Boston Business Litigation Blog

Appeals Court Vacates Custody Award Due to Domestic Abuse Allegations

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In the recent unpublished Memorandum and Order Pursuant to Rule 1:28, Manning v. Manning, the Massachusetts Appeals Court overturned a custody judgment from the Probate and Family Court awarding a couple shared legal and physical custody of their two children due to the lower court judge's failure to make required findings of fact regarding the wife's allegations of domestic abuse by the husband. At the time of their divorce trial, the wife testified that her husband had abused her on numerous occasions during the marriage, including punching her, throwing objects at her, and grabbing her by the neck in front of their child. The trial judge credited the wife's testimony, writing in the judgment that the husband "physically battered and assaulted the [w]ife throughout the entire tenure of the marriage." Despite this finding, however, the judge ordered that the parties should have shared custody of their children, with each parent exercising parenting time for one week at a time.

Circuits Split on Benign Language Exception for Debt Collection Envelopes

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The United States Court of Appeals for the Seventh Circuit has split from holdings by the Fifth and Eighth Circuits in holding that the Fair Debt Collection Practices Act ("FDCPA") does not contain a "benign language" exception to the requirement that the envelope for a debt collection letter contain no language other than the debt collector's address. Preston v. Midland Credit Management, Inc.

First Circuit Upholds Securities and Wire Fraud Convictions Against Former State Street Vice-President Ross

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In United States v. McLellan, the First Circuit upheld securities and wire fraud convictions against former State Street Vice-President and head of the Department of Transitional Services Ross McLellan ("McLellan"). McLellan was convicted by a jury in the United States District Court for the District of Massachusetts on charges of securities fraud, wire fraud, and conspiracy to commit securities and wire fraud. During his tenure as head of the transitional management group, McLellan served as the overseer of State Street's transition management program which assisted large institutional investors in restructuring their portfolios as they transitioned from one asset manager to another. At trial, the prosecution presented evidence that McLellan designed a scheme to promise low commissions to potential clients, then embedded large, hidden commissions into the price of the securities when reporting the prices to his clients.

Business Interruption Coverage Class Action

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A case recently filed with the United States District Court for the District of Massachusetts, Rinnigade Art Works v. Hartford Financial Group, is the first suit in Massachusetts seeking class action status in challenging an insurance company's denial of coverage for COVID-19 related business losses.

A Federal Plaintiff's Right to "Fish or Cut Bait"

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By filing a complaint in federal court, a plaintiff may unilaterally initiate a civil action against a defendant. As "master of [its] complaint," the plaintiff also decides which laws provide the framework for it to recover under the facts the plaintiff alleges. Caterpillar Inc. v. Williams. Does that mean that a plaintiff has the accompanying, unilateral and discretionary right to dismiss its case, too?

G.L. Ch. 209A Restraining Orders Must be Based on a Reasonable Fear of Abuse.

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For a plaintiff to obtain an abuse prevention order, colloquially known as a "restraining order," against a defendant, the issuing court must make a finding of abuse. For the purposes of 209A, abuse is defined as a) attempting to cause or causing physical harm; b) placing another in fear of imminent serious physical harm; or c) causing another to engage involuntarily in sexual relations. In cases where no attempted or actual physical contact has occurred, the question is generally whether the defendant placed the plaintiff in fear of imminent serious physical harm. Past cases have established that such fear must be reasonable in light of the totality of the circumstances of the parties' relationship.

Massachusetts Appeals Court Rejects Plaintiff-Borrowers' Claim that Obsolete Mortgage Statute Limits Mortgagee's Ability to Foreclose on Properties in Default

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The Massachusetts obsolete mortgage statute, G.L. c. 260, § 33, provides, in relevant part, that "power of sale in any mortgage of real estate shall not be exercised . . . nor proceeding begun for foreclosure of any such mortgage after the expiration of . . . 5 years from the expiration of the term or from the maturity date." The purpose of the statute is to create a date certain by which an old mortgage is deemed discharged as a matter of law in order to provide certainty for title examiners and thereby remove impediments to the purchase and sale of real estate subject to mortgages for which a discharge was never filed in the applicable Registry of Deeds.

