Palmer Development Corp. v. Gordon

Smith, Therefore, may be Estate we conclude see sanctioned Real acting agent in her of the Act. See as an unlicensed Commission for a violation when (1988 13067, 13068 Crosses, Pamph. §§ could have had no 32 M.R.S.A. & contacts with the Comm’n, 1998); expectation v. Maine Real Estate that she would be Golz reasonable 1288, 1289-90 payment for those services. The entitled to summary entering trial court did not err discourage In unli- order to further plaintiffs’ judgment for the defendants on activity, Legislature prohibit- censed has quantum meruit count. sharing splitting ed the or of commissions persons by providing with unlicensed entry may “paying, be sanctioned for di- licensee rectly indirectly, any part Judgments or share of his affirmed.

compensation arising accruing real from a brokerage any person to

estate transaction perform

who is not licensed to service compensated.” he is or would be 13067(1)(J) (1988) § (emphasis

M.R.S.A. add-

ed). Cohn, therefore, Jaret & could not have

split the commission with vio- Smith without lating risking imposition law 1999 ME 22 sanctions, inclusive the loss of its broker- 13068(2)(D) § age license. See M.R.S.A. PALMER DEVELOPMENT (1988). Therefore, in order for Smith to CORPORATION placing have received a commission without v. position violating Jaret in the & Cohn Act, necessary it would have been for the Stephen F. et al. GORDON paid Crosses to have half of the commission directly to Jaret & Cohn and the other half Supreme Court of Maine. Judicial arrangement to Smith. Such an would have purposeful attempt been a to avoid the re- Argued Jan. 1999. licensing strictions of the laws. It would not Feb. 1999. Decided expect payment be for a reasonable broker to under those circumstances. sum, light we conclude that in language underlying policy Act, Brokerage

Real Estate License it is not any person expect

“reasonable” for

receive commission for real estate broker-

age services when all of those services were person

rendered while that was not licensed provide Cfi, e.g., the services. Swafford

Harris, (Tenn.1998) 967 S.W.2d 324-26 recovery

(refusing quantum to allow under theory

meruit when to do so would “under- strong policies public

mine and subvert es- prohibit unprofessional

tablished to [certain]

conduct”). recovery of a To allow broker’s

commission, “usage founded on the

trade,” person to a not licensed to who was

engage in that trade would undermine the

express legislative goal “promoting confi-

dence in the business of real broker- estate §

age.” 32 M.R.S.A. 13061. WATHEN, C.J, CLIFFORD,

Before and RUDMAN, SAUFLEY, ALEXANDER, and CALKINS, JJ.

CALKINS, J. ap- Development Corporation Palmer judgment Superior peals from the (York J.) Fritzsche, County, granting a Court wrongful motion to dismiss its claim for grounds statute of limitations defense is successful affirm the not a favorable termination. We judgment. (PIN), orig-

