Ross v. Continental Resources, Inc.

899 N.E.2d 847, 73 Mass. App. Ct. 497
CourtMassachusetts Appeals Court
DecidedJanuary 12, 2009
DocketNo. 07-P-153
StatusPublished
Cited by16 cases

This text of 899 N.E.2d 847 (Ross v. Continental Resources, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ross v. Continental Resources, Inc., 899 N.E.2d 847, 73 Mass. App. Ct. 497 (Mass. Ct. App. 2009).

Opinions

McHugh, J.

Through extraordinary effort, a dispute involving roughly $15,000 mushroomed into a judgment approximating $135,000, the foundation for which is spread upon a docket comprising fifteen single-spaced pages and a correspondingly voluminous record appendix. The papers filed in the Superior Court, where the case was tried, bubble with sulphurous acrimony that, though cooled somewhat, has spilled over to the papers filed here, threatening on occasion to obscure the essential questions the appeal presents. Those questions center on the appropriateness of the initial judgment and of the trial judge’s serial modifications of that judgment. Our review of the record leads us to conclude that the judge was correct in some respects and incorrect in others. We therefore affirm in part and reverse in part.

1. Background, a. The underlying dispute. To understand the significant twists and turns that produced the appellate issues, it is necessary to discuss the substantive and procedural history of the case in a little more detail than is customary. The dispute originated in a commercial relationship that began in the 1980’s. Stanley Ross (Stanley), one of the original plaintiffs, was then a principal in a company called Docunet Corporation (Docunet). Docunet leased computer equipment from the defendants, Continental Resources, Inc., and Continental Leasing Co., Inc. (collectively Continental).

In 1987, Docunet fell substantially behind on its lease payments, so Continental, Docunet, and Stanley entered into a new lease agreement restructuring Docunet’s obligations. Stanley [499]*499personally guaranteed Docunet’s performance under the new agreement, securing that guarantee with a second mortgage on the Ross home. Although Stanley owned the home as a tenant by the entirety with his wife, plaintiff Francine Ross (Francine), he did not tell Francine about the guarantee.

Docunet soon encountered serious financial problems and, as a result, failed to honor the obligations it had assumed under the new lease agreement. As a consequence, Docunet returned to Continental all the leased equipment and, in 1991, filed for reorganization under Chapter 11 of the Bankruptcy Code, listing Continental as a creditor to which it owed $7,500. The bankruptcy proceedings led to a fifty percent plan of reorganization. Although some creditors received payment under that plan, Continental was not among them.

Ultimately, the reorganization was unsuccessful, and in 1994, Docunet again filed for bankruptcy, this time under Chapter 7 of the Bankruptcy Code. Continental was aware of both bankruptcy actions but, believing that the debts were uncollectible, wrote them off in 1991 and made no contemporaneous effort to collect on Stanley’s guarantee.

b. Early stages of litigation. In 1999, however, Continental apparently decided that it was worthwhile to pursue Stanley’s guarantee and so began foreclosure proceedings against the Ross house in the Land Court, where it received a judgment under the Soldiers’ and Sailors’ Civil Relief Act of 1940, 50 U.S.C. App. § 510 (2000), authorizing entry and sale.3 Negotiations between Continental and Stanley then ensued but ended without resolution. At some point between 1989 and the time it started the 1999 litigation, Continental had destroyed its Docunet billing records in the ordinary course of business. Summaries of at least some of those records, however, were available, albeit without any documentary support or backup.

By the summer of 2000, Stanley was suffering from cancer and he and Francine decided to sell their house. It was then that Francine first learned of Continental’s second mortgage and the [500]*500impediment to a sale the mortgage posed.4 More negotiations ensued, during which Francine and Stanley told Continental of Stanley’s health problems.

The negotiations failed. Thereafter, Stanley and Francine brought an action against Continental in Superior Court seeking declaratory and injunctive relief to prevent foreclosure and damages for violation of G. L. c. 93A, breach of contract, fraud, interference with advantageous relations, “fraudulent inducement,” and intentional infliction of emotional distress. Continental counterclaimed against Stanley on his guarantee of the Docunet/Continental agreement.