Land Court Holds That Family Has Successfully Asserted Adverse Possession Claim Over Disputed Land.

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In the recent case of Bliss v. Boston Clear Water Company, LLC (decided April 21, 2020), the Essex Land Court found that the plaintiff, Mary Bliss, had successfully proved a claim to ownership of property on the grounds of adverse possession because her family had been using the property adversely, openly, notoriously, exclusively, and continuously for a period spanning nearly thirty years. The Bliss family's use of the disputed land began in 1985 when Mary's husband, Gerald Bliss, started tending to the grounds of property that was owned at the time by his next-door neighbor. Specifically, the Bliss family paved a portion of the neighboring land, installed a fence around a well, constructed a pitcher's mound and a hockey net, and even went so far as to hire a professional landscaping company to conduct routine maintenance on the land. In addition, the Bliss family parked their cars on the land and allowed their guests to park there, and the family's children played openly on the property.

First Circuit Upheld District Court's Preliminary Injunction Applying Delaware Law Based on Massachusetts's Choice-of-Law Framework

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Recently, in NuVasive, Inc. v. Day, the United States Court of Appeals for the First Circuit upheld the decision of the United States District Court for the District of Massachusetts to apply Delaware law and grant an employer a preliminary injunction against a former employee related to a nonsolicitation clause.

Are Non-Disparagement Clauses Constitutional?

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Unfortunately, the emotionally charged circumstances of divorce and custody cases can create very difficult conditions for the parties and their children. On occasion, one or both parties will engage in disparaging behavior - calling the other party names in public and to third parties, making insulting comments on social media, and spreading disinformation within the community about the case and the other party.

Co-Parenting During the COVID-19 Crisis

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In his open letter dated March 24, 2020, Chief Justice Casey indicated that it is important, during the current Covid-19 crisis and corresponding Stay-at-Home Advisory, for children to spend time with both of their parents. While this provided welcome clarity for upcoming parenting exchanges, it also created an opportunity - especially for parties operating under a parenting schedule by way of a temporary order and in the midst of contested litigation concerning custody issues - to put contested litigation issues aside and create a parenting arrangement (perhaps even a temporary, equal parenting) that more effectively deals with the reality of school/child-care closures and the requirements of working remotely (for both parents and students).

Appeals Court holds no "easement by necessity" for maintenance of land obtained by adverse possession.

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In the recent decision, McDonald v. Andrade, the Massachusetts Appeals Court reversed a trial court decision, awarding an easement to a Plaintiff who had - in the same lawsuit - obtained the land to which the easement pertained by adverse possession.

Guidelines Published for Video-Conferencing in International Litigation

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The Hague Conference on Private International Law (the "HCCH") has just published its Guide to Good Practice on the use of video-conferencing technology in the taking of evidence (the "Guide") pursuant to the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (the "Convention"). Though the HCCH undertook to investigate such best practices long before the advent of COVID-19, its publication is particularly timely in light of the pandemic.

SJC Holds Consent-to-Settle Clauses in Professional Liability Insurance Policies Valid

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The Supreme Judicial Court recently issued a decision that confirms the legality of consent-to-settle clauses in professional liability insurance policies. In Rawan v. Continental Casualty Company, the SJC held that the refusal of an insured party to settle an underlying tort claim limits the insurance company's exposure to claims of unfair claim settlement practices as long as the company operates in good faith.

Pivotal Questions Concerning Coronavirus and Performance Under Contracts with Force Majeure Clauses

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It is no exaggeration to state that the coronavirus (COVID-19) pandemic has been the largest disruptor to businesses this year. Productivity has slowed as co-workers self-quarantine to prevent the risk of exposure to the virus, and offices across the nation are closed as a way of slowing the spread of the disease. Naturally, one question that arises out of these events is whether businesses are expected to perform under their contracts or whether they are excused from performance in light of the current crisis. The answer to that question may rely on the heretofore rarely used force majeure clauses contained in their contracts.

