text:
    FORBES FAMILY RANCH LIMITED LIABILITY COMPANY v. William C. FORBES, cotrustee, & another.
    17-P-704
    Appeals Court of Massachusetts.
    Entered: September 13, 2018
    MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

      Of the Hillside Street Trust.

      Julia Forbes, as cotrustee of the Hillside Street Trust.

   Forbes Family Ranch Limited Liability Company (Forbes, LLC), a beneficiary of the Hillside Street Trust (HST), commenced this action on August 12, 2011, seeking to have William C. Forbes (Cam) and Julia Forbes (Julia) removed as trustees of the HST pursuant to G. L. c. 203, § 12. After a trial, a judge of the Probate and Family court entered judgment dismissing the complaint and Forbes, LLC, now appeals. , For the reasons that follow, we affirm the judgment.

Background. We refer the parties to the judge's careful and detailed findings for the background facts which are largely undisputed. We set forth only those facts necessary to address the arguments made on appeal. Briefly, this case revolves around Forbes family trusts which collectively own and/or operate the Beckton Stock Ranch and surrounding properties in Sheridan County, Wyoming. Two Forbes family trusts, the HST and the Beckton Ranch Trust (BRT), own irrigated and nonirrigated foothills on which the ranch operates, as well as acres of open mountain land. A third trust, the Sarah P. Forbes Revocable Trust (the SPFRT), owns the ranch operation. While all three trusts have overlapping beneficiaries and trustees, not all of the beneficiaries and trustees are the same for each trust and the percentages of each trust held by a particular beneficiary also varies.

The HST is a Massachusetts business trust and specifically provides that it is to be governed by Massachusetts law. The purpose of the trust is for the trustees to hold any property acquired by the trust for the benefit of the shareholders. There is no suggestion in the trust instrument that the trustees have any duty to preserve the trust properties in any particular configuration or put them to any particular use. Indeed, when the HST first was created, it held property in Milton, Massachusetts. The trust instrument confers virtually unlimited powers on the trustees to "deal with the trust property for the purpose of carrying out the terms of this trust as if they were the outright owners thereof" with no need to obtain the consent of the shareholders to take action. The HST is to terminate upon the death of Amelia Forbes, 100 years old at the time of trial. The trust provides that "[u]pon termination the entire trust property shall be distributed."

Between 1984 and 1997, Sarah B. Forbes (Sal) transferred all of the shares of the HST to her children including sixty-one shares to each of her living children, Waldo E. Forbes, II (Spike), Charlotte F. Wunderlick (Cherry), Julia Forbes, Sarah Forbes, William C. Forbes (Cam), Edith L. Forbes (Elf), and the remaining fifty-four shares to Douglas and Donald Bingham, the heirs of Sal's deceased daughter. At some point before this litigation, Spike transferred his shares to Forbes, LLC. At the time of the litigation, Cam and Julia were cotrustees of the HST and have been since August of 2007.

The easement transaction. Between 2009 and 2010, the BRT trustees negotiated with the Nature Conservancy regarding the sale of a conservation easement on BRT land. It is undisputed that for many years, the family had been interested in placing a conservation easement on some of the property and there was no opposition to the plan. Ultimately, the Nature Conservancy agreed to pay the BRT approximately $1,684,000 and convey a twenty-four-acre parcel known as the "Polo Field," appraised at $316,000, in exchange for a conservation easement over 1,020 acres of BRT land. The judge found that money in exchange for a conservation easement was both unusual and of great benefit to the BRT. No HST land was included in the conservation easement.

The crux of this appeal turns on the manner in which the BRT granted the easement. In order for funding to be available to the Nature Conservancy from the State of Wyoming, the deal had to be completed by the end of 2010. In October of 2010, BRT learned that the Nature Conservancy would require each shareholder to sign an eligibility form before a sale could be completed. The trustees concluded it simply was not feasible to obtain each BRT shareholder's signature within the required timeframe. The Nature Conservancy, therefore, suggested a single BRT shareholder act as an agent to complete the deal.

The trustees selected Julia to be the agent largely because she lived in a State that did not have personal income tax, time was of the essence, and she was willing to do it. The judge found that the BRT "trustees did not consider a non-trustee as an agent because time was critical and they did not want to jeopardize the transaction." Julia, however, held less than the 210 BRT shares that the trustees determined, based on appraisals and a market analysis, were necessary to exchange for the 1,020 acres on which the conservation easement would be placed. Accordingly, on December 15, 2010, Julia relinquished all sixty-one of her HST shares in exchange for approximately 320 acres of HST land, which bordered both HST and BRT land. She then transferred the 320 acres to the BRT trust for sixty newly issued BRT shares. Next, the BRT transferred the 1,020 acres of BRT land on which the conservation easement was to be placed to Julia in exchange for her 210 BRT shares. Thereafter, on December 15, 2010, Julia granted the conservation easement to the Nature Conservancy over the 1,020 acres.

In early 2011, in exchange for 172 new shares of BRT, Julia conveyed to BRT the 1,020 acres, now burdened by the conservation easement, along with the cash proceeds less taxes and other related transactional expenses. When the transaction was complete, Julia no longer had any shares in the HST. The judge specifically found that Julia did not personally benefit from the easement transaction. In fact, he found that she effectively paid the taxes because she received fewer BRT shares (172) when she transferred the 1,020 acres back into the BRT than the number of shares she used to acquire the 1,020 acres from the BRT (210).

Julia and Cam did not inform the HST shareholders specifically about the trust's acquisition of Julia's shares in advance. However, in a December, 2009, letter to HST shareholders, the trustees had described a mechanism by which shareholders could transfer their shares, represented by a proportionate share of HST property, to the BRT in exchange for shares in the BRT in order to take advantage of the later BRT termination date. The proposal in large part mirrored what occurred with the redemption of Julia's shares in the easement transaction. The trustees invited feedback and indicated that in the absence of objection, they were inclined to offer the "swap" option to the shareholders. None of the shareholders, including Spike, objected. In February of 2011, Julia and Cam provided the shareholders with more specifics on the opportunity to transfer their HST shares for property to be transferred to the BRT for an equal number of BRT shares. So far as the record reflects, none of the shareholders exchanged his or her shares.

The judge found that the trustees chose the specific parcel of HST land transferred to Julia because it did not have access to public utilities or a public road as a stand-alone property and because the water used to irrigate the 320-acre parcel was owned by the BRT. In addition, the judge found that the HST benefited from the sale of the conservation easement to the Nature Conservancy because the HST thereafter held the most prime hunting and recreation land in the area, and the land is the only divisible and buildable land along the face of the mountains that is not burdened by a conservation easement unlike many old working ranches in the area.

Subsequent transactions. After the easement-related transaction, the three Forbes family-related trusts engaged in a complicated series of additional land swaps over a span of many months. The judge found that although there had been a reduction in HST's holdings, following the transactions, the HST held approximately 800 acres of land that can be divided in multiple ways, including three or four small ranches or "ranchettes," two thirty-six-acre subdivided lots, a large tract of mountain land, and the "Fox" property. In short, the judge concluded the HST holdings provided varied possibilities for subdivision to accommodate the shareholders' different interests upon termination of the HST.

Spike commenced this action in the Probate and Family Court seeking removal of the HST trustees, an accounting, and rescission of the trustees' conveyances. He asserted that Cam and Julia breached their fiduciary duties to the shareholders of the HST by participating in "unauthorized" transfers of Julia's shares for trust property. Further, Spike asserted that by virtue of all of the transfers, the HST gave up 573 acres of land, including nearly all of the HST's irrigated lands and lands that support ranch operations and received back a net of approximately forty-five acres of land, the matriarch's house, and four and one-half percent interest in the Fox property, valued at $45,000. Based on expert testimony which he credited, the judge found, however, that when all the transactions had been completed, there certainly had been a loss of acreage and irrigable land, but there had been virtually no loss in value of the HST. Specifically, the judge found that the value of the HST land was $10,850,000 before the transactions and $9,245,000 after the transactions. More importantly, the value of each HST share before the transaction was $25,833.33 and, because the trust recaptured Julia's shares to complete the conservation transaction, the per share value of the HST after the transactions was effectively the same at $25,752.09.

The judge concluded that Cam and Julia did not commit a serious breach of trust or otherwise breach their duties to the shareholders. Further, the judge found that even if they had made errors in judgment, the HST benefited from the trustees' breadth of knowledge and their work as unpaid trustees and it was not in the best interests of the trust to remove Cam and Julia as trustees.

Discussion. We review a decision on whether to remove a "trustee only 'to determine whether the judge's findings are clearly erroneous or whether there has been an abuse of discretion.' " Passero v. Fitzsimmons, 92 Mass. App. Ct. 76, 82 (2017), quoting from Matter of the Trusts Under the Will of Crabtree, 449 Mass. 128, 136 (2007) (Will of Crabtree ). "If challenged, a trustee 'has the burden of showing that he has discharged the duties of trustee with reasonable skill, prudence, and judgment.' " Will of Crabtree, 449 Mass. at 136, quoting from Rugo v. Rugo, 325 Mass. 612, 617 (1950). "[T]he 'question in each case is whether the circumstances are such that allowing the trustee to continue would be detrimental to the trust.' " Will of Crabtree, 449 Mass. at 136, quoting from 2 A.W. Scott & M.L. Ascher, Trusts § 11.10, at 656 (5th ed. 2006).

We limit our review to the issues Spike raises on appeal.

a. Distribution. Spike first argues that the 320 acre transfer to Julia should be considered separately from the subsequent transfers between the trusts and that the judge's conclusion that the transfer of the 320 acres to Julia was not an unauthorized "distribution" pursuant to section five of the HST instrument was clearly erroneous. Quite simply, section four of the trust specifically authorizes the trustees to acquire outstanding shares for such consideration as they may determine is appropriate. Nothing in the terms of the trust prevented the trustees from acquiring Julia's shares. Further, the argument that the transfer was a "distribution" pursuant to section five is contradicted by Spike's own testimony. He testified that Julia "received a defined asset in exchange for consideration, namely her own shares. It was a sale and transfer of assets. It was not a distribution ...." We agree.

