The Massachusetts Appeals Court today enforced, without substantial comment, analysis or citation to authority, a bank’s loan guaranty contract providing that the "[g]uarantor agrees that whenever any attorney is used by the Lender to obtain payment hereunder, to enforce this Guaranty . . . the Lender shall be entitled to recover reasonable attorneys' fees, all court costs, and expenses." MountainOne Bank v. Hurley, No. 18-P-1504. https://www.mass.gov/files/documents/2019/08/15/18P1504.pdf. The court also consequently awarded the bank its appellate fees. Parties to contracts sometimes wonder whether courts will enforce such provisions. Today’s decision, albeit an unpublished decision, reaffirms that yes, such provisions can be enforceable and that this conclusion is sometimes so obvious a reviewing court will not need to analyze the issue in detail or even cite supporting authority.
Earlier this week, I filed my clients’ appellate reply brief in the McHugh et al. v. Commonwealth of Massachusetts putative 7,700-member class action. A link to the brief is here: https://bit.ly/32A9W98
The case largely comes down to two core and important questions: First, is the Massachusetts doctrine of sovereign immunity constitutional? Second, should the largest employer in the state—the Commonwealth itself—be required to follow its own employment laws?
We hope to find out answers to both questions in the coming months.
The Massachusetts Appeals Court has again reminded litigants of the necessity of following procedures in administrative (make that *all*) matters. In Genworth Life Ins. Co v. Commissioner of Insurance, No. 18-P-55 (June 3, 2019), the Appeals Court rejected Genworth’s appeal of the trial court’s summary judgment against Genworth on the basis that Genworth “had not followed the proper procedure to secure approval for proposed rate increases for long-term care insurance.”
In a bulletin released in 2008 (2008-08 bulletin), the commissioner announced that all filings by insurance carriers doing business in Massachusetts must be made using the Division of Insurance’s (division) system for electronic rate and form filing (SERFF)
Though Genworth filed its request for rate increases through SERFF, it amended its filings through SERFF to change the requested rate increase, but never made any filing through SERFF that sought a specific deadline for the implementation of its requested rate increases. After some negotiations and significant delay in the approval process, Genworth sent letters to the commissioner through e-mail and Federal Express, but not through SERFF. The letters cited G. L. c. 175, § 108, which, Genworth argued, in combination with G. L. c. 175, § 193F, constituted a so-called “deemer provision” whereby Genworth’s requested rate increase was “deemed approved” when the commissioner did not explicitly disapprove the increase within thirty days.
But the instructions to the Commissioner’s 2008-08 bulletin state explicitly, under the section titled “Deemer Provision,” that “[t]his section does not apply . . . to any filings that are effective on approval.” The Appeals Court deferred to this interpretation, noting that “[w]e review questions of statutory interpretation de novo. . . . [However, w]e give substantial deference to a reasonable interpretation of a statute by the administrative agency charged with its administration enforcement.” Further, “an administrative agency may use sub-regulatory guidance to ‘fill in the details or clear up an ambiguity of an established policy’ without resort to formal rulemaking as long as it does not contradict its enabling statute or preexisting regulations.’”
The Appeals Court applied these precedents noting that the 2008-08 bulletin mandating the use of SERFF “did not conflict in any way with the relevant statutes but, rather, provided a method to implement them -- a method with which Genworth clearly was familiar, having filed its 2012 rate increase proposal through SERFF.”
The lesson here—one the appellate courts frequently teach—is that strict compliance with statutory or other procedural requirements can be essential.
The Massachusetts Appeals Court today reminds litigants that where a party claims an entitlement to attorney's fees under G. L. c. 231, § 6F (the statute relating to insubstantial, frivolous or bad faith claims or defenses), a party challenging a denial of fees must file a separate notice of appeal pursuant to G. L. c. 231, § 6G. A party appealing a § 6F order incorporated into a final judgment is required to file two notices of appeal, one to appeal the § 6F order to a single justice and the other to appeal the balance of the judgment to a panel. See Troy Indus., Inc. v. Samson Mfg. Corp., 76 Mass. App. Ct. 575, 584 (2010) (quoting Bailey v. Shriberg, 31 Mass. App. Ct. 277, 284 (1991)).