What Happens to GAL Investigations During the Coronavirus Pandemic

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The COVID-19 public health emergency has ground many activities to a halt, including the vast majority of matters at Probate and Family Courts across the Commonwealth of Massachusetts. Although the impact of court closures has been felt most strongly in the paucity of hearings, other departments, like drug testing, lawyer of the day programs, conciliation and mediation sessions, have also been impacted by the requirements of state and local orders and advisories. 

Issuance of 1099-C Does Not Void Equitable Lien on Foreclosure Surplus

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The United States District Court for the District of Massachusetts, in a matter of first impression in the First Circuit, has joined the majority of courts to find that a junior lienholder's issuance of a 1099-C to a mortgagor following foreclosure does not extinguish the junior lienholder's claim to excess proceeds from a senior lienholder's foreclosure. Wells Fargo Bank, N.A and Orlans PC, Plaintiffs, v. Thomas Fraze et al., Defendants.

SJC Determines Unpaid Commissions Due to Retaliatory Firing "[M]ust Be Trebled," per the Wage Act

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Recently in Parker v. EnerNOC, Inc., the Supreme Judicial Court held that, per the Massachusetts Wage Act, G.L. c. 149, §§ 148A, 150, an employee, who was deprived of a commission as a result of a retaliatory termination by her employer prior to the commission coming due, was entitled to treble the amount of the unpaid commission.

Federal Court Permits Plaintiffs' Claims That "Rent-A-Bank" Predatory Lending Scheme Violated Massachusetts Consumer Protection Act

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In Kaur v. World Bus. Lenders, LLC, Judge Willian Young of the United States District Court for the District of Massachusetts has partially denied a motion brought by World Business Lenders, LLC and Axos Bank to dismiss claims that the defendant lenders violated the Massachusetts usury statute and the Massachusetts Consumer Protection Act, General Law Chapter 93A.

Usury laws limit the interest rate that lenders can charge on a line of credit or a loan. The Massachusetts law against usury, Massachusetts General Law Ch. 271, §49(d), creates an annual interest rate cap of 20 percent. However, the Massachusetts usury statute allows lending institutions to avoid the 20% state usury cap if they register the loan with the State Attorney General's Office within two years of making it. Further, the National Bank Act exempts nationally chartered banks from such state usury caps. Moreover, there is a controversial practice of non-bank lenders marketing, funding, and collecting on a loan that a nationally charted bank has formally underwritten and originated on paper before assigning the loan to the non-bank lender. This essentially allows the non-bank lender to borrow a nationally charted bank's federal preemption. Proponents of these so-called "rent-a-bank" operations argue that such high-interest loans provide a legitimate service by granting credit to under-served, high-risk borrowers. Opponents argue that these loans trap borrowers in a cycle of debt where they either default or pay far more in interest than the original principal. This is one of the issues discussed in Kaur v. World Bus. Lenders, LLC.

In March 2018, borrowers Ramanjeet Kaur and Kulwinder Singh Uppal took out a $175,000 loan for their small business from World Business and Axos's predecessor with annual percentage rate interest in excess of 92 percent. The borrowers, a married couple, used their home as collateral for the loan. Less than seven months later, World Business began foreclosure proceedings against the borrowers' home after their loan fell into arrears. The borrowers filed suit alleging World Business had violated the state's usury law, because it identified the Axos, as opposed to World Business, as the lender when it registered with loan with the Attorney General pursuant to Gen. Law Ch. 271 §49(a). They also alleged that World Bank had engaged in two forms of unfair and deceptive business practices in violation of Gen. Law Chapter 93A: (1) issuing a loan that was doomed to fail and (2) deceptively identifying World Business as the loan "servicer" in the loan documents when it was actually the "true lender." The lenders move to dismiss the borrowers' claims.

The Court found that the borrowers' claims that the loan violated state usury laws could not survive and must be dismissed, because World Business had registered the loan with the Massachusetts Attorney General's Office within two years of making the loan, as required by section 49(d) of Gen. Law Ch. 271, which did not require the registration to identify the actual lender (and required only information concerning the borrower and the loan itself).