As authorized by the trust, the trustees acquired Julia's outstanding shares in exchange for what they considered to be a proportionate share of the trust property. Section five of the trust does allow trustees, in their discretion, to make "distributions" of principal and income to shareholders in proportion to shares held and the trustees at different times did refer to the transfer to Julia as a "distribution." Such statements were made, however, in the context of a "distribution" in exchange for Julia's shares in the HST. Distributions pursuant to section five do not require shareholders to forfeit their shares in the trust. Accordingly, each of Spike's arguments grounded on the premise that the trustees made an unauthorized "distribution," in violation of the terms of the trust, fails.

b. Duty of loyalty. Spike next contends that even if the trust permitted the transfer to Julia, the transfer "violated the fundamental precept of the duty of loyalty that a trustee shall administer the trust solely in the interests of the beneficiaries." Spike largely ignores that the HST instrument grants the trustees extraordinarily broad powers. It even expressly authorizes trustees to have conflicts of interest such as the one alleged here. Where a trust document grants a trustee discretion beyond that ordinarily attaching to a trustee, "acts of a trustee challenged as improper self-dealing will be struck down by the courts only 'upon clear proof that the trustees are abusing their authority and acting in perversion of the trust.' " Steele v. Kelley, 46 Mass. App. Ct. 712, 735 (1999), quoting from Dumaine v. Dumaine, 301 Mass. 214, 221 (1938). That is, courts will interfere with the acts of a trustee granted extraordinary discretion only if the trustee acts "beyond the bounds of a reasonable judgment," "arbitrarily, capriciously," "in bad faith," or "as the result of fraud." Ibid. The record does not support a finding of such egregious conduct in this case. Moreover, Sal knew when she transferred the property into the HST that conflicts of interest were permitted by the terms of the trust. Removal on those grounds, therefore, is not warranted. See Symmons v. O'Keeffe, 419 Mass. 288, 298 n.9 (1995). In addition, as the judge noted, the trust instrument provides that the written approval of an accounting by two-thirds of the shareholders shall completely discharge the trustees and be final and binding upon all shareholders. Here, the judge found that eighty-three percent of the shareholders approved of the trustees' transactions.

That is not to say the trustees' conduct is beyond review. Pursuant to G. L. c. 203E, § 802(g )(3), relied on by Spike, a trustee's duty of loyalty to beneficiaries does not preclude "a transaction between a trust and another trust ... of which the trustee is a fiduciary or in which a beneficiary has an interest," provided the transaction is "fair" to the beneficiaries. Although G. L. c. 203E, § 802(g )(3), is not applicable to this case, earlier case law also recognized that a " 'fundamental fairness' test" applied to assertions that a fiduciary has engaged in self-dealing. Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 529-530 (1997). We conclude that a fairness analysis was appropriate in considering Spike's claim of self-dealing under both versions of the Massachusetts Probate Code.

Based on an appraisal on behalf of the Nature Conservancy, the trustees determined that 320 acres of HST property was the proper consideration for Julia's shares of the HST. That appraisal assigned a value of $3,500 per acre to the property owned by members of the Forbes family, including the HST land. Expert testimony at trial, credited by the judge, reaffirmed that $3,500 per acre was an accurate valuation. Indeed, when Spike later proposed exchanging BRT shares for new HST shares, he agreed that the trustees' "methodology in setting relative land valuations seems fine and appropriate." For reasons explained in his decision and not challenged on appeal, the judge declined to credit Spike's expert's contrary opinion of value of the HST land prior to and after the easement transactions.

The judge found, based on the trustees' expert's testimony which the judge credited, that the HST property was valued at $10,850,000 before the sale of the 320 acres and Julia held 14.52 percent of the HST shares. Thus Julia's interest in the HST had a value of $1,575,420 prior to the redemption of her shares. Multiplying the 320 acres by the $3,500 per acre value adopted by the judge results in a total value of $1,120,000. At that rate, if the transaction was unfair to anyone, it was unfair to Julia. The trustees met their burden to demonstrate that the transaction was fair and we discern no breach of loyalty or other fiduciary duty in the transfer of the 320 acres.

A persistent theme at trial, and reflected in his brief on appeal, was Spike's assertion that the trustees chose the HST's most valuable land to transfer to the BRT. The judge credited the trustees' rationale for choosing the specific 320 acres and concluded the parcel was a logical choice which benefited both trusts by creating more possibilities for subdivision of the HST lands. Moreover, the trust instrument did not require the trustees to preserve any particular land on behalf of the trusts. With the termination of the HST and resulting distribution looming, that the trustees had an eye on reasonable divisions of the land cannot be said to be unreasonable, imprudent, or unfair.

c. Value of HST after all of the transfers between the family trusts. The only argument Spike makes related to the transactions that took place after the easement transaction is that the judge's conclusion that there was no loss in value to the remaining HST shareholders after all of the transactions were completed was clearly erroneous. Spike contends the judge erred in relying on the trustees' expert's appraisal in drawing this conclusion because the expert valued only land and improvements without separately valuing "severable and transferable water rights." The issue of the transfer of Wyoming water rights was precluded by a pretrial motion in limine. Expert testimony on that issue was also precluded. Moreover, it was due to issues regarding water rights that Spike filed a motion to amend his complaint, which was denied. Spike's entire argument on the severable and transferable water rights seems to be an effort to get around these adverse rulings.

To the extent that Spike's contention that the trustees' expert's appraisal testimony should be disregarded because it did not consider severable water rights as a separate component of value was an issue properly raised and preserved below, Spike's contention that water rights should have been assessed separately is not supported by the record. In fact, our review of Spike's expert's appraisal reveals that his expert did not assess water rights as a separate and severable interest. Like the trustees' expert, he reduced the value due to the reduction of irrigated acres, but did not purport to separately value water rights. The trustees' expert noted the amount of irrigable land after the transfers is approximately twenty-two acres, compared to 266 irrigable acres prior to the transfer. Further, the appraisal recognized that irrigable land is more valuable than dry land. In short, the record does not support Spike's supposition that water rights should have been separately assessed or that the trustees' expert appraisal failed to consider and value the loss of "irrigable" acreage.

d. Motion to amend. Finally, Spike argues that the judge erroneously denied his motion to amend, filed on December 10, 2013, six weeks before trial originally was to begin. Although "a trial judge should be generously disposed to amending pleadings," DeVenuti v. Reardon, 37 Mass. App. Ct. 73, 77-78 (1994), "a liberal amendment policy does not justify overriding the rights of a person who would be prejudiced by the last minute allowance of a motion to amend." Walsh v. Chestnut Hill Bank & Trust Co., 414 Mass. 283, 286 (1993). "Among the good reasons ... for which a motion to amend may be denied are that no justification for the lateness of the motion is apparent (beyond counsel for the moving party having had a late dawning idea) and that one or more of the nonmoving parties would be caught off balance by the proffered amendment." DeVenuti v. Reardon, 37 Mass. App. Ct. at 77.

Here, the motion itself reveals that Spike waited some six months from the discovery of facts pertaining to his motion to amend before bringing the motion. Moreover, the defendants argued that the motion could not be allowed because the court lacks jurisdiction over the parties Spike sought to add. On appeal Spike makes no argument that the Probate and Family Court has jurisdiction over the various trustees and family members Spike sought to add. Given the delay in bringing the motion, apparent lack of jurisdiction over defendants sought to be added, and that only one month remained before trial was to begin, there was no abuse of discretion in the judge's denial of the motion to amend.

Judgment affirmed.

      Due to the common surname, we use the names and nicknames of the parties used by the parties and the Probate and Family Court.

      General Laws c. 203, § 12, was the statute in place governing removal of trustees when this action was commenced in 2011, and the complaint seeks recovery pursuant to it. St. 1954, c. 478, § 3. The subsequent statute, G. L. c. 190B, § 7-308, although approved January 15, 2009, was not made effective until March 31, 2012. St. 2008, c. 521, §§ 9 & 44, as amended by St. 2010, c. 409, § 23, and St. 2011, c. 224. The current statute, G. L. c. 203E, § 706, was made effective July 8, 2012, and specifically provides that it applies only to "judicial proceedings concerning trusts commenced on or after the effective date." St. 2012, c. 140, §§ 56 & 66.
      The judge and the parties all cite to the current statute, c. 203E, for the applicable standards on removal. Pursuant to G. L. c. 203E, § 706(b ), "[t]he court may remove a trustee if: (1) the trustee has committed a serious breach of trust; ... (3) because of unfitness, unwillingness or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries; or (4) there has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust and a suitable co-trustee or successor trustee is available." Under the former G. L. c. 203, § 12, the court could remove a trustee "if it finds that such removal is for the interests of the beneficiaries of the trust or ... [the trustee] is unsuitable therefore." Because the judge's findings are sufficient to sustain his decision under either version of the statute, we conclude the judgment may be sustained.

      The complaint also sought to compel a fiduciary accounting but the record suggests that an accounting has been distributed, the judge noted the request for a fiduciary accounting was not before him at trial, and the plaintiff makes no argument on appeal regarding any accounting or lack thereof.

      For convenience we refer to the plaintiff, Forbes, LLC, and Spike interchangeably.

      A Massachusetts business trust is "a form of business organization ... whereby property is conveyed to trustees, in accordance with the terms of an instrument of trust, to be held and managed for the benefit of such persons as may from time to time be the holders of transferable certificates issued by the trustees showing the share into which the beneficial interest in the property is divided." Brigade Leveraged Capital Structures Fund Ltd. v. PIMCO Income Strategy Fund, 466 Mass. 368, 369 n.4 (2013). See G. L. c. 182, § 1.

      Around 1984, Sarah B. Forbes (Sal), widow of Waldo E. Forbes, owned all of the shares of the HST trust and she transferred approximately 3,096 acres of the Wyoming property into the HST in exchange for the Milton property.

      Amelia Forbes is the sister of Waldo E. Forbes, and the last surviving child of Ellen Forbes.

      Considering Amelia Forbes's advanced years, it was anticipated at all times relevant to this appeal that the termination of the HST was approaching. Indeed, Amelia died on August 31, 2016. The BRT, on the other hand, will terminate twenty years after the death of Amelia Forbes, thus, twenty years after the HST terminates.

      Cam manages the ranch and is a trustee of all of the family trusts.

