Fronk v. Coleman

29 Mass. L. Rptr. 41
CourtMassachusetts Superior Court
DecidedOctober 28, 2011
DocketNo. MICV201001988H
StatusPublished

This text of 29 Mass. L. Rptr. 41 (Fronk v. Coleman) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fronk v. Coleman, 29 Mass. L. Rptr. 41 (Mass. Ct. App. 2011).

Opinion

Connolly, Thomas E., J.

UNDERLYING CASE

This civil action has a long history that grows out of the underlying case of Robert Fronk et al. v. John F. Fowler et al., Middlesex Superior Court C.A. No. 2002-1216, 71 Mass.App.Ct. 502 (2008), 456 Mass. 317 (2010). The underlying case basically involved at the commencement of the trial, five counts, namely, (1) breach of contract, (2) breach of fiduciary duty, (3) fraud and misrepresentation, (4) misappropriation of business opportunity and (5) restitution, that coalesced around three damage claims by the plaintiffs (hereinafter “Fronk Group”) as follows:

1. The first category of damages consisted of the Fronk Group’s contention that the defendants (hereinafter “Fowler Group”) denied them the opportunity to participate in the 1 and 9 East Street properties (business opportunity claim);

2. The second category included the Fronk Group’s contentions that the Fowler Group charged Maple East Associates Limited Partnership excessive fees during their management of the property (related party transactions claims); and

3. The third category consisted of the Fronk Group’s contention that the Fowler Group had intentionally under valued 23 East Street during its sale (valuation claim).

Prior to the trial of the underlying case, the Fronk Group hired a real estate appraisal firm, Coleman and Sons Appraisal Group, LLC and two of its officers, namely Martin Coleman and Robert L. Coleman (hereinafter “Coleman Appraisers”) to offer expert testimony on the business opportunity claim.1 Coleman Appraisers was never a party in the underlying action. Robert Coleman was the appraiser who furnished the bulk of the services for the Fronk Group. He prepared a report for his expected testimony which was supplied prior to trial to the plaintiffs’ and defendants’ counsel. The report had mistakes in it. Robert also made some mistakes in his testimony before the Court.

The trial judge, Judge Nonnie Burnes, in this 2002 juiy-waived case in her Findings of Fact, Conclusions of Law and Order (33 pages) issued on March 29,2006 found for the Fowler Group on all three claims. On Claim #1 (business opportunity claim) — the Judge found that it was not proven in two ways. She found that the Fowler Group did not commit a breach of the partnership agreement and secondly, she found that the Fowler Group did not violate their fiduciary duty with respect to such opportunities. On Claim #2 (related party transactions claim) — the Judge found that the Fowler Group did not violate their fiduciary duty with respect to such opportunities because the parties had shaped that duty in the terms of the partnership agreement. On Claim #3 (valuation claim) — the Judge found that the valuation of 23 East St. was reasonable, both in light of the Fowler Group’s affirmative evidence and the complete failure by the Fronk Group to contradict it. Thus, Judgment was issued for the Fowler Group on all claims.

In addition, the Judge found that “the plaintiffs’ entire case was wholly insubstantial, frivolous, and not brought in good faith . . . The plaintiffs [Fronk Group] cannot have had a reasonable subjective belief in the merits of this lawsuit, and objectively, there is no reasonable basis.” In making that finding, the Judge recapitulated the total absence of evidentiary or legal support for the plaintiffs’ case and concluded that it was without even a colorable basis in the law. See Robert Fronk et al. v. John F. Fowler et al., 456 Mass. 317, 324-25 (2010). The Judge on a motion from the Fowler Group, under G.L.c. 231, §6F, assessed attorneys fees and expenses against the Fronk Group in the amount of $1,230,941.26.

