Boston Business Litigation Blog

Seeking US Discovery for Foreign Proceedings: The Second Circuit Opens US Style Discovery to the World

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Earlier this month, the Second Circuit issued a decision in In re Application of Antonio Del Valle that significantly expands the ability of parties to foreign legal proceedings to obtain discovery through United States courts. In Antonio Del Valle, the Second Circuit reached two key conclusions that work to expand the reach of discovery by U.S. courts under 28 U.S.C. § 1782. 

What Happens if the House is Sold During the Divorce?

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It is the unfortunate case that, in many divorces, the marital home is sold as part of the divorce proceedings. Sometimes, the decision is made for non-financial issues - the house is tied to too many memories and both parties decide that they are better off starting anew. More often than not, however, the financial circumstances are such that the house is simply unaffordable. Perhaps the party who wants to stay will no longer be able to afford the carrying costs; an unfortunate corollary of most divorces is that oftentimes one income or even two are insufficient to maintain two different households. Whatever the reason, often by agreement and sometimes by court order, the marital home is just ordered to be sold either during or after the divorce.

Supreme Court Holds That Federal Arbitration Act Permits Litigation of Disputes By Workers Bound by Independent Contractor Agreements

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The United States Supreme Court held in the unanimous decision of New Prime Inc. v. Oliveira earlier this year that the Federal Arbitration Act's exclusion as to contracts of employment necessitated that the parties' arbitration clause be overridden and the plaintiff be allowed to pursue his lawsuit in the Massachusetts federal courts.

Viable Retaliation Claim For An Employee Terminated Several Months After He Complained About Discrimination By His Supervisor

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In a recent unpublished decision, Bakhtiar v. Infineon Technologies Americas Corp.the Superior Court in Worcester County (Yarashus, J.) found that an employee could establish a prima facie case of retaliation under Massachusetts law (G.L.c. 151B, § 1) even though eight months passed between his complaint of discriminatory treatment by his supervisor and his termination.

Gimmick Check Not Accord and Satisfaction Under UCC Section 3-311

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The United States District Court for the Eastern District of Virginia has held that, where a debtor in bad faith tenders a check or money order for substantially less than the amount owed on a loan, the receipt and deposit of that check will not constitute an "accord and satisfaction" under the Uniform Commercial Code ("UCC"), Section 3-311. Miffin v. Selene Finance LP.

What "Counts" as Income for the Purposes of a Child Support Order?

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In Massachusetts, the amount of weekly child support to be paid by a parent is calculated by relying on the Massachusetts Child Support Guidelines, which are published by the Executive Office of the Massachusetts Trial Court and updated every three years. Although it is a simple proposition to say that child support orders are largely based on the parents' respective incomes, it is important to understand what is included as "income" by the Probate and Family Court in determining a child support obligation.  The Guidelines themselves take the broadest possible approach to defining income, stating that "income is defined as gross income from whatever source, regardless of whether that income is recognized by the Internal Revenue Code or reported to the Internal Revenue Service or state Department of Revenue or other taxing authority."  The Guidelines go on to list 29 different types of income which are presumptively included in a parent's income for child support purposes, including, among other items, salaries, wages, overtime, tips, commissions, severance pay, royalties, interest and dividends, bonuses, certain government benefits, workers' compensation, distributions from trusts, pension and annuity income, capital gains, lottery or gambling winnings, prizes and awards, and rental income.

Bankruptcy Sale of Beneficiary's Interest in Nominee Trust Sufficient to Trigger Tenant's Right of First Refusal

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"A nominee trust is 'an entity created for the purpose of holding legal title to property.'" Goodwill Enterprises, Inc. v. Kavanagh. Record title for the property held in a nominee trust is in the name of the nominee trust's trustee (not its beneficiaries), but such trustees "are often viewed as agents for the convenience of the principals (i.e., the beneficiaries)." Id. But what is the nature of a beneficial interest in a nominee trust? Is it more like an ownership share of a corporation or does it constitute a real property interest in the property held by the nominee trust?

Are Employees Paid Solely by Way of Commissions Entitled to Separate Payments for Overtime Work or Work on Sundays Under the Massachusetts Overtime and Sunday Wage Statutes?

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In Sullivan v. Sleepy's LLC, the Massachusetts Supreme Judicial Court (SJC) answered this question in the affirmative. In Sullivan, the SJC considered whether an employer satisfied its obligations to its employees under Massachusetts Overtime and Sunday wage laws, where its employees' wages were comprised entirely of commission (or draws against commission), if their total weekly income met or exceeded one and a half times their regular hourly rate or at least one and a half times the minimum wage for each hour they worked over forty. The Court concluded that those employees were entitled to a separate payment - in addition to their draws or commissions - of one and a half times their regular rate or at least one and a half times minimum wage for every hour they worked over forty. With regard to Sunday pay, the SJC affirmed that a plain reading of that statute requires a separate and distinct time and a half payment for hours worked on a Sunday pay even when an employee received commission payments in the first instance that equaled or exceeded what the employee would be entitled to per the Sunday pay statute.

