Boston Business Litigation Blog

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).  

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 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.

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).

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.

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. 

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.

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.

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.

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).

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.

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).

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.

It has been said that "the best time to plant a tree was 20 years ago. The second best time is now." These words reflect the wisdom that few things are as beautiful and capable of enhancing the appeal of property as much as a mature tree. It is therefore not surprising that an entire body of law exists concerning tree-related disputes between neighbors.

The Rule 410 Mandatory Self Disclosure provisions of the Supplemental Probate and Family Court Rules is one of the most basic, yet misunderstood, requirements of divorce litigants.

The United States Court of Appeals for the Third Circuit has split with the Fourth and Ninth Circuits and held, en banc, that civil lawsuits alleging violations of the Fair Debt Collection Practices Act("FDCPA"), 15 U.S.C. § 1692 et seq., must be filed within one year of the alleged violations, and that the statute of limitationsis not tolled until the violations are discovered by the plaintiff. Rotkiske v. Klemm, 890 F.3d 422 (3d Cir. 2018).

The Alimony Reform Act specifies statutory limits for the duration of alimony depending on the length of the marriage. The shorter the marriage, the shorter the duration of an alimony obligation. The length of marriage is defined as the "number of months from the date of legal marriage to the date of service of a complaint or petition for divorce or separate support." But what happens in the event that there is more than one complaint for divorce, or complaints for support and modification? What becomes the "end date" of the marriage so that one can determine how long the marriage was and, consequently, how long the alimony obligation will last?

The United States Census Bureau shows the median age of individuals at the time of their first marriage is becoming increasingly older for both men and women. Meanwhile, the number of unmarried individuals cohabiting with their significant others is growing. These trends may be due in some part to couples delaying the responsibilities of marriage as they focus on their careers, but here is something all couples should know: for purposes of determining the length of a marriage for an alimony award, the period of premarital cohabitation could be included regardless of whether both parties were contributing financially.

Until late 2017, the question of whether a former officer of a Massachusetts corporation has access to attorney-client privileged communications made while that officer was employed at the corporation, had not been directly addressed by Massachusetts courts.

One of the biggest challenges startups and early stage companies face is attracting and retaining talented employees. When the potential of a company outstrips its ability to pay market value salaries, compensation packages that include grants of stock or options can bridge the gap until the business has sufficient cash flow. There are many advantages to these compensation arrangements, but companies need to be aware of some of the legal pitfalls as well.

In an important decision for debt investors, the Supreme Judicial Court has ruled that passive debt buyers are not "debt collectors" under the Massachusetts Fair Debt Collection Practices Act ("MDCPA"). The decision, Dorrian v. LVNV Funding, LLC, can be found here.

In the United States, the Federal Arbitration Act ("FAA") provides the rules that govern most arbitrations, and is binding on both state and federal courts. See 9 U.S.C. § 1 et seq. But the FAA is "something of an anomaly" in federal legislation as it "bestow[s] no federal jurisdiction." Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 582 (2008). So motions to compel arbitration or enforcement proceedings must be brought in state courts unless there is some independent basis to assert jurisdiction (such as federal diversity jurisdiction).

The Probate & Family Court recently announced that the Fiduciary Litigation Pilot Project under Standing Order 3-17 (https://www.mass.gov/probate-and-family-court-rules/probate-and-family-court-standing-order-3-17-fiduciary-litigation) has been expanded to apply to cases filed in Essex and Plymouth Counties. Previously, the pilot project applied to case filed only in Middlesex, Norfolk and Suffolk Counties.

