CONSTRUCTION SOURCE MANAGEMENT, LLC v. BELLE FLEUR HOLDINGS, LLC, & Another.

• Court: Massachusetts Appeals Court
• Decided: November 25, 2025
• Docket: 25-P-0071
• Status: Unpublished

Opinion

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as 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 23.0 or 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).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

25-P-71

CONSTRUCTION SOURCE MANAGEMENT, LLC

vs.

BELLE FLEUR HOLDINGS, LLC, & another.1

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

This action arises from the initial stages of land

development and construction of a marijuana cultivation

facility. After arbitration resulted in a significant monetary

award to Construction Source Management, LLC (CSM), for breach

of contract, defendants Belle Fleur Holdings, LLC (Holdings),

and Belle Fleur Realty, LLC (Realty), unsuccessfully sought

summary discharge of the mechanic's lien placed on the disputed

property and to pursue counterclaims against CSM and its manager

as a third-party defendant. A judgment entered confirming the

arbitration award, a judgment on the pleadings entered

1 Belle Fleur Realty, LLC. dismissing the counterclaims and third-party complaint, and an

order entered denying the motion for summary discharge. The

defendants now appeal from that order and from so much of the

judgment on the pleadings that dismissed Realty's counterclaim

for slander of title.2 We affirm.

Background. In the spring of 2021, CSM agreed to build a

marijuana cultivation facility for Holdings.3 A short time

before CSM began work on the facility, Holdings executed a

quitclaim deed granting the underlying property to Realty, for

no consideration, without informing CSM.4 Partway into the

project, Holdings began having difficulty securing funding to

continue paying for construction. CSM submitted seven bills to

Holdings -- the first two were paid in full while the remaining

five went unpaid. Shortly thereafter, CSM ceased work, filed a

notice of contract to establish a mechanic's lien against the

property pursuant to G. L. c. 254, § 2, and initiated a lawsuit

2 The notice of appeal also identifies the judgment confirming the arbitration award, but these are the only issues argued in the brief.

3 The project was to be built on a parcel of land in Blandford. The building itself was to be sited at least one hundred feet above the main road, requiring CSM to install a long roadway at a steep grade. Once its employees began work, it became clear that the original design for the road would be inadequate, necessitating a change in the scope of work.

4 At the time of the conveyance, Realty was managed by two of Holdings' owners.

2 against both defendants for breach of contract. The defendants

filed counterclaims against CSM and its manager alleging, among

other things, that CSM and its manager had committed fraud and

there was never any contract between the parties. After an

evidentiary hearing in the Superior Court, a judge determined

that a binding contract existed between CSM and Holdings and

allowed CSM's motion to compel arbitration.

The arbitrator conducted a hearing and, over the course of

three days, considered 165 exhibits and the testimony of five

witnesses. The owners of Holdings attended the arbitration but

did not testify. The arbitrator found that Holdings breached

its contract with CSM and awarded damages to CSM. A different

judge of the Superior Court entered an order confirming the

arbitration award by the parties' agreement. Subsequently, CSM

moved to dismiss the defendants' counterclaims. The defendants,

in turn, moved to dissolve CSM's mechanic's lien on the property

and opposed the motion to dismiss its counterclaims. A third

judge (motion judge) allowed CSM's motion, dismissing all

counterclaims, and denied the defendants' motion to dissolve the

lien. The defendants appealed and claim error only in the

dismissal of Realty's slander of title counterclaim and the

denial of their motion dissolve the mechanic's lien.

3 Discussion. 1. Slander of title. Slander of title is a

particular type of injurious falsehood involving the

"disparagement of the property in land, chattels, or intangible

things." Tenants' Dev. Corp. v. AMTAX Holdings 227, LLC, 495

Mass. 207, 224 (2025), quoting Restatement (Second) of Torts

§ 624 comment (1977). In order to prevail on a claim for

injurious falsehood a party must show that the other party

publishes a false statement and "(a) . . . intends for

publication of the statement to result in harm to the interests

of the other having a pecuniary value, or either recognizes or

should recognize that it is likely to do so, and (b) . . . knows

that the statement is false or acts in reckless disregard of its

truth or falsity." Id., quoting Dulgarian v. Stone, 420 Mass.

843, 852 (1995). We note that this case presents an uncommon

theory of slander of title in which Realty claims CSM slandered

Realty's title to intangible property -- the ability of Realty

to obtain future financing -- by falsely claiming that it

entered into a written contract with Realty.