Supreme Judicial Court signals that it may become more difficult for primary custodial parents to move children out of the Commonwealth

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In Massachusetts, petitions for the removal or relocation of a child from the Commonwealth are evaluated under one of two legal analyses, depending on whether one parent has sole/primary custody or the parents share physical custody. Where one parent has primary physical custody of the child(ren) a judge will determine whether there is cause shown to permit relocation by applying the "real advantage" analysis first set forth in the case of Yannas v. Frondistou-Yannas.The interests of the custodial parent weigh heavily in the real advantage test, as a custodial parent will be permitted to relocate if the move offers a genuine, recognizable advantage to that parent and is consistent with the child's best interests.

Arbitrating Technology Transfer Disputes

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Technology transfer is a critical way for innovation companies to enter into new markets and profit from the hard work that they have done in developing new technology. These agreements can take many forms, from an assignment of the intellectual property rights to a licensing agreement, to a joint venture. And unlike the sale of physical assets, with the sale or licensing of IP, there are numerous complicated issues involving exactly what is being transferred, adaptations or further development of the technology, and competition between the technology owner and the transferee.

During the heady moments when reaching a deal, everyone always seems on the same page. But months or years down the road, disputes can often arise, particularly where there are substantial royalty payments in the balance.

Federal National Mortgage Association Cannot Be Held Vicariously Liable for Acts of Agent Without Actual Authority

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The United States Court of Appeals for the First Circuit has held, in a matter of first impression, that the Federal National Mortgage Association, commonly known as Fannie Mae, cannot be held vicariously liable for the acts of its agent absent actual authority from Fannie Mae for the agent's actions. Faiella v. Federal National Mortgage Association.

Taking the Fifth: No Longer an Option When it Comes to Adultery in Massachusetts

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Pursuant to 2018 Session Laws Chapter 155, Section 2 (An Act Relative to Reproductive Health), Massachusetts's outdated law criminalizing adultery was repealed. The Governor approved the law on July 27, 2018.

2018 Session Laws Chapter 155, Section 2 specifically repealed Massachusetts General Laws Chapter 272, Section 14 (Adultery), which read:

Summer Internship Reflection: The Psychology of Law

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By Alina C. Hachigian

This summer I had the opportunity to intern with Fitch Law Partners. In addition to assisting attorneys with research and deposition preparations, over the course of the summer I was able to experience law outside the office as well. I traveled to different courts around the city and sat in on various matters ranging from criminal to family law. With each visit I began to better understand the in-court portion of litigation and the amount of intricacies that must come together within the courtroom in order to win a case. Exposure to this aspect of litigation provided me a more detailed view of the process as a whole and I found myself becoming more critical of the system itself. I questioned the purpose and effect of each dynamic I discovered in the courtroom and how such aspects affect different individuals. Overall, these experiences gave me a more nuanced view of litigation and allowed me to better consider how this type of work plays out within the framework of our society today.  

Is the knowledge of a closing attorney imputed to the mortgage company?

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This issue arose in the recent Massachusetts Appellate case Salem Five Mortgage Company, LLC v. Lester. In that case, a mortgage company lent a borrower $300,000 for the purchase of a home on Nantucket. After the mortgage company approved the loan, but before the closing date, the borrower requested that his wife be added to the deed as a tenant by the entirety. However, the wife's name was not added to the mortgage, which remained solely in the name of the borrower. As a result, the mortgage company received a security interest only in the borrower's undivided interest in the property. The closing attorney, who represented both the mortgage company and the borrower, was aware of way in which the title was worded and told the seller of the property that the borrower and his wife would take title as tenants by the entirety. The mortgage eventually went into default, at which time the mortgage company discovered the mistake and sued for reformation of either the deed or the mortgage.

The New Judgments Convention

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One of the main reasons that we at FITCH recommend that the vast majority of cross-border contracts contain international arbitration clauses is because of the New York Convention. More formally called the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the New York Convention was ratified in 1959 and currently has 159 parties. It requires states to honor and enforce arbitral awards issued in any of the other member states, and means that by selecting international arbitration as the dispute resolution mechanism, parties can get their awards enforced virtually anywhere on the planet.

What Happens at a Pre-Trial Hearing?

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If a divorce or 209C case is pending, the court, sooner or later, will schedule what is known as a pre-trial hearing. Sometimes this is also referred to as a pre-trial conference. This will happen either on the court's own initiative once a complaint has been on file long enough, or following a case management conference. At a case management conference, the parties and judge will address a timeline for the case - the appropriate timeline for a discovery deadline and a pre-trial hearing, among other matters. The parties can, by stipulation, avoid appearing at a pre-trial hearing by submitting a written agreement that specifies the specific dates for the case timeline.

When is Joint Legal Custody Inappropriate?

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Massachusetts courts recognize two distinct types of custody of children. The first, physical custody, is what most litigants mean when they refer to having "joint custody" or "primary custody" of their child. Physical custody is a term that describes the amount of time the child spends in the care of each parent. Although physical custody is often the aspect of divorce or custody litigation that is most contentious, the second type of custody - legal custody - is also a fundamental element of parental authority. Legal custody refers to the parents' rights to make "major decisions regarding the child's welfare including matters of education, medical care and emotional, moral and religious development." M. G. L. c. 208, § 31. Legal custody can be either joint, in which the parties must confer with each other and reach shared decisions on these types of matters, or sole, in which one parent has the ability to make decisions about the child's health, education, or religion, even if the other parent disagrees. Joint legal custody, at a minimum, requires "two capable parents with some degree of respect for one another's abilities as parents, together with a willingness and ability to work together to reach results on major decisions in a manner similar to the way married couples make decisions." Rolde v. Rolde

First Circuit Finds That A Notice Of Default Is Potentially Deceptive, Rendering The Foreclosure Invalid

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In Thompson v. JPMorgan Chase Bank (1st Cir. 2019), the First Circuit reversed the District Court's dismissal of the borrowers' claims against the mortgagee, finding that the notice of default did not strictly comply with the terms of the mortgage and Massachusetts law. 