However, the Court found that the borrowers had alleged sufficient facts to proceed with their claims that the defendant lenders were in violation of Chapter 93A. In Massachusetts, the Supreme Judicial Court has held that a "high cost home mortgage loan" violates Chapter 93A if the lender should have recognized the borrower was unlikely to be able to repay the loan. Although the loan in this case was not a home mortgage loan, Judge Young concluded that the law from home mortgage cases "serves as a 'recognized or established common law or statutory concept of unfairness' relevant to this case." Citing the fact that the borrowers' loan was roughly the same amount that they had paid for their house (which was the collateral for the loan), the loan application was missing important information about the business itself that could have been used to evaluate the likelihood that the loan could be repaid, and World Business marketed its loans to applicants with low credit scores who could not otherwise obtain a loan as factors potentially relevant to whether the issuance of the loan was an unfair and deceptive practice, the Court denied so much of the defendants' motion as sought dismissal of the claims that the defendants had violated General Law Ch. 93A.

The legal issues surrounding these lending practices are very much unsettled areas of law within Massachusetts, and it is highly likely these issues will arise again.

Massachusetts Statutes of Limitations and the Current Pandemic

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A statute of limitations sets forth a firm deadline for a plaintiff to bring a lawsuit against a defendant for a given cause of action, subject to certain exceptions. Any lawsuit filed after the relevant statute of limitations has expired may be dismissed as "time-barred," reflecting a "compromise between a plaintiff's need to remediate wrongs and society's need for closure and forward movement." Doe v Harbor Schools, Inc. But how does a public health crisis like the COVID-19 pandemic affect that compromise?

Are Comp Time and Work-Related Travel Expenses Recoverable Under the Wage Act?

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The Massachusetts Wage Act allows an employee to recover "wages" that have been "unreasonably retained" by an employer.  A salary is within the scope of the statute.  What else is considered "wages"?  It's not clear because the term "wages" is not defined.  The statute simply provides that the term "wages" includes holiday and vacation time but such enumeration is not exhaustive.  Courts have interpreted the term "wages" to mean wages that have been "earned," as opposed to wages that are contingent on some other fact or are discretionary.  For example, accumulated sick days are not "wages" because they are contingent on a specific fact, i.e. the employee being sick.  The same is true for bonuses since they are paid at the discretion of the employer.  Commissions, however, are generally considered "wages" if they are not discretionary and are the result of the employee's work, provided that the amount of the commission is definitely determined and due and payable. 

When does the statute of limitations clock begin running in multi-phase, multi-building real estate development projects?

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Large, multi-unit, multi-building real estate developments can be seen all over the greater Boston area these days. As with any major project, problems can arise, and what looked like perfect, shiny new building may start to form a few cracks. Once cracks start to appear, when does the statute of limitations clock begin to run?

I have an out-of-state child support order, but my child and his other parent moved to Massachusetts. Does this change how long I am obligated to continue paying child support?

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Different states have different rules regarding when a parent's child support obligation ends. In some states, a parent's child support obligation ends when a child turns 18 years old. In Massachusetts, a parent's child support obligation generally lasts at least until the child reaches age 18, but could continue until when the child turns 21 if the child is living with a parent and dependent upon that parent, or up until the child turns 23 if the child principally lives with a parent and is dependent upon that parent due to the child's enrollment in an educational program (excluding educational costs beyond an undergraduate degree). See M.G.L. ch. 208, §28

Massachusetts District Court Applies Precondition Test to Determine That Employees Are Not Entitled to Overtime Pay for Employee-Required Training

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In a recent Memorandum and Order, the United States District Court for the District of Massachusetts District Court granted summary judgment to a group of defendant banks after applying a "precondition" test established by the First Circuit regarding overtime pay to employees for their participation in required training programs. The case, Miller et al v. Citizens' Financial Group et al., stemmed from the plaintiff employees' claims that the banks had failed to pay them overtime compensation for time spent outside of regular working hours to study for mandatory licensing exams, and that this failure constituted a violation of both the Fair Labor Standards Act and Massachusetts and Pennsylvania state law. The District Court analyzed the summary judgment motion under controlling First Circuit precedent as established in Ballou v. General Electric Co. and Bienkowski v. Northeastern University. In both cases, the plaintiffs claimed that they were not compensated for time spent on mandatory classwork and/or training in connection with their employment and, in both cases, the First Circuit upheld summary judgment rulings against the plaintiffs. 

