Franchi Management Co., Inc. v. Flaherty ( 2018 )

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17-P-275 Appeals Court
FRANCHI MANAGEMENT COMPANY, INC., & others 1 vs. PAUL F.
FLAHERTY, JR., trustee, 2 & another; 3 PASQUALE FRANCHI, trustee, 4
& others, 5 third-party defendants.
No. 17-P-275.
Middlesex. January 11, 2018. - June 21, 2018.
Present: Rubin, Sacks, & Wendlandt, JJ.
Negotiable Instruments, Note. Practice, Civil, Action to reach
and apply, Notice of appeal, Interest. Notice,
Timeliness. Interest.
1 Michael P. Franchi, Louis Franchi, Linda A. Kacewicz, KCN
Realty Trust, and Sea Breeze Realty Trust.
2 Of the Patricia Franchi Flaherty 1999 Revocable Trust.
Flaherty was also sued in his individual capacity.
3 John S. Kacewicz. Kacewicz was sued in his then capacity
as trustee of the Patricia Franchi Flaherty 1999 Revocable
Trust. We are informed by the parties that he is no longer a
trustee, and that a successor trustee has not been named.
4 Of Haverhill Realty Development Trust and of Westcliff
Road Nominee Trust.
5 Meadow Green-Wildcat Ski Lift Corp., Meadow Green-Wildcat
Corp., LMF Franklin Corp., Natick Crossing Corp., and
Commonwealth Babcock Associates, LLP.
2
Civil action commenced in the Superior Court Department on
August 13, 2009.
The case was heard by Kathe M. Tuttman, J., on motions for
summary judgment; entry of separate and final judgment was
ordered by Bruce R. Henry, J.; and a motion for amendment of the
amended judgment was heard by Maynard M. Kirpalani, J.
Christopher J. Marino (Kenneth J. Mickiewicz also present)
for Paul F. Flaherty, Jr.
John J. Gushue for Franchi Management Company, Inc., &
others.
WENDLANDT, J. In this case, we address the timeliness of a
notice of appeal from a final judgment that was corrected twice:
first, sua sponte to fix a clerical error in the calculation of
prejudgment interest, and second, on a motion pursuant to
Mass.R.Civ.P. 60(a), 365 Mass. 828 (1974), to correct an
additional error in that same calculation. Because neither the
sua sponte correction of a clerical error nor the filing (as
here) of a rule 60(a) motion beyond ten days from entry of the
original judgment has the effect of restarting the time for
appeal from that judgment under Mass.R.A.P. 4(a), as amended,
464 Mass. 1601 (2013), we dismiss defendant Paul F. Flaherty,
Jr.'s appeal from the original judgment as untimely. 6
Background. We briefly set forth the undisputed facts as
agreed by the parties in their cross motions for summary
judgment, leaving some procedural details for our discussion
6 Only Paul F. Flaherty, Jr., in his capacity as trustee,
filed an appeal.
3
below. This dispute stems from the failure of the defendants,
as trustees of the Patricia Franchi Flaherty 1999 Revocable
Trust (trust), to pay plaintiff Michael Franchi (Michael) on a
promissory note (note) pursuant to which Michael loaned $750,000
to his sister Patricia Franchi Flaherty (Patricia). 7 Under the
terms of the note, Michael and Patricia agreed that Michael's
sole recourse for payment would be from Patricia's ownership and
beneficial interests in certain assets, which she had previously
transferred to the trust. Patricia died before the initial
payment became due, and the trust did not make payments to
Michael. The present action, which Michael and the other
plaintiffs commenced in Superior Court, 8 followed.
After a period of discovery, Michael moved for partial
summary judgment on count 2 of the second amended complaint,
asserting that the court should reach and apply trust assets to
satisfy a $750,000 debt owed to him by Patricia. 9 In their
7 Because these parties share a surname, we will refer to
each by first name.
8 Counts 1 through 4 of the plaintiffs' second amended
complaint sought to reach and apply assets of the defendants to
satisfy debts owed to the plaintiffs; count 2 concerned only the
debt owed to Michael. The complaint also included a claim
requesting the imposition of a constructive trust (count 5);
claims alleging fraudulent conveyance (count 6) and breach of
fiduciary duty (count 7); and a demand for an accounting (count
8).