Supreme Court Rules that Double Jeopardy Does Not Prevent State and Federal Prosecutions

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The Double Jeopardy Clause of the Fifth Amendment provides that "No person shall...be subject for the same offence to be twice put in jeopardy of life or limb." That clause means that no person can be prosecuted twice for the same crime. Historically, the Double Jeopardy Clause had not been held to bar separate sovereign governments from trying an individual for the same crime, a doctrine known as the separate-sovereigns doctrine. Because the federal and state governments are separate sovereignties, the Double Jeopardy Clause had historically been held not to prohibit the Federal government from prosecuting an individual for an offense for which that individual had already been tried in state court.

Practical Considerations on Electronic Disclosures in International Arbitration

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Electronically stored information ("ESI") has connected businesses in ways that were not previously possible. ESI has also become a major source of evidence in all forms of commercial disputes. Arbitration generally limits discovery in order to promote its underlying goal as a cost-effective alternative to litigation. Nonetheless, parties often request documents from each other in disputes and the prevalence of ESI makes it inevitable that these documents will continue to impact the nature of international arbitrations. 

To Be or Not to Be . . . a Debt Collector

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In Obduskey v. McCarthy & Holthus L.L.P., the Supreme Court examined whether an entity engaged in the limited purpose of enforcing a security interest in a nonjudicial foreclosure proceeding fit the definition a "debt collector," thereby subjecting it to all of the provisions of the Fair Debt Collectors Practices Act ("FDCPA"). The Supreme Court unanimously ruled that the Respondent, McCarthy & Holthus LLP ("McCarthy"), hired by Wells Fargo to enforce its security interest by acting as its agent to foreclose on a defaulting, Colorado debtor's home, in that narrow instance, was not a "debt collector" within the meaning under the FDCPA, except with regard to the confines of §1692f(6). In order to reach its decision, the Court partitioned the FDCPA's definition of a "debt collector" into two parts: (1) a 'primary' debt collector defined as "any person . . . in any business the principal purpose of which is the collection of any debt, or who regularly collects or attempts to collect, directly or in-directly, debts[;]" and (2) for the purposes of §1692f(6) of the FDCPA, a 'limited-purpose' debt collector defined as also including "any person . . . in any business the principal purpose of which is the enforcement of security interests."

Uncontested Actions To Modify A Judgment Or Order By Agreement: Supplemental Probate And Family Court Rule 412

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Since its amendment in 2013, Supplemental Probate and Family Court Rule 412 has provided litigants/parties with the ability to jointly request that the Court modify an existing judgment or order administratively and without the need for a formal hearing. While such administrative modifications can cover a myriad of provisions, including child support, actions pending under M.G.L. 209A (abuse prevention orders) are specifically excluded from the modification procedures set forth in Rule 412.

Are trust interests part of the marital estate?

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The inclusion - or non-inclusion - of beneficial trust interests in the marital estate for purposes of an asset division incident to a divorce is quite often a hotly contested issue. How does one account for a trust interest in a divorce? Did the trustee make any distributions during the marriage? Is the trust terminating anytime soon? If so, for what reason? And if it terminates, what happens to the principal? Is it - or its potential future acquisition - considered property?

United States District Courts Reach Differing Conclusions on Definition of Automated Telephone Dialing System

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The United States District Courts for the District of Massachusetts and the Northern District of Illinois recently reached different conclusions on the definition of an Automated Telephone Dialing System ("ADTS"), reinforcing a split of authority among courts across the country on the definition of such a system under the Telephone Consumer Protection Act ("TCPA), 47 U.S.C. § 227(a)(1).  The TCPA's definition of an ADTS is "Equipment that has the capacity - (A) to store or produce telephone numbers to be called, using a random or sequential number generator, and (B) to dial such numbers."

Terminating a Nominee Trust to Advance its Purposes through the MUTC

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Nominee trusts are common vehicles "for holding title to real property in which one or more persons or corporations, pursuant to a declaration of trust, declare that they will hold any property that they acquire as trustees for the benefit of one or more undisclosed beneficiaries." Berish v. Bornstein The trust is the record owner of the property, with the trustee(s) (but not the beneficiaries) named on the deed, thereby offering privacy to those beneficiaries. Nominee trusts also streamline ownership among multiple parties because the trustee(s) can act on behalf of all beneficiaries for matters concerning the property. Additionally, nominee trusts simplify transfers of ownership among beneficiaries, both by avoiding the recording process and also by excluding the subject property from probate. 

Consumer Financial Protection Bureau Survives Attack on Constitutionality...For Now?

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The Consumer Financial Protection Bureau (CFPB), established with the purpose of "ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive,"has been in the news quite a bit of late.  The Trump administration is considering an overhaul of the rules limiting bank overdraft fees, the head of enforcement at the CFPB, Eric Blankenstein, resigned amid scandal, and the United States House of Representatives passed a bill to reverse certain actions undertaken by the current administration to loosen bank oversight, to name just a few matters in the press.  Amid all that activity, the CFPB quietly defeated a challenge to its constitutionality in the courts...for now.

