Rockland Trust Co. v. Langone

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SJC-12129
ROCKLAND TRUST COMPANY vs. ROBERT J. LANGONE.
Suffolk. February 7, 2017. - June 1, 2017.
Present: Gants, C.J., Lenk, Hines, Gaziano, Lowy, & Budd, JJ.
Supreme Judicial Court, Superintendence of inferior
courts. Practice, Civil, Counterclaim and cross-claim,
Motion to dismiss. District Court, Jurisdiction, One-trial
system.
Civil action commenced in the Supreme Judicial Court for
the county of Suffolk on January 6, 2016.
The case was considered by Spina, J.
Jason W. Morgan for the plaintiff.
Dana Alan Curhan for the defendant.
LOWY, J. The question before us is whether, pursuant to
G. L. c. 218, §§ 19 and 19A, a District Court judge may grant a
plaintiff's motion to dismiss a compulsory counterclaim under
Mass R. Civ. P. 12 (b) (10), as appearing in 450 Mass. 1403
(2008), because the counterclaim is reasonably likely to result
2
in the recovery of more than $25,000. We conclude that the
judge may not.
Background. The dispute between the parties stems from two
promissory notes executed in 1984 and 1987 to Rockland Trust
Company (Rockland) from the Aunyx Corporation, of which the
defendant, Robert Langone, was a former officer and principal
owner. Alleging that Langone was a guarantor for the notes,
Rockland sued Langone in the District Court in 2003, after Aunyx
defaulted. Langone filed counterclaims asserting damages of
$6,500. Initially, Rockland prevailed, but, for reasons not
relevant here, the judgment was later vacated in 2014.
Subsequently, Langone brought an additional counterclaim,
asserting damages of $110,000. Citing rule 12 (b) (10), and
G. L. c. 218, §§ 19 and 19A (b), Rockland moved to dismiss the
counterclaim 1 arguing that the District Court could not proceed
1
The parties do not address whether Langone's counterclaim
is compulsory or permissive. Langone's allegation of fraud,
seeking $110,000, stems from purported collaboration between
Rockland and another Aunyx employee to issue a "loan proceeds
check payable to [the employee], instead of Aunyx." It appears
that the loan proceeds check relates to the same promissory
notes at issue in Rockland's allegations. Accordingly, we treat
Langone's counterclaim as compulsory and do not address the
application of Mass. R. Civ. P. 12 (b) (10), as appearing in 450
Mass. 1403 (2008), and G. L. c. 218, §§ 19 and 19A, in the
context of permissive counterclaims.
3
with a counterclaim in excess of $25,000. 2 The judge denied the
motion, concluding that she had discretion to retain the case.
Rockland appealed to a single justice of the county court under
G. L. c. 211, § 3, who denied its petition without a hearing.
Rockland appealed to the full court.
"Because the issue raised relates to the efficient
administration of justice in the trial courts, we have elected
to decide the case under our power of general superintendence,
G. L. c. 211, § 3, second par." Sperounes v. Farese, 449 Mass.
800, 802 (2007). We affirm the single justice's denial of
Rockland's petition.
Discussion. Generally, the District Court may proceed with
a case "only if there is no reasonable likelihood that recovery
by the plaintiff will exceed $25,000." G. L. c. 218, § 19. 3 See
G. L. c. 218, § 19A (b). 4 This limitation is, however, merely
2
The parties do not dispute that Langone is reasonably
likely to receive more than $25,000 should he prevail on the
counterclaim. See G. L. c. 218, § 19.
3
General Laws c. 218, § 19, provides, in relevant part:
"Except as otherwise provided by law, the [D]istrict
[C]ourt and Boston [M]unicipal [C]ourt [D]epartments shall
have original jurisdiction of civil actions for money
damages. The actions may proceed in the courts only if
there is no reasonable likelihood that recovery by the
plaintiff will exceed $25,000, or an amount ordered from
time to time by the [S]upreme [J]udicial [C]ourt."