9 The plaintiffs filed a separate motion for summary
judgment on counts 1, 3, 4, 5, and 7 of the second amended
4
opposition, the defendants conceded liability under the note;
they disputed only the amount due to Michael and whether Michael
had complied with the notice provisions. 10 The motion judge
allowed Michael's motion and ordered the trust to pay the
principal balance of the note together with interest, 11 remarking
that the defendants did not appear to dispute that Michael's
claim was a direct contractual claim against the trust (as
opposed to a claim against Patricia's estate). Pursuant to
complaint, and the defendants filed a cross motion for summary
judgment on all of the counts. The motion judge allowed the
defendants' cross motion for summary judgment as to counts 5
through 8. The judge denied both the plaintiffs' and
defendants' motions for summary judgment on counts 1, 3, and 4,
concluding that Patricia's estate was a necessary party as to
those counts. The judge ordered Patricia's estate to be joined
and that said joinder "shall relate back to the date of filing
of the original complaint." The plaintiffs then successfully
moved to amend the complaint to include Patricia's estate as a
defendant. Parallel litigation between the parties ensued in
the Probate and Family Court, where a judge ruled that the
plaintiffs' claims against the estate were time barred. The
plaintiffs have appealed that decision to this court, and the
appeal has been stayed pending resolution of the Superior Court
litigation on the other counts of the complaint. A third
litigation was then commenced by some of the plaintiffs, who
filed a complaint in the Supreme Judicial Court pursuant to
G. L. c. 190B, § 3-803(e), seeking equitable relief to allow
them to pursue their claim against Patricia's estate. A single
justice of the Supreme Judicial Court transferred the action to
the Superior Court for consideration together with the remaining
claims of the present action.
10Despite this concession, in their cross motion for
summary judgment, the defendants argued that Patricia's estate
was a necessary party for all the "reach and apply" counts of
the complaint, including Michael's claim on the note.
11Subsequently, the motion judge allowed, in part,
Michael's motion for attorney's fees and costs.
5
Mass.R.Civ.P. 54(b), 365 Mass. 820 (1974), Michael moved for
entry of final judgment on his claim. The unopposed motion was
allowed. The clerk of the Superior Court entered a final
judgment on Michael's claim on December 22, 2014 (original
judgment). Defendant Paul F. Flaherty, Jr., now appeals.
Discussion. Rule 4(a) of the Massachusetts Rules of
Appellate Procedure requires an appellant in a civil case to
file a notice of appeal "within thirty days of the date of the
entry of the judgment appealed from." Mass.R.A.P. 4(a), first
par. Here, the defendant purports to appeal from the original
judgment, which entered as a final judgment on December 22,
2014. 12 Specifically, on January 11, 2017 -- more than 750 days
after the original judgment entered, and nearly two years after
the thirty-day deadline for appeal from the original judgment
had lapsed on January 21, 2015 -- the defendant filed a notice
of appeal from the original judgment. Accordingly, unless an
exception applies, the defendant's appeal is not timely.
Rule 4(a) provides that certain postjudgment motions will
alter the time period for the filing of a notice of appeal, such
that the thirty-day period will not commence until the entry of
the order disposing of the postjudgment motion. Relevant to the
12
As set forth supra, while the original judgment did not
dispose of all of the claims, it was a "final judgment" entered
pursuant to Mass.R.Civ.P. 54(b), which the defendants did not
oppose.
6
present case, rule 4(a) was amended in 2013 to provide as
follows:
"If a timely motion under the Massachusetts Rules of Civil
Procedure is filed in the lower court by any party . . . to
alter or amend a judgment under Rule 59 or for relief from
judgment under Rule 60, however titled, if either motion is
served within ten days after entry of judgment . . . the
time for appeal for all parties shall run from the entry of
the order . . . granting or denying any . . . such motion"
(emphasis added).
Mass.R.A.P. 4(a), second par. A notice of appeal filed before
the disposition of these postjudgment motions "shall have no
effect"; "[a] new notice of appeal must be filed within the
prescribed time measured from the entry of the order disposing
of the [postjudgment] motion." Ibid.