Serving Process on Chinese Companies in US Litigation

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Hundreds of billions of dollars' worth of goods and services flow between the United States and China every year, and all of that commerce gives rise to disputes.  While we at FITCH usually recommend entering into International Arbitration agreements when contracting with parties in Chinasometimes that is not an option, such as when Chinese companies creates knock-off products and sell them online to U.S. consumers.  While U.S. courts will have jurisdiction over these disputes, just serving process on Chinese companies or individuals can be bedeviling. 

Court Grants Summary Judgment to Employer on Former Employee's Claim of Gender-Based Associational Discrimination and Retaliation

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In Baer v. Montachusett Regional Technical School District (D. Mass. May 17, 2019), the United States District Court for the District of Massachusetts granted summary judgment to an employer on a former employee's claim that he was discriminated and retaliated against because of his association with his wife, who was also a former employee. 

Business Litigation Section Holds That Director In Professional Corporation Owes Fiduciary Duty To Fellow Shareholders

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In a fascinating decision, the Business Litigation Section of the Superior Court of Massachusetts recently held that a terminated doctor/shareholder could bring a breach of fiduciary duty action against the controlling director.  

The New York Convention Preempts State Law Regulating The Business of Insurance - Fifth Circuit Affirms Dismissal In Favor of Arbitration

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In McDonnel Group, LLC v. Great Lakes Insurance SE, UK Branch (5th Cir. 2019)the Fifth Circuit recently held that the New York Convention trumps state insurance law.  When its insurance claim was denied, McDonnel Group, LLC ("McDonnel") sued the insurers seeking a declaratory judgment that it was entitled to coverage.  The insurers moved to dismiss arguing that the policy contained a provision to arbitrate all disputes between the parties.  The policy, however, also contained a conformity to statute provision, meaning that if any term of the policy conflicts with a state statute, then "the terms are amended to conform to such statutes."  Invoking that provision, McDonnel argued that it had no obligation to arbitrate because the arbitration clause was void as it conflicted with a Louisiana statute forbidding arbitration in insurance contracts.  

When The Price Isn't Right: Mortgagees Must Ascertain The Fair Market Value Of A Property Before Conducting A Foreclosure Auction

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The foreclosure process varies across the United States, but the process traditionally occurs in one of two ways:  judicial or  non-judicial foreclosures.  Residential foreclosures in Massachusetts are non-judicial, which means that the foreclosure process happens outside of the courtroom.  Non-judicial foreclosures, also known as power of sale foreclosures, allow the mortgagee to sell the property if the mortgagor defaults on their loan provided the mortgagee complies with the statutory requirements under G.L.c. 244 §§ 11-17B.  In addition to the requirements under the statute, mortgagees owe mortgagors a duty of good faith and reasonable diligence to protect their interest in the property. 

"Merged" Versus "Surviving" Provisions of a Separation Agreement

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The vast majority of divorce cases are resolved not by trial, but by the parties agreeing upon and submitting a Separation Agreement to the Probate and Family Court for approval.  One of the more confusing elements of a Separation Agreement for many clients is the fact that certain provisions of the agreement are deemed to "merge" with the Judgment of Divorce and other provisions are deemed to "survive."  Although these terms may be unfamiliar to non-attorneys, the distinction between the two is not particularly complex.  

Fitch Arguments Prevail as Supreme Court Rules on How Foreign Governments May Be Served with Process

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On March 26, 2019, the Supreme Court reversed the Second Circuit in the case of Sudan v. Harrison, which involved how foreign states may be served under the Foreign Sovereigns Immunities Act ("FSIA").  28 USC § 1608 governs service of process on foreign states, and explains that a foreign state may be served (1) "in accordance with any special arrangement," (2) "in accordance with an applicable international convention on service of judicial documents," (3) "by sending a copy of the summons and complaint and a notice of suit ... by any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the head of the ministry of foreign affairs of the foreign state concerned," or (4) by requesting the State Department to make service on the foreign state.  In Sudan v. Harrison, the plaintiffs mailed service of process to the head of the ministry of foreign affairs care of Sudan's US embassy.  When Sudan did not answer the complaint, a $314 million default judgment entered, which Sudan then challenged asserting that the mailing should have gone to the head of the ministry of foreign affairs at the actual ministry of foreign affairs, where that official works.

Can the Judge Give "Decisive Weight" to a Child's Preference?

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Recently in Jouret v.  Buteau, Docket-18-P-68 (Mass. App. Ct. April 11, 2019) (Memo and Order Pursuant to Rule 1:28), the Appeals Court of Massachusetts vacated those parts of a modification judgment that eliminated Father's parenting time and prohibited his contact with the children, holding that the trial court should not have given the children's preference "decisive weight."

Business Valuation in Divorce Cases

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Business valuation arises in divorce cases where one or both spouses have an ownership interest in a closely held corporation - that is, a corporation which has a limited number of shareholders. This ownership interest is usually considered a marital asset, just like real property or a bank account, and is thus subject to equitable division in a divorce. Valuing a spouse's interest in this type of business can be a complex process due to the fact that there is no market on which a spouse could readily liquidate his or her shares. Accordingly, in many cases, the divorcing parties will retain a business valuator to determine the value of the spouse's ownership interest in the company.

