DECISION AND ORDER REGARDING DEFENDANTSâ MOTION TO
DISMISS CHARLES LIGHTBODYâS FIRST AMENDED THIRD-PARTY
COUNTERCLAIMS COMPLAINT (DOCKET ENTRY NO. 21.0)
A. Davis, Associate Justice of the Superior Court
case is, at its core, a legal malpractice action arising out
of the sale of a parcel of land in Everett, Massachusetts
(the "Property") by plaintiff FBT Everett Realty,
LLC ("FBT") to an affiliate of Wynn Resorts
("Wynn") for use as the site of a new gambling
casino. Plaintiffs The DeNunzio Group, LLC, Dustin DeNunzio
("Mr. DeNunzio"), and Anthony Gattineri ("Mr.
Gattineri" or, collectively with The DeNunzio Group,
LLC, and Mr. DeNunzio, the "Other Plaintiffs") each
own an interest in FBT. At one time, third-party defendant
Charles Lightbody ("Mr. Lightbody") also held an
interest in FBT. It is alleged that Mr. Lightbody, who has a
criminal record, sold his interest in FBT in mid-2012 or
early 2013 (depending upon who you ask) based on his belief,
and the belief of the Other Defendants, that his continuing
involvement in FBT would impede Wynnâs ability to obtain a
license from the Massachusetts Gaming Commission (the
"Commission") to operate a casino on the Property.
It is further alleged that FBT, Lightbody, and the Other
Plaintiffs obtained their understanding about the danger
allegedly posed by Mr. Lightbodyâs ownership interest in FBT
from defendants Paul Feldman ("Attorney Feldman")
and his law firm, Davis, Malm & DâAgostine, P.C. ("Davis
Malm" or, collectively with Attorney Feldman,
"Defendants"), who represented FBT and the Other
Plaintiffs in their real estate dealings with Wynn.
Mr. Lightbodyâs possible ownership interest (and the
purported concealment of that interest) eventually did
trigger an investigation by the Commission and the
Massachusetts State Police (the "Investigation")
and the filing of federal criminal charges against Mr.
DeNunzio, Mr. Gattineri, and Mr. Lightbody concerning the
Property. The Investigation also triggered a
demand by Wynn that FBT reduce the selling price for the
Property by $40 million, which FBT ultimately agreed to do.
Commission subsequently issued a "Decision Regarding the
Determination of Premises for the Gaming Establishment for
Mohegan Sun MA, LLC and Wynn MA, LLC" in May 2014 (the
"Determination"), which expressly found that the
members of FBT were not "parties in interest" with
respect to Wynnâs proposed gaming license and, therefore, Mr.
Lightbodyâs ownership interest in FBT did not, in fact,
endanger Wynnâs ability to obtain the Commissionâs approval
to operate a casino on the Property.
and a half years later, FBT and the Other Plaintiffs
commenced this legal malpractice action against Feldman and
Davis Malm. See Complaint and Jury Demand, dated November 1,
2017 (Docket Entry No. 1.0). The gist of their claims is that
Feldman and Davis Malm were negligent in advising FBT and the
Other Plaintiffs that Mr. Lightbodyâs ownership interest in
FBT posed a threat to Wynnâs ability to acquire a gaming
license for the Property, and that the sale price for the
Property was needlessly reduced by $40 million as a result.
Feldman and Davis Malm have respond to FBT and the Other
Plaintiffsâ claims, in part, by asserting counterclaims
against The DeNunzio Group, LLC, and Mr. DeNunzio and Mr.
Gattineri individually, for contribution and
misrepresentation, arguing, in part, that they "failed
to provide timely and accurate information to Attorney
Feldman" and "acted tortiously as to FBT and each
other ..." Answer, Counterclaims and Jury Demand
of the Defendants (Docket Entry No. 6.0), Â¶Â¶ 15 and 17(a).
Feldman and Davis Malm also have filed a third-party
complaint against Mr. Lightbody asserting the same claims
against him. Third-Party Complaint (Docket Entry No. 7.0), Â¶Â¶
33-39. Mr. Lightbody, in turn, has fired back with his own
set of counterclaims against Attorney Feldman and Davis MaIm
alleging negligence (Count I), breach of fiduciary duty
(Count II), violation of G.L.c. 93A (Count III), and
vicarious liability (Count IV). First Amended Answer,
Counterclaims, Cross claim and Jury Demand of the Third-Party
Defendant (the "Lightbody Counterclaims," Docket
Entry No. 16.0).
foregoing summary fairly describes the current procedural
positions of the parties. Presently before the Court is
Attorney Feldman and Davis Malmâs motion to dismiss Mr.
Lightbodyâs counterclaims on statute of limitations grounds
(the "Motion to Dismiss," Docket Entry No. 21.0).
