur, and their uncle, the defendant, Jang Bahadur Singh. On appeal, the defendant argues that he was fraudulently induced to sign the agreement and that the plaintiffs have unclean hands and therefore are not entitled to the equitable relief of specific enforcement. We affirm.
Background. On November 17, 2011, Jasmohan Singh filed a complaint and an ex parte motion for a temporary restraining order in the Probate and Family Court against the defendant. The complaint alleged that the defendant withheld certain assets from Jasmohan Singh and other family members, that were intended to be held in trust, in the form of bank accounts held in the United States and shares of stock in Frick India, Ltd. (Frick) held by the defendant in India. The probate judge denied Jasmohan Singh's motion for a preliminary injunction. In this posture, at the defendant's initiation, the parties entered into the agreement. The plaintiffs agreed to dismiss the probate action, execute mutual releases, and indemnify the defendant against any related claims brought by the plaintiffs' mother. The defendant agreed to transfer certain of the assets and one-half of his Frick shares to the plaintiffs and other family members.
After fruitless discussions regarding how to effectuate the shares' transfer, the plaintiffs filed suit in the Superior Court seeking to enforce the agreement. On cross motions for summary judgment, the motion judge found that the agreement was a “valid and enforceable contract under Massachusetts law” and “supported by a valid and legally appropriate consideration.” Judgment did not enter in favor of the plaintiffs, however, because the judge found that the defendant's argument regarding illegality under Indian law created a disputed issue of material fact.
In the meantime, the parties engaged in litigation and other administrative proceedings in India between October, 2012, and February, 2014, regarding the Frick shares' transfer and other issues. After a second round of cross motions for summary judgment, the motion judge held that the agreement was valid under Indian law, and judgment entered for the plaintiffs.
Discussion. 1. Standard of review. “We review a grant of summary judgment de novo.” Miller v. Cotter, 448 Mass. 671, 676 (2007). Where, as here, “both parties have moved for summary judgment, the evidence is viewed in the light most favorable to the party against whom judgment is to enter.” Albhari v. Zoning Bd. of Appeals of Brewster, 76 Mass.App.Ct. 245, 248 n. 4 (2010). “The court does not pass upon the credibility of witnesses or the weight of the evidence [or] make [its] own decision of facts.” Shawmut Worcester County Bank, N.A. v. Miller, 398 Mass. 273, 281 (1986) (quotation omitted). The moving party may satisfy its burden either by submitting affirmative evidence that negates an essential element of the opposing party's case or by demonstrating that the opposing party has no reasonable expectation of proving an essential element of its case at trial. Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). “We may affirm the entry of summary judgment on any ground supported by the record.” Molina v. State Garden, Inc., 88 Mass.App.Ct. 173, 177 (2015).
2. Fraudulent inducement and parol evidence. The defendant argues that the motion judge erred in allowing summary judgment for the plaintiffs where the defendant established a material factual dispute based on fraudulent inducement. The defendant alleges two kinds of fraudulent statements and omissions: that Jasmohan Singh (1) was to pay monetary consideration for the Frick shares' transfer after conducting research on Indian law regarding the transfer, and (2) concealed the scope of his mismanagement of Frick.
The plaintiffs assert, and the defendant acknowledges, that he failed to plead fraudulent inducement, an affirmative defense, in his answer in contravention of both Mass.R.Civ.P. 8(c), 365 Mass. 749 (1974) (party shall set forth defenses, including fraud, affirmatively in responsive pleadings), and Mass.R.Civ.P. 9(b), 365 Mass. 751 (1974) (fraud must be pleaded with particularity). Demoulas v. Demoulas, 428 Mass. 555, 575 n. 16 (1998). See Anthony's Pier Four, Inc. v. HBC Assoc., 411 Mass. 451, 471 (1991). The defendant argues instead that we should consider this argument on the merits because the plaintiffs have been on notice of his fraud defense since 2012. Because the motion judge addressed it, we consider it on the merits. See Demoulas, supra.
