Katz v. Carriage Hill, LLC.

20 Mass. L. Rptr. 29
CourtMassachusetts Superior Court
DecidedAugust 25, 2005
DocketNo. 20050963A
StatusPublished

This text of 20 Mass. L. Rptr. 29 (Katz v. Carriage Hill, LLC.) 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
Katz v. Carriage Hill, LLC., 20 Mass. L. Rptr. 29 (Mass. Ct. App. 2005).

Opinion

Agnes, Peter W., J.

I. Introduction

The Carriage Hill Condominium complex in Southborough, Massachusetts consists of 25 buildings comprising 62 units of residential housing intended for seniors. The trustees of the Carriage Hill Condominium Trust (plaintiffs) have brought this civil action to recover money damages against the condominium project’s developer and the initial trustee of the condominium trust,3 a Massachusetts limited liability corporation known as Carriage Hill, LLC (defendant Carriage Hill) and two individuals (defendants Heim and Zarella) who allegedly are the principals of Carriage Hill and who allegedly acted as trustees during the development phase of the project and prior [30]*30to the time when authority was turned over to the unit owners who elected their own trustees. The plaintiffs allege that defendants Carriage Hill, Heim and Zarella were negligent and breached their contract with the condominium association (made up, of course, of the individuals who purchased condominium units) by not properly constructing the units and are responsible for several millions of dollars of repairs that must be made in the roofs, walls and windows of individual condominium units. The plaintiffs also joined as a defendant another Massachusetts limited liability corporation, defendant R&R, LLC, (defendant R&R) which is allegedly controlled by the wives of defendants Heim and Zarella. Plaintiffs allege that on October 22, 2004, before suit was filed by the plaintiffs, defendant Carriage Hill sold its two remaining units in the condominium development in question to defendant R&R, and that R&R was in the process of transferring the units to third parties.

The matter before the court is the special motion to dismiss filed by the plaintiffs and based on the Massachusetts anti-SLAPP statute, G.L.c. 231, §59H.

II. Background

This lawsuit was filed on May 25, 2005. It consists of six counts as follows: count 1 (negligence against Carriage Hill); count 2 (Breach of fiduciary duty against Carriage Hill); count 3 (Breach of implied warranty against Carriage Hill); count 4 (Breach of fiduciaiy duty as to Heim and Zarella); count 5 (Fraudulent transfer as to Carriage Hill involving the transfer of 2 units to R&R); and count 6 (Injunctive relief against R&R to prohibit the transfer of the 2 units in question). Plaintiffs also sought an attachment and a preliminary injunction against Carriage Hill and R&R to prevent any additional transfers of ownership of units in the condominium complex in question. The defendants responded with affidavits indicating that Carriage Hill was not insolvent and actually owned additional condominium units other than the two transferred to R&R, and furthermore, that the transfer of units from Carriage Hill to R&R was appropriate because the wives of both Heim and Zarella had provided investment capital to defendant Carriage Hill which made it possible for Carriage Hill to undertake the condominium project and thus that defendant Carriage Hill owed money to the wives of defendants Heim and Zarella. Following a hearing on the plaintiff s request for prejudgment security, and on the basis of affidavits submitted by both sides, the court (Fecteau, J.) allowed an attachment in the amount of $300,000 against defendant Carriage Hill only and denied relief against defendant R&R.

Thereafter, on or about June 28, 2005 the defendants filed an answer with counterclaims. The defendants’ counterclaims consist of a count for intentional interference with contractual relations (based on a claim that the lawsuit and request for prejudgment security interfered with a relationship between R&R and a prospective buyer of a condominium unit), and a count for abuse of process (based on a claim that the plaintiffs’ lawsuit was based on bad faith, was in retaliation for another lawsuit between one of the individual plaintiff trustees and defendant Carriage Hill, and is frivolous).

III. Discussion A

It is appropriate to begin with the language of the anti-SLAPP statute. G.L.c. 231, §59H provides, in pertinent part as follows:

In any case in which a party asserts that the civil claims . . . against said party are based on said party’s exercise of its rights of petition under the constitution of the United States or of the commonwealth, said party may bring a special motion to dismiss . . . The court shall grant such special motion, unless the party against whom such special motion is made shows that: (1) the moving party’s exercise of its right to petition was devoid of any reasonable factual support or any arguable basis in law and (2) the moving party’s acts caused actual injury to the responding party. In making its determination, the court shall consider the pleadings and supporting and opposing affidavits stating facts upon which the liability or defense is based.

The Supreme Judicial Court considered the legislative history and purpose of the anti-SLAPP law, in Duracraft Corporation v. Holmes Products Corporation, 427 Mass. 156 (1998). In Duracrqft, the court explained that “(t]he typical mischief that the legislation intended to remedy was lawsuits directed at individual citizens of modest means for speaking publically against development projects.” Id. at 161. SLAPP actions, the court stated, are “meritless suits"; “ ‘[t]he objective of SLAPP suits is not to win them, but to use litigation to intimidate opponents’ exercise of rights of petitioning and speech.” Duracraft, supra, at 161, citing Wilcox v. Superior Court, 27 Cal.App.4th 809, 816-17 (1994).

In reviewing the Massachusetts law, the Duracrqft court acknowledged that the statute provided “very broad protection for petitioning activities,” id. at 162, but that the Legislature did not intend to create an absolute privilege for petitioning activities. Id. at 162-63. As the Duracrqft court put it, “(w]e also see no evidence that the statute was intended to reach suits such as this one between two corporate competitors involved in other ongoing litigation, where the special motion may have been deployed not to limit ‘strategic litigation,’ but as an additional litigation tactic.” Id. at 163. The problem faced by the Court in Duracrqft, however, was that the Legislature omitted to include any boundaries on the scope of the anti-SLAPP statute’s reach. “By protecting one party’s exercise of its right of petition, unless it can be shown to be sham petitioning, the statute impinges on the adverse party’s exercise of its right to petition, even when it is [31]*31not engaging in sham petitioning.” Duracraft, supra, 427 Mass. at 166. For this reason, the court resorted to the settled approach to statutory construction whereby an interpretation is preferred which avoids a conclusion that a law is unconstitutional and which retains “as much of the legislative intent as is possible in a fair application of constitutional principles.” Id. at 167. See also id. at 163 n.l 1 (enactment of G.L.c. 231, §59H does not preclude the court from interpreting the law to insure that it is “applied only to SLAPP’s and not to suits arising in wholly different circumstances”).

With regard to the burden on the moving party to show that “the civil claims . . .

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Related

Carroll v. Gillespie
436 N.E.2d 431 (Massachusetts Appeals Court, 1982)
Wilcox v. Superior Court
27 Cal. App. 4th 809 (California Court of Appeal, 1994)
Malone v. Belcher
103 N.E. 637 (Massachusetts Supreme Judicial Court, 1913)
Reardon v. Sadd
159 N.E. 751 (Massachusetts Supreme Judicial Court, 1928)
Jacoby v. Spector
198 N.E. 157 (Massachusetts Supreme Judicial Court, 1935)
Duracraft Corp. v. Holmes Products Corp.
691 N.E.2d 935 (Massachusetts Supreme Judicial Court, 1998)
McLarnon v. Jokisch
727 N.E.2d 813 (Massachusetts Supreme Judicial Court, 2000)
Fabre v. Walton
781 N.E.2d 780 (Massachusetts Supreme Judicial Court, 2002)
Adams v. Whitman
822 N.E.2d 727 (Massachusetts Appeals Court, 2005)

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Bluebook (online)
20 Mass. L. Rptr. 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/katz-v-carriage-hill-llc-masssuperct-2005.