Lead Opinion
A baseless suit was filed in the Boston Municipal Court Department. Ultimately, the judge ordered attorney’s fees imposed against the attorneys and litigants who brought the
1. Background. To provide clarity and context it is important to discuss prior proceedings involving many of the same people involved in the present suit. See Dimtil Med. Supplies, Inc. v. Metropolitan Ins. Co., 69 Mass. App. Ct. 1117 (2007). Dmitriy Tilman owned Dimtil Medical Supplies, Inc. (Dimtil). On February 3,1998, Dimtil sued Metropolitan Insurance Company (Metropolitan), seeking reimbursement for the costs of medical supplies Dimtil had provided various insureds of Metropolitan. Metropolitan counterclaimed, alleging that the supplies were medically unnecessary and the bills were excessive. Of significance, Metropolitan was represented by Audrey Parr, then of Morrison, Mahoney & Miller
We now turn to the salient facts of the case at bar. While the Dimtil-Metropolitan suit was being played out, plaintiff Tilman, on the evening of August 10, 1998, and his friends — Vitaly Zakuta, Yelena Kratsberg, and Michael Leyfer — went to a movie at the Cleveland Circle Theater in Brookline. The four friends parted around 1:00 a.m., with plaintiffs Zakuta and Krats-berg as passengers in Tilman’s car and Leyfer in his own car. Approximately thirty minutes later, Leyfer’s car collided with Tilman’s car.
Commerce Insurance Company (Commerce) was the insurer of both cars and, after an initial investigation, determined that Leyfer was responsible for the accident and began paying personal injury protection (PIP) benefits to Tilman ($3,890), Zakuta ($2,000), and Kratsberg ($2,110). McCrevan represented Tilman. It is unclear from the record whether Cohen represented Zakuta and Kratsberg at this time.
In March, 1999, Commerce retained the defendants, David Brink and his law firm, Smith & Brink, P.C. (S&B), to further investigate the plaintiffs’ automobile insurance claims. Brink
Some months later, in April, 2000, the Dimtil-Metropolitan case was tried in Superior Court, resulting in a mixed judgment. The judgment awarded $5,822.42 to Dimtil for unpaid reimbursements; $19,000 to Metropolitan on its G. L. c. 93A claim; and attorney’s fees for each party.
Brink handled the appeal for Metropolitan. In or around April, 2001, he spoke with McCrevan, counsel for Dimtil, about a possible settlement prior to the appeal moving forward. During this conversation, McCrevan allegedly threatened that if Brink did not accept a settlement agreement favorable to Dimtil, he would make Brink pay. Brink did not speak with McCrevan again.
Approximately four months later, in August, 2001, Tilman, Zakuta, and Kratsberg — through their attorneys McCrevan and Cohen — filed the instant Boston Municipal Court action against Commerce, Leyfer, Brink, S&B, and Karen Golab, the claims adjuster for Metropolitan.
Brink and S&B filed a motion to dismiss, which was denied on October 2, 2001. More than a year later, on January 9, 2003, Brink and S&B filed a motion for summary judgment (which Golab joined orally). In opposition, the plaintiffs filed voluminous documentation, without organization or annotations, alleging that the bases for their claims were contained therein. The motion for summary judgment was allowed on April 7, 2003, on all counts involving Brink, S&B, and Golab. The judge found that Tilman’s allegation that his automobile insurance policy records were shared via Golab with Brink or anyone at Commerce “amounts to no more than speculation.”
On November 25, 2003, Brink and S&B filed a motion for attorney’s fees, upon which the judge delayed acting until the remaining claims against Commerce and Leyfer came to final judgment. Once that occurred,
After a hearing, the defendants’ motion was granted on September 15, 2006, pursuant to Mass.R.Civ.P. 11(a), 365 Mass. 753 (1974), and the “court’s inherent supervisory powers.” The judge ruled that “[ajttomeys, who are duty bound to maintain the highest ethical standards possible in all circumstances, act as gatekeepers who ensure . . . that the business of the court is not demeaned by unfounded, fraudulent, frivolous, or spiteful actions .... These obligations were lost in the fervor of overzealous advocacy in this case.” The judge awarded payment of $30,000 in attorney’s fees, ordering Tilman to pay $26,000, and apportioning $1,000 each from Zakuta and Kratsberg, $1,250 from Attorney McCrevan, counsel to Tilman, and $750 from Attorney Cohen, counsel to Zakuta and Kratsberg.