Attorney Feldman and Davis Malm argue, in the first instance,
that all of Mr. Lightbodyâs counterclaims are time-barred
because Mr. Lightbody knew or should have as early as
December 2013, when the Commission issued a "Report of
Suitability of Applicant Entities and Individual
Qualifiers" (the "December 2013 Report"), that
he had been harmed as a result of Defendantsâ purported
negligence. See Memorandum of Law in Support of
Defendantsâ Motion to Dismiss at 15-17. Alternatively,
Attorney Feldman and Davis Malm argue that Mr. Lightbodyâs
tort-based counterclaims are time-barred because Mr.
Lightbody knew or should have known no later than May 2014,
when the Commission issued its Determination expressly
finding that the owners of FBT were not "parties in
interest" with respect to Wynnâs proposed gaming
license, that he had been harmed as a result of Defendantsâ
purported negligence. Id. at 16-17. Lastly, Attorney
Feldman and Davis Malm argue that Mr. Lightbodyâs G.L.c. 93A
counterclaim necessarily fails because he has alleged nothing
more than "ordinary negligence" on Attorney
Feldmanâs part. Id. at 19-20.
Lightbody, not surprisingly, opposes Attorney Feldman and
Davis Malmâs Motion to Dismiss. He claims that he did not
learn of Defendantsâ alleged malpractice and the harm it
caused him until late 2015, when he purportedly first heard
of the Commissionâs May 2014 Determination. Charles
Lightbodyâs Opposition to the Law Firm Defendantsâ Motion to
Dismiss, dated May 29, 2018, at 5-6. He further argues that
questions as to whether he "should have known" of
Defendantsâ alleged negligence and the resulting harm at an
earlier time "are for the fact finder," and are not
appropriate for resolution on a motion to dismiss.
Id. at 1, 4-8.
Court conducted a hearing on Defendantsâ Motion to Dismiss on
August 14, 2018. At the hearing, the Court gave the parties
leave to make additional written submissions concerning the
potential applicability of G.L.c. 260, § 36 to Mr.
Lightbodyâs counterclaims. Those submissions now have been
received and reviewed by the Court. Upon consideration of the
motion papers submitted by the parties and the oral arguments
of counsel, Defendantsâ Motion to Dismiss is ALLOWED IN
PART to the extent, and for the reasons, summarized
law holds that "[t]he statute of limitations does not
begin to run on a claim of malpractice until the [claimant]
knows or reasonably should know that he or she has been
harmed by the [opposing partyâs] conduct." Williams
v. Ely, 423 Mass. 467, 473 (1996). Where a question
exists as to whether a claimant knew or should have known of
the harm caused by an opposing partiesâ conduct, it is the
claimantâs burden to "demonstrat[e] that [he or she] did
not know of the [harmful conduct] within the statute of
limitations and that âin the exercise of reasonable
diligence, [he or she] should not have known.â
" Albrecht v. Clifford, 436
Mass. 706, 715 (2002) (quoting Friedman v.
Jablonski, 371 Mass. 482, 487 (1976)). As a general
matter, facts that are easily discovered or that can be
determined from an examination of public records are deemed
to be "known" or "reasonably knowable."
See, e.g., Friedman, 371 Mass. at 486 (in action
involving alleged misrepresentation concerning right of way,
"[t]he plaintiffs could have conducted a title search,
employing an attorney acting on their behalf, and, in
determining when the cause of action accrued against these
defendants, the plaintiffs must take the consequences of any
failure to do so or of any omission on the part of their
attorney"). See also Anthonyâs Pier Four, Inc. v.
Crandall Dry Dock Engineers, Inc., 396 Mass. 818, 825
n.9 (1986) (declining to apply discovery rule to claim that
defendant misrepresented qualifications of project workers
where alleged breach was "a fact that the plaintiff
could have ascertained at the time of construction ... by
inquiring as to [the workersâ and subcontractorsâ]
qualifications"); Graveline v. BayBank Valley Trust
Co., 19 Mass.App.Ct. 253, 254 (1985) (declining to apply
discovery rule to claim that defendant misrepresented age of
buildingâs roof where the age of the roof "could have
been determined by [an] inspection"). Whether a claimant
actually knew or should have known a particular fact at a
particular point in time typically is "a factual issue
that should not only survive a motion to dismiss, but be
decided by the trier of fact." Ortiz v. Mass. Med.
Services, Inc., 86 Mass.App.Ct. 1116, 2014 WL 5326511,
at *2 (Oct. 21, 2014) (Rule 1:28 decision). "However, a
judge can still determine, as matter of law, whether the
plaintiffâs complaint demonstrate[s] sufficient heft to
plausibly show that the plaintiffâs lack of knowledge was
objectively reasonable." Id. Cf. Melrose
Housing Auth. v. New Hampshire Ins. Co., 402 Mass. 27,
31 n.4 (1988) ("Inherent unknowability is not a fact,
but rather a conclusion to be drawn from the facts").
