Ceruolo v. Garcia ( 2017 )

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16-P-1443 Appeals Court
DAVID CERUOLO vs. MARTHA GARCIA & another.1
No. 16-P-1443.
Essex. June 5, 2017. - September 7, 2017.
Present: Sullivan, Henry, & Shin, JJ.
Practice, Civil, Default, Motion to dismiss. "Anti-SLAPP"
Statute.
Civil action commenced in the Superior Court Department on
September 16, 2014.
A special motion to dismiss was heard by Robert A.
Cornetta, J., sitting by designation, and a motion to vacate
default was considered by him.
Kevin C. Cain for the defendants.
Donald J. Hubbard for the plaintiff.
SULLIVAN, J. The plaintiff, David Ceruolo (David) sued his
ex-wife Lyllian Ceruolo (Lyllian),2 and her mother, Martha Garcia
(Garcia) for defamation and negligent and intentional infliction
1
Lyllian Ceruolo.
2
Because these parties share the same last name, we refer
to them by their first names.
2
of emotional distress following the conclusion of a contentious
divorce. The defendants were defaulted in the civil action, and
moved unsuccessfully to remove the default. Lyllian and Garcia
appeal from the entry of a final judgment after a hearing on
assessment of damages, contending that the default should have
been vacated. David cross-appealed regarding damages. We
reverse the judgment and remand the case for further
proceedings.
Background. During a contentious divorce action, Lyllian
and her mother made serious allegations regarding David's
conduct. A Probate and Family Court judge found the allegations
unproven and untrue.
Following the entry of final judgment in the divorce case,
David filed this suit against Lyllian and Garcia. The
defendants, represented by counsel, filed a notice of appearance
and a notice of intent to file a special motion to dismiss
pursuant to G. L. c. 231, § 59H, the "anti-SLAPP" statute.
Thereafter, various procedural anomalies occurred. Because the
timing of subsequent events is of importance here, we set out
the timeline in some detail.
On November 25, 2014,3 Lyllian and Garcia timely filed the
special motion to dismiss. The judge considered both the
3
All dates refer to the docket in the Superior Court unless
otherwise noted.
3
pleadings and the affidavit on file, as required by the statute.
See G. L. c. 231, § 59H ("the court shall consider the pleadings
and supporting and opposing affidavits stating the facts upon
which the liability or defense is based"). The pleadings
focused on conduct leading up to and during the divorce. The
affidavit of damages filed by David made additional allegations
not found in the complaint, including a general statement that
there was an ongoing course of defamatory conduct after the
entry of the decree. On February 6, 2015, the judge allowed the
motion as to those statements that occurred "during" the divorce
action and up to the date of the decree, November 22, 2013. The
motion was denied to the extent that David could make a showing
that "the conduct complained of does not fall under petitioning
activity protected under the statute." Thus, the judge left for
another day what conduct fell outside the scope of the anti-
SLAPP statute.
Six days later, on February 12, 2015, the defendants served
a motion for more definite statement pursuant to Mass.R.Civ.P.
12(e), 365 Mass. 754 (1974), in accordance with Superior Court
Rule 9A (rule 9A). David timely served his opposition on
February 24, 2015. A reply brief and opposition to the filing
of the reply brief were exchanged, and the package was complete
4
on or about March 8, 2015.4 For reasons not apparent on the
record, the defendants did not file the package within the ten-
day time period set forth in rule 9A(b)(2). On March 24, 2015,
David served a request for default pursuant to Mass.R.Civ.P.
55(a), 365 Mass. 822 (1974), which was docketed on March 25 and
allowed by the clerk the following day. The entry of default
was sent to David but not to the defendants.5
Lyllian and Garcia, unaware that the default had entered,
but having been served with the rule 55(a) request, filed their
motion for a more definite statement (omitting the contested
reply brief), pursuant to Mass.R.Civ.P. 12(e), on March 27,
2015. That motion was denied on April 3, 2015, "in light of"
the earlier ruling on the anti-SLAPP motion. This ruling,
perhaps unintentionally, left unanswered how David was to make
the required showing that the complained of conduct "did not
fall under petitioning activity."
The denial of the defendants' motion for a more definite
statement likewise was not received by defendants' counsel.
David then filed a motion for assessment of damages and a motion
4
The plaintiff's reply was served on March 5, 2015.