"We review the grant of a motion to dismiss de novo,

accepting as true all well-pleaded facts alleged in the

complaint, drawing all reasonable inferences therefrom in the

plaintiff's favor." Lanier v. President & Fellows of Harvard

College, 490 Mass. 37, 43 (2022). "In assuming the facts as

4 alleged, however, '[w]e do not regard as "true" legal

conclusions cast in the form of factual allegations'" (citation

omitted). Edwards v. Commonwealth, 477 Mass. 254, 260 (2017),

S.C., 488 Mass. 555 (2021). "To survive a motion to dismiss,

the facts alleged must plausibly suggest[] (not merely be

consistent with) an entitlement to relief" (quotations omitted).

Id., quoting Iannacchino v. Ford Motor Co., 451 Mass. 623, 636

(2008).

As a threshold matter, the previous evidentiary hearing and

arbitration decision have preclusive effect on many facts

alleged in the defendants' counterclaim.5 Accordingly, we do not

accept the precluded allegations as true for purposes of our

review. We do not accept as true, for example, any allegation

that CSM engaged in fraudulent or deceptive behavior, as these

5 Although Realty was not party to the arbitration, it was in privity with Holdings because its interests were aligned in, for example, attempting to prove that CSM was not owed any money by either party. See DeGiacomo v. Quincy, 476 Mass. 38, 43-44 (2016) ("whether a nonparty is in privity with a party depends on the nature of the nonparty's interest, whether that interest was adequately represented by a party to the prior litigation, and whether binding the nonparty to the judgment is consistent with due process and common-law principles of fairness"). Where Realty and Holdings litigated as a single unit, were represented by the same counsel, and had overlapping ownership and management, we are satisfied that their interests were sufficiently aligned to fairly preclude relitigation of the facts found by the arbitrator. Furthermore, they do not appeal from the motion judge's determination that Realty was in privity with Holdings for purposes of their other counterclaims.

5 claims were found to be unsubstantiated. We also note that the

arbitrator interpreted the construction contract between CSM and

Holdings and determined that CSM was not paid the nearly $2.3

million it was due.6 Therefore, to the extent that Realty's

claim of slander of title could be based on allegations that CSM

acted fraudulently in procuring a signed written contract for

its services, these facts have already been determined to

Realty's detriment. In examining the remainder of the facts

alleged in Realty's counterclaim, the only remaining factual

allegation that could possibly form the basis for Realty's

slander of title claim is the allegation that CSM's statement of

account "falsely claimed that BF Realty owed $2,294,038.80 to

CSM under the terms of the non-existent contract between CSM and

BF Realty."7

Specifically, in the defendants' counterclaim, they

summarily allege that CSM published its statement of account

with knowledge or reckless disregard of its falsity. We need

not accept this legal conclusion, which merely restates the

6 We note that the arbitrator adjusted the contractual damages downward from this point, but it is undisputed that this was the amount owed under the contract.

7 The publication of the mere assertion that CSM had a contract with Realty was unlikely to harm Realty's finances. Accordingly, it is the claimed false assertion that Realty owed a significant amount of money to CSM that must form the basis of the slander of title.

6 element to be proven, as true. See Schaer v. Brandeis Univ.,

432 Mass. 474, 479 (2000) ("It is only when . . . conclusions

are logically compelled, or at least supported, by the stated

facts, that is, when the suggested inference rises to what

experience indicates is an acceptable level of probability, that

'conclusions' become 'facts' for pleading purposes" [citation

omitted]). Accordingly, we look to the remainder of the

defendants' allegations to support the inference that CSM knew

or should have known that Realty owed it nothing. Our review of

the defendants' own factual allegations, however, does not

support this inference. The defendants' factual allegations

support the contradictory inference that it was reasonable for

CSM to believe its contract with Holdings would be applicable

against Realty as well.

We take as true the allegations that Realty was not a

signatory of the contract between Holdings and CSM. This fact

alone, however, is insufficient to support an inference of CSM's

knowledge of falsity where the motion judge found that CSM was

never informed that Holdings had transferred the property at

issue to Realty and only learned of the transfer when CSM

started the process of perfecting a mechanic's lien.

