P.J. Keating Co. v. Roads Corp.

24 Mass. L. Rptr. 212
CourtMassachusetts Superior Court
DecidedJune 17, 2008
DocketNo. 062135B
StatusPublished
Cited by1 cases

This text of 24 Mass. L. Rptr. 212 (P.J. Keating Co. v. Roads Corp.) 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
P.J. Keating Co. v. Roads Corp., 24 Mass. L. Rptr. 212 (Mass. Ct. App. 2008).

Opinion

Lu, John T., J.

INTRODUCTION

The plaintiff P.J. Keating Company (Keating) brought this case against the defendants Roads Corporation (Roads) and its former officer John F. Sarao, Jr. (Sarao) (collectively, Defendants) to collect outstanding debts allegedly arising out of the labor and materials Keating supplied to Roads as its subcontractor on a series of projects.

Keating has filed special motions to dismiss2 counterclaims, pursuant to the anti-SLAPP statute, set forth at G.L.c. 231, §59H, which prohibits the Defendants from bringing their counterclaims if they are based on Keating’s protected petitioning activity.

BACKGROUND

For purposes of a special motion to dismiss, the court must “consider the pleadings and supporting and opposing affidavits stating the facts upon which the'liability or defense is based.” G.L.c. 231, §59H.

In 1992, Roads entered into a credit agreement with Keating pursuant to which Keating advanced credit to Roads in exchange for Roads’s promise to repay. Sarao signed the credit agreement on Roads’s behalf and “personally guarantee[d] payment of any and all obligations incurred by Roads and agree[d] to personally pay the same in event that Roads Corp. fails, neglects or for whatever the reason is unable to pay same.” Roads’s Opposition to Keating’s Special Motion to Dismiss, Exhibit 1 of Exhibit 6, Credit Agreement. Relying on the credit agreement and the guarantee, “Keating extended open credit to Roads and supplied various services and materials to Roads on a variety of construction projects.” Keating Amended Complaint, ¶6.

Keating alleges that it entered into contracts with Roads for at least thirty3 construction projects between 1997 and 2004, all of which contain an identical provision concerning payment to Keating:

The amounts retained by [Roads] shall be paid to [Keating] within thirty (30) days after all the following conditions have been met: (a) the Owner has finally approved and accepted the Work; (b) the Owner has determined the final quantities for the Work; (c) the Owner has paid and [Roads] has received the amounts that the Owner retained for the Work; and (d) [Keating] has furnished to [Roads] evidence satisfactory to [Roads] that all of [Keating’s] laborers, mechanics, subcontractors, materialmen and suppliers have been paid in full for all amounts due to them for all of the labor, materials, equipment, supplies and other things that they furnished to [Keating] in connection with the performance of the Work. It is expressly acknowledged that receipt of payment by [Roads] from the Owner on account of the work performed by [Keating] shall be a condition precedent to any obligation of [Roads] to make payment to [Keating] of any such retained amounts.

Keating’s Memorandum of Law in Support of its Special Motion to Dismiss, at 11 (emphases and underlining in original), quoting Article V of contract.4

Keating alleges that it received some payments for its work on the contracts,5 and that, in response to Keating’s periodic requests for the outstanding payments from Roads, Roads “largley agreed with the amounts due[,]” Keating Amended Complaint, ¶8, and advised Keating to “be patient.” Roads’s Opposition to Keating’s Special Motion to Dismiss, Exhibit 6, Donna St. Laurent Affidavit, ¶6. In October of 2006, Keating filed an action against Roads and Sarao, as the guarantor of Roads’s debts, seeking payment of the amounts still outstanding; Keating filed an amended complaint in January of 2007. Among the allegations in its amended complaint, Keating asserts that, to the extent the statute of limitations bars it from recovering payments on any of its contracts, “Roads and/or Sarao have waived and are estopped by their own actions and deeds from claiming the expiration of any statute of limitations.” Keating Amended Complaint, ¶8. Keating alleges that the Defendants breached the credit agreement (Count I) and violated G.L.c. 93A, §11 (Count III), and that it is entitled to recover in quantum meruit (Count II) based on the Defendants’ failure to pay pursuant to the credit agreement, “misrepresenting to and misleading Keating into forbearing suit within certain statutes of limitations by various promises to pay Keating, while knowing that those promises would not be kept...” Keating Amended Complaint, ¶11.

After several failures to effect service, and Keating’s attorney’s and the process server’s observations that Roads’s business location and the residence of its president, Eric Sarao, appeared abandoned, Keating sought and obtained from the clerk an entry of default pursuant to Mass.R.Civ.P. 65(a) as to both Roads and Sarao. About three months later, the Superior Court allowed Keating’s motion for default judgment and assessment of damages, ordering the Defendants to pay Keating $469,799.67 plus interest and costs. In seeking to remove the default judgment, Roads’s president, Eric Sarao, claimed that Keating never served him with its complaint and that his residence, where he had lived continuously for seven years, was not abandoned. Sarao, also seeking to remove the default judgment, explained in an affidavit that, suffering from anxiety and depression, he moved to Florida in November of 2005. A process server “delivered the complaint and other papers in this suit to [him] in Florida in January or early February of 2007 . . . [but he] remained anxious and depressed and unable to focus on or otherwise deal with the Keating situation normally and did nothing.” Keating’s Memorandum of Law in Support of its Special Motion to Dismiss, [214]*214Exhibit 3, John Sarao Affidavit (September 25, 2007), ¶10.

The court removed the default judgments against them, and Roads and Sarao filed counterclaims against Keating. In his counterclaim, Sarao alleges that Keating violated G.L.c. 93A by initiating an action and obtaining a judgment against Sarao “when it knew that the alleged obligations of Roads Corporation . . . were barred by the applicable statute of limitations, were unliquidated and in dispute and/or were otherwise not recoverable”; and by attributing “false and misleading statements to Sarao individually and/or to Roads including (i) that Roads agreed with amounts Keating claimed were due; (ii) that Roads waived the Statute of Limitations!;] and (iii) that Roads reaffirmed amounts due Keating all for the sole purpose of creating a claim against [Sarao], individually under the credit application/personal guaranty . . .” Sarao Counterclaim, S114(a)-(b).

Roads alleges that Keating intentionally made “fraudulent representations to the court and Roads Corporation with respect to the abandonment of dwellings, the waiver of the Statute of Limitations, and the validity of balances allegedly due and owing by Roads to [Keating].” Roads Counterclaim, ¶11. In its second counterclaim, Roads contends that Keating, by those fraudulent representations and its “attempted use of this Honorable Court to acquire a fraudulent judgment against Roads[,]” violated G.L.c. 93A, §11. Roads Counterclaim, ¶17.

DISCUSSION

Strategic Lawsuits Against Public Participation, or “SLAPP suits,” are designed “to intimidate opponents’ exercise of rights of petitioning and speech!,] targeting] people for[, inter alia,] ‘reporting violations of law, writing to government officials, attending public hearings, [and] testifying before government bodies . . .’ ” Duracraft Corp. v. Holmes Prods. Corp., 427 Mass. 156, 161-62 (1998). By enacting G.L.c.

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Bluebook (online)
24 Mass. L. Rptr. 212, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pj-keating-co-v-roads-corp-masssuperct-2008.