The Fronk Group appealed the judgment and the award of attorneys fees and expenses. A single justice of the Appeals Court determined that one of the Fronk Group’s claims, that is the plaintiffs’ business opportunity claim was not frivolous and that the award under G.L.c. 231, §6F was not warranted. The single justice ordered that the trial court’s order granting legal fees and expenses be vacated. On appeal, the Appeals Court’s three-judge panel affirmed the order of the single justice. On April 9, 2009, the Supreme Judicial Court allowed a motion for further appellate review and the entire case was entered on the Supreme Judicial Court docket on May 13, 2009. On March 25, 2010, the Supreme Judicial Court reversed the single [42]*42justice’s and the three-judge panel’s Order which had vacated the trial court’s orders on the award of legal fees and expenses. Robert Fronk et al v. John F. Fowler et al., 456 Mass. 317 (2010). The Supreme Judicial Court reinstated the Order of the trial Judge in the granting of legal fees and expenses under G.L.c. 231, §6F.2

PRESENT CASE

After the Fronk Group lost the juiy-waived trial and had $1,230,941.26 in attorneys fees and costs assessed against them under G.L.c. 231, §6F, it made a claim, without filing a lawsuit, against Coleman Appraisers for negligence in the preparation of its report and in Robert Coleman’s testimony at the trial. Coleman Appraisers was insured by CNA Insurance Company. The negligence claim was settled by payment by CNA Insurance of $300,000.00 to the Fronk Group. As a condition of the settlement and as contained in the release, the Fronk Group reserved any right to seek “indemnity” and/or “contribution” from the Coleman Appraisers on the G.L.c. 231, §6F legal fees awarded against the Fronk Group for punitive and compensatory reasons.3

The plaintiffs in this case, namely the Fronk Group, have instituted this civil action against the defendants, Coleman Appraisers, seeking “indemnity” and “contribution” on the G.L.c. 231, §6F legal fees assessed against them in the underlying case. Coleman Appraisers has filed a motion to dismiss pursuant to Mass.R.Civ.P. 12(b)(6). The issue, for purposes of the present motion, is: Does the Fronk Group’s complaint in Count I (Indemnity) and in Count II (Contribution) state a claim against the Coleman Appraisers upon which relief may be granted under Mass.R.Civ.P. 12(b)(6)?

I. THE NATURE OF A CLAIM FOR ATTORNEYS FEES UNDER G.L.c. 231, §6F AND ITS APPLICATION TO THE PRESENT CASE

Judge Nonnie Burnes found that Fronk Group’s entire case “was wholly insubstantial, frivolous, and not brought in good faith.” The absence of good faith can be found in a party’s knowledge or having reason to know that its claim lacks any substantial factual support or legal support. Judge Burnes explicitly found that the Fronk Group could not have had a reasonable subjective belief in the merits of the lawsuit and objectively there was no reasonable basis. Furthermore, Judge Burnes found that the Fronk Group, “stubbornly pursued the lawsuit even when discovery showed beyond peradventure that there had never been any basis for it.”

A claim for attorneys fees under G.L.c. 231, §6F is not compensation resulting from the injury or harm giving rise to the cause of the action, but is compensation for the effort of defending against the disputed claim. Ben v. Schultz, 47 Mass.App.Ct. 808, 813 (1999). A motion brought under c. 231, §6F is not part of the merits of the underlying action but is collateral to the judgment entered in that action. Id. at 813. A motion under §6F is not a distinct cause of action resulting in a judgment that finally resolves the rights of the parties, but instead is sui generis and a collateral proceeding and separate from but not entirely independent of the judgment. Id.

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Related

Waldman v. American Honda Motor Co.
597 N.E.2d 404 (Massachusetts Supreme Judicial Court, 1992)
Stewart v. Roy Bros. Inc.
265 N.E.2d 357 (Massachusetts Supreme Judicial Court, 1970)
Fronk v. Fowler
923 N.E.2d 503 (Massachusetts Supreme Judicial Court, 2010)
Wilkinson v. Citation Insurance
447 Mass. 663 (Massachusetts Supreme Judicial Court, 2006)
Ben v. Schultz
716 N.E.2d 681 (Massachusetts Appeals Court, 1999)
Fronk v. Fowler
883 N.E.2d 972 (Massachusetts Appeals Court, 2008)

Cite This Page — Counsel Stack

Bluebook (online)
29 Mass. L. Rptr. 41, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fronk-v-coleman-masssuperct-2011.