      The record is silent as to why no HST land was included. There is no indication that the Nature Conservancy expressed interest in purchasing an easement over HST land and Spike does not contend HST land should have been included.

      Julia waited until 2015 to transfer the "Polo Field" to the BRT due to litigation commenced by Spike in Wyoming.

      Cam and Julia, as cotrustees of the HST, transferred twenty-eight acres of HST land bordering the property, called Cave Creek, to the SPFRT in exchange for a single acre bordering HST property and a four and one-half percent interest as tenant-in-common in a remote 160-acre parcel of dry grazing land (the Fox property). In addition, BRT transferred to the HST a seventy-two-acre Cave Creek parcel in exchange for 253 acres of HST land referred to as Elk Draw, the site of family graves.

      In Wyoming, Spike commenced an action against the trustees of the BRT, making many of the same claims. See Forbes v. Forbes, 341 P.3d 1041 (Wyo. 2015). Although the Supreme Court of Wyoming recognized that the BRT was a Massachusetts business trust, it applied Wyoming law to the issues raised by Spike. As noted earlier, the HST trust contains a provision that it is to be governed by provisions of Massachusetts law. Neither party has argued that Wyoming law should be applied in this case or that principles of res judicata apply to this case. Accordingly, we apply the law of Massachusetts to this dispute.

      Spike suggests that the trust's failure to report the exchange on its taxes as a taxable event somehow means it was a "distribution," but does not explain the basis for his argument.

      "Any individual acting as a Trustee hereunder ... may deal and contract with, and be employed by the Trustees hereunder ... and may ... be a member, shareholder, creditor, attorney, director, officer, trustee, agent, or employee of any ... trust ... in which the trust hereunder is interested directly or indirectly as a stockholder ... all in the same manner and with the same freedom as though not a Trustee hereunder, and without accountability for any profit, benefit, or compensation received in connection with such action or relationship, notwithstanding, that such action or relationship may require the vote or consent of such individual and/or the Trustees hereunder, and such actions, dealings and transactions shall be neither void nor voidable."

      Although Sal was not the original settlor of the HST, she contributed all of the trust's current property to the HST. Presumably, she knew and understood the terms of the trust and the trustees' broad powers.

      Admittedly, the Nature Conservancy's appraiser first concluded the original per-acre value was $5,000, but adjusted it downward by thirty percent because of the vast size of the Forbes property and in recognition of the "generally accepted" principle that "significantly larger properties typically sell at per-acre prices less than those similar but smaller properties." Even if we were to conclude that a figure closer to the $5,000 per acre value originally arrived at by the appraiser should apply to the smaller parcel transferred to Julia, the value of the shares at that rate would have been $1,600,000, a close approximation to Julia's interest in the HST.

      Because the parties do not make the argument, we do not consider whether to evaluate the trustees' conduct as if they were officers in a closely held corporation. See Richardson v. Clarke, 372 Mass. 859, 861-862 (1977).


source: Caselaw Access Project

license: Public Domain

text:
    FIDELITY AND DEPOSIT COMPANY OF MARYLAND v. BEYOND CONSTRUCTION, INC.
    17-P-1190
    Appeals Court of Massachusetts.
    Entered: September 13, 2018
    MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
   Fidelity and Deposit Company of Maryland (F&D) appeals from the judgment dismissing its application pursuant to G. L. c. 254, § 15A, for summary discharge of a mechanic's lien filed by Beyond Construction, Inc. (Beyond). F&D argues that the judge erred in dismissing its application because Beyond failed to perfect its lien by recording a statement of account under G. L. c. 254, § 8 ( § 8 statement). We agree with the judge that F&D's action in recording a bond, pursuant to G. L. c. 254, § 14, dissolved the lien and obviated the need for Beyond to perfect the lien by recording a statement of account. We therefore affirm the judgment of dismissal.

Background. In June, 2014, a general contractor entered into a contract with the owner of property in the Brighton section of Boston to convert an office building into residential units. The general contractor retained a subcontractor to perform certain work. In June, 2016, that subcontractor retained Beyond to construct interior framing on the project. Beyond completed its work on the project by February, 2017. Claiming that it was owed nearly $200,000 for its work, Beyond filed a mechanic's lien, pursuant to G. L. c. 254, § 4, by recording a notice of contract on March 17, 2017.

On March 20, 2017, the general contractor recorded a bond, pursuant to G. L. c. 254, § 14, in the amount of the lien claimed by Beyond and identified F&D as the surety. On May 24, 2017, Beyond filed an action on the bond, pursuant to G. L. c. 254, § 14, in Superior Court. On June 14, 2017, F&D filed the instant action pursuant to G. L. c. 254, § 15A, seeking summary discharge of Beyond's mechanic's lien, specifically due to its failure to record a § 8 statement. A Superior Court judge dismissed F&D's action.

Discussion. An application pursuant to G. L. c. 254, § 15A, seeks to test the legal sufficiency of a mechanic's lien based on recorded instruments and undisputed documents. See Madigan v. Trace Constr., Inc., 71 Mass. App. Ct. 1, 7 (2007), quoting from Golden v. General Builders Supply LLC, 441 Mass. 652, 657 (2004). We review such a legal determination de novo. See Trace Constr., Inc. v. Dana Barros Sports Complex, LLC, 459 Mass. 346, 351 (2011). In dismissing F&D's application, the trial judge reasoned that:

"by filing Notice under [ § 4 ], Beyond was entitled to lien protection under the Statute.... Had Beyond been given the opportunity to file a Statement pursuant to [ § 8 ], it would have been able to enforce its lien under the provisions of [§ 5].... Instead, [F&D] preemptively resorted to protective action against Beyond's lien by filing a [ § 14 ] [bond].... At that point, the matter became one of lien bond protection by [F&D] rather than lien perfection by Beyond. 'Once a bond is recorded in accordance with [ § 14 ], the lien is dissolved on the record, and any concern about uncertainty of title arising from that lien is eliminated.' ... Hence, any purported defect in Beyond's lien was rendered moot by [F&D's] bonding off of the lien."

F&D argues that the judge erred because the plain language of G. L. c. 254, § 14, requires that a § 8 statement be filed, even after the recording of a bond. See Casseus v. Eastern Bus Co., 478 Mass. 786, 787 (2018) (courts must follow plain language of statute). We disagree. The sole reference in § 14 to a § 8 statement appears in the following sentence:

"The claimant may enforce the bond by a civil action commenced within ninety days after the later of the filing of the statement required by section 8 or receipt of notice of recording of the bond, but such bond shall not create any rights which the claimant would not have had, or impair any defense which the obligors would have had, in an action to enforce a lien."

G. L. c. 254, § 14, as amended through St. 2002, c. 400, § 2.

Thus, § 14 requires a claimant seeking to enforce a bond to bring a civil action within ninety days of the filing of a § 8 statement or within ninety days of receipt of notice of recording of the bond, whichever event is later in time. The plain language of § 14 by no means requires a § 8 statement to be filed in order to maintain an action to enforce a bond.

F&D argues that, in requiring the bond action to be filed "after the later of" two events, § 14 contemplates that either event could come later in time; yet, any interpretation that does not require a § 8 statement to be filed after recording of a bond renders the words "after the later of" superfluous, because recording of the bond would always be the event later in time. See Wolfe v. Gormally, 440 Mass. 699, 704 (2004) (statute must be construed to give effect to all its provisions such that none are rendered superfluous). We disagree with the premise that because a § 8 statement is not required to be filed after the recording of a bond, such a statement never will be filed once a bond has been recorded. Even after receipt of notice of recording of a bond, a claimant could file a § 8 statement in order to preserve its rights in the event of a bond filed early in a project, before the claimant's harm or extent of harm may be apparent. The "after the later of" language clarifies that, in cases involving both a filed § 8 statement and receipt of notice of recording of the bond, it is the later of the two events that starts the clock. The language is therefore not superfluous.

Additionally, F&D points to the above-quoted language in § 14, preserving rights and defenses that the parties would have had in an action to enforce a lien, as support for the proposition that a claimant in an action to enforce a bond must perfect a lien by filing a § 8 statement. We do not view this language as requiring the parties to a bond action to comply with all procedural requirements of a lien action. Rather, this language ensures the parties that all substantive rights and defenses are preserved, regardless of whether the action is to enforce a lien or a bond. The procedural requirements of each action are laid out in the sections governing those actions.

Section 14, pertaining to bond actions, explicitly provides that, once the bond is recorded, "the lien shall be dissolved." It would be illogical to require the perfection of a dissolved lien. See Sebago v. Boston Cab Dispatch, Inc., 471 Mass. 321, 339 (2015) (statute should not be interpreted to provide illogical result). Section 14 goes on to provide that claimants may enforce the bond by filing a timely civil action in Superior Court. Because F&D's recording of the bond dissolved Beyond's lien and entitled it to file an action on the bond, the judge properly dismissed F&D's application for summary discharge of the lien.

Judgment affirmed.

      It is important to note that, when the bond is the later event, the ninety-day clock starts to run after "receipt of notice of recording of the bond," and that no specific time frame is provided to give such notice. G. L. c. 254, § 14. Therefore, a claimant could very well file a § 8 statement after recording of a bond but before receiving notice of such recording.

      In this case, Beyond had completed its work on the project and was able to determine what it was due by the time it filed its mechanic's lien by recording its notice of contract. When it received notice of recording of the bond only days later, it was therefore prepared to file an action on the bond. A claimant that files a mechanic's lien earlier in a project, however, may not be in a position to know whether it even has a claim or the extent of any such claim at the time that a bond is recorded. By filing a § 8 statement even after receipt of notice of recording of the bond, the claimant has more ability to control the timing of its civil action.