4
General Laws c. 218, § 19A (b), provides, in relevant
part:
4
procedural, not jurisdictional. Sperounes, 449 Mass. at 806-
807. See G. L. c. 218, § 19 (vesting District Court with
"original jurisdiction of civil actions for money damages," but
providing that actions "may proceed" only if no reasonable
likelihood plaintiff will recover more than $25,000). If a
defendant makes a timely objection to a plaintiff's claim that
is reasonably likely to obtain more than $25,000, the judge must
dismiss the claim without prejudice. Sperounes, supra. If,
however, the defendant does not assert the procedural limit as a
defense in a timely manner, the District Court judge may, in his
or her discretion, retain the case. Id. at 807. 5
Rockland contends that a District Court judge may not
proceed with a compulsory counterclaim in excess of the $25,000
procedural amount set forth in § 19 when the amount is timely
asserted as a defense. Because the procedural amount in § 19
"If it appears to the court from the statement of damages
by the plaintiff that there is no reasonable likelihood
that the estimated damages will be consistent with the
civil money damage limits of the court, as set forth in
[§] 19, the judge, after receiving written responses from
the parties and after a hearing, if requested by any party,
may dismiss the case without prejudice for failure to
comply with the requirements of said [§] 19 regarding the
amount necessary for proceeding in the [D]istrict [C]ourt
or Boston [M]unicipal [C]ourt [D]epartments."
5
The parties also dispute whether Rockland's assertion of
the procedural amount defense was timely. Because we conclude
the rule 12 (b) (10) motion was properly denied on other
grounds, infra, it is unnecessary to resolve the timeliness of
Rockland's response.
5
applies to the potential recovery "by the plaintiff," Rockland's
argument requires interpreting "plaintiff" to include a
plaintiff-in-counterclaim. G. L. c. 218, § 19. We decline to
adopt this interpretation. Based on the plain language of the
statute and the legislative history of the one-trial system in
Massachusetts, we conclude that the Legislature intended for the
District Court to proceed with cases properly before it, even if
a compulsory counterclaim exceeds the procedural amount of § 19.
1. Plain meaning of §§ 19 and 19A. Whether §§ 19 and 19A
require dismissal of counterclaims seeking more than $25,000 in
the District Court is a question of statutory interpretation,
which we review de novo. Meikle v. Nurse, 474 Mass. 207, 209
(2016). Our primary goal in statutory interpretation is to
"effectuate the intent of the Legislature in enacting" the
statute (citation omitted). Libertarian Ass'n of Mass.
v. Secretary of the Commonwealth, 462 Mass. 538, 550 (2012).
"The language of a statute is interpreted in accordance with its
plain meaning, and if the language is clear and unambiguous, it
is conclusive as to the intent of the legislature" (citation
omitted). Meikle, supra at 210.
"Plaintiff," as the term is ordinarily used, does not
include plaintiffs-in-counterclaim. The plain meaning of the
term "plaintiff" is "[t]he party who brings a civil suit in a
court of law." Black's Law Dictionary 1336 (10th ed. 2014).
6
When a defendant files a compulsory counterclaim against a
plaintiff, the plaintiff is still the individual responsible for
initiating the suit.
Further, when the Legislature has intended to address
plaintiffs-in-counterclaim, it has done so explicitly. For
example, in G. L. c. 21E, § 4A (h), the Legislature defined
"plaintiff" to include an "original plaintiff, third-party
plaintiff, plaintiff-in-counterclaim and plaintiff-in-
crossclaim." Similarly, in G. L. c. 231, § 104, where the
Legislature made removal procedures available to a plaintiff-in-
counterclaim, 6 the Legislature explicitly referred to a
"plaintiff against whom a claim, counterclaim, or cross-claim"
had been brought. By contrast, § 19 refers only to "the
plaintiff." Because of the ordinary meaning of "plaintiff" and
because the Legislature has specified when procedural rules
should apply to plaintiffs-in-counterclaim, we do not interpret
the plaining meaning of § 19 to include plaintiffs-in-
counterclaim. 7
6
As discussed infra, the Legislature has since rendered
this mechanism for removal unavailable.