5
Despite the fact that counsel had entered an appearance
for the defendants, and had received a copy of the earlier order
on the anti-SLAPP motion, counsel's name was not entered
correctly on the docket. The docket reflects that the clerk's
office mailed the default order to David but not to defense
counsel. Defense counsel avers that she did not receive it.
5
for default judgment on April 21, 2015, which was served on
defense counsel. Notably, although the motion was served on the
defendants, it did not contain a representation that default had
entered.6
On November 25, 2015, defense counsel called the clerk's
office to inquire about the status of the motion for a more
definite statement. The attorney learned that default had
entered on March 26, that the defendants' motion for a more
definite statement had been decided on April 3 and that notice
of the orders had not been sent to counsel. Counsel was not
correctly listed on the docket as counsel of record. The entry
for counsel was adjusted.
On December 9, 2015, Lyllian and Garcia filed a motion to
vacate the default, verifying the facts outlined above by
affidavit. The same motion judge denied the motion "based upon
finding of no excusable neglect." Lyllian and Garcia filed a
motion for reconsideration of the denial of the motion to vacate
the default, and a supplemental motion, but both were denied by
a second judge for the same reason.
6
There is a margin endorsement, entered on the motion for
assessment of damages after it was filed, setting a July 17,
2015, hearing date for assessment of damages, but there is no
indication on the docket that notice of that hearing was given,
or that a hearing was held until after the defendant moved to
vacate the default in December of 2015.
6
A hearing on assessment of damages was held before the
second judge. Judgment entered in the amount of $100,000 plus
$21,483.70 in prejudgment interest pursuant to Mass.R.Civ.P.
55(b)(2), as amended by 463 Mass. 1401 (2012). This appeal
followed.
Discussion. 1. Motion to vacate default. We review the
denial of a motion for removal of default pursuant to rule
55(c), 365 Mass. 822 (1974), for an abuse of discretion. See
Burger Chef Sys., Inc. v. Servfast of Brockton, Inc., 393 Mass.
287, 289 (1984). "An abuse of discretion occurs when the
judge’s decision rests upon a clear error of judgment in
weighing the factors relevant to the decision . . . such that
[it] falls outside the range of reasonable alternatives, or when
the judge’s decision constitutes a significant error of law."
Chambers v. RDI Logistics, Inc., 476 Mass. 95, 110 (2016)
(quotations and citations omitted).
Here there was a significant error of law. The standard
applicable to a rule 55(c) motion to remove the entry of default
is "good cause," not the "excusable neglect" standard applied
here.7 See Mass.R.Civ.P. 55(c) ("For good cause shown the court
7
The excusable neglect standard applies to motions to
vacate a default judgment under Mass.R.Civ.P. 60(b), 365 Mass.
828 (1974). Even under rule 60(b), however, a "liberal . . .
application" is warranted where, as here, "the mischief leading
to the judgment occurs at the pretrial stage." Berube v.
McKesson Wine & Spirits Co., 7 Mass. App. Ct. 426, 429 (1979).
7
may set aside an entry of default"). The excusable neglect
standard is applied after judgment has entered. The "good
cause" standard is applicable when default, but not judgment,
has entered. This is a less stringent standard than excusable
neglect under Mass.R.Civ.P. 60(b), 365 Mass. 828 (1974). See
Broome v. Broome, 40 Mass. App. Ct. 148, 152 (1996). We look to
the Federal counterpart to rule 55(a) for guidance. See Burger
Chef, supra at 289 n.3.
The grounds for relief from default in Massachusetts are
substantially similar to those recognized in the Federal system.
Reporter's Notes to Rule 55, Massachusetts Rules of Court, Rules
of Civil Procedure, at 84 (Thompson Reuters 2017). An adequate
basis for allowing the motion "must be shown," but "any doubt
should be resolved in favor of setting aside defaults so that
cases may be decided on their merits." Ibid.
"Allowing an entry of default to be set aside on a showing
of reasonable justification is in keeping both with the
philosophy that actions should ordinarily be resolved on
their merits, [United States v. One Parcel of Real
Property, 763 F.2d 181, 183 (5th Cir. 1985)]; [Meehan v.