First Circuit Rules That Massachusetts State Wage Act Not Preempted by Federal Law

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In the recent case of Capron v. Office of Attorney Gen. of Mass., the federal First Circuit Court of Appeals issued an interesting ruling regarding the intersection of federal and state law, affirming a U.S. District Court order of dismissal providing that state wage and hour laws fully applied to foreign nationals employed as "au pairs" in Massachusetts on special visa programs promulgated by the U.S. State Department. 

Why Are Mediation and Conciliation Confidential?

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Mediation and conciliation are two of the most common methods of alternative dispute resolution ("ADR"). In each of these voluntary processes, a third party neutral with no stake in the case tries to facilitate a compromise or agreement between parties who are in dispute. The mediator, or conciliator, will spend time with the parties and work with them, and their counsel, to assess each of their goals and help them move towards an agreement that is fair and reasonable and something each of the parties can live with. 

United States Supreme Court Rejects Discovery Rule for Fair Debt Collection Practices Act, But Leaves Potential Fraud-Specific Discovery Rule for Another Day

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The United States Supreme Court has agreed with the United States Court of Appeals for the Third Circuit, and resolved a circuit split with the Fourth and Ninth Circuits, holding that the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. ("FDCPA") does not incorporate the discovery rule into its statute of limitations. Rotkiske v. Klemm, et al. 

Merlini v. Canada: The "Commercial Activity" Exception to the Foreign Sovereign Immunities Act

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In Merlini v. Canada, the First Circuit dealt with an interesting case involving a clerical employee of the Canadian embassy who was injured on the job. After numerous twists and turns in her attempt to get worker's compensation coverage for her injury, she ultimately sued the country of Canada, asserting that because it did not have worker's compensation coverage under Massachusetts law, she could recover from it directly. Canada argued that it was immune from suit under the Foreign Sovereign Immunities Act ("FSIA"). 

What happens when a buyer and a seller of a property negotiate past the purchase and sale deadline?

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The Massachusetts Appeals Court recently issued an opinion in Ferguson v. Maxim, finding that the parties' offer agreement to purchase a property was enforceable even though the parties failed to timely execute the purchase and sale agreement (which, Defendants had argued, was a term of the offer), and the deadline to execute the purchase and sale agreement could be waived by the parties.

In Ferguson, the Plaintiff alleged that he and the Defendants had a binding agreement for the sale of the Defendants' property in Leominster. The parties executed a "Contract to Purchase Real Estate," which self-identified as a "Binding Contract" and identified the property, the purchase price and deposit terms, and the time and place of closing, and set a deadline by which the parties were to execute a purchase and sale agreement (P&S).

Through counsel, the parties began to negotiate the terms of the P&S but the first draft of the P&S was not circulated until after the deadline to execute the P&S had passed, and negotiations continued thereafter. At different times, counsel for both parties suggested extending the P&S deadline, but the record did not indicate that any extensions were ever granted or denied. At one point, counsel for the Defendants' attempted to cease negotiations on the grounds that the P&S deadline had passed, before later reviving negotiations for another week, and then once again terminating negotiations. Shortly thereafter, the Defendants sold the property to a third party.

First Circuit Holds Bank's Sustained Overdraft Fees Are Not Interest Under the National Bank Act

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The First Circuit recently affirmed the dismissal of a case in which the plaintiff alleged that Citizens Bank's "Sustained Overdraft Fees" on overdrawn checking accounts were usurious interest charges in violation of Section 85 of the National Bank Act (the "NBA"). Fawcett v. Citizens Bank, N.A. 

Is a Court Required to Consider Past Abuse in a Child Custody Modification Action?