      In an action to enforce a lien, where the property is the security for the claim, the § 8 statement (required to be filed in the registry of deeds) serves to apprise those with an interest in the property of encumbrances. See NES Rentals v. Maine Drilling & Blasting, Inc., 465 Mass. 856, 860 (2013). Because a § 14 lien dissolution bond extricates the claim from the property, a § 8 statement would not serve this purpose.


text:
    COMMONWEALTH v. Vincent A. TISCIONE.
    17-P-581
    Appeals Court of Massachusetts.
    Entered: September 11, 2018.
    MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
   Following a jury trial, defendant Vincent Tiscione was convicted of armed robbery, G. L. c. 265, § 17, and assault and battery, G. L. c. 265, § 13A(a ), from which he now appeals. The jury could have found the following. Tiscione and codefendants Sean Michaels and Ryan Wilcox arranged a drug purchase from the victim, Norman Fanion. They met at approximately 4:30 P.M. at Webster Square Plaza in Worcester. Fanion arrived first, and was driven by his girl friend, Emily Todd, who entered a nearby store upon arrival. The defendants arrived soon after in a car driven and owned by the defendant. Fanion got into the back right passenger's seat and gave the defendant some of the drugs, but demanded that the defendant pay him before he would hand over the rest. Michaels then put Fanion in a headlock and hit him with a wrench. Todd had made her way back and grabbed Michaels. Fanion yelled out her name but Wilcox put his hand in Fanion's mouth, preventing him from speaking further. Then the defendant put the car in reverse and drove behind the plaza, where the defendants took the rest of Fanion's drugs. Fanion was able to gain control of the wrench, but Wilcox pulled out a knife demanded that Fanion turn over his valuables. He turned over twenty-five dollars, and Wilcox pulled two gold chains from Fanion's neck. Michaels pushed him out of the car. Taking the defendant's claims in turn, we affirm the convictions.

Jurors' exposure to extraneous information. The defendant argues first that the jurors' exposure to extraneous prejudicial information warrants a new trial. After defense counsel's closing argument, the prosecutor and defense counsel got into a heated exchange at sidebar that, as the judge found, the jury likely overheard. It is reproduced in the margin. After the jurors reached a verdict, but before it was announced, the judge agreed to conduct an individual voir dire of the jurors in the event that the jury returned a verdict of guilty. During the voir dire the judge asked the jurors, in substance, whether they heard the exchange and, if so, what they heard. Several jurors overheard snippets of the exchange, including one juror who claimed that he heard comments about defense counsel's "integrity" or "morals." The judge did not ask any of the jurors whether hearing the exchange would affect their ability to be fair and impartial. After the voir dire, defense counsel stated, "That's it, I think.... Thank you, your Honor."

"When there is a claim of extraneous influence on a jury, a two-step procedure is to be followed. First, the defendant 'bears the burden of demonstrating that the jury were in fact exposed to the extraneous matter. To meet this burden he may rely on juror testimony.' Commonwealth v. Fidler, 377 Mass. 192, 201 (1979). If the defendant meets this burden and the judge finds that extraneous matter came to the attention of the jury, 'the burden then shifts to the Commonwealth to show beyond a reasonable doubt that [the defendant] was not prejudiced by the extraneous matter.' Id."

Commonwealth v. Kincaid, 444 Mass. 381, 386 (2005).

The defendant argues that the heated conversation constitutes "extraneous matter" because it called into question defense counsel's integrity. Since he met his burden of proving that the jury were exposed to extraneous matter, and the judge did not make a finding as to the jurors' impartiality, the defendant continues, the Commonwealth failed to meet its burden of proving beyond a reasonable doubt that he was not prejudiced by the extraneous matter. He properly concedes that he did not preserve the claim of error and that our standard of review is for a substantial risk of a miscarriage of justice. See Commonwealth v. Fredette, 56 Mass. App. Ct. 253, 258-259 (2002).

We need not decide whether the judge erred because, even if he did, there was no such risk. "An error creates a substantial risk of a miscarriage of justice unless we are persuaded that it did not 'materially influence[ ]' the guilty verdict." Commonwealth v. Alphas, 430 Mass. 8, 13 (1999), quoting from Commonwealth v. Freeman, 352 Mass. 556, 564 [1967] ). In this case, we are so persuaded. Although jurors might have heard comments that tended to impugn the integrity of defense counsel, none of these comments were directly connected to the defendant, the crimes for which he was charged, or the evidence in the case. And, while the judge did not give a curative instruction, he had earlier instructed the jury that, "[t]he law requires that we talk about [the admissibility of evidence] out of your hearing, because think about it. If it's going to be ruled improper or inadmissible, you shouldn't hear it." The jury thus were aware that sidebar conversations were not for their ears. The judge also instructed the jury that opening and closing statements are not evidence. In these circumstances, there was no substantial risk of a miscarriage of justice.

Limitation on defense counsel's cross-examination of Fanion. The Commonwealth's theory at trial was that the interaction between Fanion and the defendants was a drug deal gone wrong. Throughout most of the investigation, including in his testimony before the grand jury, Fanion had denied that the meeting was a prearranged drug deal. He changed this portion of his story the day before trial. At the time of trial, Fanion had pending charges, some of which related to the possession and distribution of marijuana, and was incarcerated in a house of correction. Defense counsel sought to question Fanion about his pending charges, current incarceration, and bail amount in order to demonstrate that Fanion had a motive to lie and to tailor his testimony to the Commonwealth's theory of the case, and that this was why Fanion changed this part of his story. The judge permitted defense counsel to question Fanion about his pending charges, including that he was arrested with $59,000 in cash on him, about the fact that he had recently changed his story, and about his reasons for doing so, but not about his current incarceration or bail amount. The defendant argues that this decision violates his State and Federal confrontation rights. Because the issue was preserved, we review it for prejudicial error.

A judge has "broad latitude to direct the course of a trial, and this judicial discretion extends to limiting and otherwise controlling cross-examination." Commonwealth v. Vardinski, 438 Mass. 444, 451 (2003). "A judge may not restrict cross-examination of a material witness by foreclosing inquiry into a subject that could show bias or prejudice on the part of the witness." Commonwealth v. Aguiar, 400 Mass. 508, 513 (1987). However, "[a] judge does have discretion to limit cross-examination concerning possible bias when further questioning would be redundant." Commonwealth v. Bui, 419 Mass. 392, 400 (1995). If the judge's limitation of the defendant's confrontation rights was in error, it is nonprejudicial only if harmless beyond a reasonable doubt. See Vardinski, supra at 452. In determining whether the error was harmless, we consider "the importance of the witness's testimony in the prosecution's case, whether the testimony was cumulative, the presence or absence of evidence corroborating or contradicting the testimony of the witness on material points, the extent of cross-examination otherwise permitted, and, of course, the overall strength of the prosecution's case." Commonwealth v. DiBenedetto, 414 Mass. 37, 40 (1992), quoting from Delaware v. Van Arsdall, 475 U.S. 673, 684 (1986).

We need not decide whether the judge's decision was in error because any error would have been harmless beyond a reasonable doubt. While Fanion's testimony was obviously important to the prosecution's case, that the armed robbery occurred during a drug deal -- the only portion of Fanion's story that changed, allegedly in order to curry favor with the authorities -- was a collateral issue. Had Fanion been consistent and asserted at trial that he was not engaged in drug dealing at the time of the crime, it would have been of no benefit to the defense. We note also that Fanion's testimony was cumulative of, and corroborated by, the testimony of Trisha Gain, the defendant's girl friend at the time of the incident. She testified that the defendant told her earlier that day that he planned to rob Fanion "[t]o get some weed." Further, the judge permitted the defendant to inquire into Fanion's bias by allowing cross-examination on Fanion's pending charges. The judge also specifically instructed the jury that they could consider the pending charges in deciding whether Fanion "had a motive for giving his statement at the time that he gave the statement or for his testimony today, and the nature of that testimony or statement." In these circumstances, had the judge erred, there would have been no prejudice.

Motion to dismiss the indictment. After learning that Fanion changed his story the day before trial, the defendant moved to dismiss the indictment, claiming that the indictment was defective because it was obtained due to Fanion's lie -- that at the time of the crime he was not engaged in a drug deal. In order to succeed on such a motion, the defendant must make a three-part showing to warrant dismissal of the indictment. First, "false or deceptive evidence" must have been presented to the grand jury. Commonwealth v. Mayfield, 398 Mass. 615, 621 (1986). Second, the evidence must have been presented "knowingly and for the purpose of obtaining an indictment" or with "reckless disregard of the truth." Ibid. Third, "the defendant must show that the presentation of the false or deceptive evidence probably influenced the grand jury's determination to hand up an indictment. This requires a showing not only that the evidence was material to the question of probable cause but that, on the entire grand jury record, the false or deceptive testimony probably made a difference." Id. at 621-622.

The defendant's claim -- which is somewhat at odds with his previous argument that the victim's testimony at trial that he was dealing drugs was harmful to the defendant -- fails on the third prong. That the robbery happened during a drug deal was a collateral issue and was likely irrelevant to the grand jury's decision to indict. It is no more lawful to rob and assault and batter a drug dealer than to do so to anybody else. Because the defendant has not shown that the testimony probably influenced the grand jury's decision to indict, the judge was correct to deny the motion to dismiss.

Admission of prior bad acts evidence. The defendant and Gain broke up in May of 2014, approximately seven months after the robbery. Gain told the grand jury in September of 2014 that she had wanted to end the relationship with the defendant around the time the robbery occurred. On cross-examination, defense counsel attempted to impeach this statement by reading to the jury romantic, sexually explicit letters that Gain wrote to the defendant between November of 2013 and March of 2014. On redirect, the prosecutor asked Gain, over defense counsel's objection, why she wanted to break up with the defendant and why she stayed with him despite wanting to break up. She testified that she wanted to break up with the defendant "[b]ecause of all the incidents happening, and [she] couldn't deal with it," including "[h]im going to jail and what he did to [her]." She also testified that she wanted to end the relationship because he "laid his hands on" her in September of 2013. Gain described the incident, testifying that he "just snapped one day and smashed his phone. And [she] said a stupid remark and then that's when he went after [her]." Finally, according to Gain, she did not feel safe ending the relationship.