School district fails to establish that full-time work is an essential function of a teacher's position in summary judgment proceeding

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Last month in Incutto v. Newton Public Schools, et al., the United States District Court - District of Massachusetts denied a Newton Public Schools' motion for summary judgment regarding a former kindergarten teacher's claim for disability discrimination, despite the school district's assertion that the teacher's ability to work full-time was an essential function of her job as a full-time teacher. 

Nonjudicial Foreclosures are not Subject to the FDCPA, says the Supreme Court

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Until the Supreme Court's recent decision in Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019), if you were an entity engaged solely in the enforcement of security interests on loans, such as through nonjudicial foreclosure proceedings, the federal Fair Debt Collection Practices Act (the "FDCPA") would have been applied to you in some states but not others.  That is because the United States Courts of Appeals were divided on the issue, with the Ninth and Tenth Circuits finding that the Act did not apply, and the Third, Fourth, and Sixth Circuits finding that it did apply.  The Supreme Court resolved that Circuit split last month when it found that businesses engaged solely in security-interest enforcement do not qualify as "debt collectors" under the FDCPA.  

First Circuit Interprets the Rights of Receivers under 12 U.S.C. § 1821(d)(2)(A) in the Federal Deposit Insurance Corporation's Favor

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In Zucker v. Rodriguez, No. 17-1749 (1st Cir. 2019), the First Circuit interpreted the rights of Receivers under 12 U.S.C. § 1821(d)(2)(A) in the Federal Deposit Insurance Corporation's favor.

United States Supreme Court to Consider Whether Fair Debt Collection Practices Act Subject to the Discovery Rule

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The United States Supreme Court has agreed to consider a case that could resolve a split among the United States Courts of Appeals as to whether the discovery rule applies to the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. ("FDCPA").  Rotkiske v. Klemm, et al., No. 18-328 (U.S., certiorari granted Feb. 25, 2019).

Does The Wage Act Apply To Employment In A Foreign Country?

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The answer is: it depends.  A Superior Court recently addressed that issue in Lockley v. Studentcity.com (Suffolk Superior Court, No.201801293-BLS2). Ms. Lockley, a resident of Colorado, brought a putative class action lawsuit alleging violation of the Wage Act against Studentcity.com, Inc. ("Student City"), a foreign corporation doing business in Massachusetts.

Massachusetts Federal Court Finds Mediation Privilege Waivable, Applies "Manifest Disregard" Standard In Med-Arb Case

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Last month, one defendant's application to vacate a med-arb award brought about two important developments in ADR case law in Massachusetts.

Business Litigation Session Holds That Memorized Information Derived From Employment Can Violate Confidential Information And Non-Solicitation Clauses

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In a novel recent decision, the Business Litigation Session of the Superior Court of Massachusetts held that a financial consultant who had left his job and then allegedly prepared a list of his old firm's clients entirely from memory on his first day with his new employer had violated the non-solicitation and confidential information provisions in his employment agreement with the former employer.  

Giving clarity - and teeth - to a surviving spouse's elective share of the decedent's estate.

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Described by the Supreme Judicial Court as "unwieldly and perplexing to apply in most instances," the Massachusetts spousal elective share statute, "is intended to prevent spousal disinheritance, either by inadvertence or design," through allowing "a dissatisfied surviving spouse" to "waive the provisions of a deceased spouse's will and take a statutorily prescribed share of the decedent's estate." Ciani v. MacGrath, 481 Mass. 174, 175, 186 n12 (2019). In Ciani, the SJC attempted both to clarify and fortify the statute, holding in part that it allows a dissatisfied surviving spouse to bring an action to realize the value of his or her share of the decedent's real estate. Where the decedent has left issue (i.e., offspring or lineal descendants), the statute entitles a dissatisfied surviving spouse to elect - in lieu of his or her formal bequest (or lack thereof) - to receive a share of the decedent's estate comprising one-third of the decedent's personal property and one third of the decedent's real property. The SJC focused its analysis on situations in which that share exceeds $25,000 in value, reading the elective share statute to allow a dissatisfied surviving spouse to receive (1) the first $25,000 from the decedent's personal property or, if necessary, from the decedent's real property as well; (2) income from the a trust containing the remaining third of the personal property for life; and (3) an ownership interest the remaining third of the decedent's real estate, for life. 

What Happens if Nothing is Happening in my Divorce Case?

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Although it may be difficult to imagine for someone going through the difficult process of a divorce, on occasion divorce cases can linger for months, if not years, with little to no activity on the docket. The parties may have filed divorce papers, but never got around to following through with the divorce process. Or, the parties may have separated and then settled into new lives, never actually filing divorce papers or finalizing the divorce. The parties may have even reconciled. It is not unusual to have a client who has been separated for five, ten, sometimes fifteen years without having formalized his or her divorce.

Top Five Reasons to Include International Arbitration Provisions in Cross-Border Contracts

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In our modern, globally interconnected world companies from different nations frequently enter into business agreements with one another. While such joint ventures can create exciting opportunities, they can also run into challenges, or sour altogether. Thus, it is important to consider dispute resolution mechanisms at the outset of a contract or joint venture between international partners. International arbitration is the dispute mechanism best suited to resolving cross-border disputes. As the following five reasons show, international arbitration should be selected as the dispute resolution method between international partners for virtually any international contract:

SJC Expands What Constitutes an Adverse Employment Action for Employment Discrimination

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The Massachusetts Supreme Judicial Court (the "SJC") recently held that an employer's failure to approve a lateral transfer request of an employee can qualify as an adverse employment action in the context of employment discrimination.

