Boston Business Litigation Blog

When Three's a Crowd: Intervention under Federal Rule of Civil Procedure 24

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In T-Mobile Northeast LLC v. Town of Barnstable, et. al., the First Circuit affirmed the decision of the United States District Court for the District of Massachusetts to deny local residents' motion for leave to intervene.

Business Interruption Coverage Class Action: Update on Rinnigade Art Works v. Hartford Financial Group

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Back in June, Massachusetts saw the filing of the first suit seeking class action status challenging an insurance company's denial of coverage for COVID-19 related business losses, Rinnigade Art Works v. Hartford Financial Group.

In Which Cases is an Alimony Award Based on Need?

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In a recent Rule 23 decision, the Appeals Court of Massachusetts provided further clarification relating to the Young v. Young decision and how a judge is expected to calculate alimony. In a nutshell, if a payor's "ability to pay" is not an issue, then the amount of alimony will be determined by the recipient's reasonable need. If the parties do not have sufficient income to maintain the lifestyle that both spouses enjoyed during the marriage, then the statutory alimony percentages will be used to calculate the amount of a support order.

Tenth Circuits Confirms $36.1 Million International Arbitration Award

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The Tenth Circuit confirmed a $36.1 million international arbitration award in a dispute between Bolivian company Compañia de Inversiones Mercantiles S.A. ("CIMSA") and a group of Mexican companies known as Grupo Cementos de Chihuahua, S.A.B. de C.V. and GCC Latinoamerica, S.A. de C.V. (collectively "GCC") relating to a right of first refusal for certain shares. In doing so, the Court reaffirmed Federal policy in favor of arbitral dispute resolution, particularly with respect to international disputes.

Massachusetts Federal Court Rules on Employee Status Under the Fair Labor Standards Act

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In a decision recently issued in the case of Maldonado et al. v. Cultural Care, Inc. et al., a group of "local childcare consultants" ("LCCs") brought a class action suit against Cultural Care, a company that places foreign au pairs with host families located in the United States. The plaintiffs alleged that Cultural Care and its officers violated the Fair Labor Standards Act ("FLSA") by misclassifying them as independent contractors and paying them less than the minimum wage required by both the FLSA and state law in Massachusetts, New York, and California. Cultural Care moved to dismiss the plaintiffs' claims based on a lack of subject matter jurisdiction and failure to state a claim upon which relief could be granted.

Advantages to International Arbitration: Confidentiality

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In prior posts here at FITCH, we have discussed some of the reasons that parties choose international arbitration over litigation for their cross-border disputes. Over the next few months, we will be taking a deeper dive into the advantages of international arbitration. One such advantage is confidentiality.

Can a judge order that a retirement account be divided equally between the parties as of the date of their divorce if one party made contributions to that account after the parties separated but before the date of divorce?

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This issue was examined by the Appeals Court in the recent case, Hoy v. Hoy. In that case, the wife was the primary wage earner during the parties' long-term marriage and the trial judge in the divorce found that the husband was in need of alimony. However, because the wife's income was substantially reduced by the time of the trial, the judge did not order her to pay alimony. Instead, the judge noted that the issue of alimony could be brought back before the Court and modified at a later date and ordered the wife to provide the husband with notice if her income increased by more than 5%. Additionally. the judge awarded the husband slightly more than half of the marital assets, including half of the wife's retirement accounts accrued over length of the marriage and more than half of the proceeds of the sale of the marital home.

Does The Seller's Death Terminate A Real Estate Listing Agreement?

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In a case of first impression, Newton Centre Realty, Inc. v. David R. Jaffe (June 23, 2020), the Appeals Court recently decided that the seller's death terminates a real estate listing agreement and concluded that the broker was not entitled to recover contract damages from the seller's estate.

Clarifying the Clear and Unequivocal Standard of Contempt in the Probate and Family Court

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In a recent Rule 23 decision, the Appeals Court of Massachusetts upheld a finding of contempt against a father who, without the mother's consent, registered the children for soccer.

"Last Mile" Delivery Drivers Exempt from Federal Arbitration Act

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The United States Court of Appeals for the First Circuit has held that, despite never crossing state lines in the course of their duties, "last mile" delivery drivers qualify for the Federal Arbitration Act's ("FAA") exemption for transportation workers due to their sufficient engagement in interstate commerce. Accordingly, the FAA did not apply to the Plaintiff's contract, state law applied instead, and the Plaintiff's claims could proceed in court rather than via arbitration. Waithaka v. Amazon.com, Inc. et al.

The Use of International Arbitration for Banking and Finance Disputes: Tailoring the Arbitration Clause

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As we have pointed out before, the use of international arbitration for banking and finance disputes continues to grow. The International Chamber of Commerce also recently came out with a report discussing this growing trend for financing disputes.

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.

Payment of Wages and Earned Vacation Not Due Until Actual Date of Discharge, Even If Employee Stopped Working Earlier

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In Knous v. Broadridge Financial Solutions, Inc., the United States District Court for the District Court of Massachusetts awarded summary judgment to an employer on the employee's claims of unpaid wages and earned vacation at the time of discharge.

As a result of restructuring, the employer decided to terminate the employee. The employer informed the employee of his termination in a meeting on May 17, 2019, during which the employer "instructed" the employee to return company property, stop working, and vacate the site. The employer also specifically informed the employee that he would still receive wages and benefits as of May 24, 2019, and also presented the employee with a severance agreement that defined his date of termination as May 24, 2019.