After initial skirmishes, the case was set for trial on an expedited basis. The parties then agreed that Continental would discharge its mortgage in return for creation of an escrow fund into which Stanley and Francine would place $50,000 to be held until entry of final judgment.

c. Trial and decision. Escrow agreement in place, the case was tried, jury-waived, before a judge of the Superior Court, who dismissed all of Stanley’s and Francine’s claims except their claim under G. L. c. 93A. With respect to that claim, the judge found that, although Continental asserted that Stanley owed approximately $15,000 in principal and approximately $17,000 in interest on the guarantee, Continental’s own records were insufficient to prove that Stanley owed that or any other amount. In addition, the judge found that Continental never told Stanley or Francine about destruction of its records and resulting inability to provide any “backup” for its claim. Continental hid information about its record destruction from Stanley and Francine, the judge found, “in order to, and solely as a way to, leverage [Stanley’s and Francine’s] interest in selling their house into a willingness on [their] part ... to pay money to Continental, even though it could not document or back up the actual monies owed” and even though it knew that Stanley “was suffering from cancer and that as a result of his illness, the Rosses intended to sell their home.”

Insofar as Continental’s counterclaim was concerned, however, the judge stated that she disbelieved Stanley’s trial testi[501]*501mony that Docunet had paid Continental everything Continental was owed. More specifically, she disbelieved Stanley’s testimony that he, himself, had sent checks directly to Continental as well as his testimony that canceled checks confirming those payments had been destroyed by a basement flood that had left all other basement contents intact.

Based on the list of creditors Stanley filed in the 1991 bankruptcy proceedings, the judge found that Docunet owed Continental “at least” $7,500 and therefore ordered entry of judgment for Continental in that amount plus interest. With respect to Continental’s violation of G. L. c. 93A, the judge determined that Stanley’s and Francine’s damages were the attorney’s fees of $10,773.36 they had incurred defending against Continental’s foreclosure efforts. Based on a finding that Continental’s actions were knowing and wilful, she trebled those damages to $32,321.88 and awarded Stanley and Francine $57,696.31 in attorney’s fees for prosecution of the c. 93A claim.

d. The first judgment. Stanley died a few days after the trial ended, and his estate was substituted as a plaintiff. Francine and the estate (collectively Francine) and Continental promptly filed motions for reconsideration of the order for entry of judgment, each focusing on components of the order that were adverse to their interests. Continental, arguing that it had received an insufficient damages award, supported its motion with an affidavit from its attorney that took aim at the reliability of Docunet’s bankruptcy creditor list, which the judge had used as a basis for her damages award.

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

Related

Trindade v. Grove Services, Inc.
D. Massachusetts, 2023
Johnson v. Frei
103 N.E.3d 1239 (Massachusetts Appeals Court, 2018)
Murad v. Quinones
89 N.E.3d 1205 (Massachusetts Appeals Court, 2017)
Rass Corporation v. The Travelers Companies, Inc.
63 N.E.3d 40 (Massachusetts Appeals Court, 2016)
Graf v. Hospitality Mutual Insurance
33 Mass. L. Rptr. 13 (Massachusetts Superior Court, 2015)
Bamberg v. Goldman, Sachs & Co.
771 F.3d 37 (First Circuit, 2014)
Anderson v. American International Group, Inc.
32 Mass. L. Rptr. 280 (Massachusetts Superior Court, 2014)
Neuwirth v. Neuwirth
8 N.E.3d 757 (Massachusetts Appeals Court, 2014)
Marbro Hudston, Inc. v. All Pro Productions, Inc.
2014 Mass. App. Div. 33 (Mass. Dist. Ct., App. Div., 2014)
T. Butera Auburn, LLC v. Williams
986 N.E.2d 404 (Massachusetts Appeals Court, 2013)
Stacy v. Zhao
2013 Mass. App. Div. 59 (Mass. Dist. Ct., App. Div., 2013)
Specialized Technology Resources, Inc. v. JPS Elastomerics Corp.
28 Mass. L. Rptr. 163 (Massachusetts Superior Court, 2011)
Batishchev v. Cote
27 Mass. L. Rptr. 150 (Massachusetts Superior Court, 2010)
Board of Trustees of the Sea Grass Village Condominium v. Bergquist
2009 Mass. App. Div. 132 (Mass. Dist. Ct., App. Div., 2009)

Cite This Page — Counsel Stack

Bluebook (online)
899 N.E.2d 847, 73 Mass. App. Ct. 497, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ross-v-continental-resources-inc-massappct-2009.