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Recently in Malachi M. v. Quintina Q., the SJC held that:

[P]ursuant to G.L. c. 208, § 31A, the judge at a modification proceeding must consider evidence of both past and present abuse, including evidence of domestic abuse that occurred prior to the entry of the divorce judgment, and must address the applicability of the rebuttable presumption, even in the absence of evidence of abuse occurring after the divorce judgment.

U.S. Court Denies Motion to Stay in $118 Million-Dollar Venezuelan Debt Case

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The United States District Court for the Southern District of New York has denied a motion brought by Venezuelan state-owned oil company, Petróleos De Venezuela, S.A. ("PDVSA"), and PDVSA Petróleo, S.A. ("Petróleo") (together, "Defendants"), for an additional 120-day stay of the litigation in Red Tree Investments, LLC v. Petróleos De Venezuela, S.A. and PDVSA Petróleo, S.A.

The Insider Trading Landscape Changes Under Blaszczak

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The U.S. Court of Appeals for the Second Circuit's decision in U.S. v. Blaszczak may have just changed the landscape for insider trading prosecutions. In order to prove an insider trading charge under the Securities Exchange Act of 1934 (the "Exchange Act"), the government has to prove that an insider received some "personal benefit" from exchanging material, non-public information. This requirement comes from the 1983 U.S Supreme Court ruling in Dirks v. SEC

Third Circuit Confirms that TILA Recoupment or Set Off Claims Outside the Statute of Limitations Can Only Be Asserted Defensively

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The United States Court of Appeals for the Third Circuit has reaffirmed that exceptions to the statute of limitations for asserting certain claims regarding allegedly deceptive loan practices found in the Truth in Lending Act ("TILA"), apply only to assertion of those claims defensively, and not as an affirmative claim against a lender, in Gochin v. Markowitz.

A Court May Modify A Merged Provision in a Separation Agreement Regarding Children's Expenses Only When There Has Been A Material Change in Circumstances

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Divorce litigants in Massachusetts may not clearly understand the distinction between those provisions in a Separation Agreement regarding child support and those provisions regarding the payment of the child(ren)'s expenses. Both types of provisions are merged into the Judgment of Divorce, meaning that the court can modify them in appropriate cases. Generally speaking, the standard for modifying a child support order is that there must be "an inconsistency between the amount of the existing order and the amount that would result from the application of the Massachusetts child support guidelines." M. G. L. c. 208, § 28. In contrast, the standard for modifying any provisions about payment of a child's expenses is that there must have been a "material change in circumstances" since the entry of the judgment that is being modified. 

Tracking Down Documents For Legal Proceedings Abroad: Recent Decisions Broadening The Scope of Section 1782

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Section 1782 of the U.S. Code (28 U.S.C.§ 1782) is a very important discovery tool for litigants who are part of a legal proceeding outside the U.S. (particularly if access to discovery is restricted there). It allows a foreign litigant to make a request before a federal court to obtain evidence from a person within the district for "use in a foreign or international tribunal." 

First Circuit Holds that Employee's Termination Not Violative of Implied Covenant of Good Faith and Fair Dealing

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In the recent case of Suzuki v. Abiomed, Inc., the First Circuit Court of Appeals affirmed a U.S. District Court order granting summary judgment to the defendant employer, holding that the company's termination of an employee approximately fifteen months prior to the achievement of an important milestone, which would have entitled the employee to a large equity grant, did not violate the implied covenant of good faith and fair dealing in his employment contract. 

What happens if one spouse builds a house and the other spouse does not help?

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In a recent 1:28 decision, the Appeals Court of Massachusetts considered a challenge to a judge's order that real estate acquired by the Husband prior to the marriage should remain with the Husband following the divorce.

Arbitrating Against Chinese Companies: Recent Developments from the HKIAC

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When foreign companies do business with Chinese companies, international arbitration can be a key tool for dispute resolution, as it avoids either having a foreign court judgment that is unenforceable in China or having to deal with Chinese courts and home-court advantage for the Chinese company. Chinese courts have a good track record of enforcing international arbitral awards under the New York Convention. 