The defendant argues that the judge abused his discretion by admitting this prior bad act evidence. Evidence of prior bad acts is ordinarily admissible for a purpose other than to show a defendant's propensity to commit the crimes charged, such as to rehabilitate a witness, see Commonwealth v. Hall, 66 Mass. App. Ct. 390, 394 (2006), but is inadmissible if "its probative value is outweighed by the risk of unfair prejudice to the defendant." Commonwealth v. Crayton, 470 Mass. 228, 249 (2014). Here, defense counsel impeached Gain's general credibility by attempting to point out an inconsistency between her grand jury testimony -- that she wanted to break up with the defendant in September of 2013 -- and her behavior: that she did not do so until several months later. The challenged evidence explained why her testimony and her behavior were consistent: she did not break up with the defendant because he had been violent with her in the past and she was afraid of him. Although the prior bad acts evidence certainly was prejudicial to the defendant, defense counsel's questioning opened the door to the issue, and the prosecutor had no other way to rehabilitate Gain's general credibility. In these circumstances, we cannot say that the judge abused his discretion by admitting this evidence.

Judgments affirmed.

      He was acquitted of assault and battery with a dangerous weapon, G. L. c. 265, § 15A(b ).

      Wilcox pleaded guilty before trial.

      Prosecutor "This is a misstatement of the records."
      Defense counsel "That is not true."
      Clerk : "Shh."
      Prosecutor : "It's completely true."
      Judge : "Okay. You're going to have to argue that, because it went into evidence by stipulation without any --"
      Prosecutor : "I guess maybe I should have assumed that [defense counsel] was being fully honest here in saying that this is --"
      Defense counsel : "Don't say I'm not honest."
      Judge : "Shh, shh."
      Defense counsel : "That's an insult."
      Prosecutor : "Well, I'm --"
      Defense Counsel : "Don't say it."
      Clerk : "Shh, shh."
      Defense counsel : "It's not true."
      Prosecutor : "Well, I'm insulted that you --"
      Defense counsel : "Don't say it. You don't say that to me."
      Judge : "Quiet."
      Defense counsel : "Not in this courtroom. I'm the most honest individual in this courtroom."
      Prosecutor : "It's a misstatement --"
      Defense counsel : "That's clear."
      Judge : "You may argue that."
      Prosecutor : "It's a misstatement of the --"
      Defense counsel : "It's not."
      Judge : "You may argue that, [prosecutor]."
      Prosecutor : "It's a direct misstatement."
      Judge : "Okay. Thank you."

      The heated exchange arose out of a dispute between counsel about the time zone of some telephone records that were introduced in evidence. Some of the jurors heard that this was the subject of the exchange, but the defendant does not argue that this constitutes extraneous matter.

      The judge specifically told defense counsel he could question Fanion on whether he had changed his story in order to curry favor with prosecutors, but defense counsel never did so.

      The judge denied the defendant's request for a contemporaneous limiting instruction but instructed the jury in his general charge the next day that they "may not take [prior bad acts] as a substitute for proof that the defendant committed the crimes charged, nor may you consider it as proof that the defendant has a criminal personality or bad character. But you may consider it solely on the limited purpose of the witness's credibility and motive." It is "preferable that the limiting instruction be given the same day as the testimony at issue." Commonwealth v. Linton, 456 Mass. 534, 551 n.12 (2010). See instruction 3.760 of the Criminal Model Jury Instructions for Use in the District (2009) (instruction should be given "at the time the evidence is admitted"). But "we do not find that the delay materially diminished the impact of the limiting instruction on the jury." Linton, supra at 551 n.12.


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    Thomas R. OLAFSSON & another v. Stephanie R. SULLIVAN-MCCAUGHEY & others.
    17-P-856
    Appeals Court of Massachusetts.
    Entered: September 11, 2018.
    MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

      Olafsson Realty Group, LLC.

      Elite Weston Builders, LLC, and American Trust Real Estate, LLC.

   Defendant Stephanie Sullivan-McCaughey appeals from a judgment against her on tort and contract theories arising from her business relationship with the plaintiff, Thomas R. Olafsson. The appeal of her company, American Trust Real Estate, LLC (ATRE), challenges its inclusion in the judgment where the jury made no award against it. We affirm the judgment on Olafsson's breach of contract and misrepresentation counts against Sullivan-McCaughey. We reverse the judgment on Olafsson's claim of negligence against Sullivan-McCaughey. We also reverse the judgment on all counts against ATRE.

Background. In December, 2007, Olafsson, Sullivan-McCaughey, and Paul J. Mignone entered a written partnership agreement for the purpose of developing two parcels of residential real estate in Weston, known as 53 Shady Hill Road and 40 Radcliffe Road. Prior to formation of the partnership, Olafsson held title to both lots, and had begun some work on developing them. The partnership agreement stated:

"All capital to date to establish the position on both Shady Hill and Radcliffe projects have been provided by [Olafsson] or the Olafsson Realty Group, LLC [ORG]. It is agreed upon by all partners that no profits are to be distributed to any partner until the start up capital, both hard and soft costs, provided by [Olafsson] or ORG that have not been reimbursed by existing, past and present construction financing, have been in [sic ] paid in full."

In April, 2008, Olafsson, Sullivan-McCaughey, and Mignone formed a Massachusetts limited liability company, called Elite Weston Builders, LLC (EWB). All three principals were named as managers of EWB. Olafsson does not dispute Sullivan-McCaughey's representation that title to the Shady Hill and Radcliffe properties had been transferred to the partnership, and was thereafter transferred by the partnership to EWB. Notwithstanding having formed EWB, the parties never dissolved their partnership. They also never adopted a written operating agreement. See G. L. c. 156C, § 2(9).

At some point, Sullivan-McCaughey began serving as project manager for the developments, either in her personal capacity or through her company, ATRE. The work did not go as well or as quickly as hoped. There were problems with the construction at Shady Hill, resulting in delays and unexpected costs. The source of those problems was hotly contested at trial, with Sullivan-McCaughey placing blame on a general contractor hired by Olafsson before she began managing the projects. Ultimately, the parcels were sold in 2008 -- with the Radcliffe land sold as a vacant lot with only excavation completed and the Shady Hill parcel sold with an unfinished structure.

In August, 2011, Olafsson sued Sullivan-McCaughey and Mignone on a variety of theories. Olafsson's claims against Sullivan-McCaughey proceeded to a jury trial in April, 2016. Sullivan-McCaughey moved for directed verdict both at the close of Olafsson's case and again at the close of all evidence. After the jury verdict, she brought an emergency motion for reduction of damages and then filed four separate motions for judgment notwithstanding the verdict (n.o.v.). The trial judge denied the emergency motion for reduction of damages. A different judge heard the motions for judgment notwithstanding the verdict and denied them. This appeal followed.

Discussion. "A motion for judgment n.o.v. presents a 'pure question of law, specifically, whether "anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the plaintiff." ' " Wodinsky v. Kettenbach, 86 Mass. App. Ct. 825, 833 (2015), quoting from Quinn v. Mar-Lees Seafood, LLC, 69 Mass. App. Ct. 688, 702 (2007). "The evidence is reviewed in the light most favorable to the plaintiff, 'without weighing the credibility of the witnesses or otherwise considering the weight of the evidence.' " Wodinsky, 86 Mass. App. Ct. at 833, quoting from Haddad v. Wal-Mart Stores, Inc., 455 Mass. 91, 94 n.5 (1978). "Relief is appropriate under a motion for judgment n.o.v. '[o]nly when no rational view of the evidence warrants a finding [for the nonmoving party]....' " Quarterman v. Springfield, 91 Mass. App. Ct. 254, 257-258 (2017), quoting from Mullins v. Pine Manor College, 389 Mass. 47, 56 (1983).

1. Breach of contract. Olafsson prevailed on three out of four of his contract theories, with the jury's combined award on that count totaling $87,216.66. On appeal, Sullivan-McCaughey argues that her motion for judgment n.o.v. should have been allowed because the partnership agreement became a nullity by operation of the limited liability statute, G. L. c. 156C, once the parties formed EWB. Thus, she claims, there was no enforceable contract among the parties and she was entitled to judgment on Olafsson's contract claim as a matter of law.

As a threshold matter, Sullivan-McCaughey's argument was not adequately preserved for two reasons. First, it was not included in her directed verdict motion. See Bonofiglio v. Commercial Union Ins. Co., 411 Mass. 31, 34 (1991), citing Mass.R.Civ.P. 50(b), 365 Mass. 814 (1974). Second, far from arguing that this issue was controlled by the statute, Sullivan-McCaughey repeatedly sought a jury instruction on this issue, treating the question as a factual inquiry regarding the parties' intent rather than a legal issue based on operation of a statute. Sullivan-McCaughey could not actively seek to put the issue before the jury only to later claim it was a question of law outside the jury's purview.

We need not rest on waiver, however, because Sullivan-McCaughey's theory fails on the merits. We see no basis for declaring the partnership agreement to be a nullity simply because the parties subsequently formed a limited liability company. This is especially so where no operating agreement was adopted. The meager authority Sullivan-McCaughey cites does not support her proposition and, in any event, is not binding on this court.

Sullivan-McCaughey also argues that Olafsson waived his contract claims by signing two documents purporting to set forth all amounts he was owed after the sale of the subject land. The jury were instructed on the law of waiver and modification, however, and apparently rejected Sullivan-McCaughey's waiver defense -- as to which she had the burden of proof. And, to the extent Sullivan-McCaughey now claims that waiver is a legal question in the instant circumstances, she waived that argument by allowing it to be put to the jury without objection.

Finally, Sullivan-McCaughey argues that Olafsson should have brought his breach of contract claim against EWB because it was EWB -- and not Sullivan-McCaughey -- who had an obligation to make payments to him. This argument is unavailing for three reasons. First, there was no showing that Olafsson had a contract with EWB -- the partnership agreement was among Olafsson, Sullivan-McCaughey, and Mignone. Second, all parties, including Sullivan-McCaughey, agreed that distributions from the closing on the Radcliffe property would be made directly to the parties by an attorney who received the funds, and would not pass through EWB. Third, Olafsson's claims as to improperly written checks, commissions, and/or deposit money do not implicate any payment that could have been made to him by EWB.

