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Brennan v. Ferreira

United States District Court, D. Massachusetts

May 2, 2017

LINDA BRENNAN, Plaintiff,
v.
THOMAS F. FERREIRA, BARBARA FERREIRA, JOHN JEFF FERREIRA, TAMMY FERREIRA, HICKS STREET, INC., HILDA MIRANDA, THREE BIG DOGS IRREVOCABLE TRUST, PRESCOTT, BULLARD & MCLEOD, RICHARD C. BORGES, and DOUGLAS LEATHAM, Defendants.

          MEMORANDUM AND ORDER

          WILLIAM G. YOUNG JUDGE.

         I. INTRODUCTION

         The plaintiff, Linda Brennan ("Brennan"), has brought suit against Thomas F. Ferreira and Barbara Ferreira (collectively "T&B Ferreira"); John Jeff Ferreira and Tammy Ferreira (collectively "J&T Ferreira"); Hicks Street, Inc.; Hilda Miranda; Three Big Dogs Irrevocable Trust; Prescott, Bullard & McLeod; Richard C. Borges; and Douglas Leatham ("Leatham"), alleging, inter alia, violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), violations of the Uniform Fraudulent Transfer Act ("UFTA"), and common law civil conspiracy. PI. Linda Brennan's Mot. Am. Compl., Ex. 1, Am. Compl. and Jury Demand ("Am. Compl.'') 2, ECF No. 41-1.

         Brennan has moved for leave to file an amended complaint. PI. Linda Brennan's Mot. Am. Compl., ECF No. 41. Leatham opposed, arguing that the claims against him ought be dismissed for failure to state a claim. Opp'n Def., Douglas Leatham, PI., Linda Brennan's Mot. Am. Compl. ("Def.'s Opp'n"), ECF No. 44; Mot. Def. Dismiss, ECF No. 12. For the reasons below, this Court grants Brennan leave to file her amended complaint, but dismisses counts I and II against Leatham.

         A. Procedural History

         Brennan initially filed her complaint on December 16, 2016. Compl. 1, ECF No. 1. Leatham moved to dismiss the complaint, Mot. Def. Dismiss, and the parties briefed the issues, Linda Brennan's Opp'n Def.'s Mot. Dismiss ("Pl.'s Opp'n"), ECF No. 35; Mem. Law Def. Supp. Mot. Dismiss, ECF No. 13.

         On the morning of the hearing addressing Leatham's motion to dismiss, Brennan filed a motion for leave to file an amended complaint. Pi. Linda Brennan's Mot. Am. Compl. Leatham opposed, maintaining that the amended complaint failed to cure the deficiencies of the original complaint. Def.'s Opp'n.

         B. Facts Alleged

         Brennan is a creditor of T&B Ferreira under the UFTA. Am. Compl. ¶ 13. She and her former husband, Andrew Brennan, were partners with T&B Ferreira in various businesses and real estate ventures, including F&B Enterprises, Inc. and Land Locker, Inc. Id. at 2. In 1995, the Brennans and T&B Ferreira agreed to part ways, dividing their common business and real estate interests. Id. As part of their agreement, the Brennans were to receive monthly payments, but T&B Ferreira stopped making these payments in August 2000, and filed for Chapter 11 Bankruptcy on behalf of F&B Enterprises, Inc. soon after. Id.

         Leatham is T&B Ferreira and J&T Ferreira's certified public accountant. Id. ¶ 18. On or about December 17, 2012, Barbara Ferreira transferred the deed to 25 Tinkham Lane, Mattapoisett, Massachusetts, to J&T Ferreira for $1.00, well below the property's fair market value. Id. ¶¶ 20-21. J&T Ferreira subsequently sold the property for $435, 000.00. Id. ¶ 22. Brennan alleges that Leatham filed false tax returns and made false accounting entries by charging Land Locker, Inc. for uninsured property damage, id. ¶¶ 56-57, that this assistance was necessary to the Ferreiras' scheme, id. ¶ 61, and that Leatham knew or should have known that the Ferreiras were concealing assets, id. ¶ 64.

         II. ANALYSIS

         The amended complaint asserts three causes of action against Leatham: violation of RICO (count I), id. ¶¶ 65-80; fraudulent conveyances under the UFTA (count II), id. ¶¶ 81-86; and civil conspiracy (count III), id. ¶¶ 87-91. Leatham contends that the amended complaint "suffers from the same substantive defects as the original [c]omplaint, " in that it does not allege sufficient facts to support Leatham's involvement in the purported scheme to defraud creditors. Def.'s Opp'n 1-2.

         Although a court ought grant leave to amend a pleading "when justice so requires, " Fed.R.Civ.P. 15(a)(2), a district court retains significant discretion to deny amendment if it appears futile. See Foman v. Davis, 371 U.S. 178, 182 (1962). "In assessing futility, the district court must apply the standard which applies to motions to dismiss, " Adorno v. Crowley Towing & Transp. Co., 443 F.3d 122, 126 (1st Cir. 2006) (citing Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st Cir. 1996)); that is, whether, accepting all factual allegations as true, a complaint states a plausible claim to relief, see Saldivar v. Racine, 818 F.3d 14, 18 (1st Cir. 2016) (citing Cardigan Mountain Sch. v. New Hampshire Ins. Co., 787 F.3d 82, 84 (1st Cir. 2015)).

         A. Count I: ...


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