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Kiribati Seafood Company, LLC v. Crovo

Superior Court of Massachusetts, Suffolk, Business Litigation Session

November 18, 2016

Kiribati Seafood Company, LLC
M. Delacy Crovo No. 135613


          Janet L. Sanders, Justice

         Plaintiff Kiribati Seafood Company, LLC (Kiribati) filed this legal malpractice action against defendant M. Delacy Crovo (Delacy) seeking to recover damages flowing from Delacy's alleged role in violating a Washington state court order against Kiribati. Kiribati's Amended Complaint asserts both contract-based and negligence-based claims as well a violation of 93A. The case is now before this Court on the defendant's motion for summary judgment. Specifically, the defendant contends that Kiribati's claims are barred by the applicable statutes of limitations. This Court agrees, and therefore concludes that the Motion must be ALLOWED .


         The relevant facts in the summary judgment record, viewed in the light most favorable to Kiribati, are as follows. Kiribati is a Washington state limited liability company formed in 2000 to own and operate a commercial fishing vessel. Currently, Kiribati is owned by Nicholas Coscia, who holds the majority interest, and a second individual with a minority interest named Steven Ross.

         In 2000 and 2001, Kiribati refurbished a boat, the MADEE, with the expectation that it would be used in South Pacific commercial fishing operations. In 2001, the MADEE sustained damage due to a rudder failure. It was repaired in Tahiti, but suffered additional damage after a dry dock collapsed. Lawsuits ensued. Moran Windes & Wong, PLLC (MWW), a Seattle based law firm, represented Kiribati in an action brought in Hawaii related to the rudder failure. A French law firm, later acquired by the Paris office of Dechert, LLC (Dechert), represented Kiribati on its claim for damages to the MADEE sustained in the dry dock collapse. Sometime in May 2010, Dechert on behalf of Kiribati, settled the dry dock collapse case, and the proceeds of the settlement (the Settlement Funds) were sent to Dechert. At the time of the settlement, Delacy's brother Charles Crovo (Charles) was the majority owner of Kiribati, with Coscia holding a minority interest.

         Delacy is a Massachusetts attorney who has acted as (or held herself out to be) counsel for Kiribati at various times commencing in 2000. At the heart of this lawsuit is the role she played in the transfer of the Settlement Funds from Dechert to other entities. In a letter dated April 29, 2010 to Dechert's Paris office (the April 2010 Letter), Delacy stated that she was Kiribati's corporate attorney and that Charles Crovo was authorized to make all monetary decisions on Kiribati's behalf This letter was sent under Delacy's married name, Marie D. Carlson, with a letterhead that read, " Law Offices of Marie Carlson." Delacy sent a second letter, again under the name " Marie Carlson, " to Dechert in May 17, 2010 (the May 2010 Letter), again stating that she was Kiribati's corporate counsel and that, in her legal opinion, Charles Crovo was authorized to receive the Settlement Funds on Kiribati's behalf. Delacy provided Dechert with the information necessary to deposit the funds in her IOLTA account. On May 19, 2010, Dechert transferred the Settlement Funds to Delacy, who subsequently disbursed the funds to Charles and others.

         While these events were taking place, MWW, the Seattle law firm, was looking to get paid its attorneys fees for representing Kiribati in the separate litigation for damages caused by the rudder failure. On May 25, 2010, MWW filed an action in Washington state court asserting an attorneys fee lien against the Settlement Funds and, to secure that lien, asked the court to order Kiribati to deposit the funds into the court registry. MMW, PLLC v. Kiribati Seafood Co. et al., Civ. No. 10-2-18839 SEA (King County Superior Court). The Seattle court allowed that motion on June 22, 2010 and ordered that the Settlement Funds be deposited with the court by June 25, 2010 (the June 2010 Order). Kiribati did not comply with that Order.

         As a consequence of that noncompliance, MWW filed a motion to strip Charles and Coscia of any authority to act on behalf of Kiribati and to appoint a receiver. The motion alleged that Coscia and Charles, together with others, had engaged in acts of misconduct intended to circumvent the court's June 2010 Order. In support, MWW alleged that Crovo had " invented a fictitious lawyer named 'Marie Carlson' who claimed to be Kiribati's corporate counsel and wrote up a fictitious certification that Mr. Crovo presented to the Paris Bar Association and the Paris Bank, which caused them to both remove their financial controls on the account and facilitated the payout of the $860, 000 to Mr. Crovo." Attached to the motion was the April 2010 Letter from Delacy to the Dechert attorney in Paris. The motion concluded: " The rats are fleeing the ship and the court needs to act before it sinks and irreparably harms the creditors."

         Kiribati filed an opposition to the motion, supported by Delacy's affidavit dated July 1, 2010. Coscia participated in Kiribati's opposition to MWW's motion, which he admitted reading. In her affidavit, Delacy explained that she regularly uses her married name, " Marie D. Carlson, " for her legal work. She stated that that she had disbursed the Settlement Funds to various trusts at the direction of Charles on June 8 and on June 10, 2010. Delacy denied knowing of MMW's May 25, 2010 request that the Settlement Funds be deposited with the court at the time that she disbursed the funds to these other entities.

         On July 2, 2010, the Seattle court allowed MWW's motion to appoint a receiver, finding that Kiribati's noncompliance with its June 2010 Order placed it in contempt. The court appointed James P. Rigby as receiver of Kiribati and granted him " all the powers necessary to act on behalf of Kiribati" and specifically gave him the authority to obtain custody over the Settlement Funds. Rigby undertook an investigation as to what had happened with the money. On June 29, 2011, he filed a written report with the court stating that the funds had been transferred from Delacy's IOLTA account to Charles personally as well as to companies he controlled. This report was sent to Coscia, among others. On September 2011, Charles paid the Settlement Funds into the Seattle court registry.

         The receivership was terminated on June 26, 2013. Coscia took over control of Kiribati together with Ross. Less than a week later, Kiribati sued Dechert here in Massachusetts. See, Kiribati et al. v. Dechert, LLP, Civ. No. 13-2393-BLS 2 (Suffolk Superior court). Kiribati alleged that Dechert had committed legal malpractice in releasing the Settlement Funds to Delacy. The case was ultimately dismissed on summary judgment.

         Kiribati filed the instant lawsuit against Delacy on September 8, 2014. It alleged that Delacy had committed legal malpractice by failing to comply with the Seattle court's June 2010 Order. As a consequence of her misconduct, Kiribati alleged that it had been forced to incur attorneys fees and other costs in connection with the appointment of a receiver and the receiver's efforts to recover the Settlement Funds.


         Delacy argues that all of the claims asserted against her are time-barred because the statute of limitations began to run on July 2, 2010 when the Seattle court allowed the motion to appoint a receiver for Kiribati. She contends that, as of that date, Kiiribati was aware that it sustained some appreciable harm--namely, the attorneys fees associated with the appointment of the receiver and the fees that would likely be incurred in connection with the receiver's recovery efforts. The parties agree that a three year statute of limitations applies to Counts I through VIII, which are those claims based on legal malpractice. G.L.c. 260, § 4. A ...

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