2. Misrepresentation. Sullivan-McCaughey argues that she was entitled to judgment on Olafsson's misrepresentation claim because Olafsson failed to present any evidence of a false statement on which he reasonably relied. See ZVI Constr. Co. v. Levy, 90 Mass. App. Ct. 412, 423 n.14 (2016). Ordinarily, "false statements of opinion, of conditions to exist in the future, or of matters promissory in nature are not actionable." Yerid v. Mason, 341 Mass. 527, 530 (1960). See Stolzoff v. Waste Systems Intl., Inc., 58 Mass. App. Ct. 747, 759 (2003). But false statements of future intent are actionable as fraud if a jury can find "the statements misrepresent the actual intention of the speaker and were relied on by the recipient to his damage." McEvoy Travel Bureau, Inc. v. Norton Co., 408 Mass. 704, 709 (1990).

Accordingly, the jury were instructed that they could return a verdict for Olafsson only if Sullivan-McCaughey "intentionally misrepresented her intention and Mr. Mignone's intention" in entering the partnership agreement, or knew that her promise to repay start-up costs to Olafsson was false and "intended not to perform that statement." Here, the jury could have determined based on the entirety of the circumstances and the combination of facts presented to them about the course of dealings between Sullivan-McCaughey and Olafsson that Sullivan-McCaughey's promissory statement was false when made.

Sullivan-McCaughey also argues briefly that Olafsson did not prove damages arising from any misrepresentation. There was, however, evidence before the jury that could have supported their award of $16,000 in damages, based either on a draw of $16,000 taken by Sullivan-McCaughey, or based on disbursements of $8,000 each to Sullivan-McCaughey and Mignone.

Finally, Sullivan-McCaughey argues that Olafsson did not rely on any false statement by transferring the properties to EWB because they passed through the partnership first. This argument is unavailing, since Sullivan-McCaughey does not deny that Olafsson's consent to that transfer was required nor does she contend that his consent was not, in fact, given.

3. Negligence. As to Olafsson's negligence claim, Sullivan-McCaughey argues a total failure of evidence on both her duty of care as a project manager and the manner of alleged breach. Here, Olafsson demonstrated that there were cost overruns and that the stairs had to be rebuilt repeatedly. Olafsson, however, provided no evidence from which a jury could determine whether this was a result of any breach of duty by Sullivan-McCaughey or even whether rebuilding was unnecessary or the fault of Sullivan-McCaughey. Without an exploration of the circumstances surrounding the rebuilding or expert testimony regarding the necessity of the rebuilding, there was no basis for the jury to find negligence. Cf. Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co., 439 Mass. 387, 403 (2003) ("Only where professional negligence is so gross or obvious that jurors can rely on their common knowledge to recognize or infer negligence may the case be made without expert testimony"); Atlas Track Corp. v. Donabed, 47 Mass. App. Ct. 221, 226-227 (1999), quoting from Pongonis v. Saab, 396 Mass. 1005 (1985) (expert testimony required to prove standard of care of a reasonable engineer where the allegations "did not involve conduct that was 'so gross or obvious that laymen [could have relied upon] their common knowledge to recognize or infer ... negligence' "). Accordingly, the judgment on Olafsson's negligence claim is reversed.

4. Joint and several liability of ATRE. Finally, ATRE argues that judgment should not have entered against it in this case. We agree. The only mention of ATRE in the special questions put to the jury is found in the contract section, in which the jury were asked whether Sullivan-McCaughey breached her contract with Olafsson by "causing real estate commissions to be paid to [ATRE]." The jury's answer to that question established only Sullivan-McCaughey's liability, not ATRE's. Moreover, there was no evidence submitted in the case as to any contract between Olafsson and ATRE, except insofar as Sullivan-McCaughey contended that ATRE (and not she) served as the project manager for the Shady Hill and Radcliffe developments. Accordingly, because the jury did not find ATRE liable on any count, the judgment against ATRE is reversed.

So much of the judgment as held defendant Sullivan-McCaughey liable for negligence is reversed. So much of the judgment as held American Trust Real Estate, LLC, liable is reversed. The judgment is otherwise affirmed, and the order dated December 13, 2016, denying the defendants' postjudgment motions is otherwise affirmed.

So ordered.

reversed in part; affirmed in part.

      In his complaint, Olafsson named himself as plaintiff "individually and as Manager of Olafsson Realty Group, LLC." We observe that a Massachusetts limited liability company can sue and be sued in its own name, see G. L. c. 156C, § 55. The trial judge treated ORG as a named party in the special verdict questions presented to the jury. We also treat ORG as a named plaintiff for purposes of the judgment and for purposes of this appeal. We note, however, Sullivan-McCaughey's uncontested representation that ORG was administratively dissolved on April 29, 2011.

      In his complaint, Olafsson named Sullivan-McCaughey "individually and as Manager of Elite Weston Builders, LLC," and also named EWB separately as a party. It appears from the trial court's docket sheet that EWB was served with process. Sullivan-McCaughey purported to answer the complaint "in all named capacities," but the signature block on her answer does not indicate that her counsel intended to appear on behalf of EWB. The trial court's docket sheet also does not indicate an appearance by any counsel on behalf of EWB. The judgment does not appear to have been entered against EWB, although it lists Sullivan-McCaughey in her capacity as manager of EWB, consistent with the caption used by Olafsson. The trial judge did not treat EWB as a party in the special verdict questions, and did not ask the jury any questions about EWB. No party has moved for entry of default or a default judgment against EWB. Accordingly, EWB's status in relation to the litigation is unclear, but to the extent Olafsson intended to pursue claims against EWB it appears those claims were not prosecuted.

      The deeds are not in the record before us.

      Sullivan-McCaughey represents in her brief that Mignone did not participate in the trial because he had received a discharge in bankruptcy.

      In the alternative, all four motions sought a new trial or remittitur. Having reviewed the record thoroughly, we affirm the denial of Sullivan-McCaughey's alternative requests for a new trial or remittitur.

      Because the trial judge had retired, the regional administrative justice assigned the motions for judgment n.o.v. to a different judge.

      The judge denied the directed verdict motion as to breach of contract and fraud at the close of Olafsson's case. At the close of all evidence, Sullivan-McCaughey renewed her directed verdict motion. The judge's response was simply, "same ruling."

      Eventually, after several requests, the trial judge gave the jury a supplemental instruction stating, "[t]he Defendant also claims that by entering into the LLC, the parties intended that the partnership agreement, to the extent that it existed, was no longer in operation.... [A]gain, it's for you to determine what was the intention of the parties, as with every single step of this, in terms of determining whether there was a contract, what the terms of the contract was, whether it was modified or not modified, whether it was waived or not waived; those are all questions that you must determine as a matter of fact ...."

      At various times, the judge suggested that this issue could be dealt with in posttrial motions, expressing a willingness to instruct the jurors while also stating, "I think that's a question of law though." The fact that the judge may have invited posttrial motions on the subject did not, however, prevent a waiver. It was up to Sullivan-McCaughey's counsel to decide how to proceed, and he insisted on giving the question to the jury notwithstanding the judge's suggestion that it was likely a question of law.

      Sullivan-McCaughey did not seek a special verdict question with respect to waiver or modification.

      We note there were no pretrial dispositive motions filed in this case.

      We note that Sullivan-McCaughey has not argued that tort liability cannot arise where the parties' dealings have been reduced to a contract and the allegedly false-when-made promise is entirely co-extensive with an enforceable contract term. We do not reach the question, and our only task is to determine whether any evidence in the record supported the jury's affirmative answer to the question that was posed to them.

      Although she hints at it in her brief, Sullivan-McCaughey does not explicitly argue that Olafsson lacked standing to bring his negligence claim because EWB and not Olafsson was the party contracting with Sullivan-McCaughey and/or ATRE to perform project management services. Because we reverse on another ground, we need not consider the issue.

      Sullivan-McCaughey also argues that Olafsson's negligence claim was barred by the economic loss rule. See Garweth Corp. v. Boston Edison Co., 415 Mass. 303, 305 (1993). Sullivan-McCaughey did not object, however, to a special verdict form that expressly invited the jury to award on the negligence claim damages that were plainly economic in nature -- i.e., "extra costs that were deducted from plaintiff's share of the proceeds for the sale of Shady Hill." Accordingly, she likely waived her economic loss rule argument, but we need not decide the point since we reverse on another ground. We note, however, that the economic loss rule "was developed in part to prevent the progression of tort concepts from undermining contract expectations." Wyman v. Ayer Properties, LLC, 469 Mass. 64, 70 (2014). We note further that neither party has briefed the threshold question whether a contract between a project owner and its project manager gives rise to a tort claim based on poor performance by the manager. We take the issues as they have been framed by the parties.


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    WORCESTER REGIONAL RETIREMENT BOARD v. CONTRIBUTORY RETIREMENT APPEAL BOARD & others.
    17-P-1353
    Appeals Court of Massachusetts.
    Entered: September 28, 2018
    MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

      Worcester Retirement Board and Thomas Clawson.

   The Worcester Regional Retirement Board (WRRB) appeals from a Superior Court judgment affirming a decision of the Contributory Retirement Appeal Board (CRAB). See G. L. c. 30A, § 14 (7). WRRB claims error in CRAB's interpretation of G. L. c. 32. We affirm.

1. Standard of review. "Courts must ascertain the intent of a statute from all its parts and from the subject matter to which it relates, and courts must interpret the statute so as to render the legislation effective, consonant with reason and common sense." Rotondi v. Contributory Retirement Appeal Bd., 463 Mass. 644, 648 (2012), quoting Cote-Whitacre v. Department of Pub. Health, 446 Mass. 350, 358 (2006) (Spina, J., concurring). Although questions of law are reviewed de novo, we " 'typically defer to CRAB's expertise and accord " 'great weight' to [its] interpretation and application of the statutory provisions it is charged with administering" ' (citation omitted)." Retirement Bd. of Stoneham v. Contributory Retirement Appeal Bd., 476 Mass. 130, 134 (2016), quoting Weston v. Contributory Retirement Appeal Bd., 76 Mass. App. Ct. 475, 479 (2010). If CRAB's interpretation of the notoriously complex retirement law is reasonable, it should be honored by the courts. See Arlington Contributory Retirement Bd. v. Contributory Retirement Appeal Bd., 75 Mass. App. Ct. 437, 441 (2009).