We represent a putative class action of some 7,700 Massachusetts state employees wrongly and illegally denied benefits. We filed our appellate brief yesterday in the case. All workers, including state workers, deserve to be treated fairly.
In a decision issued today, the Massachusetts Supreme Judicial Court rejected a challenge to a criminal conviction based in part on a trial judge’s reflections about the terrorist attacks of September 11, 2001. Trial in the case commenced on September 11, 2013, with the judge’s recollection of her day on September 11, 2001. After evacuating the courthouse on that day when news of the attacks spread, she said, the jurors unanimously decided to return the next day. The judge went on to express confidence that the jurors will “appreciate [their] part of the government here… and [the jurors] are the government here.” The SJC held that the judge’s statement “did not prejudice the defendant” and was intended “to emphasize the importance of jury duty.” The court further stated that no error occurs where “the judge’s remarks were neither intemperate nor critical of the attorneys, there was no danger that the judge exhibited to the jury a bias against the defendant.”
So judges in Massachusetts state courts are permitted to instill a sense of patriotism in a jury by using a seriously emotional and traumatic event, such as 9/11, so long as they exhibit self-control and do not criticize the attorneys or exhibit bias.
In an impactful employment-related decision issued today, Ferman v. Sturgis Cleaners Inc., SJC-12602, the Massachusetts Supreme Judicial Court adopted the “catalyst test” to determine whether employees, whose claims against their employers under the Wage Act, G. L. c. 149, §§ 148, 150, resulted in a favorable settlement agreement and stipulation of dismissal, "prevailed" in their suit for purposes of an award of attorney's fees and costs under the Wage Act's fee-shifting provisions. Under the catalyst test, if the plaintiff's lawsuit is a necessary and important factor in causing the defendant to grant a material portion of the requested relief, a settlement agreement, even without any judicial involvement, may qualify the plaintiff as a prevailing party for fee-shifting purposes.
In the ruling, the SJC therefore expressly rejected the harder-to-establish Buckhannon test for federal feeshifting statutes established by Buckhannon Bd. & Care Home, Inc. v. West Virginia Dep't of Health & Human Resources, 532 U.S. 598 (2001), which requires a prevailing litigant to prove there was a "material alteration of the legal relationship of the parties" (citation omitted) and a "judicial imprimatur on the change."
The plaintiffs in the case were former employees of the defendants' dry cleaning business who sued claiming that the defendants failed to pay them approximately $28,000 in regular and overtime wages as required by G. L. c. 149, §§ 148 and 150, and G. L. c. 151, §§ 1A and 1B. These statutes provide that "[a]n employee so aggrieved who prevails in such an action shall be awarded treble damages . . . and shall also be awarded the costs of the litigation and reasonable attorneys' fees." G. L. c. 149, § 150; G. L. c. 151, § 1B.
As a result of mediation, the parties executed a memorandum of understanding in which they agreed to settle the case for $20,500, but reserved the issue of the plaintiffs' entitlement to attorney's fees for resolution by the court. The plaintiffs claimed approximately $40,000 in attorney's fees and $1,000 in costs. The trial judge concluded that the catalyst test and not the Buckhannon test applied to Massachusetts fee-shifting statutes. In applying the catalyst test, the trial court determined that the parties' agreement, which amounted to nearly seventy percent of the plaintiffs' initially demanded monetary relief, resulted "in a practical benefit as a result of their attorneys' efforts." As such, the plaintiffs were "prevailing parties" for purposes of an award of attorney's fees and costs and the trial court awarded the plaintiffs a reduced figure of approximately $17,000 in attorney’s fees and costs.