What Qualifies As An Educational Use Under The Dover Amendment?

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The Superior Court of Massachusetts recently annulled the decision of a local zoning board that had permitted construction of an outdoor aerial adventure park pursuant to what is commonly referred to as the "Dover Amendment" - i.e., G.L. c. 40A, § 3. In Sullivan v. Heritage Plantation of Sandwich, Inc., 35 Mass. L. Rptr. 281 (2018) ("Heritage Plantation"), the Court found that the particular outdoor adventure park at issue did not have a primary goal of educational significance and did not involve a nonprofit organization using its land for educational purposes, and, therefore, could not take advantage of the significant zoning exemptions offered by the Dover Amendment. 

Alimony based on "bonus income" is not available when income is determined to be payment for stock options

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In a recent summary decision, a panel of the Massachusetts Appeals Court considered whether or not certain payments that a former husband received in addition to his base salary constituted "bonus income," of which husband would then be obligated to pay his former wife a percentage as alimony.  (See Dunbar v. Dunbar, 2019 WL 993330) (Pursuant to Rule 1:28).  

Handling your First International Arbitration

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It was bound to happen eventually.  Maybe your company just went global or maybe they've been working internationally for years.  But eventually, whether through some mistake in translation in an international contract, some global or local change in circumstances, or just picking a poor foreign partner, a dispute has arisen over some international transaction.

SJC Approves Counsel's Fees In Settlement of Wage Act Claim

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In a recently decided case, the Supreme Judicial Court held that two employees who asserted claims under the Massachusetts Wage Act, G.L. c. 149, §§148 and 150, were entitled to recover attorneys' fees from their former employer where the parties had entered into a private settlement agreement. In Ferman v. Sturgis Cleaners, Inc., the SJC held that the employees were entitled to an award of attorneys' fees where their lawsuit acted as a "necessary and important factor" in causing their former employer to "provide a material portion" of the relief they requested in the form of a private settlement.

Business Valuation in Divorce Cases

Photo of Lacey Brantley

Business valuation arises in divorce cases where one or both spouses have an ownership interest in a closely held corporation - that is, a corporation which has a limited number of shareholders. This ownership interest is usually considered a marital asset, just like real property or a bank account, and is thus subject to equitable division in a divorce. Valuing a spouse's interest in this type of business can be a complex process due to the fact that there is no market on which a spouse could readily liquidate his or her shares. Accordingly, in many cases, the divorcing parties will retain a business valuator to determine the value of the spouse's ownership interest in the company.

First Circuit Court of Appeals Holds that Foreign Manufacturer Can Be Sued in Massachusetts

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In an important decision for foreign companies, the First Circuit Court of Appeals recently reversed a trial court ruling and held that a foreign manufacturer of an allegedly defective product was subject to personal jurisdiction and could be sued in Massachusetts.  In Knox v. Metalforming, Inc., 914 F.3d 685 (1st Cir. 2019), plaintiff Stephen Knox badly injured his hand at his place of work, Cape Cod Copper, while operating a machine manufactured by German company Schechtl Maschinenbau GmbH and sold to Cape Cod Copper by MetalForming, Inc., Schechtl's Georgia-based exclusive U.S. distributor.  

Texas Supreme Court Holds Customer Liable for Forged Check Loss Where Bank Makes Available Statements of Account

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The Texas Supreme Court has found that where a bank makes available a statement of account, consistent with Section 4-406 of the Uniform Commercial Code ("UCC"), the customer must bear the loss of forged checks, even when the bank did not send physical statements for the account. Compass Bank v. Calleja-Ahedo, 2018 Tex. LEXIS 1314 (Tex. Dec. 21, 2018).

Key Changes in the 2019 Amendments to the Massachusetts Rules of Appellate Procedure

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Last month the Supreme Judicial Court announced amendments to the Massachusetts Rules of Appellate Procedure, which will take effect on March 1, 2019. The amendments include substantial modifications and clarifications to the rules of appellate procedure currently in effect. A key modification throughout the amendments is a change to filing deadlines. The deadlines for filing will be in 7-day increments, replacing the 10- or 20-day deadlines which have caused confusion because the deadlines sometimes landed on a weekend or holiday. Throughout the amendments there are general changes, such as using only gender-neutral terms, replacing "trial court" with "lower court", eliminating references to obsolete technology, and making the language of the rules more modern and easily understood. Additionally, the new rules are more handily broken down into parts and subparts, making referencing specific rule provisions easier for litigants and the courts.

I Have A Signed P&S Agreement But The Seller Refuses To Sign The Deed Because She Claims She Does Not Speak And Read English Fluently And Therefore We Have No Valid Agreement. What Can I do?

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You can sue for specific performance of the purchase and sale agreement ("P&S agreement").InOcean City Development, LLC v. Barrros,(Mass. Land Court, January 2, 2018), the Land Court addressed that issue, ordering the Seller to convey her property to the Buyer in accordance with the P&S agreement signed by the parties.

U.S. Court Stays Third Party Funder's Action To Enforce Foreign Arbitral Award Pending Decision In French Court Of Appeals

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The United States District Court for the District of Columbia has temporarily halted an effort to enforce a foreign arbitral awardagainst Uzbekistan where the prevailing party had previously initiated proceedings in France topartially vacatethe same award. The twist in Gretton Ltd. v. Republic of Uzbekistan, 2019 WL 464793 (C.A. No. 18-1755, February 6, 2019) ("Gretton v. Uzbekistan"), is that the prevailing partyinitiated the French proceedings, while the prevailing party'sthird party funder initiated the U.S. proceedings.