Parties involved in a real estate dispute in Massachusetts are fortunate to have choices when it comes to the venue of the litigation. One of the most strategic decisions that a plaintiff or defendant can make is deciding where to litigate the case. When it comes to real property disputes, the Massachusetts Land Court and the Superior Court have overlapping jurisdiction, also referred to as concurrent jurisdiction, on certain claims. While the Superior Court enjoys broad jurisdiction over a variety of civil and criminal matters, the Land Court specializes in disputes involving real property. Massachusetts General Laws Chapter 212, § 26A, permits either party to remove any non-jury civil action involving "any right, title or interest in land" from the Superior Court to the Land Court. The claim must not be one that entitles a party to a jury trial because the Land Court only conducts jury-waived trials, frequently called bench trials.

Would it surprise you to learn that when you see a clause in your international sales contract stating that Massachusetts (or any other State's) law applies, that it actually incorporates an international treaty that will likely supersede the Uniform Commercial Code ("UCC")?

One of the new provisions of the new tax reform bill - background here - is that the long-standing tax deduction for alimony will no longer be available for separation agreements and divorces obtained after December 31, 2018. Specifically, the reform applies to "any divorce or separation instrument . . . executed after December 31, 2018" (emphasis added).

The price of Bitcoin has recently skyrocketed, rising from $1200 per Bitcoin in the second quarter of 2017 to $ 10,000 per Bitcoin in 2018. However, the law has not kept pace: critical questions remain regarding how Bitcoin should be valued. For example, if Bitcoin is fraudulently transferred, how should damages be calculated? In February 2016, in the first case of its kind, the U.S. Bankruptcy Court for the Northern District of California held that, for the purpose of the fraudulent transfer provisions of the U.S. bankruptcy code, Bitcoins are not the equivalent of United States dollars. However, the court left open whether Bitcoin should be valued as a currency or a commodity.

One of the first questions that any attorney and potential litigant must consider when deciding whether to file a lawsuit is where to bring the case. Since November 2017, potential probate litigants in three Massachusetts counties have a new venue to consider, the Fiduciary Litigation Session, or "FLS", at the Norfolk Division of the Probate and Family Court in Canton, Massachusetts. The parameters of the FLS are outlined in Probate and Family Court Standing Order 3-17. Borrowing elements of the successful Business Litigation Session at the Suffolk Superior Court, /blog/2015/10/the-specialized-role-of-the-business-litigation-session.shtml, the FLS's goal is "to provide a specialized forum for the speedy resolution of contested and complex probate litigation cases and to provide individualized and collaborative case management to reduce the costs associated with fiduciary litigation." http://www.mass.gov/courts/case-legal-res/rules-of-court/probate/pfc-orders/3-17.html

On April 1, 2018, the Pregnant Workers Fairness Act (the "Act") takes effect. https://malegislature.gov/Laws/SessionLaws/Acts/2017/Chapter54. The Act amends Massachusetts' anti-discrimination law, G.L. c. 151B, which applies to employers with six or more employees, to now include pregnancy and related conditions as protected categories. The Act requires employers to provide "reasonable accommodations" for pregnancy and related conditions, including breastfeeding and the need to express breast milk, so long as the accommodations do not cause the employer "undue hardship."