On December 20, 2007, the Appellate Division of the Boston Municipal Court Department affirmed the award of attorney’s fees and dismissed the plaintiffs’ appeal, concluding that the trial judge “was well within her discretion” and that “[t]he Plaintiffs have failed to demonstrate clear error.” The Appellate Division held that “[t]he trial judge’s findings and conclusions provide ample support for the determination that the Plaintiffs acted in bad faith in bringing the action against [Brink and S&B].” The plaintiffs timely appealed.
The plaintiffs argue that it was error for the Appellate Division to affirm the Boston Municipal Court judge’s award of attorney’s fees against the plaintiffs’ attorneys and against the plaintiffs pursuant to rule 11 and the inherent powers of the court. We affirm the award against the attorneys, but reverse the award as imposed against the litigants.
2. Sanctions against attorneys. It is well settled that District Court judges have authority to award attorney’s fees against attorneys pursuant to rule 11.
Here there was a sufficient basis for the judge to find bad faith and to order attorney’s fees against McCrevan and Cohen pursuant to rule 11. Putting aside the vitality of the legal theory for initially filing suit, neither attorney investigated the telephone conversation between Golab and Parr, which formed the factual basis for the lawsuit, to determine what, if anything, Golab revealed to Parr and whether Parr supplied information to anyone at S&B. Counsel made no effort to depose Golab, Parr, or Brink until faced with the defendants’ motion for summary judgment and, even then, failed to comply with the Rules of Civil Procedure and a Boston Municipal Court standing order.
The judge was not wrong in concluding that the record demonstrated that the suit was filed in bad faith and without any viable factual basis. See Community Natl. Bank v. Dawes, 369 Mass. 550, 557 n.6 (1976) (“[Rule 11] imposes an obligation on attorneys ... to ensure that sham pleadings are not employed”). Accordingly, the Appellate Division did not err in affirming the award of attorney’s fees against the attorneys.
3. Sanctions against litigants. Given that rule 11 does not authorize a court to impose sanctions against litigants, as opposed to attorneys, a District Court judge may impose attorney’s fees against litigants only if such a determination is provided for by statute or falls within the inherent powers of the District Court.
General Laws c. 231, § 6F, allows a “court,” upon motion by any party in a civil case, to award reasonable attorney’s fees and costs against any party, attorney or litigant, whose claim or defense was “wholly insubstantial, frivolous and not advanced in good faith.” Ibid., inserted by St. 1976, c. 233, § 1. See Ash-ford v. Massachusetts Bay Transp. Authy., 421 Mass. 563, 568-
The question remains whether assessment of fees against litigants falls within the District Court’s inherent powers. While we recognize that judges possess the inherent power to act “as necessary to secure the full and effective administration of justice,” O’Coin’s, Inc. v. Treasurer of the County of Worcester, 362 Mass. 507, 514 (1972), the Legislature made clear its intent to withhold authority from the District and Municipal courts to impose attorney’s fees against litigants. See id. at 513 (“It is well recognized that the General Court, pursuant to its general police powers, may enact legislation which declares or augments the inherent powers of the judiciary”). The Legislature, if it chose to give those courts such power,
In the instant case, there was a plethora of evidence of bad faith by the litigants, Tilman, Zakuta, and Kratsberg. The judge found correctly that documents submitted in opposition to the plaintiffs’ claims “establish[ed] that the investigation conducted by Commerce was, if anything, a reasonable investigation of what appeared to be suspicious circumstances surrounding the Accident.” Tilman failed to demonstrate any facts showing collusion by the defendants, could not articulate any connection between Parr and the investigation by Commerce, and provided deposition testimony amounting to mere speculation (see note 11, supra). In addition, the findings reflect that Zakuta and Kratsberg “each testified under oath at their depositions that they did not know of any facts to support their claims.” Based on this, it was understandable for the judge to award a total of $30,000 in attorney’s fees to Brink and S&B. However, the trial judge did not have the authority to assess attorney’s fees against the plaintiffs.
4. Conclusion. The decision of the Appellate Division is
So ordered.
Parr left that law firm to become a partner at Smith & Brink, P.C., in February or early March, 1999.
In addition to Commerce learning that the plaintiffs and Leyfer were friends and had seen a movie together earlier that night, Brink found that the plaintiffs filed inconsistent claim reports, made contradictory statements to their medical providers regarding how they were injured, and refused to cooperate, making themselves unavailable for questioning.
Metropolitan was found to have violated G. L. c. 93A, but no damages, other than attorney’s fees, were awarded.
Attomey McCrevan claimed 491.35 hours of work on the case, totaling $110,770, plus costs of $8,191.12. Attorney Cohen claimed one hundred hours of work, worth $22,075. The judge disallowed nearly $100,000 of their fee request, ruling that “an expenditure of almost 600 attorneys’ hours ... is extraordinarily excessive and disproportionate to the amount of damages involved.”