7
Rockland also argues rule 12 (b) (10) explicitly applies
to counterclaims. We disagree. First, rule 12 (b) (10) allows,
in relevant part, a motion to dismiss based on an "[i]mproper
amount of damages . . . in the District Court as set forth in
G. L. c. 218, § 19." Mass. R. Civ. P. 12 (b) (10). The basis
for dismissal under rule 12 (b) (10) is coextensive with § 19.
Thus, because our interpretation of "plaintiff" in § 19 does not
7
2. Legislative intent of the one-trial system. Allowing
the District Court to proceed with a counterclaim that exceeds
the procedural amount in § 19 is consistent with the Legislative
intent behind the one-trial system and our prior interpretation
of the enacting Legislation.
In 2004, the Legislature enacted a Statewide "one-trial
system for civil cases." Sperounes, 449 Mass. at 800, citing
St. 2004, c. 252. The one-trial system took effect gradually,
at first applicable only in select counties, and eventually
expanded to apply Statewide. See Ravnikar v. Bogojavlensky, 438
Mass. 627, 632 n.7 (2003). See also St. 1996, c. 358; St. 2000,
c. 142; St. 2002, c. 70; St. 2004, c. 252. The "intent or
purpose of the one-trial system [is] to increase the efficacy of
trials in the District and Superior Courts over the inefficient
include plaintiffs-in-counterclaim, neither does rule 12 (b)
(10).
Second, this interpretation does not render meaningless the
reference to counterclaims in rule 12 (b), as suggested by
Rockland. By stating that the defenses enumerated in rule
12 (b) may be used in defense of various claims, including
counterclaims, rule 12 (b) does not purport to expand the
circumstances in which each defense may apply. Rather, rule
12 (b) allows a party to assert by motion one of the enumerated
defenses when the defense is substantively available. Because
rule 12 (b) (10) is coextensive with § 19, a motion to dismiss
pursuant to rule 12 (b) (10) is not substantively available for
counterclaims. The term "counterclaim" is not rendered
meaningless in rule 12 (b) because one of the ten enumerated
defenses does not apply to compulsory counterclaims.
8
remand-removal system that had previously been in
effect." Zizza v. Zizza, 456 Mass. 401, 407 (2010).
One of the primary mechanisms for increasing the efficiency
of trials is the expansion of the jurisdiction of the District
Court. The one-trial system gives the District Court "the same
equitable powers and jurisdiction as is provided for the
[S]uperior [C]ourt" for cases that were previously subject to
the remand-removal system. Herman v. Home Depot, 436 Mass. 210,
214 (2002). See Ravnikar, 438 Mass. at 634 ("[T]he District
Court may exercise the same equitable powers and jurisdiction as
the Superior Court to resolve the entire case"). The one-trial
system further authorizes the District Court to hold jury
trials, with six jurors. See G. L. c. 218, § 19B (a).
In enacting the jurisdiction of the District Court as part
of the one-trial system, the Legislature rendered certain
provisions of the remand-removal system, including G. L. c. 231,
§ 104, no longer applicable. See St. 2004 c. 252, § 22 (G. L.
c. 231, §§ 102C, 103, 104, 104A, 106, and 107, "shall not apply
to civil actions commenced in the [D]istrict [C]ourt, Boston
[M]unicipal [C]ourt, and [S]uperior [C]ourt [D]epartments on or
after August 31, 2004"). 8 Section 104 allowed, among other
8
The one-trial system as set forth in St. 2004, c. 252,
§ 23, applies to all proceedings in the enumerated trial court
departments subsequent to August 31, 2004, even if the suit
commenced before 2004.
9
things, a plaintiff against whom a counterclaim was brought, or
a defendant asserting a compulsory counterclaim, to "file in the
[D]istrict [C]ourt . . . a claim of trial by the [S]uperior
[C]ourt," if the counterclaim exceeded $25,000. G. L. c. 231,
§ 104. On receiving a timely request, the District Court clerk
transmitted the papers and fees to the clerk of the Superior
Court for the case to "proceed as though then originally entered
there." Id. If the right of removal was "not properly
exercised [the case was] tried in the [D]istrict [C]ourt." Id.