[¶ 2] Penobscot Indian Nation action, in inally brought defendant this entities, against suit in federal court several including Development. Palmer One of against Develop- PIN claims Palmer Racketeer ment was civil violation of the Act Corrupt Organizations Influenced and (RICO). granted The federal district court summary judgment Devel- favor of Palmer opment claim was because PIN’s RICO four-year of limitations. barred statute Key Penobscot Indian Nation v. Bank of Me., (D.Me.1995).1 F.Supp. Palmer filed a Development [¶3] then complaint Superior one-count Court against for malicious PIN attorneys represented five and law firms who PIN in the federal Palmer De- court suit.2 Stephen (orally), E. B. Wade James Bel- velopment alleged and their law- that PIN leau, Skelton, Abbott, P.A., Au- Taintor & (referred collectively yers law firms as burn, plaintiff. for defendants) lawyer had no reasonable Preti, Jeffrey (orally), Development en- T. Edwards Flaher- to believe Palmer (for Pachios, LLC, Portland, ty, gaged Beliveau & activities that would Sullivan), maliciously and that filed Ronald Caron & Chris- RICO claim it was Caron (orally), Taintor H. Kir- Palmer Devel- topher T. Theodore and without cause. chner, Norman, LLC, settled, DeTroy, PIN opment & Hanson but (for Portland, Gordon, Haley, Stephen Peter civil claim remained use of Kubetz, Wise), lawyer against and Gordon & Bernard J. defendants. P.A., Eaton, Peabody, Veague, to M.R. pursuant & defendants filed motion Bradford (for Nation), 12(b)(6) Bangor, P. failure to state Indian Civ. dismiss for Penobscot They argued to the successfully defendants. a claim. filed, complaint Peppereli were Trust 1. After all of claims and counterclaims 2. After was 46, 1,¶ summary judgment, PIN and trial or resolved Heir Co. v. Mountain Fin. 1998 ME appealed. (Me.1998), other defendants Penobscot In several we made it clear Me., (1st Key F.3d 538 dian Nation v. Bank prosecution applies to tort of malicious denied, Cir.), -, 118 S.Ct. cert. -U.S. wrong- prosecutions tort of criminal whereas the pursue an 139 L.Ed.2d 229 PIN did refers to civil actions ful use appeal summary judgment in favor of brought maliciously. on the RICO claim. Penob Nation, F.3d at 544 n. 7. scot Indian qualify Superior court held it cannot favorable Court that favorable termination is element of the tort of termination. proceedings and that the RICO action was court also found sub- The Lackner favorably Develop- not terminated to Palmer supporting deci- policy reasons its stantial ment. justification for a sion. It noted that the prevent stale of limitations is statute In Trust Co. v. [¶ 4] time, when, passage the of claims due to 46, Heir Fin. 1998 ME Mountain ¶ memories are evidence is hard to obtain and 15, 651, 656, adopted A.2d the Re 708 A in a suit for dim. Id. statement definition of the tort of however, proceedings, must show a of civil proceedings. The tort exists cause, probable an element that nec- lack of where: essarily of these same involves consideration (1) continues, initiates, procures “Certainly policy if stale issues. Id. 395-96. cause, proceedings litigation preclude considerations of such is- (2) a other than that action, underlying in the the same con- sues securing proper adjudication the of preclude in the malicious siderations also it proceedings claim which the are justifi- at action.” Id. 396. This (3) based, the have termi- noted, supported, the court cation is further person against in whom nated favor by general rule that a statute of limita- the they brought. are shield, tions defense can be used as but (citing Id. (Seoond) Restatement Of Torts as a sword. Id. (1977)). tort, § 674 The third element of the termination, favorable is an “essential ele- The rule in Lackner that termination ¶ 16, ment of the claim.” Id. 708 A.2d at 656. grounds on statute of limitations is not favor What constitutes a favorable termination is a by majority adopted able has been question of law. See id. The issue of wheth- the issue. courts that have addressed party wrong- aer can maintain an action for Hess, 927, Kan.App.2d 21 P.2d Miskew v. 910 ful use of civil after a successful 223, (Kan.Ct.App.1996), the court noted 233 underly- in statute of limitations defense the general rule is that a termination ing question impression in action is of first underlying action on statute of limitations the (declining Maine. See id. consider Af grounds is not a favorable termination. in circumstances which a dismissal would rationale, surveying a reflecting on the ter termination). qualify