The case proceeded to this court, wherein the judgment of the trial court was affirmed. See Dimtil Med. Supplies, Inc. v. Metropolitan Ins. Co., 69 Mass. App. Ct. 1117 (2007).
Attorney McCrevan continued to represent Tilman. Attorney Cohen
The claims against Leyfer and Commerce, essentially for negligence and breach of contract, respectively, are not before us on appeal. See note 13, infra.
Parr still represented Metropolitan on its case involving Dimtil. According to the itemized bill of Parr, S&B billed Metropolitan for Parr’s work.
At his deposition taken on behalf of the defendants, Tilman testified:
Q.\ “But you don’t know of any conversations between Parr and Brink; do you?”
A.: “No, I don’t.”
Q:. “You don’t know of any conversations between Brink and Golab; do you?”
A.: “No.”
Q:. “And you don’t know if any conversations between Golab and Parr were related to Brink; do you?"
*849 A.: “No.”
Q.: “You just assume that; right?”
A.: “Yes."
In his affidavit, Attorney McCrevan wrote that after the alleged GolabParr conversation, “the investigation of Mr. Tilman’s August 10, 1998 auto accident began.” It is difficult to discern how this conversation was improper. Golab and Parr were working together on the Dimtil case. Although Parr had left Morrison, Mahoney & Miller for S&B, she continued to represent Metropolitan. The information allegedly provided was neither confidential nor privileged. As the motion judge observed, “There is, therefore, nothing unlawful or improper about Golab’s obtaining the records in question, and, in fact, the plaintiff has not alleged that there was.”
Tilman also alleged that Brink and Parr motivated a disgruntled Dimtil employee, Darlene Wilson, to steal files and checks from his company and turn them over to the defendants. However, there was no evidence that Brink or Parr, both of whom were present when Wilson visited their office and gave a sworn statement, instigated her stealing of the documents. In addition, as counsel for Commerce and Metropolitan, they had a duty to inquire about allegations of fraud. The transcript of Wilson’s sworn statement shows that she believed Dimtil engaged in insurance fraud and voluntarily spoke with Brink and Parr.
The plaintiffs’ claims against Commerce and Leyfer proceeded to trial, first to a Boston Municipal Court judge, and then de novo in Superior Court. Ultimately, a Superior Court jury returned a verdict for the defendants. The plaintiffs did not appeal from the resulting judgment.
For purposes of our discussion, we refer to the District Court and Boston Municipal Court interchangeably. See Mass.R.Civ.P. 1, as appearing in 423 Mass. 1404 (1996). See also Sperounes v. Farese, 449 Mass. 800, 801 n.2 (2007).
While the record is somewhat unclear, it appears that in opposition to summary judgment, counsel for Zakuta and Kratsberg, i.e., Cohen, needed more time to depose Golab, Brink, and Parr. In such an instance, an affidavit must be filed detailing why an opposition cannot be presented and why more time is needed. See Mass.R.Civ.P. 56(f), 365 Mass. 824 (1974). Additionally, counsel did not comply with Boston Municipal Court Standing Order 1-88, which prohibits discovery requests more than one year after the commencement of the action without leave of court. It appears that counsel for Zakuta and Kratsberg served notices of depositions and discovery requests without seeking leave of court to do so.
Two of the plaintiffs, Zakuta and Kratsberg, were unable to articulate any
The plaintiffs’ argument that the trial judge, and in turn the Appellate Division, failed to consider the subjective intent of the plaintiffs’ attorneys by not considering McCrevan’s affidavit is without merit. Unlike in Crystal Constr. Corp. v. Hartigan, 56 Mass. App. Ct. 324 (2002), upon which the plaintiffs rely, McCrevan’s affidavit provided conclusory objections to the defendants’ statements and did not detail any investigation McCrevan conducted to verify the basis for the claims. Compare id. at 334-335 (affidavit sufficiently demonstrated that defendant could reasonably have believed that case law justified his motion to dismiss), with Psy-Ed Corp. v. Klein, 62 Mass. App. Ct. at 115-116 (affidavit was “totally inadequate” and did not withstand motion for sanctions).
Of course, attorney’s fees may be awarded pursuant to an applicable clause in a contract. See WHTR Real Estate Ltd. Partnership v. Venture Distrib., Inc., 63 Mass. App. Ct. 229, 235-236 (2005); Robbins v. Krock, 73 Mass. App. Ct. 134, 135-136 & n.2 (2008).