1. Sua sponte correction of clerical error. The defendant
first maintains that the time for appeal was restarted when, on
December 30, 2014, the court sua sponte corrected an arithmetic
error in the original judgment regarding the amount of interest
owed to Michael. The trial court has the power to correct
clerical mistakes (such as arithmetic errors 13) pursuant to
Mass.R.Civ.P. 60(a), which provides:
13Here, the correction of the interest calculation was a
clerical error that did not affect the substantive rights
determined in the original judgment. See Artco, Inc. v.
DiFruscia, 5 Mass. App. Ct. 513, 515, 517 (1977) (rule 60[a]
motion to correct clerical error in computation of interest did
not affect finality of earlier judgment or extend time to bring
motion under rule 60[b][2] or [3]). See also Bernier v. Boston
Edison Co. 380 Mass. 372, 388 n.17 (1980) (rule 60[a] motion is
proper vehicle for correcting error in computation of interest).
7
"Clerical mistakes in judgments, orders or other parts of
the record and errors therein arising from oversight or
omission may be corrected by the court at any time of its
own initiative or on the motion of any party and after such
notice, if any, as the court orders. During the pendency
of an appeal, such mistakes may be so corrected before the
appeal is docketed in the appellate court, and thereafter
while the appeal is pending may be so corrected with leave
of the appellate court."
The trial court's exercise of this power does not restart
the appellate clock. Rule 4(a) of the Rules of Appellate
Procedure, second par., provides only that certain
postjudgment motions restart the time to appeal; nothing in rule
4(a) suggests that the time for appeal is restarted based on the
sua sponte action by the trial court. To the contrary, it is
well settled that where (as here) the trial court uses its
inherent power to correct a clerical mistake such that the
amended judgment does not alter the substantive rights affected
by the original judgment, the time for appeal generally runs
from the original judgment. 14 See Jones v. Boykan, 74 Mass. App.
Ct. 213, 217 n.7 (2009) ("[T]he correction of a clerical error
does not extend the time for taking an appeal from a final
judgment"); Farkas v. Rumore, 101 F.3d 20, 22 (2d Cir. 1996)
(per curiam), citing Federal Trade Commn. v. Minneapolis-
Honeywell Regulator Co., 344 U.S. 206 (1952) ("Where a judgment
14Of course, a party would have thirty days from the entry
of such an amended judgment to appeal from the revisions
reflected in that judgment. See 11 Wright, Miller, & Kane,
Federal Practice & Procedure § 2871 (3d ed. 2012).
8
is reentered [based on a sua sponte correction of an
administrative mistake by the trial court], and the subsequent
judgment does not alter the substantive rights affected by the
first judgment, the time for appeal runs from the first
judgment"). 15 Accordingly, the sua sponte amendment of the
original judgment did not alter the time to file the notice of
appeal from the original judgment.
2. Rule 60(a) motion to correct a clerical error. The
defendant next argues that the time for appeal was restarted
when Michael served on the defendants a motion pursuant to
Mass.R.Civ.P. 60(a) to correct an additional clerical error in
the amended judgment. Specifically, on January 5, 2015 -- less
than ten days after entry of the amended judgment, but more than
ten days after entry of the original judgment -- Michael served
a rule 60(a) motion to correct another clerical error in the
calculation of prejudgment interest in the amended judgment. 16
15"As a general principle, we apply to our rules of civil
procedure the construction given to the cognate Federal rules."
Pentucket Manor Chronic Hosp., Inc. v. Rate Setting Commn., 394
Mass. 233, 236 (1985), quoting from Chavoor v. Lewis, 383 Mass.
801, 806 n.5 (1981).
16The motion judge did not reach the merits of this
January, 2015, rule 60(a) motion because the action was stayed
in August, 2015, pending resolution of the Probate and Family
Court matter. See note 9, supra. In September, 2016, Michael
served and filed a renewed rule 60(a) motion to correct the
clerical error. That renewed motion was served more than ten
days after the amended judgment entered. For the present
analysis, we assume arguendo that the renewed rule 60(a) motion
9
The defendant maintains that this motion, pursuant to rule
60(a), is one of the enumerated postjudgment motions that
restart the time to file the notice of appeal. In particular,
the defendant contends that it was a motion "to alter or amend a
judgment under Rule 59 or for relief from judgment under Rule
60, however titled, if either motion is served within ten days
after entry of judgment" (emphasis added). Mass.R.A.P. 4(a),
second par. The defendant's argument overlooks that the rule
60(a) motion was not "served within ten days after entry" of the
original judgment from which the defendant purports to appeal.
