RFF Family Partnership, LP v. Link Development, LLC

53 F. Supp. 3d 267, 2014 U.S. Dist. LEXIS 138265, 2014 WL 5151521
CourtDistrict Court, D. Massachusetts
DecidedSeptember 30, 2014
DocketCivil Action Nos. 11-10968-NMG, 14-10065-NMG
StatusPublished
Cited by2 cases

This text of 53 F. Supp. 3d 267 (RFF Family Partnership, LP v. Link Development, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RFF Family Partnership, LP v. Link Development, LLC, 53 F. Supp. 3d 267, 2014 U.S. Dist. LEXIS 138265, 2014 WL 5151521 (D. Mass. 2014).

Opinion

MEMORANDUM & ORDER

GORTON, District Judge.

This protracted litigation involves contradictory mortgages recorded with respect to a 22-acre commercial property in Saugus, Massachusetts (“the Property”). The conflict has spawned multiple lawsuits, including two in this Court. The prevailing controversy concerns a three-way dispute among Link Development, LLC (“Link”), BD Lending Trust (“BD Lending”) and RFF Family Partnership LP (“RFF”) with respect to a 2012 settlement between RFF and BD Lending.

These convoluted cases have become intractable for several reasons:

1) BD Lending, • caught between the prospect of significant tort liability to Link and the prospect of an uncertain resolution with RFF, entered into two settlement agreements, each conditioned, at least indirectly, upon some action of a third party;
2) while BD Lending intended to limit its obligation to Link to the amount it expected to receive from RFF, its agreement with Link neglected to reflect that intention and instead, it required a fixed payment; and
3) the parties have confirmed on several occasions, on the record and at oral argument, that BD Lending has no assets.

This litigation began in 2006 and has since included one bench trial, two federal lawsuits, at least two state court actions and two separate settlement agreements consummated on the eve of the respective trials in those actions.

Numerous motions are currently pending before this Court, including (1) RFF’s motion for contempt against BD Lending based upon the latter’s failure to comply with the terms of a settlement agreement in the 2011 Federal Case, (2) Link’s motion to dismiss BD Lending’s cross-claims against it in the 2014 Federal Case, (3) several cross-motions for summary judgment in the 2014 Federal case and (4) several discovery motions.

I. Factual Background and Procedural History

The facts and procedural history of this litigation are complicated and difficult to-summarize in chronological order. In essence, all of the cases emanate from the unauthorized conveyance of a mortgage on the Property in 2006 by a subsequently disbarred attorney and the parties’ efforts to sort out ownership of that real estate ever since.

[269]*269A. The BD Lending Mortgage

In 2005, Link (a limited liability company) was formed by now-disbarred Attorney Stuart Sojcher (“Sojcher”) on behalf of an investor to hold and develop the Property which the developer had acquired by foreclosure deed.

In September, 2006, Sojcher, without authorization of Link, executed a 30-day promissory note payable to BD Lending in the amount of $700,000 to be secured by a mortgage on the Property (“the BD Mortgage”), then owned by Link. The individual defendant, Steven A. Ross (“Ross”), is named as a party-defendant in his capacity as the Trustee of BD Lending and, with respect to certain claims, also in his individual capacity. The BD Mortgage was subsequently recorded in October, 2006. Attorney Sojcher continued to act without corporate authority and then absconded with most of the proceeds of the loan.1

In November, 2006, after Link defaulted on the short-term loan which was secured by the BD Mortgage, BD Lending commenced initial foreclosure proceedings on the Property.

B. The 2006 Superior Court Case

In response to BD Lending’s foreclosure proceedings, in December, 2006, Link filed a complaint against Attorney Sojcher and BD Lending in the Massachusetts Superi- or Court for Suffolk County (“the 2006 Superior Court Case”), along with a parallel suit in Land Court, alleging, inter alia, “slander of title,” fraud, conversion, civil conspiracy and violations of Chapter 93A. Link also sought a declaration that the BD Mortgage was void and that Sojcher was “not authorized to enter into any mortgage on behalf of [Link].” Link asserted that Attorney Sojcher had absconded with the proceeds of the loan made in connection with the BD Mortgage after Link had warned BD Lending that Attorney Sojcher lacked authority to execute the mortgage but that BD Lending had gone forward with the transaction anyway.

C. Subsequent Developments

While the Superior Court action was pending, in October, 2007, RFF loaned $1.4 million to Link (“the RFF Loan”) in exchange for a “good” first mortgage on the Property (“the RFF Mortgage”). As part of the loan agreement, Link represented, inter alia, that (1) the RFF Mortgage would be a “good first mortgage and not ... subject to any liens or encumbrances, whether inferior or superior” and (2) Link would not incur, assume, create or permit “any mortgage, pledge, lien, lease, encumbrance or charge” on the Property without the prior written consent of RFF.

In March, 2008, Link defaulted on the RFF Loan. Representatives of RFF and Link subsequently negotiated an extension of the maturity date of the RFF Loan until November, 2008, as well as incremental extensions thereafter. In March, 2010, however, RFF exercised its statutory power of sale under the RFF Mortgage, conducted a public auction and foreclosed the Mortgage. RFF, as the highest bidder, purchased the Property for $2.5 million.

D. The 2011 Federal Case

In June, 2011, RFF filed a complaint in this Court against BD Lending and Link (“the 2011 Federal Case”), alleging that Link had defaulted on the loan, breached loan agreements and falsely represented that RFF had a legally valid and enforceable first lien on the Property. The com[270]*270plaint also alleged that the BD Mortgage was fraudulently conveyed and therefore unenforceable. In various memoranda and orders, the Court characterized the dispute in the 2011 Federal Case as principally concerning damages owed by BD and Link to RFF and the amount of any surplus of such damages that RFF owed to other lienholders.

E. The 2012 Link Settlement

In June, 2012, just before the 2011 Federal Case was scheduled to go to trial, Link and BD Lending executed a written settlement agreement (“the 2012 Link Settlement”) whereby Link dismissed its claims against BD Lending in the 2006 Superior Court Case and agreed to

waive[ ] all rights to contest the authenticity, enforceability, and/or legitimacy of the promissory note from Link to BD dated September 29, 2006 ... or the mortgage dated September 29, 2006 from Link to BD securing the BD Note.

In exchange, BD Lending agreed to pay Link $450,000 up front and $650,000 (or more) at a later date. (The amount of the supplemental payment was to increase by $50,000 for each year the debt remained outstanding.)

The Link Settlement contains two other provisions relevant here. First, it requires BD Lending to provide Link with an assignment of the BD Lending Mortgage (“the Assignment of Mortgage”) to be (a) held in escrow pending satisfaction of BD Lending’s obligations under the Link Settlement, (b) discharged upon satisfaction of such obligations but (c) recorded in the event of a default thereof. Second, BD Lending is required to provide Link with seven days notice before it discharges or transfers the BD Lending Mortgage.

F. The November, 2012 Trial of the 2011 Federal Case

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Related

RFF Family Partnership, LP v. Link Development, LLC
238 F. Supp. 3d 168 (D. Massachusetts, 2017)

Cite This Page — Counsel Stack

Bluebook (online)
53 F. Supp. 3d 267, 2014 U.S. Dist. LEXIS 138265, 2014 WL 5151521, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rff-family-partnership-lp-v-link-development-llc-mad-2014.