"I was laid off --- Will the judge attribute income to me when determining child support?"

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The Massachusetts Appeals Court recently addressed this issue in Miles v. Beusch, Docket 17-P-1511 (Mass. App. Ct. January 24, 2019) (Memorandum and Order Pursuant to Rule 1:28). In that case, the former Husband appealed the trial court's decision to attribute income to him for the purpose of calculating child support. 

What happens when a divorcing spouse actively misrepresents his or her income in the context of a child support or alimony analysis or tries to hide assets?

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A recent Appeals Court case addressed that issue, affirming the trial court's judgment that found that the husband's misrepresentations about his income were egregious enough that the trial judge's use of discretion to attribute and impute income to the husband was appropriate, and that the assets that he had tried to divert were subject to equitable division.

Fitch Represents International Law Professors at the Supreme Court

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Fitch attorney Jared Hubbard was at the Supreme Court this past November on behalf of a group of international law professors-including George Bermann of Columbia Law School and David Stewart of Georgetown Law School-who appeared as amici curiae (friends of the court) in the case of Sudan v. Harrison, Dkt. 16-1094.

Trustees of Non-Massachusetts Trusts May be Subject to Jurisdiction of Massachusetts Courts for Some Claims Related to the Administration of the Trust

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Under the Massachusetts Uniform Trust Code, the Probate Court generally cannot "entertain proceedings" concerning the administration of trusts "registered or having [their] principal place of administration in another state." But does that mean a Massachusetts court cannot hear breach of fiduciary duty and other related claims against a Massachusetts-based trustee where the situs of the trust is another state? The Superior Court considered this question in Curran v. Berkshire Hills Bancorp, No. 1784CV03580-BLS2, 2018 WL 3431892 (Mass. Super. Ct. May 24, 2018), when the beneficiaries of a Vermont trust brought claims of breach of fiduciary duty and violation of Chapter 93A (the Massachusetts consumer protection statute) against the trustee, a Massachusetts bank. Over the bank's objections, the court allowed the suit to proceed, drawing a distinction between actions seeking an order instructing or compelling a trustee to act in a certain way concerning the ongoing management of trust assets, on the one hand, and actions seeking damages under a tort-based theory for the trustee's prior conduct concerning the trust, on the other, as in the present case. Similarly, the court found that, since the beneficiaries brought claims against the trustee itself rather than claims regarding the status or disposition of trust assets (such as for an accounting or other relief concerning ongoing administration of the trust), asserting jurisdiction over those claims in Massachusetts would not raise the potential to disrupt or disrespect any pending Vermont proceedings concerning the administration of the trust.

An Employer Cannot Retaliate Against an Employee for Filing a Lawsuit for a Workplace Injury

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An employee who filed a workers' compensation claim for a workplace injury while she was a temporary worker may file a negligence lawsuit against the company even though the company became her employer after she received workers compensation benefits for the injury from the temp agency's insurer, and the law prevents the employer company from taking retaliatory action against her for doing so. This principle was recently clarified by the Massachusetts Appeals Court, in Bermudez v. Dielectrics.

Condominium Boards and Fiduciary Duty: To Whom Does the Duty Extend?

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Do you know what fiduciary duties your condominium board owes? And to whom the duty is owed?

First, what, exactly, is a fiduciary duty? The nature of fiduciary duties depends on the nature of the relationship between the parties but, at its simplest, it is a duty of loyalty and good faith. It is an obligation to act for the benefit of another. It is a well-established general principle that an organization's board has a fiduciary duty to the organization.

Consistent with this general principle, members (or trustees) of a condominium's board also have certain fiduciary duties. But, you may be asking, to whom is that fiduciary duty owed? The answer is surprisingly clear: In Massachusetts, members of condominium boards owe a fiduciary duty to the condominium association (or trust), not to any individual condominium owner. See, e.g., Cigal v. Leader Dev. Corp., 408 Mass. 212, 219 (1990).

Can I relocate with my child after divorce?

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If you're a parent of a minor child of divorce in Massachusetts, can you relocate to a different state or country with your child (an issue the courts call "removal")?

Assuming no negotiated agreement to relocate with your co-parent (a preferred outcome in resolving these highly contentious disputes), and to help you answer this question in the context of contested litigation, Fitch family law attorneys will walk you through a judge's required functional analysis that is based on current Massachusetts law. It's a complicated process of gathering the facts of your particular case and connecting them to the correct legal standard.

Commission Payments Are "Compensation" Under the Massachusetts Wage Act

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The Massachusetts Wage Act, M. G. L. c. 149, § 148, governs how and when an employee's wages must be paid and provides that an employer who fails to comply with the Wage Act may be subject to treble damages and be ordered to pay the attorneys' fees of the employee who has to turn to the courts to enforce their rights under the Wage Act. Commission payments are considered "wages" and, therefore, are governed by the Wage Act. For a commission to be "wages," the Wage Act provides that the amount of the commission must be "definitely determined" and "due and payable to [the] employee." Commission compensation has been "definitely determined" when the amount of the compensation due is "arithmetically determinable." Commission compensation is "due and payable" to the employee when "dependent contingencies have been met and it is thus owed to the employee." Practically speaking, that means that the employee (or the court considering whether an employer has violated the Wage Act by failing to pay a commission) must be able to calculate how much commission was owed to the employee and that all of the conditions that must be met for the commission to be payable must have been met.