2. Background. On November 1, 2010, Thomas Clawson, a vested member of the Worcester Retirement System (WRS), retired from his employment with the city of Worcester (city). At the time, Clawson was also a member of the Worcester Regional Retirement System (WRRS) arising from his concurrent employment as an elected member of the town of Millbury's (town) school committee. In December, 2009, Clawson had tendered a check to WRRB, seeking to buy back prior noncontributing service in order to vest in that system and thereby avoid the looming restriction on enhanced retirement benefits. See G. L. c. 32, § 5 (2) (e ), inserted by St. 2009, c. 21, § 7. WRRB improperly rejected the check leading to administrative proceedings that ended favorably to Clawson in 2011. If WRRB had granted Clawson's request and accepted his check, Clawson would have vested in WRRS in November, 2010; and WRS would have asked WRRB to transfer Clawson's retirement account to WRS.

Once Clawson completed his service purchase in May, 2011, he vested in WRRS, deemed effective December 31, 2009. When WRRB learned of Clawson's retirement on June 9, 2011, it informed Worcester Retirement Board (WRB) that WRB had retired Clawson, an active member of WRRS, "in error" and requested a transfer of his retirement account to WRRB. See G. L. c. 32, § 3 (7) (b ) and (d ). Five days later, Clawson refunded all the compensation he had received from the town since the date of his retirement ($1,135.89) and requested that the town not pay him for the duration of his term. Thereafter, WRRB failed to respond to Clawson's request to transfer his account to WRS and to return his postretirement deductions. Following Clawson's appeal of WRRB's inaction, an administrative magistrate of the Division of Administrative Law Appeals (DALA) in his decision sided with WRRB, a decision reversed on further appeal to CRAB. See G. L. c. 32, § 16 (4).

3. Discussion. We conclude, as did the motion judge, that CRAB's interpretation and harmonization of the statutory provisions in issue were reasonable. As CRAB fairly recognized, G. L. c. 32, § 3 (7) (b ), standing alone, seems to support WRRB's position that Clawson's retirement from WRS was ineffective because he remained in service for the town. However, another discordant statutory provision permits a member to "continu[e] in service in any governmental unit" at retirement as long as the requirements of G. L. c. 32, § 91, are met. G. L. c. 32, § 3 (7) (d ) ("In no event shall any member be eligible to receive a retirement allowance from one system while continuing in service in any governmental unit, except as provided for in section ninety-one"). CRAB was warranted in reconciling these provisions to find that where, as here, a retiree's hours and compensation would fall below statutory limits, he could, as expressly permitted by § 3 (7) (d ), remain employed at the second position provided that he terminated his membership in that retirement system. See G. L. c. 32, § 91 (d ). As CRAB pointed out, for some public employees, reappointment would be impractical or impossible. CRAB could logically have reasoned that the Legislature would not require the "empty gesture of a resignation and re-employment" for a retirement to become effective.

No legislative policy or intent is violated or thwarted by CRAB's interpretation permitting, within limits, the continuation of part-time public service at retirement. See Bristol County Retirement Bd. v. Contributory Retirement Appeal Bd., 65 Mass. App. Ct. 443, 446-447 (2006). A blanket rule requiring the termination of all government service would potentially dissuade retirees from continuing their public service. This result cannot be what the Legislature had in mind in imposing the statutory restriction. Mindful of CRAB's expertise in this difficult area of law, we discern no error in CRAB's conclusion that § 3 (7) (b ) was inapplicable in the circumstances of this case.

CRAB held in the alternative that even if Clawson did not qualify for the § 91 (b ) exception, Clawson effectively terminated his "service" as of the date of his retirement, curing any § 3 (7) (b ) violation. We agree. As CRAB could properly have reasoned, Clawson's failure to resign his WRRS membership and his paid town employment in November, 2010, was caused, in significant part, by WRRB's error. Shortly after prevailing against WRRB in his first appeal, Clawson returned all postretirement compensation to the town and waived compensation for the remainder of his term. See G. L. c. 32, § 1 (defining "[s]ervice" as "service as an employee in any governmental unit for which regular compensation is paid"). CRAB was warranted in finding that at this point, Clawson's employment should have been deemed terminated as of November 1, 2010. Clawson's retirement from WRS was properly deemed valid on this basis as well.

But for WRRB's mistake, the transfer of Clawson's account could have been effected at the time of Clawson's retirement from WRS. CRAB acted within its authority in ordering WRRB to correct the error existing in its record by (1) cancelling Clawson's membership effective prior to November 1, 2010; (2) returning all postretirement deductions to Clawson; and (3) transferring his account and membership to WRB. See G. L. c. 32, § 20 (5) (c ) (2) ; Bristol County Retirement Bd. v. Contributory Retirement Appeal Bd., 65 Mass. App. Ct. at 449 ("[S]ection [20 (5) (c ) (2) ] effectively acknowledges that the retirement law is a complicated combination of various legislative efforts occurring at different times and for different purposes, that it is difficult to administer, and that it is inevitable that mistakes in implementation will be made").

Finally, WRRB argues that CRAB's decision should be reversed because it improperly considered a letter regarding Clawson's ineligibility for health insurance as a WRRS retiree. Even if CRAB erred or abused its discretion by denying WRRB's motion to strike, CRAB included the letter in the record for the limited purpose of background information. CRAB specifically agreed with WRRB that the issue of Clawson's entitlement to health insurance "has no bearing" on any legal issue in the case. CRAB's lengthy substantive analysis does not mention the letter, confirming the point. Any error was harmless. See Catlin v. Board of Registration of Architects, 414 Mass. 1, 6-7 (1992).

Judgment affirmed.

      As a full-time career employee of the city, Clawson had accumulated thirty-one years of creditable service. He earned less than $5,000 per year for his part-time school committee work.

      That statutory provision prohibited individuals with dual membership from transferring and combining their accumulated funds and service into one system. By its plain language, it did not apply to any member who was vested in two or more systems as of January 1, 2010.

      After his retirement, Clawson continued to serve on the Millbury school committee until the end of his term in April, 2012. Clawson did not cancel his membership in WRRS. WRRB continued to take monthly retirement deductions of $11.36 from his compensation.

      General Laws c. 32, § 3 (7) (b ), provides, in relevant part, "No pension or retirement allowance shall become effective on account of any such person's membership in one system until the date the member terminates his service in any other governmental unit."

      General Laws c. 32, § 91 (b ), provides, in relevant part, that "any person who has been retired and who is receiving a pension or retirement allowance ... may ... be employed in the service of the commonwealth, county, city, town, district or authority ... for not more than nine hundred and sixty hours in the aggregate, in any given calendar year; provided that the earnings therefrom when added to any pension or retirement allowance he is receiving do not exceed the salary that is being paid for the position from which he was retired." The Legislature increased the limit on postretirement earnings, effective April 2, 2012. See St. 2011, c. 176, §§ 50 and 64.

      Clawson himself engaged in no subterfuge and certainly obtained no windfall to the detriment of the public fisc. We are not persuaded that CRAB's decision will have wide-ranging negative effects.

      WRRB did not address this alternative conclusion in its brief.

      On appeal, WRRB argues that CRAB's "finding" that Clawson's "original plan" was to retire from both positions simultaneously was unsupported by substantial evidence. This argument misstates CRAB's actual "finding." CRAB concluded that if Clawson's "service purchase had been accepted at the time of [his] original application in December 2009, he would have been vested in both systems as of the date of his retirement, and would have carried out his original plan to take advantage of the pre-2009 dual membership provisions."

      Generated after the administrative magistrate issued his decision, the letter was provided to CRAB as part of Clawson's supplementation of his notice of objection to DALA's decision.


text:
    COMMONWEALTH v. Jesus MERCED.
    17-P-1624
    Appeals Court of Massachusetts.
    Entered: September 28, 2018
    MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
   The Commonwealth appeals from a Superior Court judge's order allowing the defendant's motion to suppress. The Commonwealth argues that the motion judge erred for two reasons. First, the postal inspector who identified and seized the package had a reasonable suspicion that justified seizing the defendant's package and the length of time for the seizure was reasonable. Second, the police officers had probable cause to search the package based on the certified drug-sniffing canine's positive alert that the package contained a controlled substance.

Background. We summarize the facts as found by the motion judge, supplemented by uncontroverted facts from the record, and reserve some facts for later discussion. Commonwealth v. Cruz, 459 Mass. 459, 461 (2011), citing Commonwealth v. Isaiah I., 448 Mass. 334, 337 (2007). The package in question originated in Caguas, Puerto Rico, and was addressed to Jose Pagan at 11 Lowell Street, West Springfield. On December 11, 2015, the United States Postal Inspection Service (USPIS) in San Juan, Puerto Rico (Puerto Rico USPIS), informed the USPIS in Springfield (Springfield USPIS), that they could not locate the sender of the package because the address listed was not associated with the name of the purported sender of the package. The package was sent to the Springfield USPIS for further review. The Springfield USPIS's postal inspector, Richard Tracy, attempted to identify Jose Pagan, the intended recipient of the package. Tracy determined that Pagan was not associated with the destination address listed on the package. The destination listed on the package was a place of business, Los Bori's Auto Repair.

Tracy seized the package based on: (1) the USPIS's inability to associate both the sender and the recipient of the package with the respective addresses provided, (2) Tracy's personal knowledge from previous investigations that false names are commonly used in the shipment of illegal substances to avoid identification, and (3) Tracy's personal knowledge from previous investigations that cocaine is commonly sent from Puerto Rico to the United States via the United States Postal Service (postal service). On December 12, 2015, USPIS met with police officer Joseph Brewer and his canine, Charon, at the Wilbraham police department. The package was placed in a vacant officer where Officer Brewer and canine Charon could examine it. Upon approaching the package in the vacant room, canine Charon alerted Officer Brewer that she detected controlled substances in the package. Based on canine Charon's positive alert, Tracy applied for a Federal search warrant to search the package. The Federal search warrant was granted on December 15, 2015. The package was thereafter searched and approximately 500 grams of cocaine was recovered. Narcotics Detective Daniel Znoj of the West Springfield police department subsequently applied for a State search warrant to search the intended destination of the package, 11 Lowell Street, West Springfield. This warrant was granted on December 16, 2015.

