MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The origins of this case date back to the 1980s, when Joseph Verna and Leonard S. French, who were then friends, participated in a series of real estate investments. The investment at issue in this case involved the purchase of approximately five acres of land in Franklin through a trust named the Motel Realty Trust (MRT).
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The sole beneficiary of MRT was Motel Realty Associates (MRA), of which Verna, French, members of Frenchs family, and another individual named Stephen Montana were members. Vernas 8.33 percent interest later came to be held by the Greenspring Realty Trust (Greenspring). After the land was sold, in part to a hospital and in part at an auction to Montana, Greenspring brought this action in 2014 claiming that it was not paid its 8.33 percent share of the proceeds. Greenspring asserted claims against (1) French
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for an accounting of MRA and for breach of the duty of good faith and loyalty and (2) MRT for an accounting of MRT.
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Following a jury-waived trial, the trial judge found in Greensprings favor in the amount of $72,607.54. The trial judge also awarded Greenspring prejudgment interest for the period from July 2, 2014, when the action was filed, to January 1, 2019, when the accrual of prejudgment interest was tolled. Greenspring appeals from the final judgment entered on September 25, 2020, arguing that its claim against MRT was a derivative claim rather than a direct claim, that a variety of other errors flowed from the trial judges treatment of the claim as a direct claim, and that the judge committed errors of law or abuses of discretion in declining to award attorneys fees and additional interest. We affirm.
Background. We set forth the facts as found by the trial judge, reserving for our discussion the details regarding the procedural history of this case. French handled the day-to-day affairs of MRT as its manager. In 1998, French negotiated to sell a 4.85-acre parcel of land to a hospital; the parcel included 3.69 acres of MRTs land, plus additional neighboring land in which Greenspring had no interest. After the 3.69 acres were sold to the hospital, Montana brought an action claiming that he was not paid his share of the proceeds, and the claim was submitted to an arbitrator. While the arbitrator ruled in Montanas favor and the Superior Court confirmed the arbitration award, MRT did not pay the judgment. As a result, Montana initiated a legal proceeding to have the remaining portion of MRTs land sold at a public auction. Montana was the highest bidder at that auction, acquiring the land for $155,000.
Thereafter, Greenspring brought this action claiming that it was not paid its 8.33 percent share. The trial judge concluded that Greenspring was entitled $72,607.54, comprising 8.33 percent of the following amounts: $675,128 in proceeds from the sale to the hospital, $41,511.15 in extension fees paid by the hospital due to delays in closing,
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and $155,000 in proceeds from the auction sale.
Discussion. 1. Preliminary matters. Before turning to the merits, we note that the defendants have filed motions to stay this appeal and to expand the record. The motions arise out of other cases pertaining to different real estate investments made by Verna and French. The defendants argue that this appeal should be stayed pending resolution of the other cases to avoid piecemeal appeals and that we should expand the record in this appeal to include documents on file in the other cases. The motions to stay and to expand the record are denied.
As noted, the other cases pertain to different real estate investments made by Verna and French, and they were brought in 2014 by Greenspring against French, individually or as the trustee of various trusts.
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While the other cases are factually distinct from this case in that they involve different real estate investments and different trusts, the parties have represented that the other cases present issues that are similar, at least in some respects, to the issues presented in this case. To that end, this case was tried first as the “bellwether” case. Given that all the cases have been pending for eight years, and that this case was intended to be the bellwether case, we conclude that the “efficient disposition of cases” is best served by proceeding with this appeal.
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Danvers v. Wexler Constr. Co., 12 Mass. App. Ct. 160, 164 (1981). Moreover, where the other cases are factually distinct, we limit our review to the documents and exhibits on file in this case. See Mass. R. A. P. 8 (a), as appearing in 481 Mass. 1611 (2019).
2. Direct or derivative claim. Turning to the merits, Greensprings primary argument is that its claim against MRT was a derivative claim brought on behalf of MRA, and that a variety of other errors flowed from the trial judges treatment of the claim as a direct claim. Greenspring raised this argument in a posttrial motion, and the trial judge ruled that Greensprings claim against MRT was pleaded and tried as a direct claim. There was no error in the trial judges ruling.
Whether Greensprings claim was direct or derivative turns on whether the harm alleged to be suffered “resulted from a breach of duty owed directly to [Greenspring], or whether the harm claimed was derivative of a breach of duty owed to [MRA].” International Bhd. of Elec. Workers Local No. 129 Benefit Fund v. Tucci, 476 Mass. 553, 558 (2017). In various places throughout Greensprings complaint, Greenspring asserted that MRT committed breaches of duties owed to Greenspring, not MRA, and requested relief for Greenspring, not MRA. Specifically, Greenspring alleged that MRT never made any distributions or rendered any accountings to Greenspring and requested that MRT be required to render true and complete accountings to Greenspring. Moreover, where Greenspring was not trying to recover any money for members of Frenchs family and Montana already had resolved his claim against MRT, the sole issue at trial was the amount of money owed to Greenspring, not to MRA generally for distribution to all the partners. We therefore agree with the trial judge that Greensprings claim against MRT was pleaded and tried as a direct claim.