Furthermore, other allegations in the defendants' counterclaim

show that the defendants indicated to CSM that Realty would be

7 the party responsible for paying for the construction. For

example, we take as true fact thirty-six of the counterclaim,

which states that CSM's manager was shown a term sheet from the

defendants' putative financier stating Realty was to receive the

construction loan to finance the project. Facts twenty-two and

twenty-four of the counterclaim state that Realty was formed

with the express purpose of securing financing for the project

being completed by CSM. Fact thirty-three alleges that CSM

received assurances that "the BF Entities" (referring to both

Holdings and Realty) expected to receive additional funding for

the project; and fact fifty-three avers that, at some point

during the project, CSM learned "the BF Entities' financing

sources had withdrawn." Furthermore, the counterclaim is

entirely devoid of any allegations that the defendants

assiduously observed corporate formalities and maintained a

strict separation of corporate identities such that CSM should

have been on notice that Realty was not liable for obligations

incurred by Holdings.

In sum, when taking all the nonprecluded facts in the

defendants' counterclaim as true, we conclude Realty has failed

to allege facts that reasonably support the inference that CSM

knew or should have known its statement of account was false as

to Realty. Because the defendants have failed to plausibly

8 allege a necessary element of their slander of title claim, we

affirm its dismissal.

2. Motion to dissolve the mechanic's lien. The defendants

also claim the motion judge erred in denying their motion for

summary discharge of the mechanic's lien, which CSM placed on

the fee interest of the property at issue pursuant to G. L.

c. 254, § 2.8 They argue that dissolution of the lien is

appropriate where, as here, CSM's notice of contract stated that

it had a contract with Realty and none existed, thereby failing

to strictly comply with the statute.

"The mechanic's lien statute provides 'that a debt due to a

person who performs labor or supplies material for the

improvement of real estate by agreement or with the express of

implied consent of the owner is secured by a mechanic's lien'"

(citation omitted). Ng Bros. Constr., Inc. v. Cranney, 436

Mass. 638, 642 (2002). Its purpose is to ensure that

contractors get paid for their labor and materials when they

improve the value of another's property. A mechanic's lien is a

creation of statute and can be enforced only by strict

compliance with the statute. Trace Constr., Inc. v. Dana Barros

8 CSM argues that the defendants' motion to dissolve the lien was improper because, pursuant to G. L. c. 254, § 15A, the proper means to challenge the lien was to file a verified complaint. Because we find no error in the judge's denial of the defendants' motion, we need not reach this issue.

9 Sports Complex, LLC, 459 Mass. 346, 351 (2011), citing National

Lumber Co. v. United Cas. & Sur. Ins. Co., 440 Mass. 723, 726,

(2004). The defendants argue that CSM's lien failed to strictly

comply with the statute because it improperly alleged a contract

with Realty in its notice of contract. According to the

defendants, this amounted to a "knowing and willful"

misrepresentation as to what CSM was owed and dissolution of the

lien is the only equitable decision. We are not persuaded. As

noted above, the fact that CSM was owed nearly $2.3 million was

settled conclusively in the arbitration.

The essence of the defendants' argument is actually that

the lien was subject to summary discharge because it identified

land owned by Realty where the contract was with Holdings, the

putative tenant of the property. General Laws c. 254, § 2,

however, explicitly contemplates a situation such as this, in

which a contractor has a contract with a tenant to improve real

property. The contractor may obtain a mechanic's lien on the

property in such a situation when the owner of the land has

consented to the improvement in question. G. L. c. 254, § 2 ("A

person entering into a written contract with the owner . . . or

with the consent of such owner . . . shall have a lien upon such

real property"). Where an owner's consent to the improvement of

real property is at issue, a judge looks for evidence of the

10 owner's "contemplation and active encouragement" of the

improvements. Trace Constr. Inc., 459 Mass. at 356.

Furthermore, the consent need not be in writing. See id. at 352

n.10.

Here, we cannot conclude the motion judge erred in

determining that Realty contemplated and actively encouraged the

construction of the marijuana cultivation facility by CSM. The

owners of Realty were the same parties managing Holdings and

seeking financing to build the facility. By Realty's own

admission, the owners engaged with CSM as the "BF Entities" in

pursuing the construction project. The property in question was

transferred from Holdings to Realty for no consideration after

the contract to improve the property was in place. Finally, one

of Realty's managers sent a letter to the town where the

property is located expressing Realty's consent to the

improvement of the property for purposes of obtaining permits

and approvals. Because there was ample undisputed evidence in

the record showing that Realty consented to the improvement of

11 the property in question, the judge correctly denied the motion

to dissolve the mechanics lien.

Judgments affirmed.

Order denying motion for summary discharge of mechanic's lien affirmed.

By the Court (Meade, Neyman & Walsh, JJ.9),

Clerk

Entered: November 25, 2025.

9 The panelists are listed in order of seniority.