Senior Housing Properties Trust v. HealthSouth Corp.

447 Mass. 259
CourtMassachusetts Supreme Judicial Court
DecidedJuly 17, 2006
StatusPublished
Cited by9 cases

This text of 447 Mass. 259 (Senior Housing Properties Trust v. HealthSouth Corp.) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Senior Housing Properties Trust v. HealthSouth Corp., 447 Mass. 259 (Mass. 2006).

Opinion

Marshall, C.J.

This appeal arises from consolidated cases pending in the Land Court among various trusts and corporate entities and their subsidiaries concerning the sale and lease back arrangements of five nursing homes and two rehabilitation hospitals located in the Commonwealth. At issue is whether a judge in the Land Court may invoke the provisions of Mass. R. Civ. R 39 (b), 365 Mass. 801 (1974), to revive a right to a trial by jury that has been waived for failure to comply with the procedures set forth in G. L. c. 185, § 15. That statute provides, in part, that failure to enter in the Superior Court (within a specified period) questions that have been “framed” in the Land Court “shall constitute a waiver of the claim to a trial by jury, and thereafter the superior court shall have no further jurisdiction of the case.”3

In this case a judge in the Land Court concluded that the defendant, HealthSouth Corporation (HealthSouth), failed to comply with the requirements of G. L. c. 185, § 15, and consequently had waived its right to a jury trial. Invoking rule 39 (b), the judge then ruled, as a matter of discretion, that HealthSouth “may have a jury trial on all issues so triable.” The judge denied the plaintiffs’ subsequent request that he report [261]*261his order to the Appeals Court pursuant to Mass. R. Civ. R 64 (a), as amended, 423 Mass. 1403 (1996). The plaintiffs petitioned for interlocutory relief, G. L. c. 231, § 118, first par., and a single justice of the Appeals Court granted leave to pursue an interlocutory appeal from the judge’s order. We transferred the case here on our own motion. We affirm so much of the judge’s order as ruled that HealthSouth waived its right to a jury trial and reverse so much of his order as granted Health-South the right to a jury trial in the Superior Court.

1. Background. The plaintiffs, Senior Housing and HRPT Properties Trust (HRPT Trust), are real estate investment trusts that own and lease commercial real estate, including nursing homes and hospitals. HealthSouth is a health care services provider that owns and leases medical facilities to conduct its operations. For disputed reasons not relevant to our decision, in January, 2002, HealthSouth and Senior Housing restructured their existing financial arrangements and entered into a new “Exchange Agreement” whereby HealthSouth conveyed two rehabilitation hospitals to Senior Housing and Senior Housing conveyed five nursing homes to HealthSouth. By separate agreement signed the same day, HealthSouth leased the two hospitals from Senior Housing, with an option to purchase.4 HealthSouth subsequently conveyed one of the five nursing homes it had purchased, a skilled nursing facility in North Andover, to Senior Residential Care/North Andover, Limited Partnership (Senior Residential Care).5

The Land Court cases arose from these transactions: the first, [262]*262which we shall refer to as the parking lot case, was initiated by HRPT Trust, and the second, which we shall refer to as the lease reformation case, was commenced by Senior Housing. We review the procedural history of both cases in some detail as it is relevant to our analysis of G. L. c. 185, § 15.

On February 3, 2003, HRPT Trust commenced an action against Senior Residential Care to quiet title, pursuant to G. L. c. 240, §§ 1-10,® claiming that Senior Residential Care was wrongfully using a parking lot and buildings owned by HRPT Trust in North Andover adjacent to one of the skilled nursing facilities involved in the 2002 transaction between Senior Housing and HealthSouth. HRPT Trust also sought declaratory relief, remedies for trespass and ejectment, and damages. On March 18, 2003, pursuant to Mass. R. Civ. P. 24, 365 Mass. 769 (1974), HealthSouth filed a motion to intervene in the parking lot case and filed a complaint and a jury demand, naming Senior Housing and HRPT Trust as defendants (rule 24 complaint).6 7 Health-South advanced claims of breach of contract, breach of implied covenant of good faith and fair dealing, reformation, fraud, negligent misrepresentation, civil conspiracy, and violations of G. L. c. 93A, alleging that it had acquired the disputed property in North Andover under the January, 2002, exchange agreement with Senior Housing, and that, during negotiations, Senior Housing had misrepresented that it was the record owner of the disputed property, when HRPT Trust was its actual owner.8 On June 2, 2003, Senior Housing and HRPT Trust, represented by the same counsel, filed a joint answer to HealthSouth’s rule 24 complaint, together with a demand for a jury trial.9

Meanwhile, on April 16, 2003, Senior Housing had commenced a separate action in the Land Court against HealthSouth [263]*263(lease reformation case), alleging that HealthSouth’s chief financial officer had misrepresented its creditworthiness during the January, 2002, lease negotiations,10 and that its creditworthiness was a “primary factor” on which the 2002 amended lease agreement was based. Senior Housing sought reformation of the lease.11 On May 23, 2003, HealthSouth filed its answer as well as counterclaims in the lease reformation case, together with a demand for a jury trial.12 On July 11, 2003, HealthSouth’s motion to consolidate the two cases was allowed. Mass. R. Civ. R 42 (a), as amended, 423 Mass. 1402 (1996). Thereafter, on September 16, 2003, Senior Housing only, now represented by separate counsel, filed an answer to HealthSouth’s counterclaims in the lease reformation case.13 There matters stood. Of relevance to this case, no party framed jury trial issues in the Land Court or filed a statement of jury issues in the Superior Court. See G. L. c. 185, § 15.

Six months later, on March 12, 2004, Senior Housing moved to amend its complaint in the lease reformation case, which was allowed on September 22, 2004.14 On November 2, 2004, Health-South filed its answer to the amended complaint. It once again asserted counterclaims against both Senior Housing and HRPT [264]*264Trust, and made a demand for a jury trial.15 Senior Housing (but again not HRPT Trust) filed an answer to HealthSouth’s amended counterclaims on November 22, 2004.

On December 3, 2004, a case management conference was scheduled. By this date no party had filed a statement of jury issues as required by G. L. c. 185, § 15. In response to a claim of Senior Housing that HealthSouth had waived its right to a jury trial, the judge in the Land Court invited all parties to submit statements on that question, which Senior Housing and Health-South did on December 20, 2004.16 Senior Housing acknowledged that HealthSouth had made a jury demand no “later than 10 days after the service of the last pleading directed to such issue,” in accordance with Mass. R. Civ. P. 38 (b), 365 Mass. 800 (1974), pointing to HealthSouth’s demand for a jury trial filed with its first answer and counterclaims on May 23, 2003. Senior Housing argued, however, that HealthSouth had thereafter waived its right to a jury trial by failing to file a statement of jury issues in the Superior Court “within thirty days after the expiration of the time for claiming a trial by jury,” as required by G. L. c. 185, § 15.17 HealthSouth countered that, while [265]

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Bluebook (online)
447 Mass. 259, Counsel Stack Legal Research, https://law.counselstack.com/opinion/senior-housing-properties-trust-v-healthsouth-corp-mass-2006.