Mohamad v. Kavlakian

19 Mass. L. Rptr. 527
CourtMassachusetts Superior Court
DecidedJune 21, 2005
DocketNo. 031416
StatusPublished

This text of 19 Mass. L. Rptr. 527 (Mohamad v. Kavlakian) 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
Mohamad v. Kavlakian, 19 Mass. L. Rptr. 527 (Mass. Ct. App. 2005).

Opinion

Hillman, Timothy S., J.

The plaintiff, Mohamad A. Mohamad, brings these complaints for civil contempt against two entities, Emanuel E. Landsman (“Landsman”) and Gulf Oil Limited Partnership (“Gulf Oil”). Landsman and Gulf Oil were not parties to the underlying action between Mohamad and the defendant, Sarkis A. Kavlakian (“Kavlakian”). Mohamad nevertheless asserts that Landsman and Gulf Oil should be held in civil contempt for violating an order issued by Justice Billings of the Worcester Superior Court. Landsman and Gulf Oil counter that the order by its express terms applies only to Driveway Auto, Inc. (“Driveway Auto”), an unrelated entiiy. Landsman asserts that Mohamad has failed to meet the standards for service of process under Mass.R.Civ.P. 4. In addition, Landsman requests dismissal of the complaint on the merits. Similarly, Gulf Oil moves to dismiss the complaint pursuant to Mass.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. Gulf Oil also requests that this Court impose sanctions on Mohamad and his attorney, Stephen Gordon, pursuant to G.L.c. 231, §6F, and Mass.R.Civ.P. 11. For the reasons set forth below, Mohamad’s complaints for civil contempt against Landsman and Gulf Oil are dismissed. In addition, Gulf Oil’s motion for sanctions is granted.

BACKGROUND

This case arises out of Mohamad’s efforts to satisfy a substantial judgment that he obtained against Kavlakian for breach of contract and -violations of G.L.c. 93A. In an attempt to satisfy the judgment, Mohamad filed an ex parte motion to reach and apply the proceeds of a mortgage that Kavlakian held as a matter of record. The mortgage property, located at 671 Main Street in Winchester (“the premises”), was encumbered by multiple parties. The parties to the present contempt action were each related to a business venture that operated a gas station on the premises. A history of the business relationship among the parties is necessary to determine whether the terms of the order apply to Landsman and Gulf Oil.3

In 1994, Landsman extended purchase money financing in the amount of $270,000.00, at an annual interest rate of 8.75%, to Michael Forrest (“Forrest”), the principal of Driveway Auto. Forrest signed a promissory note in favor of Landsman (“the note”). The terms of the note stated that Forrest would make monthly installment payments to Landsman in the amount of $2,124.09. The principal amount was due in full on September 14, 1996. The note was secured by a mortgage on the premises, where Driveway Auto operated a gas station. Forrest encountered financial difficulty, and did not pay the principal in full by September of 1996. Landsman granted Forrest an extension of the note multiple times. As of early 2002, Driveway ceased making payments on the note.

Kavlakian approached Landsman and proposed arrangement that would enable Landsman to receive payments on the note. The basic agreement was that Kavlakian would execute a promissory note in the amount of the mortgage principal in favor of Landsman, and in exchange Kavlakian would receive an assignment of the mortgage from Driveway Auto. Specifically, Kavlakian executed the note in the amount of $295,000.00 at an annual interest rate of 7% (“the Kavlakian note”). Under the terms of the Kavlakian note, Kavlakian was to pay Landsman monthly installment payments in the amount of $1,961.75 for three years. The entire principal was due on May 1, 2006. The note stated that the default would occur in the event of “service upon the holder hereof of a writ, or other process seeking security for a judgment in litigation . . .” (Landsman Memo, at Ex. D.) Landsman and Kavlakian recorded the Kavlakian note and the mortgage assignment with the Middlesex Registry of Deeds.

The Kavlakian note and assignment were subject to an undisclosed, unrecorded escrow agreement. One provision of the escrow agreement, designated the “assignment back,” would effect an assignment of the mortgage from Kavlakian back to Landsman. According to the agreement’s terms, the escrow agent was to hold the “assignment back” until the occurrence of either of two conditions subsequent. First, in the event that Kavlakian satisfied his obligations under the Kavlakian note, the escrow agent was required to destroy the escrow agreement. Second, in the event that Kavlakian defaulted on the Kavlakian note, the escrow agent was directed to immediately record the escrow agreement document, including the assignment back, with the appropriate registry of deeds.

During the spring of2004, Forrest served Kavlakian with a notice to quit. At this time, even though he was not the owner of the premises and he had defaulted on the Kavlakian note, Kavlakian was negotiating with Mohamad to lease the premises to him. Mohamad gave Kavlakian a $40,000.00 deposit that was to be refunded in the event that Mohamad was unable to obtain a sign permit for the premises. Mohamad was unable to obtain the permit within the agreed-upon time frame. He then requested that Kavlakian either refund his deposit or grant him an extension of time in which to obtain the permit. The defendant refused to return Mohamad’s deposit and did not grant him an extension.

