Premier Capital, LLC v. KMZ, Inc.
984 N.E.2d 286
Mass.2013Background
- Premier filed 2007 suit in Superior Court claiming it holds a sealed promissory note executed by Zeller and that KMZ is liable as successor in interest.
- KMZ and Premier cross-moved for summary judgment; KMZ prevailed on timeliness, but Premier’s cross-motion denied due to a genuine factual issue on successor liability.
- The central issue is whether the six-year limitation in UCC art. 3-118 applies to this sealed-note action.
- The court held 3-118 applies only to actions accruing after its 1998 enactment; Premier’s action accrued before, so the twenty-year seal-contract limit in G. L. c. 260, § 1 applies.
- The court remanded because Premier’s motion was properly denied on successor liability; KMZ’s status as successor to Zeller remained disputed.
- The court ultimately reversed the KMZ summary-judgment dismissal and affirmed the denial of Premier’s summary-judgment grant, with remand for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does UCC art. 3-118 govern this sealed-note action? | Premier argues 3-118 applies to all notes, sealed or unsealed. | KMZ contends 3-118 governs only after enactment for post-1998 accrual. | 3-118 applies only to post-enactment accruals. |
| Is 3-118 retroactive to Premier's pre-enactment accrual? | Premier seeks retroactive application to cover its pre-1998 accrual. | KMZ argues no retroactive effect per statute and explicit legislative directive. | Statute does not apply retroactively; it applies only to post-enactment accruals. |
| What limitations period applies given accrual before 1998? | Twenty-year contract-under-seal period still governs because action accrued before 1998. | 3-118 would govern if retroactive; otherwise not applicable. | Twenty-year statute (c. 260, § 1) applies; action timely under seal-contract limits. |
| Is KMZ the successor in interest to Zeller such that Premier may prevail on liability? | Undisputed facts show KMZ is successor in interest to Zeller. | There is no undisputed transfer of all/substantially all assets or leases/good will transfer to KMZ. | There is a material dispute; Premier did not prove KMZ is the successor, so summary judgment in Premier’s favor was inappropriate on this point. |
Key Cases Cited
- Carreiro v. Rhodes Gill & Co., 68 F.3d 1443 (1st Cir. 1995) (successor liability requires transfer of all/substantially all assets or other indicia)
- Milliken & Co. v. Duro Textiles, LLC, 451 Mass. 547 (Mass. 2008) (liability of successor depends on transfer of assets; four-factor test)
- Guzman v. MRM/Elgin, 409 Mass. 563 (Mass. 1991) (successor liability prerequisites in asset-transfer context)
- Anderson v. Phoenix Inv. Counsel of Boston, Inc., 387 Mass. 444 (Mass. 1982) (statutory limitations generally controls future action absent clear legislative intent)
- Springfield Library & Museum Ass’n v. Knoedler Archivum, Inc., 341 F. Supp. 2d 32 (D. Mass. 2004) (retroactivity considerations for newly enacted limitations statutes)