this case, the undisputed factual record set out in the
partiesâ pleadings establishes that, on May 15, 2014, the
Commission publicly released its Determination announcing
that the members of FBT were not "parties in
interest" with respect to Wynnâs proposed gaming
license. Given the legal hot water that Mr. Lightbody and the
Other Plaintiffs understood they were in at that time (i.e.,
they were the subjects of an ongoing criminal investigation
focused on Mr. Lightbodyâs interest in the Property), the
Court can only conclude that Mr. Lightbody knew or should
have known, no later than May 2014, of Defendantsâ alleged
malpractice and the harm it purportedly caused him. Certainly
any reasonable person in Mr. Lightbodyâs position would have,
or should have recognized, no later than May 2014, that the
Commissionâs Determination was directly contrary to Attorney
Feldmanâs alleged advice that Mr. Lightbodyâs continued
ownership interest in FBT would impede Wynnâs ability to
obtain a license to operate a casino on the Property, and
also recognized that all of the resulting (and purportedly
illegal) efforts to transfer Mr. Lightbodyâs interest to Mr.
Gattineri had been unnecessary. The Court makes these rulings
as a matter of law because no other conclusion is
"objectively reasonable." Ortiz, 2014 WL
5326511, at *2.
Mr. Lightbody knew or reasonably should have known of
Defendantsâ alleged malpractice and the harm it purportedly
caused him no later than May 2014, he is precluded by the
three-year statute of limitations for "[a]ctions of
contract or tort for malpractice, error or mistake against
attorneys" established by G.L.c. 260, § 4, from
obtaining an affirmative recovery on Count I (negligence) and
Count II (breach of fiduciary duty) of his counterclaims
against Defendants. All of Mr. Lightbodyâs counterclaims
are compulsory, however, in that they plainly "arise[ ]
out of the transaction or occurrence that is the subject
matter" of Defendantsâ third-party claims against Mr.
Lightbody (i.e., Attorney Feldman and Davis Malmâs
representation of FBT and its members with respect to the
proposed sale of the Property to Wynn). See Mass.R.Civ.P.
13(a). See also Natâl Lumber Co. v. Canton Inst. for
Savings, The Bank of Canton, 56 Mass.App.Ct. 186, 188
(2002) ("For purposes of determining whether a
counterclaim is compulsory or permissive, the word
âtransactionâ [as used in Rule 13(a) ] should not be
construed narrowly or technically, but should be construed in
a sense to effectuate the settlement in one proceeding of
controversies so closely connected as appropriately to be
combined in one trial in order to prevent duplication of
testimony, to avoid unnecessary expense to the parties and to
the public, and to expedite the adjudication of suits")
(internal quotation marks and citation omitted). As such,
Counts I and II of Mr. Lightbodyâs counterclaims are subject
to G.L.c. 260, § 36, which provides that "a
counterclaim arising out of the same transaction or
occurrence that is the subject matter of the plaintiffâs
claim, to the extent of the plaintiffâs claim, may be
asserted without regard to the provisions of law relative to
limitations of actions." This means that,
notwithstanding the fact that Counts I and II of Mr.
Lightbodyâs counterclaims were not timely filed, he still may
pursue these counterclaims against Defendants, but "only
to the extent" of Defendantsâ claims against him. See
Bernstein v. Gramercy Mills, Inc., 16 Mass.App.Ct.
403, 409 (1983) (a counterclaim saved from dismissal under
G.L.c. 260, § 36, "corresponds to ârecoupmentâ in
the pre-Rules practice" and "can go only to the
extent of the plaintiffâs claim") (internal quotation
marks and citations omitted).
III of Mr. Lightbodyâs counterclaims, conversely, alleges a
violation of G.L.c. 93A by Attorney Feldman that is governed
by the four-year statute of limitations for "[a]ctions
arising on account of violations of any law intended for the
protection of consumers" established by G.L.c. 260,
§ 5A. Contrary to Defendantsâ contentions, Mr.
Lightbodyâs allegations against Attorney Feldman go well
beyond "ordinary negligence" and are sufficient, on
their face, to survive a motion to dismiss. See, e.g.,
Lightbody Counterclaims, Â¶Â¶ 35-40 (describing
Attorney Feldmanâs alleged falsification of documents
concerning the sale of Mr. Lightbodyâs interest in FBT to Mr.
Gattineri). Additionally, because Mr. Lightbody filed his
counterclaims against Defendants more than three, but less
than four years after the counterclaims first accrued in May
2014, Count III is not time-barred in any way and may be
pursued by Mr. Lightbody for its full value, if any.
IV of Mr. Lightbodyâs counterclaims alleges that Davis Malm
is vicarious liability for Attorney Feldmanâs conduct.
Because this count is merely derivative of Counts I through
III of Mr. Lightbodyâs counterclaims against Attorney
Feldman, it necessarily follows the fortunes of those
particular counts for statute of limitations purposes. See
Elias v. Unisys Corp.,410 Mass. 479, 481 (1991)
(under "principles of vicarious liability," the
"liability of the principal arises simply by the
operation of law and is only derivative of the wrongful act
of the agent"). Or, put another way, Mr. Lightbody, may
pursue his counterclaim against Davis Malm based on Attorney
Feldmanâs alleged negligence and/or breach of fiduciary duty
only to the ...