By rendering § 104 no longer applicable to the one-trial
system, the Legislature eliminated the mechanism by which a
defendant-in-counterclaim (i.e., the plaintiff) could remove a
suit to the Superior Court because the counterclaim sought more
than $25,000. In St. 1996, c. 358, § 8, the Legislature made
clear its intention that such cases proceed in the District
Court by stating that, in the applicable counties, all such
actions that were "formerly subject to . . . removal and appeal,
pursuant to [G. L. c. 231, §§ 97-107],[9] shall be subject to one
trial, with or without a jury of six, in the [D]istrict [C]ourt"
(emphasis added). See St. 2000, c. 142 (expanding effect of St.
9
Prior to St. 2004, c. 252, the one-trial system
legislation rendered G. L. c. 231, §§ 97-107, ineffective. St.
1996, c. 358, § 8. That act rendered G. L. c. 231, §§ 102C,
103, 104, 104A, 106, and 107, inoperable, while making
modifications to other sections of the former remand-removal
system. See, e.g., St. 2004, c. 252, §§ 13, 14.
10
1996, c. 358, to additional counties); St. 2002, c. 70 (same).
In 2004, the Legislature rendered § 104 inapplicable throughout
the Commonwealth. St. 2004 c. 252, § 22. Accordingly, if
grounds for removal would have existed under the remand-removal
system, which included § 104, the Legislature's explicit command
now requires that, under the one-trial system, the case proceed
in the District Court.
This interpretation is also supported by the expansion of
District Court's jurisdiction as part of the enactment of the
one-trial system. See Ravnikar, 438 Mass. at 633-634.
Significantly, § 19 grants the District Court original
jurisdiction of all "civil actions for money damages," and only
procedurally limits claims in excess of $25,000. G. L. c. 218,
§ 19. See Sperounes, 449 Mass. at 806. It follows that the
Legislature intended the District Court to have the ability to
try cases in which a counterclaim seeks more than $25,000. We
have also interpreted the one-trial system to allow the District
Court to decide a claim "which would normally fall within the
exclusive jurisdiction of the Superior Court, as long as at
least one other claim in the same action is within the
traditional jurisdiction of the District
Court." Ravnikar, supra at 634.
Under the old remand-removal system of G. L. c. 231,
Rockland would have been able to remove the case, pursuant to
11
§ 104, to the Superior Court based on Langone's compulsory
counterclaim seeking more than $25,000. Pursuant to the one-
trial system, however, the Legislature intended that such claims
remain in the District Court. Further, requiring the District
Court to dismiss Langone's counterclaim and refile it in the
Superior Court "would create 'the anomalous situation of
requiring bifurcated claims,' at the District Court and Superior
Court levels, 'with separate trials and appeals.'" Ravnikar,
438 Mass. at 634, quoting Herman, 436 Mass. at 215. 10 Such a
requirement cannot be reconciled with the Legislature's goal of
a "one-trial system." Zizza, 456 Mass. at 407.
Conclusion. Given the plain language of §§ 19 and 19A and
the purpose of the one-trial system, the District Court may
10
Rockland argues that the Superior Court would have the
ability to consolidate the smaller, original claim from the
District Court with the Superior Court claim. Although Rockland
did not specify the appropriate mechanism, counsel appears to
have been referring to G. L. c. 223, § 2B. Section 2B provides
that the Superior Court "may" order the transfer of an action
from the District Court if the actions are "between the same
parties" and "aris[e] out of . . . the same . . . event or
transaction" (emphasis added). G. L. c. 233, § 2B. Section 2B
presumes that the separate claims are already filed in different
trial court departments and cannot be fairly read to require
dismissal of a properly joined compulsory counterclaim pending
in a single trial court department, so that the counterclaim may
be refiled in another. Further, the transfer rule under § 2B is
permissive, not mandatory, meaning that Rockland's
interpretation could result in two actions stemming from the
same facts proceeding in separate departments of the trial
court. Such a possibility is plainly contrary to the
Legislature's goal to increase efficiency and the expansion of
the District Court's jurisdiction under the one-trial system.
See Zizza, 456 Mass. at 407.
12
proceed with a case properly before it, where a counterclaim
exceeds the $25,000 procedural limit. We therefore affirm the
single justice's denial of Rockland's G. L. c. 211, § 3,
petition.
So ordered.