On December 16, 2015, Tracy posed as a mail carrier and delivered the package to the destination address. Police officers surveilled the area and observed the defendant drive his vehicle out of the parking lot at the destination address and drive into the adjacent parking lot. Tracy drove the mail delivery trick into the parking lot of the destination address. The defendant walked over to Tracy as he exited the mail delivery truck with the package. The defendant asked Tracy if the package was for "Jose," to which Tracy responded in the affirmative. Tracy then asked the defendant to confirm the last name of the recipient, to which the defendant responded "Jose Pagan. I almost missed you." Tracy gave the package to the defendant after the defendant signed for it. The surveilling police officers stopped the defendant in his vehicle as he drove out of the parking lot.

The defendant was charged with trafficking cocaine greater than two hundred grams, in violation of G. L. c. 94C, § 32E (b ) (4), as being a habitual offender, in violation of G. L. c. 279, § 25 (a ), and operating a motor vehicle with a suspended or revoked license, in violation of G. L. c. 90, § 23. The defendant filed a motion to suppress the "evidence from the seizure, canine sniff, opening, and search of a parcel of mail at the United State Post Office in Springfield on the basis that [the] search warrant was insufficient." The defendant's motion also sought to suppress "all evidence and statements, if any, obtained from the resulting search of a residence located at 11 Lowell Street, West Springfield." After a nonevidentiary hearing on February 23, 2017, the motion judge allowed the defendant's motion. The Commonwealth filed the instant appeal.

Discussion. When reviewing a motion to suppress, "we adopt the motion judge's factual findings absent clear error." Commonwealth v. Isaiah I., 450 Mass. 818, 821 (2008). Although we give the facts found by the motion judge deference, we "independently determine whether the judge correctly applied constitutional principles to the facts as found." Id.

We begin with the Commonwealth's argument that the motion judge erred in allowing the defendant's motion to suppress because Tracy had reasonable suspicion to seize the package and expose it to a drug-sniffing canine. "Where there is nothing in the record to suggest that at the time of the application for a search warrant by the postal inspector there was any involvement by a State official, the determination of the validity of the Federal warrant must be reviewed under Federal law." Commonwealth v. Pinto, 45 Mass. App. Ct. 790, 792 (1998).

"First-class mail, such as letters and sealed packages, is protected by the Fourth Amendment from unreasonable search and seizure. United States v. Van Leeuwen, 397 U.S. 249, 251 (1970). 'Postal authorities may seize and detain packages if they have a reasonable and articulable suspicion of criminal activity.' [United States v.] Aldaz, 921 F.2d [227, 229 (9th Cir. 1990) ] (citations omitted). A reasonable suspicion 'is formed by specific, articulable facts which, together with objective and reasonable inferences, form the basis for suspecting that the particular person [or object] detained is [involved] in criminal activity.' United States v. Lopez-Soto, 205 F.3d 1101, 1105 (9th Cir. 2000) (citations and internal quotations omitted)."

United States v. Gill, 280 F.3d 923, 928 (9th Cir. 2002).

Here, reasonable suspicion supported the package's delayed delivery and its exposure to a drug-sniffing canine. Tracy has fourteen years of experience with investigating "criminal activities involving the use of the mail, including the investigation of items not allowed to be mailed such as controlled substances, which are given over to U.S. Postal Service for delivery." Tracy had a legitimate suspicion about the package for several reasons. The package was "approximately 12 inches by 12 inches, [ ] approximately 6 inches in thickness, and weigh[ed] approximately 5 lbs, 15 oz." The postage fee paid was a total of sixty-one dollars and sixty cents. See United States v. Daniel, 982 F.2d 146, 150 (5th Cir. 1993) ("sender paid a hefty fee ($55) to ship the relatively small package"). The Springfield USPIS was alerted by the Puerto Rico USPIS after they were unable to locate the purported sender of the package. The Puerto Rico USPIS found that the listed sender of the package was not associated with the address listed. See Gill, 280 F.3d at 928 (sender resided at different address than return address); Daniel, supra at 150 & n.5 (court considers "whether the return addressee and the return address listed on the package match"). After further investigation, Tracy himself discovered the destination address was an auto repair shop with which the recipient of the package was not associated. See id. In addition, Tracy had personal knowledge from previous investigations that the package's origin is an area that is known for shipping cocaine to the United States via the postal service. See United States v. Lozano, 623 F.3d 1055, 1060-1061 (9th Cir. 2010) (listing package's California origin as cause for reasonable suspicion); United States v. Hernandez, 313 F.3d 1206, 1211 (9th Cir. 2002) (considering package's being mailed from California, "a known drug source state," proper basis for suspicion). We conclude that these facts, taken together, provide sufficient reasonable suspicion to seize the package and expose it to a drug-sniffing canine.

We also conclude that there was no unreasonable delay in the delivery of the package. "The relevant time period is that between the initial detention and that at which probable cause is developed because '[p]robable cause is sufficient to support the subsequent detention of the package.' " Lozano, supra at 1061, quoting from United States v. Hoang, 486 F.3d 1156, 1160 n.1 (9th Cir. 2007). "To determine the reasonableness of the delay, we review the diligence of the investigators, the length of the detention, and the information conveyed to the suspect." United States v. Allen, 990 F.2d 667, 671 (1st Cir. 1993). Tracy acted diligently in investigating the recipient of the package and exposing it to the drug-sniffing canine. The package was detained for a maximum of four days before the Federal search warrant was issued. While we understand other cases have proceeded on a faster timeline, we would be hard pressed to find that five days constitutes an unreasonable delay. Moreover, the suspect never inquired about the location of the package. As such, the sender was never given misinformation about the package's whereabouts. See Lozano, 623 F.3d at 1061 (notice not required for delays of mail delivery).

Based on the uncontroverted evidence from the hearing and the affidavits filed in support of the Federal and State search warrants, there is no need to remand for further findings on whether there was probable cause for the Federal and State search warrants. Because Charon provided a positive alert that the package contained a controlled substance within a short time following its seizure, and based on the other information set forth in Tracy's affidavit, there was sufficient probable cause to issue the Federal search warrant. See Allen, 990 F.2d at 671. We also conclude that because the police recovered cocaine from the package upon executing the Federal search warrant, there was probable cause to issue the State search warrant for the package's destination, i.e. 11 Lowell Street, West Springfield.

Order allowing defendant's motion to suppress reversed.

      This appeal is interlocutory.

      Charon has been certified in the detection of marijuana, cocaine, heroin, methamphetamines, and their derivatives since 2010. Charon performs eight hours of service training per month and has had successful street identifications of controlled substances. Officer Brewer and Charon have worked with USPIS in other successful identifications of controlled substances.

      This alert included Charon pawing and biting the package.

      The Commonwealth's opposition to the defendant's motion to suppress indicates that the package was delivered on December 16, 2016. This date is error as the defendant was indicted in February, 2016. We presume the date of delivery was December 16, 2015.

      The Puerto Rico USPIS flagged the package for the Springfield USPIS on December 11, 2015. On the next day, Saturday, December 12, 2015, the USPIS attempted to identify the recipient of the package. On the same day, Tracy brought the package to the Wilbraham police department where Officer Brewer and canine Charon examined the package in a vacant room. Three days later, on Tuesday, December 15, 2015, Tracy submitted an application and attached a detailed affidavit for a Federal search warrant. We find it worthy to note that the defendant conceded at the motion hearing that the "length of detention is a very minor issue."

      See Van Leeuwen, 397 U.S. at 252-253 (twenty-nine hour delay reasonable; Hernandez, 313 F.3d at 1212 (one-day delay reasonable); Gill, 280 F.3d at 929 (six-day delay reasonable); United States v. Lux, 905 F.2d 1379, 1382 (10th Cir. 1990) (weekend detention reasonable).

      On appeal, the defendant does not challenge the truthfulness of any statements contained in the affidavits filed in support of the Federal and State search warrants. At the motion hearing, the defendant's counsel stated that paragraph seven in Tracy's affidavit "clearly is not accurate," but the defendant does not provide any basis for such dispute.

      See United States v. La France, 879 F.2d 1, 4 (1st Cir. 1989) (police entitled to delay delivery if delay is based on reasonable suspicion and is reasonably executed). See, e.g., Lozano, 623 F.3d at 1059 (drug-sniffing dog alerted officer to package and officers subsequently obtained search warrant for package).


text:
    COMMONWEALTH v. James CASTILUCCI.
    17-P-1093
    Appeals Court of Massachusetts.
    Entered: September 28, 2018
    MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
   On March 30, 1988, the defendant pleaded guilty to four counts of rape of a child under the age of sixteen, in violation of G. L. c. 265, § 23. A Superior Court judge (sentencing judge) sentenced the defendant to nine to fifteen years in State prison, "[t]hree (3) years to be served, balance suspended." The sentencing judge separately imposed five years of probation. On that same day, the defendant was "committed to the [Massachusetts] [T]reatment Center for the Sexually Dangerous at Bridgewater for a minimum of one day and a maximum of [l]ife." Such commitment was "to be served concurrently with the sentence imposed on Indictment CR12601." The defendant's civil commitment to the Massachusetts Treatment Center ran past the expiration of his prison sentence.

In 2017, two qualified examiners determined that the defendant was no longer a sexually dangerous person. The defendant was subsequently released from civil confinement. On April 18, 2017, the defendant filed a motion to terminate his probation, arguing that his probation ran concurrently with his civil commitment and therefore his probation has been served. The motion judge denied this motion, concluding that the defendant's probation would commence upon his release from his civil commitment as a sexually dangerous person and did not run concurrently with his civil commitment.

On appeal the defendant argues that the motion judge erred for two reasons. First, the defendant argues that the sentencing judge intended for the defendant's civil commitment to run concurrently with his imposed probation. Second, the defendant argues that the motion judge's order commencing the defendant's probation after his civil commitment violates his due process rights. We disagree and affirm the motion judge's order for the same reasons set forth in Commonwealth v. Sheridan, 51 Mass. App. Ct. 74, 76-79 (2001).

Order entered April 27, 2017, denying motion to determine probation status affirmed.

      On the lower court docket, the State prison sentence was listed under "SENTENCE" and the probation term was listed separately under "PROBATION."

      That indictment charged the defendant with the four counts of rape of a child under the age of sixteen.

      The defendant's motion was labeled "Motion to Determine Probation Status," which the motion judge treated as a motion to terminate probation.