Opinion
14-P-1897
03-01-2016
TORRANCE VAN & STORAGE COMPANY v. ROBERT J. DEPIETRI, JR., & others.
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
Originally, a dispute over a "build to suit" lease contract led to an action, filed in 2001 in the Superior Court, by the plaintiff-lessee, Torrance Van & Storage Company (Torrance), against the lessor, Lyman Development Realty Trust (trust), a nominee trust. Torrance alleged in that action that the trust had not delivered the leased space (located in Northborough) in a condition suitable for occupancy by the agreed-to date set forth in their contract. A jury found for Torrance, as did the trial judge, who found that the trust had violated G. L. c. 93A, § 11, by improperly retaining Torrance's security deposit. The correctness of the jury's verdict and the trial judge's c. 93A decision in the 2001 action are not challenged in the present appeal before us.
"A nominee trust is commonly used in the Commonwealth as a surrogate means to hold legal title to real estate." Greenleaf Arms Realty Trust I, LLC v. New Boston Fund, Inc., 81 Mass. App. Ct. 282, 284 n.6 (2012).
Rather, the present controversy stems from a subsequent civil action initiated in 2008 by Torrance, also in the Superior Court, against the three individual beneficial owners of the trust, who allegedly had authorized a sale of the trust's Northborough real estate, prior to the jury returning their verdict but after a judge in the 2001 action had issued a prejudgment order for an attachment in favor of Torrance against the subject real estate, as security for a potential money judgment.
At the conclusion of a bench trial in the 2008 action, a different judge, on the basis of detailed written findings of fact, ruled that the defendants, Robert J. DePietri, Jr., David P. DePietri, and Marcello Mallegni had not violated G. L. c. 93A, § 11, by selling the subject real estate. The judge concluded that by virtue of the fact that Torrance had caused to be recorded at the registry of deeds a defective writ, which failed to properly identify the trust (or refer to its trustee, Robert J. DePietri, Jr.), this recording deficiency was the cause of any loss incurred by Torrance in the case. We concur.
To frame the legal issues on appeal, we describe briefly each of the civil actions and why the two, though related in a general sense, are independent of one another. Torrance has not shown that the judge's findings of fact in the 2008 action are, in any material respect, clearly erroneous. Mass.R.Civ.P. 52(a), as amended, 423 Mass. 1402 (1996). Accepting those written fact-based findings, as we must, we perceive no reason to disturb the judge's connected legal rulings, applied to the facts so found. See Andover Hous. Authy. v. Shkolnik, 443 Mass. 300, 306 (2005).
Background. 1. 2001 action. In its original action, Torrance sought to recover its paid security deposit and liquidated damages related to the late delivery of the leased commercial space. Prejudgment, a motion judge granted Torrance's request for a real estate attachment, in the sum of $150,000, against the Northborough real estate held nominally by the trust. Torrance, in turn, recorded a writ of attachment at the county registry of deeds. However, in its pleadings and court filings, including the writ itself, Torrance incorrectly identified the trust as the "Lyman Street Development Realty Trust" (emphasis added). In addition, and perhaps more importantly, the writ failed to identify the trustee of the trust. As a result, the writ, when recorded at the registry, did not appear in the chain of title for the real estate.
a. Sale of property. Robert J. DePietri, Jr., as trustee of the trust, and as authorized and directed by a majority of the beneficial owners, David P. DePietri and Marcello Mallegni, sold the real estate in 2002 to a third party and disbursed the sale proceeds, all without notice to Torrance. Just prior to the time the case was submitted to the jury, the trust's trial counsel informed Torrance of the real estate sale. Torrance demanded that the trust pledge other security. The trust refused.
b. Jury verdict and judge's c. 93A ruling. On February 1, 2005, the jury returned a verdict in favor of Torrance on its contract and tort claims, and awarded Torrance $132,417.66 against the trust. On January 31, 2006, the trial judge ruled that the trust, by improperly retaining Torrance's deposit (among other conduct), had committed an unfair and deceptive practice, in violation of G. L. c. 93A, and ordered that the trust pay reasonable attorney's fees and related costs incurred by Torrance. Ultimately, the trial judge awarded Torrance $60,837.75, in attorney's fees and costs, pursuant to G. L. c. 93A, § 11.
c. Postverdict proceedings. After the verdict and the c. 93A ruling, the trial judge granted Torrance leave to conduct discovery of the factual circumstances surrounding the sale of the trust property. Torrance then deposed Robert J. DePietri, Jr., and David P. DePietri, who, in one form or another, confirmed that all three beneficial owners had authorized the sale and had received some portion of the net sale proceeds. Further proceedings ensued, including an injunction issued by the trial judge against Robert J. DiPietri, Jr., who was enjoined from conveying or transferring any real estate in which he had an interest.
Unlike a traditional trust, the trustee of a nominee realty trust lacks power to act unless directed by the beneficiaries. See Roberts v. Roberts, 419 Mass. 685, 688 (1995); Worcester v. Sigel, 37 Mass. App. Ct. 764, 768 (1994).
2. 2008 action. In 2008, Torrance filed a new action in the Superior Court naming Robert J. DePietri, Jr., David P. DePietri, and Marcello Mallegni as defendants. A judge, acting on the defendants' motions for summary judgment, dismissed Torrance's fraud, civil conspiracy, and fraudulent conveyance claims as time-barred. Torrance's remaining claim, for relief under G. L. c. 93A, was the subject of a bench trial before a different judge. At the conclusion of the evidence, the judge ruled that Torrance had failed to establish a c. 93A violation. In essence, the judge concluded that the writ of attachment had identified the wrong entity, a misnomer, and thus, the writ had no legal effect. The judge ruled that Torrance had not presented sufficient evidence to prove that the individual defendants were aware of the misnomer until after the sale had occurred, and, based on this evidentiary shortcoming, the judge determined that the defendants had not acted in an unfair or deceptive manner actionable under G. L. c. 93A. Compare Doliner v. Brown, 21 Mass. App. Ct. 692, 698 (1986) (statute does not enact a rule of noblesse oblige). Torrance appeals from the final judgment entered in favor of the defendants.