In July of 2003, Mohamad filed the underlying action against Kavlakian alleging breach of contract [529]*529and violations of G.L.c. 93A. On September IS, 2003, Mohamad obtained a default judgment against Kavlakian. Thereafter, Kavlakian moved to remove the default, which motion was denied after a hearing on November 17,2003. On March 16, 2004, Judge Agnes issued a Memorandum of Decision and Order on Mohamad’s motion for assessment of damages. The court awarded Mohamad $44,500.00 in principal damages for breach of contract. Finding violations of G.L.c. 93A, the court doubled the damage award and also awarded Mohamad attorneys fees.

During his search to uncover Kavlakian’s assets, Mohamad discovered the Driveway Auto mortgage held by Kavlakian. At this time, Mohamad did not have notice of the escrow agreement. Mohamad then filed an ex parte motion to reach and apply the proceeds of the Driveway Auto mortgage. On June 1, 2004, Judge Billings issued an order directing Driveway Auto to make all payments due on the mortgage to the Worcester Superior Court. The order allowing Mohamad’s ex parte motion states the following:

Driveway Auto, Inc., is to make all payments due on the mortgage dated 9/14/93 and the note secured by same to the Clerk of the Worcester Superior Court pending further Order of this Court. (Billings, J.)

Upon learning of Kavlakian’s legal difficulties and his indebtedness to various creditors, Landsman directed the escrow agent, who was also his attorney, to record the assignment back. The assignment back was recorded on June 29, 2004.

Driveway Auto was a franchisee of Gulf Oil pursuant to a gasoline supply agreement. The gasoline Gulf Oil supplied to Driveway Auto pursuant to the agreement was secured by two mortgages on the premises; one dated April 8, 1999, in the amount of $47,464.00, and the other dated January 18, 2001, in the amount of $62,953.00. These mortgages were junior to the first mortgage held by Kavlakian. In September of 2004, Gulf Oil filed a complaint against Driveway Auto, Inc., and Forrest to collect the sum due Gulf Oil under the supply agreement. The total amount then outstanding was $122,181.16.

During November of2004, Driveway Auto contacted its creditors, including the Internal Revenue Service and the Massachusetts Department of Revenue, to negotiate its debts in anticipation of selling the premises.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Conley v. Gibson
355 U.S. 41 (Supreme Court, 1957)
United States v. Friedman
143 F.3d 18 (First Circuit, 1998)
Peggy Lawton Kitchens, Inc. v. Hogan
532 N.E.2d 54 (Massachusetts Supreme Judicial Court, 1989)
Pederson v. Time, Inc.
532 N.E.2d 1211 (Massachusetts Supreme Judicial Court, 1989)
United Factory Outlet, Inc. v. Jay's Stores, Inc.
278 N.E.2d 716 (Massachusetts Supreme Judicial Court, 1972)
Massachusetts Adventura Travel, Inc. v. Mason
537 N.E.2d 609 (Massachusetts Appeals Court, 1989)
Hahn v. Planning Board of Stoughton
529 N.E.2d 1334 (Massachusetts Supreme Judicial Court, 1988)
General Motors Acceptance Corp. v. Abington Casualty Insurance
602 N.E.2d 1085 (Massachusetts Supreme Judicial Court, 1992)
Building Inspector of Peabody v. Northeast Nursery
636 N.E.2d 269 (Massachusetts Supreme Judicial Court, 1994)
Nader v. Citron
360 N.E.2d 870 (Massachusetts Supreme Judicial Court, 1977)
Weinberg v. Brother
160 N.E. 403 (Massachusetts Supreme Judicial Court, 1928)
Commonwealth v. Town of Hudson
52 N.E.2d 566 (Massachusetts Supreme Judicial Court, 1943)
Datacomm Interface, Inc. v. Computerworld, Inc.
489 N.E.2d 185 (Massachusetts Supreme Judicial Court, 1986)
Warren Gardens Housing Cooperative v. Clark
651 N.E.2d 1220 (Massachusetts Supreme Judicial Court, 1995)
Bird v. Capital Site Management Co.
423 Mass. 172 (Massachusetts Supreme Judicial Court, 1996)
Demoulas v. Demoulas Super Markets, Inc.
677 N.E.2d 159 (Massachusetts Supreme Judicial Court, 1997)
Van Christo Advertising, Inc. v. M/A-COM/LCS
688 N.E.2d 985 (Massachusetts Supreme Judicial Court, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
19 Mass. L. Rptr. 527, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mohamad-v-kavlakian-masssuperct-2005.