aas favorable jurisdictions reviewing sec number of authorities, ondary court the Miskew leading case on whether suc- jurisdic adopted general rule. Id. Other qualifies cessful statute of limitations defense held or stated in dicta tions that have v. La- as favorable termination is Lackner grounds of limitations termination on statute Croix, 747, 693, Cal.Rptr. 602 25 Cal.3d 159 Frey include: not a favorable termination is (1979). P.2d 393 Lackner set the standard 274, Stoneman, 106, 278 150 Ariz. 722 P.2d v. that of an action on termination statute Carr, 1241, (Ariz.1986); A.2d Brown v. 503 grounds does not reflect on the Cal, (D.C.1986); Amsco 1246 Union Oil underlying be merits of the claim cannot (Fla.Dist. Watson, 349, 468 So.2d 354 Div. v. of a favorable termination basis Panis, Haw.App. Wong v. 7 Ct.App.1985); prosecution. malicious Id. at 395. action for 695, 414, (Haw.Ct.App.1989); 699 772 P.2d that, Supreme The California Court noted Gordon, 809, (Ky. v. 762 812 Alcorn S.W.2d defenses, purely procedural such with other v. Southern Fin. & Ct.App.1988); Foshee jurisdiction, personal as lack of a statute of (Tenn.Ct. 817, Corp., 967 S.W.2d timely is unless limitations defense waived Thrift minority held A of courts have App.1997). raised. Id. It concluded that a statute of de statute of limitations that a successful merely procedural or limitations defense is v. termination. See Sacco nature, way fense is a favorable depen- “in no technical is Press, Inc., 271 Mont. High Country Indep. reflective of the merits ... dent on nor 209, 411, (1995); reason, Parks v. Wil- P.2d underlying Id. For this action.” (Or. guilty person lis, To insure that Or.App. 853 P.2d require- there is a Ct.App.1993).3 not awarded bonus prosecution action that ment in the malicious Development relies on favorably to proceeding has terminated j (Second) Of comment to the Restatement the favorable termi- plaintiff, and that argue victory § on stat 674 to Torts merits, or at least reflect nation be on the ter ute of limitations is a favorable merits, the action. See Bickford j mination. Comment states: Lantay, 394 A.2d 283-84 proceedings may be terminated Civil wrong- requirement carries over to This they person against are favor of the whom proceedings for the same ful use (1) adjudica- by ... the favorable litigants who Society not want reason. does tribunal, competent the claim a tion of ac- committed the acts of the withdrawal of the cused, liability escape to but who were able them, person bringing or the dis- device, “technicality” procedural to a or on of his missal of the because damages against around and collect turn ad- prosecute failure to them. Favorable justifies re- reason a their accuser. This judication by judgment rendered may be a termination of quirement that the favorable by a court after trial or demurrer on the merits underlying proceeding be equivalent. its or, way, on the merits. in some reflect § 674 cmt. (Seoond) Of Torts Restatement limitations A successful statute of [¶ 11] j- of an not reflect on the merits defense does Development points Palmer out that of limitations demonstrate action. Statutes of limita- demurrers were similar to a statute brought that actions must be societal choice circumstances because tions defense some in- period because the within a certain time challenge they to technical were available of the action formation about the substance complaint unrelat- the face of the defects on fading memories and be- grows stale with underlying action. ed to the merits protect people from the need to cause of Portland R.R. See Mooers v. Kennebec & liability remote claims. See potential Co., 279, It refers to 58 Me. 281 also 712, Co., 342 A.2d v. Ford Motor Williams comment, examples in the such as a the other Development took Palmer 713 prosecute failure and volun- dismissal for to de- advantage the statute of limitations of withdrawal, similarly tary which are not de- fense, and, essence, it that the contended un- on the merits of the terminations made recognized. to be claims were too stale RICO derlying facts. pro- of civil By bringing the reject Development’s ar- Palmer [¶ 10] We suit, Development now ceedings Palmer wrongful use of civil gument. The tort of bring facts that it earlier to forward wants origin in tort of mali- proceedings has its too old to be meritorious. We claimed were plaintiff can prosecution cious unwilling let Palmer against damages a defendant who recover limitations of the statute of reap the benefit against initiates a criminal an stale facts in and then utilize