2020 Mass. App. Div. 41

November 8, 2019 - March 18, 2020

Appellate Division Southern District

Court Below: District Court, New Bedford Division

Present: Finnerty, P.J., Pino & Campbell, JJ.

Gregory J. Koldys for the plaintiff.

Alexander W. Levine and Ellen A. Shapiro for the defendants.

FINNERTY, P.J. Kevin Santos ("Santos") is owner of two condominium units in the Round Hill Condominium Community, one unit under Round Hill Trust VII ("Trust VII") and one under Round Hill Condominium I Trust ("Trust I"). Both units are members of and governed by Round Hill Community Corporation ("Round Hill"). When Santos became delinquent in paying common fees as well as late fees assessed, Round Hill [Note 3] brought separate lien enforcement suits for each unit pursuant to G.L. c. 183A, § 6. Ultimately, Round Hill obtained judgments by default against Santos as to each unit. In order to avoid sale of the units to satisfy the judgments, Santos paid the arrears, including late fees to which he objected. Santos contends that the late charges were not validly assessed under the condominium bylaws.

Santos then brought two small claims, one against Trust VII and trustee David Nikka, individually, and one against Round Hill Community Corporation and trustees, Alan Steinert and Richard Hoffman, individually, to challenge and recover the late fees. After those cases were removed to the civil docket, the several defendants' motions to dismiss pursuant to Mass. R. Civ. P. 12(b)(6) were allowed. [Note 4] As to the Trusts, the court held that Santos's claims were res judicata. The dismissals are the subject of these appeals brought under Dist./Mun. Cts. R. A. D. A. 8A.

1. Key to the dismissals as to Round Hill is the holding of Blood v. Edgar's, Inc., 36 Mass. App. Ct. 402 (1994), which bars challenges to the propriety of assessments in actions under G.L. c. 183A, § 6. Id. at 404-405. Charges or interest imposed for late payment

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of common area expenses and any expenses incurred in that process constitute common expenses. G.L. c. 183A, § 10(b). Trustees of Cider Hill Condominium Trust v. DeOliveira, 2007 Mass. App. Div. 1, 2. A condominium owner may not challenge the legality of a common expense assessment by refusing to pay it. Blood, supra at 410. Absent a prior judicial determination of illegality, a condominium owner is obligated to timely pay the assessments under protest and then seek a judicial determination of their legality as well as suitable reimbursement. Id. at 406. Santos did not do that. Instead, Santos did not pay until after judgments entered against him -- judgments that included the late fees he challenges. Round Hill argues, and the trial court agreed, that Santos's claims were res judicata. Res judicata is now understood as a "generic term" that describes two specific types of preclusion. Heacock v. Heacock, 402 Mass. 21, 23 n.2 (1988). "Claim preclusion makes a valid, final judgment conclusive on the parties and their privies, and prevents relitigation of all matters that were or could have been adjudicated in the action." Kobrin v. Board of Registration in Med., 444 Mass. 837, 843 (2005), quoting O'Neill v. City Manager of Cambridge, 428 Mass. 257, 259 (1998). "[C]laim preclusion requires three elements: '(1) the identity or privity of the parties to the present and prior actions, (2) identity of the cause of action, and (3) prior final judgment on the merits.'" Id., quoting DaLuz v. Department of Correction, 434 Mass. 40, 45 (2001). "[I]ssue preclusion 'prevents relitigation of an issue determined in an earlier action where the same issue arises in a later action, based on a different claim, between the same parties or [parties in privity with the same parties].'" Id., quoting Heacock, supra at 23 n.2. A party is precluded from relitigating an issue where "(1) there was a final judgment on the merits in the prior adjudication; (2) the party against whom preclusion is asserted was a party (or in privity with a party) to the prior adjudication; and (3) the issue in the prior adjudication was identical to the issue in the current adjudication," was essential to the earlier judgment, and was actually litigated in the prior action. Id., quoting Tuper v. North Adams Ambulance Serv., Inc., 428 Mass. 132, 134 (1998).

Unlike claim preclusion, issue preclusion is applicable only to issues or claims that were actually litigated in the prior action and determined by a final judgment on the merits. Treglia v. MacDonald, 430 Mass. 237, 241-242 (1999); Cousineau v. Laramee, 388 Mass. 859, 863 n.4 (1983). Santos argues that because he could not challenge the fees in the enforcement actions, his claims here are not barred under the principle of res judicata (claim preclusion). He argues, further, that because the judgments were by default, the claims were not litigated and cannot bar this action. It appears that after the default judgment as to the Trust VII unit, Santos (by counsel) participated in preparing the judgment and order entered in the lien enforcement action involving the Trust I unit, which included what was due for the Trust VII unit. The res judicata issue can be determined from the materials in the appellate record.

Santos was not without a remedy to challenge the assessments. As was suggested in Blood and in Trustees of Cider Hill Condominium Trust, Santos could have timely paid the contested amounts before those cases went to judgment and then brought suit for reimbursement. However, where the issue of the legality of the late charges could not have been raised in the lien enforcement actions, and where the issue has not been litigated on the merits, Santos is not barred by res judicata from raising those claims now. Dismissal of his claims for reimbursement of late fees he contends

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were unlawfully assessed was error.