In Brossi, the Appellate Division held that the District Court “trial judge did not have the power to enter an award under G. L. c. 231, § 6F.” Brossi v. Fisher, 51 Mass. App. Ct. at 548. This conclusion is in conformity with past Appellate Division decisions. See, e.g., Mullen vs. Connolly, Mass. App. Div. (July 28, 1989); Nissenbaum vs. McGovern, Mass. App. Div., No. 9320 (November 8, 1995).
Here we note the constitutional design that all courts other than the Supreme Judicial Court are created by, and have their jurisdiction circumscribed by, the General Court. See Part II, c. 1, § 1, art. 3, of the Massachusetts Constitution; Opinion of the Justices, 372 Mass. 883, 905 (1977). See also O’Coin’s, Inc. v. Treasurer of the County of Worcester, 362 Mass. at 513 n.6.
Police Commissioner of Boston v. Gows, 429 Mass. 14 (1999), which the Appellate Division relied on in affirming the award, involved the Superior Court, not the District or Municipal courts. More significantly, in Gows, the Supreme Judicial Court, in a “rare and egregious case[],” awarded attorney’s fees “to compensate Gows for the needless litigation in which she has been forced to engage in order to enjoy the rights she had already been adjudicated to have.” Id. at 19.
The plaintiffs also argue that the defendants waited too long to renew their motion for attorney’s fees. However, they did not argue this point in the Appellate Division and, therefore, cannot argue it here. In any event, the defendants did not waive their right to attorney’s fees. See Society of Jesus of New England v. Boston Landmarks Commn., 411 Mass. 754, 756-757 (1992) (“determination of timeliness [of petition for attorney’s fees] is . . . within the discretion of [the] court”).
We decline to grant the defendants attorney’s fees to defend this appeal, as the plaintiffs’ appeal was not frivolous. See Avery v. Steele, 414 Mass. 450, 455 (1993).
Concurrence in Part
(concurring in part and dissenting in part). I respectfully dissent from part 3 of the majority opinion, because I conclude that a judge has inherent authority to ensure the integrity of proceedings in the District Court by imposing sanctions against a party who has acted in bad faith. To the extent that we may glean findings from this record, we are presented with plaintiffs and counsel who colluded to file a baseless lawsuit.
Although I agree with the majority’s thoughtful analysis of G. L. c. 231, § 6F, its referential use in the present case is based on the assumption that the Legislature may deprive a court of its inherent authority to impose sanctions for systemic misconduct by specifying how other courts may apply them. See Commissioner of Probation v. Adams, 65 Mass. App. Ct. 725, 731 (2006), quoting from Gray v. Commissioner of Rev., 422 Mass. 666, 672 (1996) (where District Court has inherent power to fashion remedies for fraud on the court, “[sjuch power exists ‘without statutory authorization and cannot be restricted or
While a departure from the “American rule,” each party bearing its own attorney’s fees, requires a legislative fee-shifting provision, I view the judge’s determination here as an imposition of sanctions in the form of reimbursement to an innocent party for litigation expense. The decision that both counsel and plaintiffs should participate in reimbursing the defendants was based on findings of wrongdoing by each, and not simply on which was the prevailing party. See Police Commissioner of Boston v. Gows, 429 Mass. 14, 18-19 (1999) (discussing, and adopting, rule of numerous other jurisdictions that judge may “consult[] [her] sense of justice in awarding attorney’s fees to compensate [a party] for the needless litigation in which [the party] has been forced to engage”).
In sum, the District Court, a court of “superior and general jurisdiction,” G. L. c. 218, § 4, has the inherent power to “punish those who obstruct or degrade the administration of justice.” New England Novelty Co. v. Sandberg, 315 Mass. 739, 746, cert. denied, 323 U.S. 740 (1944). See Berlandi v. Com
While jurisdiction in the District Court may be limited with respect to subject matter, amount in controversy, or geography, the rights conferred by art. 29 of the Massachusetts Declaration of Rights to “impartial . . . administration of justice” and the provisions of art. 30 vesting exclusive exercise of judicial power in the judiciary preclude restrictions on the authority of its judges to fashion appropriate sanctions such as the one presented here. This is even more emphatically the case where the converse of these same jurisdictional restrictions precludes many litigants from seeking recourse to, and obtaining protection from, other courts.
I would affirm the decision below.
The majority points out, correctly, that Gows concerned a case in the Superior Court. I do not find that to be a relevant distinction; the decision speaks purely to inherent judicial authority and makes no mention of c. 231, § 6F, which had then been on the books for more than two decades.