For this reason alone, the argument fails.
Nevertheless, the defendant maintains that the time for
appeal was extended because Michael's rule 60(a) motion was
served within ten days of the entry of the amended judgment.
The flaw in the defendant's contention is that the defendant
does not appeal from the clerical correction reflected in the
amended judgment. Instead, he purports to challenge the merits
of the allowance of Michael's motion for summary judgment in
the original judgment; the defendant's notice of appeal from
should be viewed as relating back to January 5, 2015, the
service date of Michael's original rule 60(a) motion. The
renewed motion was allowed, and a second amended judgment
entered on December 28, 2016. Because the defendant filed his
notice of appeal on January 11, 2017, the notice was timely as
to the further revisions in the second amended judgment. We
note, however, that the defendant has not challenged any aspect
of the further revisions, which we shall therefore affirm.
10
that judgment was not filed until more than 750 days after the
judgment entered. Michael's rule 60(a) motion (which was not
served within ten days of the entry of the original judgment)
does not "produce a Lazarus-like effect; it cannot resurrect
[the defendant's] expired right to contest the merits of the
underlying [original] judgment, nor bring the judgment itself
before us for review." Rodriguez-Antuna v. Chase Manhattan Bank
Corp., 871 F.2d 1, 2 (1st Cir. 1989). See 11 Wright, Miller, &
Kane, Federal Practice & Procedure § 2871, at 586 (3d ed. 2012)
(timely appeal from correction of clerical error, after time for
appeal of underlying judgment has run, "would be limited to
[the] disposition of the Rule 60[a] motion and would not bring
up for review the underlying judgment").
Because the trial court's sua sponte correction in the
amended judgment does not alter the finality of the original
judgment or restart the time for appeal, and because Michael's
rule 60(a) motion was not served within ten days of the original
judgment, 17 the defendant's appeal from the original judgment is
untimely. 18
17Because we conclude that Michael's motion pursuant to
Mass.R.Civ.P. 60(a) did not meet the ten-day time restriction of
Mass.R.A.P. 4(a), we need not decide whether a rule 60(a) motion
to correct a clerical error is, when served within ten days of
the entry of judgment, one of the motions encompassed by rule
4(a)(3). Compare Catz v. Chalker, 566 F.3d 839, 841-842 (9th
Cir. 2009), with Reporter's Notes to Rule 4 (2013),
Massachusetts Rules of Court, Rules of Appellate Procedure, at
11
Conclusion. The appeal from the December 22, 2014,
judgment, and from so much of the amended judgment entered
December 28, 2016, as awarded damages in the sum of $750,000 is
dismissed with prejudice. In all other respects, the amended
judgment is affirmed.
So ordered.
231 (Thomson Reuters 2018) (discussing purpose of 2013 amendment
to eliminate disparate effect on time for appeal caused by
differential treatment between motions pursuant to Mass.R.Civ.P.
59 and Mass.R.Civ.P. 60[b]).
18The defendant, seeking to preserve some avenue for
appealing from the original judgment, alternatively contends
that the present appeal is premature and should be dismissed
without prejudice. This is so, he argues, because, in allowing
the renewed rule 60(a) motion (see note 16, supra) and issuing a
second amended judgment, entered on December 28, 2016, a second
motion judge corrected the arithmetic error in the calculation
of prejudgment interest in the first amended judgment only
through December 30, 2014, the date the first amended judgment
entered, and did not enter a new separate and final judgment
pursuant to Mass.R.Civ.P. 54(b). We disagree. The second
motion judge's interest calculation conforms to rule 54(f)'s
directive to compute the "[i]nterest accrued up to the date of
entry of a judgment." Mass.R.Civ.P. 54(f), 382 Mass. 822
(1980). The amount of additional interest owed to Michael after
the date of the entry of the first amended judgment is "interest
from the date of entry of a judgment to the date of execution or
order directing the payment of said judgment," ibid., which
cannot be calculated "at this time," as the second motion judge
noted, because it will depend on when the defendants pay Michael
on the outstanding judgment.