Snow, 652 F.2d 274, 277 (2d Cir. 1981)]; American & Foreign
Ins. Assn. v. Commercial Ins. Co., 575 F.2d 980, 982 (1st
Cir. 1978); [United States v. 147 Division St., Located in
Woonsocket, R.I., 682 F. Supp. 694, 697 (D.R.I. 1988)], and
with the command of the [c]ivil [r]ules themselves. See
Fed.R.Civ.P. 1 (rules "shall be construed to secure the
just . . . determination of every action"). These policy
considerations, we suggest, are at their zenith in the
[r]ule 55(c) milieu. Early in the case, as when a default
has been entered but no judgment proven, a liberal approach
is least likely to cause unfair prejudice to the nonmovant
or to discommode the court's calendar. Cf. Phillips [v.
8
Weiner, 103 F.R.D. 177, 179 (D. Me. 1984)] (liberality
justified under [r]ule 55(c) because entry of default a
clerical act and not a final judgment). In these
circumstances, a [trial] court should resolve doubts in
favor of a party seeking relief from the entry of a
default. Gross v. Stereo Component Systems, 700 F.2d 120,
122 (3d Cir. 1983); 147 Division St., 682 F. Supp. at 697."
Coon v. Grenier, 867 F.2d 73, 76 (1st Cir. 1989). "There is no
mechanical formula for determining whether good cause exists and
courts may consider a host of relevant factors." Indigo
America, Inc. v. Big Impressions, LLC, 597 F.3d 1, 3 (1st Cir.
2010). "The three typically considered are (1) whether the
default was willful; (2) whether setting it aside would
prejudice the adversary; and (3) whether a meritorious defense
is presented." Ibid. "[C]ourts may [also] consider other
relevant factors, including '(4) the nature of the defendant's
explanation for the default; (5) the good faith of the parties;
(6) the amount of money involved; [and] (7) the timing of the
motion [to set aside the entry of default].'" Id., quoting KPS
& Assocs. v. Designs by FMC, Inc., 318 F.3d 1, 12 (1st Cir.
2003). See also 10A Wright, Miller, & Kane, Federal Practice
and Procedure §§ 2694-2695 (2016).
This is not a case of willfulness or gross neglect.
Counsel for the defendants filed an appearance, litigated an
anti-SLAPP motion, and timely served a motion for a more
definite statement under rule 12(e) upon receipt of the ruling
on the anti-SLAPP motion. At the time the motion for entry of
9
default was filed, defendant's counsel was one week late in
filing the rule 9A package for the rule 12(e) motion, but it
cannot be said that this rose to the level of gross neglect or
willful noncompliance, rather than a mistake by counsel. See
Debreceni v. Route USA Real Estate, Inc., 773 F. Supp. 498, 499
(D. Mass. 1990). The failure to respond promptly to the motion
for entry of default is explained by the service and filing of
the rule 12(e) motion, which in the ordinary course would have
tolled the time period in which to answer.8 Thus, counsel was
under the "honest, but mistaken impression" that no answer was
required. Kennerly v. Aro, Inc., 447 F. Supp. 1083, 1088-1089
(E.D. Tenn. 1977).
This mistaken impression was occasioned by the failure to
notify defense counsel of either the entry of default or the
denial of the motion for more definite statement. Although
defense counsel could have been more diligent in checking the
docket, the failure of notice favors setting aside the default.
Essroc Cement Corp. v. CTI/D.C. Inc., 740 F. Supp. 2d 131, 137
(D.D.C. 2010). Finally, the defendants filed affidavits in
support of their motion to vacate in which they proffered a
8
A rule 12(e) motion would have tolled the time in which to
answer for so long as it was pending. See Mass.R.Civ.P.
12(a)(2), 365 Mass. 754 (1974); Mass.R.Civ.P. 12(e) ("If a
pleading to which a responsive pleading is permitted is so vague
or ambiguous that a party cannot reasonably be required to frame
a responsive pleading, he may move for a more definite statement
before interposing his responsive pleading").
10
substantial defense -- i.e., that they have not made any remarks
since the divorce proceedings that could be considered
defamatory or injurious.
David is not prejudiced in these circumstances, because
wholly apart from the default, the judgment and the entry of
judgment must be set aside for independent reasons. While the
first motion judge properly considered matters outside the
pleadings on the anti-SLAPP motion, the motion for more definite
statement was denied, and the allegations contained in the
plaintiff's affidavit were never incorporated into an amended
complaint.