the defense probable without cause innocent affirmative action. prose- purpose. “Malicious improper for an argues Development also remedy wrongs to inno- done cution is file vexa- encouraged to guilty people that will be to afford the persons, cent not a means of limi- knowing that a statute justice.” lawsuits Gedratis v. tious a bonus for a failure of no threat 145, 625, expired there is Carroll, 141, tations has because 225 N.W. 247 Mich. procedural substantive or was based on jurisdictions the substan- merits 3. Other refuse follow Haven, City New grounds. See DeLaurentis v. Lackner tive/procedural distinction drawn 807, (Conn.1991) Prod., cases, A.2d 820 220 Conn. 597 Lead Inc. v. see Hammond line Co., (7th (stating indicate inno- that termination need not Cyanamid 673 570 F.2d American liability); Lapidas, Cir.1977) Jersey holding Christian (applying law cence or lack New (Tenn.1992) (rejecting distinc- 833 S.W.2d venue satisfied the dismissal for lack of procedural and reject any terminations on requirement), tion between favorable termination grounds). inquiry not on the substantive into whether termination maliciously brought by the retaliatory that a suit for use of nal lawsuit was concern, will be filed. This cause to defendants however, by attorney can be sanc- If addressed the claim was meritorious. indeed believe Miskew, tions. See 910 P.2d at 233. Rule lawyers knowingly a cause of of the Maine Rules of Procedure re- Civil limitations action barred the statute of quires pleadings signed that all must be cer- other than that of tifying signer’s claim, “that to the best of the securing proper adjudication of the information, knowledge, there is belief wrongful use have committed the tort of Trust, good ground support it.” defined it. have ¶46, 10, (quoting ME 708 A.2d at 654 suggests wrong The court 11). good ground M.R. Civ. P. Where no by attorney complained of can be addressed pleading, exists to Rule allows suggest I that Rule of M.R. sanctions. impose appropriate the court to sanction. proven P. has itself to be ineffective Civ. Thus, remedy Civ. P. 11. See M.R. holding attorneys responsible prose- for the attorney sanctions exists to deal with First, cution of claims. to the ex- baseless vexatious suit that is terminated on statute of dismissed, ques- tent the case has been grounds. remedy Because ex- tions whether a court would then entertain ists, persuaded policy finally we are motion, secondly, the Bar Rule both ending litigation has more benefit than a and the courts have been hesitant both policy permitting still another court action seeking applying At Rule sanctions. attempt compensate in an a successful civility encourage a time seek to when we litigant wrongful in a suit. There no more is among lawyers, ought suggesting not be litigious society obvious hallmark of a than that a Rule 11 motion be included with all encouragement of lawsuits about law- affirmative defenses. suits. hold that We termination of lawsuit on statute of is I need to limit the third see no not favorable termination that will prong wrongful of the definition of the tort of proceed- an action for use of civil proceedings require origi- use of civil ings. disposed nal of on when the suit be its merits entry is seeking recovery brought against law- suit Judgment affirmed. yers maliciously press who civil violations of Orga- Corrupt the Racketeer Influenced and RUDMAN, J., ALEXANDER, with whom allegedly nizations Act at a time when it was J., joins, dissenting. known to them that the actions were barred applicable statute of limitations. respectfully [¶ 13] I dissent. Trust Co. v. Mountain Heir Fin. I would allow Palmer ¶46, 15, 651, 656, ME we defined allega- attempt to establish as fact their proceedings the tort of brought an tions that the defendants to exist when Indian action on behalf Penobscot (1) initiates, continues, procures primary purpose Nation other than cause, proceedings adjudication receiving proper that of (2) with a other than that I that claim. would vacate the trial court’s securing proper adjudication complaint Development’s dismissal of Palmer claim are 12(b). P. under M.R. Civ. based, termi- have person against nated in favor of the whom brought. The instant concern Nation,

the Penobscot Indian original proceedings, lawyers but the who

represented complaint, the tribe. In its Development alleged origi-

Case Details

Case Name: Palmer Development Corp. v. Gordon

Court Name: Supreme Judicial Court of Maine

Date Published: Feb 1, 1999

Citation: 723 A.2d 881

Court Abbreviation: Me.