In a recent landmark decision, Barbuto v. Advantage Sales & Marketing, LLC, the Supreme Judicial Court ruled that an employer that terminated an employee for testing positive for marijuana use (which violated the company's policy) could be found to have discriminated against the employee on the basis of her handicap. At the time she was hired, Barbuto was informed that the company would require her to undergo a drug test. She informed the company that her physician had provided her a written certification that allowed her to use marijuana for medical purposes, due to the fact that she suffered from a debilitating medical condition under Massachusetts law; she also agreed that she would not use marijuana before work. The employer told her that a positive result for marijuana would not disqualify her from the position. Despite having made that assurance, following Barbuto's first day of work Advantage Sales terminated her employment due to the positive drug test, on grounds that the company followed federal law, not state law. The use of marijuana for medicinal purposes, while legal in Massachusetts at the time (the non-medicinal use of marijuana had not yet been legalized), was still a crime pursuant to federal law. Therefore, the use marijuana for medical purposes, even while legal in Massachusetts, could still subject the user to federal criminal prosecution. Barbuto sued Advantage Sales, alleging (among other things) that she had been discriminated against on the basis of her handicap. In Massachusetts, a "handicap" is a physical or mental impairment that substantially limits one or more major life activities of a person (or a record of having such impairment or being regarded as having such impairment). Massachusetts law prohibits employers from terminating or refusing to hire an employee because of their handicap if that employee is capable of performing the essential functions of the position involved with "reasonable accommodation," unless the employer can demonstrate that the accommodation that would need to be made would impose an undue hardship to the employer's business. A reasonable accommodation is an adjustment or modification to a job (or the way it is done or the environment in which it is done) that makes it possible for the handicapped individual to perform the essential functions of the job. An employer who receives a request for a reasonable accommodation from a handicapped person is required by Massachusetts law to engage in an interactive process with the employee to ascertain whether the requested accommodation is reasonable and, if not, whether another accommodation can be made that would be reasonable. The Massachusetts medical marijuana law provides, "Any person meeting the requirements under this law shall not be penalized under Massachusetts law in any manner, or denied any right or privilege, for such actions." Advantage Sales claimed it owed Barbuto no obligation to participate in the interactive process to identify a reasonable accommodation before it terminated her employment because, it alleged, the accommodation she sought violated a federal statute and was, consequently, unreasonable. It also alleged that she was terminated because she failed the drug test in violation of company policy, not because of her handicap. The SJC rejected Advantage Sales' first argument on grounds that the fact that Barbuto's possession of medical marijuana violated federal law does not make it per se unreasonable as an accommodation. It noted that only the employee was at risk of federal criminal prosecution for her possession of the medical marijuana, not the employer. It concluded that to hold otherwise would operate to deny handicapped employees the right to or privilege of a reasonable accommodation under Massachusetts law. It also pointed out that, even if the requested accommodation had been unreasonable, Advantage Sales was still obligated to participate in the interactive process of trying to craft another, equally effective accommodation that was reasonable (which it had not done). The Court rejected Advantage Sales' second argument on grounds that it would permit employers to enact policies that would enable them to do an end-run around handicap discrimination laws (i.e., by adopting company policies that would deny employees reasonable accommodations). The Court reversed the lower court's dismissal of Barbuto's claims of handicap discrimination and sent the case back to the lower court to determine whether her use of medical marijuana would impose an undue hardship on Advantage Sales' business and would, therefore, not be a reasonable accommodation. The Barbuto decision does not mean that employers must permit the use of marijuana even by handicapped employees. The significance of the decision is, instead, that use of medical marijuana might constitute a reasonable accommodation available to a qualified handicapped employee even if the employer has a no-tolerance drug policy or federal law prohibits the possession of marijuana. When the use of medical marijuana is proposed as an accommodation by a qualified handicapped employee, employers must engage in the interactive process to determine whether it is reasonable and, if not, whether another reasonable accommodation exists.

Foreign litigants recently successfully sought the assistance of the United States District Court for the District of Massachusetts in obtaining discovery of Massachusetts residents and a Massachusetts company for use in a foreign proceeding. See In re Penner, No. 17-CV-12136-IT, 2017 WL 5632658 (D. Mass. Nov. 22, 2017). The foreign litigants in that case relied on a Federal Statute, 28 U.S.C. § 1782, that permits U.S. District Courts to order discovery for use in foreign proceedings under certain circumstances. Section 1782 provides, in pertinent part, "[t]he district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal." In granting discovery pursuant to Section 1782, the Penner court relied upon the United States Supreme Court's analysis of that statute in Intel Corp. v. Advanced Micro Devices, Inc.

The Massachusetts Appeals Court recently denied a mortgagee's attempt to invoke the doctrine of equitable subrogation to hold the surviving spouse of a mortgagor liable for a second mortgage on their residence--owned by the married couple as tenants in the entirety--that had been procured and signed only by the deceased spouse.