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3. Attorneys fees.
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Greenspring argues that the trial judge abused his discretion in denying Greensprings request for attorneys fees where Greenspring prevailed on its claim against French for breach of the duty of good faith and loyalty. Greenspring argues that Frenchs defense, that he did not understand his obligation to provide an accounting, was made in bad faith. See Miaskiewicz v. LeTourneau, 12 Mass. App. Ct. 880, 881 (1981). However, this argument was not raised below. The basis for Greensprings request for attorneys fees below was that Greensprings claim against MRT was a derivative claim through which Greenspring was pursuing a common fund. See note 11, supra. The argument that Frenchs defense to Greensprings claim for breach of the duty of good faith and loyalty was made in bad faith is therefore waived. See Jacobs v. Massachusetts Div. of Med. Assistance, 97 Mass. App. Ct. 306, 311 n.7 (2020).
4. Interest. Greensprings final argument is that the trial judge abused his discretion in tolling the accrual of prejudgment interest as of January 1, 2019. As we explain, however, where the trial judge provided a reasoned basis for his decision, he did not abuse his discretion.
We briefly set forth the pertinent procedural history. On September 20, 2017, an order for judgment entered on the docket in Greensprings favor in the amount of $72,607.54, plus statutory interest and costs. Before a final judgment could enter, French died, and the case was stayed until such a time as a personal representative was appointed for Frenchs estate. In the probate proceedings, Greenspring objected to the appointment of Frenchs daughter as the personal representative. Greenspring objected, in part, on the basis that (1) French was the trustee of various trusts at issue in the other cases, (2) French improperly dispersed trust funds to, among others, his daughter, and (3) Greenspring planned to amend its complaints in the other cases to assert derivative claims against the trusts, which would create a conflict of interest for Frenchs daughter.
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Ultimately, a Probate and Family court judge appointed Frenchs daughter as personal representative to serve with limited power and a special personal representative to act on Greensprings cases. The stay then lifted, Greenspring requested to amend its complaints in the other cases to assert derivative claims, and the defendants filed a motion to toll the accrual of statutory interest.
At a hearing on the parties’ motions, the trial judge first denied Greensprings request to amend its complaints to assert derivative claims and stated, “[T]hese cases do not involve derivative claims. Ive said that before.” Next, the trial judge ruled that Greensprings position in the probate proceedings that it was going to amend its complaints to assert derivative claims caused unnecessary delays, thus warranting the tolling of prejudgment interest. This analysis provided a reasoned basis for the trial judges decision to toll the accrual of statutory interest, and he therefore did not abuse his discretion. See Correa v. Schoeck, 479 Mass. 686, 701 (2018) (award of prejudgment interest may be denied where plaintiff delays progression of case).
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Judgment affirmed.
FOOTNOTES
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. Other investments led to other lawsuits, as discussed infra.
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. French has since died, and Edward P. Harrington, special personal representative, has been substituted as a defendant.
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. As a technical matter, the trustee of Greenspring brought this action against French and the trustee of MRT. In the interest of simplicity, we refer to the trustees of Greenspring and MRT by the names of the trusts.
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. The hospital paid $54,562.50 total in extension fees, but the trial judge apportioned some of those fees to the neighboring land.
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. One of the cases involves an additional plaintiff, and they all involve additional defendants.
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. Because the other cases are not before us, we pass no judgment on whether they present similar legal issues.
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. We are not persuaded by Greensprings argument that (1) MRT did not owe any duties to Greenspring because MRTs beneficiary was MRA, not Greenspring, and (2) therefore, the harm had to have resulted from a breach of duty owed to MRA. Even if that were true, Greensprings complaint did not put MRT on notice that Greenspring was pursuing a derivative claim. See Berish v. Bornstein, 437 Mass. 252, 269 (2002) (complaint must “afford[ ] fair notice to the defendant of the basis and nature of the action against him”). See also Mass. R. Civ. P. 23.1, 365 Mass. 768 (1974) (establishing heightened pleading standard for derivative claims).
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. Greenspring raises several arguments regarding attorneys fees and interest. Some of those arguments -- that Greenspring was entitled to attorneys fees for pursuing a common fund, see Coggins v. New England Patriots Football Club, Inc., 406 Mass. 666, 669 (1990), and that an award of precomplaint interest was necessary to make the trust whole, see Berish, 437 Mass. at 270-271 -- are premised on the idea that the claim against MRT was a derivative claim, and we need not address those arguments further. However, Greenspring also raises arguments regarding attorneys fees and interest that do not turn on whether the claim against MRT was a derivative claim, and we address those arguments herein.
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. As explained by Greensprings counsel, Frenchs daughter “was the recipient, or the incorrect recipient, of all of the improper distributions that were made by her father ․ and so she has a financial interest in not ․ seeing that money get pulled back into the trust[s].”
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. The defendants’ request for appellate attorneys fees is denied.