Protections Afforded to Homeowners by the Massachusetts Homestead Act

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The Massachusetts Homestead Act allows homeowners to shield up to $500,000 of equity in their principal place of residence from claims from unsecured creditors (i.e. credit card debt).

Appeals Court Holds that No Easement by Necessity Created in Condominium Dispute

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Earlier this year, the Massachusetts Appeals Court issued an important decision in Chamberlain v. Badaoui reversing a Superior Court judgment and holding that a condominium's master deed did not create an express easement granting to Plaintiffs' unit access through the neighboring Defendant's unit to the fire escape stairs. The Court further held that the Plaintiffs had failed to establish an easement by necessity.

Unsuccessful Challenge to FINRA Arbitration Shows Durability of Arbitral Awards

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The Massachusetts Arbitration Act ("MAA") provides for judicial review and vacation of arbitration awards, under the specific and limited circumstances enumerated at G.L. c. 251, § 12. These limitations acknowledge the public policy goals that encourage private, binding arbitration of disputes in general. "Absent fraud," the Massachusetts Supreme Judicial Court has held, "errors of law or fact are not sufficient grounds to set aside an award... An arbitrator's result may be wrong; it may appear unsupported; it may appear poorly reasoned; it may appear foolish. Yet, it may not be subject to court interference." Lynn v. Thompson.

In Breach of Contract Claim, Courts May Award Both Damages and Specific Performance

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In Motsis v. Ming's Supermarket, Inc., (Mass. App. Ct. Nov. 5, 2019), the Appeals Court affirms a judgment awarding a commercial tenant both monetary relief and specific performance.

Conclusory Allegations, Even When Admitted by the Opposing Party, Deemed Insufficient to Defeat Summary Judgment in FLSA Dispute

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Recently in Costello v. Molari, Inc. (Memo and Order, November 20, 2019), the United States District Court for the District of Massachusetts granted an employer summary judgment because the employee failed to show that the Fair Labor Standards Act ("FLSA") applied to the employer. The employee did not identify evidence that would create a dispute of material fact as to whether the employer was engaged in interstate commerce. 

CFPB Now Claims Its Structure Is Unconstitutional

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A few short months ago, I wrote a blog post about the Consumer Financial Protection Bureau surviving an attack on its constitutionality in the United States Court of Appeals for the Ninth Circuit. In that case, the plaintiff alleged that the CFPB's structure was unconstitutional because it had a single director who did not serve at the pleasure of the President. The CFPB argued that its structure was, in fact, constitutional, and it won the argument. The plaintiff sought to have the case heard by the U.S. Supreme Court. 

New Appeals Court Decision Clarifies Residency Requirement For Filing For Divorce

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In Massachusetts, the durational residency requirement for a plaintiff to file for divorce is one year G.L. c. 208, § 5 (meaning, one must be a Massachusetts resident for a year before Massachusetts has jurisdiction over their divorce), but until recently, appellate courts had yet to define the parameters of that one-year residency requirement. Earlier this month, the Massachusetts Appeals Court provided clarification in its decision in Rose v. Rose.

On What Grounds Can an International Arbitration Award Be Vacated?

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Your U.S. company and a commercial partner from a foreign nation had the foresight to designate international arbitration as the dispute resolution mechanism in your joint venture agreement. A dispute arose and you both diligently presented your claims to the arbitral panel. The arbitral panel has issued its award. What now?

Lost opportunity for considering alimony after child support is established: Appeals Court decision leaves us in the dark

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In Casey v. Sweeney, a recent decision of the Appeals Court of Massachusetts, the court declined to provide clarification on the meaning of a statutory provision that has puzzled commentators and practitioners since it came into effect on March 1st 2012. The provision at issue is M.G.L. c 208 s 53(c)(2), which reads:

What is dissipation of the marital estate and why does it matter?

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One of the most contentious issues arising in divorce proceedings will often be the division of the parties' assets. In Massachusetts, the courts follow an equitable system of division, meaning they seek to divide property "fairly," not necessarily "equally." There are cases in which the marital estate seems to have been reduced by the irresponsible or intentional conduct of one party (party A), which ostensibly has the result of diminishing the eventual share of the marital estate that each party will retain.