District Court Finds in Favor of T-Mobile in Zoning Dispute

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In the recent Memorandum and Order issued in the case T-Mobile Northeast LLC v. The Town of Barnstable, the Massachusetts District Court held that the Town of Barnstable Planning Board ("the Planning Board") had violated the Telecommunications Act of 1996 ("the TCA") when it denied T-Mobile's request for a special permit and regulatory agreement that would allow T-Mobile to install and operate wireless equipment in a church steeple for the purpose of improving local cell phone service coverage. The dispute arose after the town had issued T-Mobile a building permit and after the majority of the construction on T-Mobile's proposed site had already been completed, at which time citizens of Barnstable claimed that the proposed site fell within a geographic area of Cape Cod that is subject to heightened regulatory scrutiny. After several hearings and consideration of evidence submitted by T-Mobile, the Planning Board denied T-Mobile's request.

The Use of International Arbitration for Banking and Finance Disputes: Tailoring the Arbitration Clause

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As we have pointed out before, the use of international arbitration for banking and finance disputes continues to grow. The International Chamber of Commerce also recently came out with a report discussing this growing trend for financing disputes.

A Party Cannot Be Both Party and Arbitrator: First Circuit Finds Arbitration Clause Unconscionable

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The First Circuit Court of Appeals recently found an agreement's arbitration clause unconscionable where one party was given almost unfettered control over the selection of the arbitrators. In Trout v. Organización Mundial de Boxeo, Inc., plaintiff Austin Trout ("Trout"), a professional boxer, claimed the defendant World Boxing Organization's ("WBO") decision to move him from a weight class cost him to opportunity to pursue a world championship in that class. He brought claims under the Muhammad Ali Boxing Reform Act, as well as breach of contract, fraud, and negligence claims.

First Circuit Affirms Dismissal of Class Action Against Nestlé, Mars, and Hershey for Non-Disclosure of Potential Child and Slave Labor Issues

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In Tomasella v. Nestlé, a politically charged case involving three of the United States' most prominent chocolate manufacturers, the First Circuit recently affirmed dismissal of a putative class action against Nestlé USA Inc., Mars, Inc., and the Hershey Company. The plaintiff in that case, Danell Tomasella, alleged that the chocolate manufacturers violated the Massachusetts Consumer Protection Act that prohibits unfair or deceptive trade practices (Chapter 93A) by failing to disclose on their packaging that child and slave labor abuses likely exist in their cocoa bean supply chains. The plaintiff also alleged that the chocolate manufacturers were unjustly enriched by such omissions.

Superior Court Holds That, Even With Advance Notice To Its Employees, An Employer May Not Avoid Its Obligations Under Sullivan v. Sleepy's LLC To Pay Separate and Additional Overtime

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In the recent Superior Court case of Martinez v. Burlington Motor Sports, Inc., et al., a defendant auto dealership moved to dismiss a commission-based employee's claim for overtime wages pursuant to G. L. c. 151, §§ 1A and 1B, arguing that the Massachusetts Supreme Judicial Court's (SJC) 2019 ruling in Sullivan v. Sleepy's LLC did not apply to the case. See Fitch's blog post on the Sleepy's decision here. The Sleepy's decision stands for the proposition that an employee paid on commission is entitled to separate and additional wages for minimum wage and to overtime and Sunday pay.

Appeals Court Rules that Settlement To Which Abutter Was Not a Party Does Not Deprive Zoning Board of Appeals of Jurisdiction Over Abutter's Appeal

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In Stevens v. Zoning Board of Appeals of Bourne, et. al., the Massachusetts Appeals Court upheld the Bourne Board of Selectman's decision to reinstate a cease and desist order against Plaintiff Lighthouse Realty Trust despite a Land Court settlement agreement between the Plaintiff and the Town.

U.S. Supreme Court Allows Non-Signatories to Enforce Arbitration Agreements

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In GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, the United States Supreme Court was presented with the question whether domestic equitable estoppel doctrines that allow a non-signatory to an arbitration agreement to compel arbitration in disputes arising under such agreement conflict with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, more commonly known as the New York Convention. The Supreme Court unanimously found no conflict, paving the way for non-signatories to agreements containing international arbitration clauses to compel arbitration using domestic doctrines of equitable estoppel.

First Circuit Affirms Dismissal of Class Action Claims Against General Electric by Victims of Nuclear Disaster Due to Availability of Adequate Alternative Japanese Forum

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In March 2011, a massive 9.0 magnitude earthquake occurred just off the coast of Japan and triggered a 45-foot tsunami, which in turn breached the seawall and resulted in a series of explosions and a widescale nuclear disaster at the Fukushima Daiichi Nuclear Power Plant (the "FNPP") in Japan. Shinya Imamura and several other individuals and business entities from the surrounding area who suffered property damage and/or economic harm as a result of the disaster filed a class action lawsuit, against General Electric Company ("GE"), Imamura v. General Electric Co., in the U.S. District Court for the District of Massachusetts. They sought compensatory and punitive damages from GE, based on their assertions that GE negligently designed the nuclear reactors and safety mechanisms at the FNPP and was at least partially responsible for the nuclear disaster GE's corporate headquarters and principal place of business in Boston, Massachusetts provided basis for jurisdiction over the lawsuit in the Massachusetts federal court.

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.

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?

Photo of Carlos A. Maycotte

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.

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."