Property Inspections Are Not Debt Collection Under FDCPA

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The United States Court of Appeals for the Seventh Circuit has held that inspections of properties encumbered by defaulted mortgages, even where the property inspector left a hang tag requesting the homeowner contact the mortgage servicer, is not debt collection under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Schlaf v. Safeguard Property, LLC, No. 17-2811, 899 F.3d 459 (7th Cir. 2018).

Texas Judge Dismisses Suit Against ICDR

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A judge of the U.S. District Court for the Southern District of Texas has dismissed a case against the International Centre for Dispute Resolution on the basis of arbitral immunity. The holding in Wartsila North America, Inc., et al v. International Centre for Dispute Resolution, et al., 2018 WL 3870015 (S.D. Tex. 2018), C.A. No. H-18-1531, was based in large part on precedent from the First Circuit.

Does ROTC Participation Create an Emancipating Event?

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In a recent decision by the Massachusetts Court of Appeals, the concept of a child's emancipation was at issue. In Bobblis v. Costa (https://www.mass.gov/files/documents/2018/10/18/17P0557.pdf), the court ruled that enrollment in ROTC does not constitute emancipation pursuant to the parties' separation agreement, as joining an ROTC program is not considered entry into the military for purposes of emancipation.

How does my pension get divided during divorce?

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Part II of this blog post focuses on how pension plans are divided during divorce. You can read Part I on our site.

Pension plans are different than other assets divided during divorce because we are trying to calculate the present value of a future benefit (a benefit that will be received but has not yet been received). The process that goes into dividing a pension during divorce can be complicated. As a result, we have broken down each factor of the process to first show in a segregated way how a pension plan gets divided during divorce. We then show in an integrated way how the pension plan's disparate factors connect to complete the whole of the process of dividing a pension during divorce. The attorneys at Fitch have the deepest respect for the enormity of time, effort and dedication it takes for clients to accumulate a pension and Fitch attorneys do their very best to provide detailed information, knowledge and transparency when it comes to valuing and dividing a pension plan during divorce. The following factors are used to calculate the present value of a pension plan:

Massachusetts Court Finds Bank Not Liable for IOLTA Scam Loss

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The Business Litigation Session of the Massachusetts Superior Court has joined other courts in holding that a bank is not liable to its customer for wiring money to a foreign account at the customer's instruction. The Plaintiff, Sarrouf Law LLP ("Sarrouf"), alleged negligence and breach of the California Uniform Commercial Code, but the Court found that the UCC expressly displaced common law and that the bank's conduct comported with the UCC's requirements. Sarrouf Law LLP v. First Republic Bank, No. SUCV2016-03069-BLS1 (Mass.Super. Aug. 2, 2018).

Seeking Special Findings of Fact Regarding Special Immigrant Juvenile Status (SIJS) in the Probate and Family Court

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Congress created the classification of "special immigrant juvenile" in the Immigration Act of 1990, providing that a certain percentage of immigrant juveniles would be allowed to petition for lawful U.S. permanent residency (i.e. "Green Card") if they met specific requirements. 8 U.S.C. § 1101 (a) (27) (J). In 2008, Congress passed the William Wilberforce Trafficking Victims Protection Reauthorization Act ("TVPRA"), which amended and clarified SIJS requirements.

Emails and Agreement for Judgment Can Satisfy Statute of Frauds

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Many consumers and corporate executives alike believe that in order to have a contract that a court will honor, a prospective litigant must produce a written contract signed by both parties to the agreement. In fact, oral agreements are often enforceable, but Massachusetts law provides through the colorfully-named "Statute of Frauds" that certain categories of contracts must be in writing to be enforceable. Mass. Gen. Laws ch. 259, §1 provides several categories of contracts that can only be enforced by way of a civil action if there is a written agreement "signed by the party [or an agent of the party] to be charged therewith," including agreements for the sale of land and other real estate, and contracts that cannot be performed within one year.

Seeking Special Findings of Fact Regarding Special Immigrant Juvenile Status (SIJS) in the Probate and Family Court

Photo of Lacey Brantley

Congress created the classification of "special immigrant juvenile" in the Immigration Act of 1990, providing that a certain percentage of immigrant juveniles would be allowed to petition for lawful U.S. permanent residency (i.e. "Green Card") if they met specific requirements. 8 U.S.C. § 1101 (a) (27) (J). In 2008, Congress passed the William Wilberforce Trafficking Victims Protection Reauthorization Act ("TVPRA"), which amended and clarified SIJS requirements.

Getting the All Clear: Court Found Law Firm's Reliance on Representation from Bank that Funds had Cleared was Unreasonable

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In Colucci, Colucci, Marcus & Flavin, P.C. v. Citizens Bank of Massachusetts, No. CV 15-13536-GAO, 2018 WL 1567605, at *1 (D. Mass. Mar. 30, 2018), the United States District Court for the District of Massachusetts awarded summary judgment to Citizens Bank of Massachusetts ("Citizens Bank") on a law firm's claim of negligent misrepresentation, finding that the law firm's reliance was unreasonable pursuant to New York law.