The judge ruled:
"On the evidence presented at this jury waived trial, the plaintiff has not set forth sufficient evidence to meet the requirements of M.G.L. c. 93A, § 11. The plaintiff has not shown that any of the three named defendants were affirmatively aware of the misnomer of the realty trust in the original complaint. In addition while the three defendants were generally aware that a real estate attachment had issued from the trial court, none of the defendants were shown to have known that the real estate attachment had been recorded at the Registry of Deeds. Further, the evidence establishes that the real estate attachment obtained by the plaintiff was defective. That is the plaintiff had available to it ready information to establish the book and page number of the trust document and the correct legal name of the trust. The plaintiff in obtaining the real estate attachment and thereafter in recording the real estate attachment failed to name the trustee on the attachment and failed to name the proper legal name for the real trust. The defendants have no legal obligation to bring those deficiencies to the attention of the plaintiff in the course of a civil litigation."
Among its claims of error, Torrance argues that the trial judge erred in focusing on the misnomer problem and neglected to apply prior decisions of the trial judge in the original 2001 action and the motion judge in the 2008 action, to the effect that the individual defendants had violated c. 93A by knowingly selling real estate that they knew was subject to an attachment.
Discussion. 1. Judicial estoppel. To the extent that Torrance asserts that the defendants should be judicially estopped from denying that they knew that the real estate was subject to attachment -- an argument that Torrance raises in various forms but without identifying how the doctrine's legal requirements were met or even addressed at trial -- its legal contention is misplaced. Further, since Torrance has not shown that the trial judge's detailed written findings of fact are clearly erroneous, it follows that the subject real estate was not subject to an attachment, because the attachment was technically defective.
Torrance further contends that its failure to perfect its security should for some reason be excused, apparently because, again, the defendants knew that the attachment was technically deficient but nonetheless deliberately failed to inform Torrance of this fact. The argument is foreclosed by the trial judge's factual findings, and it has not been shown why the defendants bore a duty to inform Torrance that its attachment was defective.
2. Time-barred claims. Torrance asserts that it was error to dismiss, as time-barred, its fraud, civil conspiracy, and fraudulent conveyance claims. Torrance argues that the controlling limitations period did not commence running in February, 2005, when it learned that the real estate had been sold. Torrance's argument is premised on the theory that its harm did not accrue in February of 2005, upon discovery of the sale, but only after the jury had returned their verdict and the trial judge in the 2001 action had issued his c. 93A decision in January, 2006, in Torrance's favor. Torrance maintains that when combined, the verdict and decision resulted in a conclusive judgment that the trust could not satisfy, because it had insufficient means to do so. Torrance also argues that the individual defendants' "wrong" in authorizing the sale was a continuing one insofar as the defendants had a legal duty to provide other security to cover the judgment. We disagree. The defendants had no duty to post other security. Nor has it been shown that the motion judge erred in ruling that Torrance's claims of fraud, civil conspiracy, and fraudulent conveyance all accrued as of February, 2005, when it learned of the sale of the real estate. Szymanski v. Boston Mut. Life Ins. Co., 56 Mass. App. Ct. 367, 369 & n.3 (2002) (limitations period runs from date when plaintiff has learned or reasonably should have learned that it has been harmed, not when plaintiff is aware of extent of precise measure of harm).
Torrance also argues that the present case should have been consolidated with the original 2001 action and that, had this been allowed, Torrance's claims would have "related back" to the original 2001 filing date. Similarly, Torrance suggests that the present case amounts, in effect, to nothing more than a "reach and apply" claim in the underlying 2001 action and, thus again, its present claims relate back to the original 2001 filing date. We disagree for the simple reason that the second case, filed in October, 2008, could not be consolidated with a separate case, which for all practical purposes was concluded in 2005. Even if consolidation could have been ordered, the challenged conduct at issue in the 2008 action (i.e., sale of the "attached" property) does not relate to the conduct at issue in the 2001 action (i.e., breach of a lease). In addition, since the more recent claims were not timely raised, we cannot conclude that it was an abuse of discretion on the part of the judge to refuse to consolidate the two cases.
Torrance also raises an essentially equitable argument to the effect that that the trial judge should have exercised his "inherent powers" to prevent a fraud on the court, so as to avoid the statute of limitations problem. The trial judge, in the 2008 case, by making the findings that he did, in effect foreclosed any suggestion that the defendants had committed a fraud on the court or otherwise performed any acts or omissions that would justify the exercise of the judge's inherent powers to accomplish justice.
Finally, Torrance's challenge to the judgment on its G. L. c. 93A claim fails by reason of the factual finding of the trial judge, which is supported by the record and is not clearly erroneous, that, though the defendants were aware that a judge in the 2001 action had authorized the filing of an attachment against the real estate, by reason of the deficiencies in the attachment Torrance filed the defendants were not aware at the time they sold the property that any attachment actually had been filed.
Judgment dated June 25, 2012, affirmed.
By the Court (Green, Vuono & Meade, JJ.),
The panelists are listed in order of seniority. --------
/s/
Clerk Entered: March 1, 2016.