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“A settlement agreement is a contract and its enforceability is determined by applying general contract law.” Sparrow v. Demonico, 461 Mass. 322, 327 (2012). “To establish fraud in the inducement, and thereby be relieved of the effect of [the agreement, the defendant] was required to establish the elements of common deceit, ... which include ‘misrepresentation of a material fact, made to induce action, and reasonable reliance on the false statement to the detriment of the person relying.’ “ Commerce Bank & Trust Co. v. Hayeck, 46 Mass.App.Ct. 687, 692 (1999), quoting from Hogan v. Riemer, 35 Mass.App.Ct. 360, 365 (1993). Here, in order to survive summary judgment on the affirmative defense of fraudulent inducement, the defendant was required to bring forth evidence showing that Jasmohan Singh made material misrepresentations intended to induce the defendant to sign the agreement. See Kourouvacilis, 410 Mass. at 716 ; Hayeck, supra .
As for the claim that the plaintiffs agreed to a monetary payment for the shares, the defendant attempts to add a term to an unambiguous contact. This we will not do. Although parol evidence is not barred where a contract was induced by fraud, McEvoy Travel Bureau, Inc. v. Norton Co., 408 Mass. 704, 711 n. 5 (1990), that is not the case where, as here, the defendant's allegations that the parties made oral promises prior to signing the agreement are contradicted by the unambiguous terms of the agreement. The one-page agreement sets forth what each side is required to do in consideration of performance by the other. The agreement specifies that the defendant shall transfer the shares to the plaintiffs (and other family members not involved in this action) and contains no provision requiring that the plaintiffs pay monetary consideration in exchange for the transfer of the shares. The defendant himself admits that he received consideration in the agreement—he obtained dismissal of the probate action with prejudice, a promise of “mutual releases as to the subject matter” of the probate litigation, and indemnity in the event that the plaintiffs' mother brought a similar suit herself. See Amerada Hess Corp. v. Garabedian, 416 Mass. 149, 155 (1993) (“[W]here the agreement of two contracting parties has been put in an unambiguous written form that the parties consider as the final this final form is the contract and, therefore, evidence of negotiations leading up to this final form of the contract is immaterial” [quotation omitted] ).
As for the alleged corporate malfeasance, the defendant admitted that he was aware of the alleged mismanagement prior to signing the agreement. He chose not to address that issue in the agreement, and he cannot show that his ignorance of Jasmohan Singh's management of Frick induced him to enter into the agreement. See Hayeck, 46 Mass.App.Ct. at 693.
3. Unclean hands. The defendant contends that the motion judge erroneously rejected his argument that the agreement should not be enforced due to Jasmohan Singh's inequitable conduct. We disagree. “The doctrine of unclean hands denies equitable relief ‘to one tainted with the inequitableness or bad faith relative to the matter in which [he] seeks relief.’ “ Murphy v. Wachovia Bank of Delaware, N.A., 88 Mass.App.Ct. 9, 15 (2015), quoting from Fidelity Mgmt. & Research Co. v. Ostrander, 40 Mass.App.Ct. 195, 200 (1996). To the extent the defendant makes arguments based on pre-agreement conduct of which he was aware when he signed the agreement, his argument fails for the reasons already stated. On appeal, the defendant argues that the motion judge misunderstood his claim and that it was Jasmohan Singh's postagreement conduct—his proposals for how to accomplish transfer of the shares and misrepresentations to Indian authorities—that constituted the alleged inequitable conduct. To the extent the defendant is raising claims involving misconduct under Indian law or before Indian authorities, he should seek legal redress in India. He now concedes that he does not challenge the legality of the shares' transfer under Indian law. Jasmohan Singh's efforts to get the defendant to fulfill his obligations under the agreement and possibly assist the plaintiffs in minimizing the tax consequences of the agreement in India do not amount to unclean hands that would bar enforcement of the agreement. See Garabedian, 416 Mass. at 156 (“In order to deny relief to a party because of inequitable conduct, the conduct at issue must directly affect the claim being brought”). As such, no triable issues remained and the plaintiff's motion for summary judgment was properly allowed. See Kourouvacilis, 410 Mass. at 716.
4. Plaintiffs' motion for appellate attorney's fees. The plaintiffs' request for an award of appellate attorney's fees and costs is allowed. In accordance with Fabre v. Walton, 441 Mass. 9, 10–11 (2004), the plaintiffs may, within fourteen days of issuance of this decision, submit an application for attorney's fees and costs with the appropriate supporting materials. The defendant shall have fourteen days thereafter to file a response to that application.
Judgment affirmed.