When will the court order a party to pay the other's attorney's fees in a family law case?

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In civil litigation, which includes cases in the Probate and Family Courts, the American rule generally dictates that each party is responsible for its own attorney's fees and expenses. However, there are some exceptions to this, and in Massachusetts some 'fee-shifting' statutes provide for one party to cover the other's legal costs, particularly in domestic relations or family proceedings.

Massachusetts Superior Court Concludes Lender Properly Foreclosed and Seized Borrower's Personal Property Following Loan Default

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A recent Massachusetts Superior Court case, Germinara v. Bakis, et al. (decided May 13, 2019), involved a plaintiff borrower who obtained a commercial loan in order to fund the purchase and operation of a gas station/convenience store, which was owned by an LLC formed by the plaintiff. The loan was secured by both the gas station property and contents and a second property that was owned by the borrower in trust. Further, the lender and the funder of the loan were granted mortgages and deeds-in-lieu of foreclosure to secure the interest on both properties owned by the borrower. When the plaintiff defaulted on the loan, the lender and the funder took title to the two properties by exercising the deeds-in-lieu of foreclosure. They sold both properties and, additionally, seized some items of the borrower's personal property that had been located at the properties, such as trucks and vehicles. Some of these items were owned by the plaintiff in his individual capacity, and not by the LLC that held title to the gas station; however, the lender held other security obligations which included the vehicles.

A Disloyal Corporate Officer, Ordered to Forfeit His Compensation To His Employer, Fails in His Attempt to Reduce The Amount of Restitution Under the Joint Tortfeasors Act

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In a case of first impression, the Business Litigation Session (Davis, J.) recently declined to reduce the amount of restitution a disloyal corporate officer had been ordered to pay to his employer in connection with a judgment against the corporate officer. In so holding, the court held that a settlement payment, received by the plaintiff employer from two co-defendants (the former employee and a competitor business), did not fall within the scope of the Joint Tortfeasors Act and, therefore, the Act could not be applied to offset any damages the former corporate officer was ordered to pay. See Element Productions, Inc. v. Editbar, LLC et al. (Suffolk Sup.Ct.).

Banking and Finance Use of International Arbitration Continues to Grow

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International arbitration has many benefits for banking and finance disputes, and parties to those disputes are increasingly recognizing those advantages. While banks and financial institutions have traditionally used courts and other judicial forums to resolve disputes, including international disputes, increasing numbers of cases are being litigated and resolved through international arbitration.

Can Student Loan Debt be Categorized as a Marital Debt?

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In Massachusetts, a judge has broad discretion with respect to the equitable division of the marital estate and may consider both economic and noneconomic contributions to the marital estate. A prenuptial agreement can clarify the responsibility for debts incurred during the marriage, as well as how payments made toward individual, pre-marital debts during a marriage, including student loans, are to be treated in the event of a divorce. Generally speaking, debt incurred during the marriage, including student loan debt, will be presumptively marital. The party challenging that presumption will typically have to present evidence that the debt at issue was intended to be an individual debt. The analysis is entirely dependent on the circumstances of the case and the determining factor will not rest on whether the challenging party's signature is on the underlying promissory note securing the original debt. In a vacuum, student loan debt incurred by one party prior to the marriage will typically be categorized as individual debt, especially in marriages of a shorter duration. However, the issue becomes more complicated where one spouse significantly pays down the other's pre-marital student loan debt. While the Court may certainly look to the intent of the parties at the time of the incurrence of the debt - in highly contested matters - evidence to that effect may be limited to the now at-odds testimony of the parties.

When Income Attribution is Appropriate

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In a recent case, Macri v. Macri, the Massachusetts Appeals Court recently cemented a trial court decision to, among other things, attribute income to Husband, who was unemployed at the time of trial. Attribution of income is often a contested topic in the Probate and Family Courts of Massachusetts, and this case provides further guidance on the issue.