This matters in the context of rule 55 proceedings. The
complaint consists almost exclusively of allegations concerning
what happened during the divorce proceeding -- allegations
barred from further consideration by the first motion judge's
ruling on the anti-SLAPP motion. Notably absent from the
complaint are any factual allegations concerning what the
defendants did after the divorce proceedings.9
For purposes of an assessment of damages pursuant to
Mass.R.Civ.P. 55(b), it is "the factual allegations of a
complaint [that] are accepted as true for purposes of
9
Separate and apart from the issue of default, in order to
meet the conditions of the first motion judge's order on the
special motion to dismiss, additional allegations also were
necessary to show what the defendants were alleged to have done
that fell outside of the protection of the anti-SLAPP statute.
11
establishing liability." Marshall v. Stratus Pharmaceuticals,
Inc., 51 Mass. App. Ct. 667, 670-671 (2001). Matters outside
the complaint, such as the affidavit here, may not be considered
as to liability because they have not been deemed admitted.
Further, "[w]hen . . . a defendant is defaulted, well-pleaded
facts are deemed to be admitted, but a plaintiff may recover
only to the extent the complaint states a claim for relief."
Jones v. Boykan, 464 Mass. 285, 295 (2013), quoting from Nancy
P. v. D'Amato, 401 Mass. 516, 519 (1988). The sole allegations
in the complaint that might arguably address conduct after the
divorce decree are found in two places, paragraph 8, count I and
paragraph 11, count II of the of the complaint. The first
states that "Garcia repeatedly and deliberately uttered false
allegations and accusations against Ceruolo to third parties."
The second is an identical allegation against Lyllian. There is
no time frame regarding either allegation.
These allegations fail to meet the notice pleading
requirements of Iannacchino v. Ford Motor Co., 451 Mass. 623,
636 (2008), because they fail to state what the defendants are
alleged to have done or said after the divorce.10 Even if deemed
10
Once the default entered, there was no longer any
opportunity for David to make the showing contemplated in the
original order that the "conduct complained of [did] not fall
under petitioning activity protected under the statute." The
complaint became the operative document. At the assessment of
damages hearing, the second judge limited the evidence to post-
12
admitted, the allegations do not state a claim for defamation or
intentional or negligent infliction of emotional distress
against either defendant based on conduct occurring after the
entry of the divorce decree. See Flagg v. AliMed, Inc., 466
Mass. 23, 37-38 (2013) (defamation); Polay v. McMahon, 468 Mass.
379, 388 (2014) (intentional infliction of emotional distress);
Conley v. Romeri, 60 Mass. App. Ct. 799, 801 (2004) (negligent
infliction of emotional distress). The complaint did not state
"a legally valid claim on which relief can be granted," and the
defendant was not entitled to relief based on the complaint as
drafted. For this reason, the plaintiff will not be prejudiced
by vacating the entry of default, because the judgment must be
vacated regardless.
2. The anti-SLAPP ruling. Both parties appeal from the
judge's ruling on the anti-SLAPP motion. The plaintiff claims
that he should have been permitted to introduce evidence at the
assessment of damages hearing of the defendants' conduct before
the divorce was initiated, as well as after. However, in the
trial court the plaintiff took the position when opposing the
special motion to dismiss that false statements were made to
divorce damages. However, the lack of clarity as to the basis
of the liability also infected the damages award. David
testified to his losses, but there was no evidence that the
losses were sustained as a result of conduct occurring after the
decree (as opposed to the ongoing effects of conduct undertaken
during the divorce proceeding) that fell outside the protection
of the anti-SLAPP statute.
13
third parties after the divorce trial.11 For their part, the
defendants claim that the judge created the post-divorce theory
of liability out of whole cloth.
For the reasons stated above, the judge properly considered
the affidavits in ruling on the motion. However, the failure to
require an amended pleading not only hampered the ability of the
defendants to defend the case, but also renders appellate review
of the sufficiency of the allegations impossible. For this
reason, we leave for remand the question of the scope of the
amended complaint, the relationship between any amended
complaint and the anti-SLAPP statute, and consideration of the
application of Blanchard v. Carney Hospital, Inc., 477 Mass.
141, 153-156 (2017), to this case. See Dever v. Ward, Mass.
App. Ct. (2017) (applying Blanchard retroactively to cases
pending on appeal).
Conclusion. The judgment is vacated, and the matter is
remanded for further proceedings consistent with this opinion.
So ordered.
11
On appeal, the plaintiff does not fault the portion of
the judge's ruling that barred his claims based on conduct or
statements occurring during the divorce proceeding.