2. Nothing in the record before us supports Santos's claims that the actions of the individual trustees were outside the scope of the language in the condominium documents exempting them from personal liability. "It is incumbent upon the appellant to insure that the Expedited Appeal constitutes an accurate, complete and objective trial court record. All relevant matters are to be included in the Expedited Appeal because . . . Rule 8A does not provide for a transcript of the evidence or appendices to the parties' briefs." Scalia v. Liberty Mut. Ins. Co., 1995 Mass. App. Div. 69, 70-71. [Note 5] As to Trust VII and David Nikka, individually, the declaration of trust provides, in part, "No Trustee shall under any circumstances . . . be held liable . . . by reason of honest errors of judgment or mistakes of fact or law . . . except his own personal and willful malfeasance and defaults." As to Alan Steinert and Richard Hoffman, individually, the Round Hill deed restrictions provide, in part, "No member of the Board . . . shall be personally liable . . . for any damage, loss or prejudice . . . on account of any act or omission of the Corporation, the Board . . . ." We do not have the benefit of the specific allegations pleaded as to the individual defendants as part of the record and, as such, are not in a position to find that the trial court's dismissal of those parties was erroneous. "Because the propriety of allowing or denying [Round Hill's] motion to dismiss turns on the contents of the complaint and because [Santos] has the burden of showing that the allowance of the motion was error, we are faced with a record that appears to prevent us from doing anything save affirm." Lifchits v. Progressive Corp., 2018 Mass. App. Div. 207.

Even on the record before us, Santos's briefs suggest claims against the individual defendants for breach of fiduciary duty. He cannot succeed on those claims because, as a matter of law, members of a governing board of a condominium association owe no duty to individual unit owners. Office One, Inc. v. Lopez, 437 Mass. 113, 125 (2002).

3. Santos also raises the issue of judicial estoppel given Round Hill's argument, on the one hand, that Santos could not challenge the assessments in the lien enforcement actions and, on the other, that he should have raised those issues by affirmative defense or counterclaim.

To the extent any argument by Round Hill suggests that Santos could have raised a defense in the lien enforcement actions or brought a counterclaim in those cases challenging the late fees, such was error.

"Judicial estoppel is an equitable doctrine that precludes a party from asserting a position in one legal proceeding that is contrary to a position it had previously asserted in another proceeding." Sandman v. McGrath, 78 Mass. App. Ct. 800, 801 (2011), quoting Otis v. Arbella Mut. Ins. Co., 443 Mass. 634, 639-640 (2005). See also Blanchette v. School Comm. of Westwood, 427 Mass. 176, 184 (1998); Commonwealth v. Taylor, 96 Mass. App. Ct. 143, 147 (2019). The doctrine's purpose is to "prevent the manipulation of the judicial process by litigants." Canavan's Case, 432 Mass. 304, 308

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(2000). As an equitable doctrine, its application in a given case is a matter of judicial discretion. Otis, supra at 640. "[T]wo fundamental elements are widely recognized as comprising the core of a claim of judicial estoppel." Id. First, a litigant's position in one action must be "directly inconsistent," meaning "mutually exclusive," of the litigant's position in another action. Id. at 640-641, citing Alternative Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 33 (1st Cir. 2004). Second, the litigant "must have succeeded in convincing the court to accept its prior position," creating a perception that one or both courts were misled. Id. at 641. There may exist situations "where the party's prior position was asserted in good faith, and where circumstances provide a legitimate reason -- other than sheer tactical gain --for the subsequent change in that party's position." Id. at 642. Such examples would include inadvertence, mistake, or the discovery of new information that was not known or readily available at the time the litigant took his or her initial position. Id. There exists no "categorical list" of requirements for or exceptions to the application of judicial estoppel, and again, in the end it is a matter of pure judicial discretion. Id. See Golfomitsos v. Anderson W. Bldrs., Mass. App. Div., 19-ADCV-06SO (Dist. Ct. Fe. 25, 2020).

Principles of judicial estoppel do not bar the correct application of the law here notwithstanding the prior legal arguments made. See Trustees of Cider Hill Condominium Trust, supra.

The orders of the court dismissing the two actions as to Trust VII and Round Hill Community Corporation are reversed, and the cases are returned to the trial court for further proceedings. The orders dismissing the actions against the individual trustees are affirmed.

So ordered.


[Note 1] Richard Hoffman and Alan Steinert.

[Note 2] David Nikka.

[Note 3] Despite the fact that the units are in different trusts and therefore the named defendants are different, we refer to the defendants collectively as Round Hill because the issues in these appeals are the same for each unit.

[Note 4] While no judgment of dismissal appears to have been entered in either case, the parties have treated the judge's orders of dismissal as being final. We shall address the merits. See GTE Prod. Corp. v. Stewart, 421 Mass. 22, 24 n.3(1995); Tech Plus, Inc. v. Ansel, 59 Mass. App. Ct. 12, 14 n.5 (2003).

[Note 5] The defendants in each case filed a motion in the trial court to file a supplemental appendix to the expedited appeal (which according to the defendants' briefs includes the complaint). An appendix or supplemental appendix is not permitted by Rule 8A. See Scalia, supra; Velasquez v. Liberty Mut. Ins. Co., 1995 Mass. App. Div. 85, 85 n.1. That motion was not acted upon and was not proper in any event.