The SJC affirmed. It began its analysis by noting that although the Buckhannon test applies to federal feeshifting statutes, "we are not . . . bound by interpretations of the Federal statute in construing our own State statute." The SJC then expressly adopted the catalyst test to determine prevailing parties under the Wage Act. The SJC reasoned that doing so provides a disincentive against unlawful conduct and also incentivizes attorneys to provide representation in cases that otherwise would not be financially prudent for them to take on.
Further, the SJC recognized that “successful litigation may be reflected in settlements as well as court rulings, as settlements are often ‘the products of pressure exerted by [a] lawsuit.’" And the catalyst test “provides a disincentive for defendants to stretch out cases and delay settlement for strategic advantage, as they would only be increasing the legal fees they would ultimately be required to pay.”
For all the foregoing reasons, the SJC determined that “a plaintiff prevails for purposes of an award of attorney's fees under the Wage Act when his or her suit satisfies the catalyst test by acting as a necessary and important factor in causing the defendant to provide a material portion of the relief demanded in the plaintiff's complaint.” In applying the test to the present case, like the trial court before it, the SJC concluded that the criteria of the catalyst test were met because the plaintiffs' lawsuit caused the defendants to provide approximately seventy percent of the plaintiffs' monetary demands—a material portion.
In a victory for parents’ rights advocates, in February 4, 2019, published decision (Adoption of Posey, No. 17-P-1473), the Massachusetts Appeals Court vacated a Probate and Family Court’s termination of a father’s parental rights. Specifically, from his home in Guatemala, the father sought to obtain custody of his two daughters who were placed in foster care after the death of their mother in the United States. The father could not take immediate custody of the children because he had been deported earlier. After a one-day trial, at which the father was necessarily absent due to his immigration status, a Probate and Family Court judge issued decrees terminating the father's parental rights. This was based, at least in part, by the Department of Children and Families shifting from a stance encouraging reunification of the children with the father to one encouraging that the children be adopted in the United States by other individuals. In finding the father to be an unfit parent, the judge characterized him as having "abandoned" the children. She also found that he had "a serious issue with criminal activity" and "longstanding issues of domestic violence." The Appeals Court determined that none of these critical findings have adequate support in the record, and so it vacated the decrees.
In analyzing the issues, the Appeals Court noted that "to take the 'extreme step' of irrevocably terminating the legal relationship between a parent and child," the judge "must determine 'by clear and convincing evidence that the parent is currently unfit to further the child's best interests.'" Adoption of Yale, 65 Mass. App. Ct. 236, 239 (2005), quoting Adoption of Carlos, 413 Mass. 339, 348 (1992). Further, "'careful factual inspection and specific and detailed findings' by the trial judge are required to 'demonstrate that close attention has been given the evidence.'" Adoption of Yale, supra, quoting Custody of Eleanor, 414 Mass. 795, 799 6 (1993).
In conclusion, the Appeals Court noted that without the clearly erroneous findings, the remaining subsidiary findings in the case show no "'grievous shortcomings or handicaps [of the father] that put the child[ren]'s welfare much at hazard,' Petition of the New England Home for Little Wanderers to Dispense with Consent to Adoption, 367 Mass. , 646 [(1975)], and thus the ultimate finding of unfitness is not properly supported by the [subsidiary] findings." Adoption of Leland, 65 Mass. App. Ct. 580, 585 (2006). As a result, the department of children and families failed to meet its burden of proving the father's unfitness by clear and convincing evidence. See Adoption of Imelda, 72 Mass. App. Ct. 354, 363 (2008). Therefore, the Appeals Court vacated the decrees terminating the father's parental rights, and remanded the case for further proceedings consistent with the opinion.
The Massachusetts Supreme Judicial Court holds that a rap song with abusive lyrics posted to Soundcloud and shared through Snapchat does not constitute three separate acts as required by Mass. Gen. Laws Ch. 258E, but reiterates that even a single act of harassment could invoke the trial court’s equitable power to issue an injunction