NA-MOR, INC. and CD HOLDINGS OF DELAWARE, INC. v. JOHN FARNSWORTH individually and as trustee of Na-Mor Inc. Realty Trust, and STAR FALL LLC

Plaintiffs Na-Mor Inc. and CD Holdings of Delaware, Inc. brought this action seeking “judgment and declaration” that (1) they are the owners in fee of 77 Walnut Street in Clinton, and (2) Na-Mor Inc., as “the rightful beneficiary of Na-Mor Inc. Realty Trust”, is the “beneficiary owner” of 75 Walnut Street. Complaint (Sept. 22, 2011). There is a problem with this, however. After extensive evidentiary proceedings in the Probate & Family Court, both of these properties were found to be “marital assets” owned and controlled by Cynthia Dziurgot, the former wife of defendant John Farnsworth, and any transfers purportedly to other persons or entities a “shell game” by Ms. Dziurgot, for no or nominal consideration, with the specific intent to “hinder or frustrate the distribution of marital assets pursuant to the divorce proceedings.” See John Farnsworth v. Cynthia Dziurgot Farnsworth, Probate & Family Court (Worcester Division), Docket No. 95D2358-DV2, Findings of Fact and Conclusions of Law (May 19, 2009), Supplemental Judgment of Contempt (Mar. 4, 2009), Order (Nov. 4, 2009). [Note 1] The Probate & Family Court appointed a Receiver with authority to sell those properties, and entered a further Order approving their sale to Mr. Farnsworth. John Farnsworth v. Cynthia Dziurgot, individually and as trustee of Na-Mor Inc. Realty Trust, Robert Dziurgot, as trustee of Elam Real Estate Trust, and Thornton Capital Ltd., Probate & Family Court (Worcester Division), Docket No. 08E-0022-GC1, Further Order of the Court Regarding the Authority of the Receiver (Nov. 19, 2008) (authorizing the Receiver to sell 75-77 Walnut Street), and Order (Nov. 4, 2009) (authorizing the Receiver to sell 75-77 Walnut Street to Mr. Farnsworth).

The plaintiffs contend that the Probate & Family Court’s orders are a nullity, claiming that the properties are not, in fact, Ms. Dziurgot’s, but rather theirs, and the orders are not binding on them (and do not affect the title to those properties) because they were not parties to the Probate & Family Court proceedings. Again, there are problems with this. First, as already noted, the Probate & Family Court has found otherwise. A Receiver has been appointed with court authority to sell the properties to Mr. Farnsworth, and has done so. Second, a Single Justice petition to the Appeals Court challenging those orders has been denied. Farnsworth v. Dziurgot, et al., Appeals Court Case No. 2008-J-0544 (Lower Ct. No. 08E-0022 GC1), Order Denying Petition for Relief from Interlocutory Order, dated December 9, Denying Motion by Na-Mor Realty Trust and Elam Real Estate Trust to Revoke Paragraph 2 of Further Order of the Court Regarding the Authority of the Receiver dated November 19, 2008 (Feb. 2, 2009). Third, collateral attacks on those orders in the form of bankruptcy filings by Ms. Dziurgot and Na-Mor have been rejected, those courts finding them without merit and made in bad faith for the sole purpose of hindering Mr. Farnsworth’s attempts to collect his judgment. See cases and orders cited in n. 1. Fourth, the initial denial of the plaintiffs’ motion to intervene in the Probate & Family Court proceedings to make these arguments was later reversed by that court. Farnsworth v. Farnsworth, Probate & Family Court (Worcester Division) Docket Nos. WO95D2358-DV2 & WO08E0022-GC1, Order (Jan. 13, 2011). There is no indication, however, that the plaintiffs have ever followed-up to make those arguments. Moreover, their Single Justice petition to stay the Receivership orders was denied. Farnsworth v. Farnsworth, Single Justice Petition by Honeycliff Limited, Na-Mor Inc., CD Holdings Ltd, APD Inc. and Skylineview Inc., Appeals Court Docket No. 2009-J-0527, Order Denying All Requests for Relief (Dec. 17, 2009) (Grainger, J.).

Mr. Farnsworth and his co-defendant Star Fall LLC (a company he incorporated and controls) have thus moved to dismiss this case or, in the alternative, have it transferred to the Probate & Family Court, either as a matter of collateral estoppel or pursuant to Mass. R. Civ. P. 12(b)(9) (pendency of a prior action in a court of the Commonwealth). The motion to dismiss is ALLOWED. This is precisely the situation addressed by Rule 12(b)(9). There is a prior action in a court of the Commonwealth addressing the question of title to the identical properties plaintiffs claim in this action. They had an opportunity to intervene in that action. Whether such intervention is still timely and meritorious and, if so, whether the plaintiffs’ substantive arguments on the ownership questions are meritorious, is a question for that court, not this one. Mass. R. Civ. P. 12(b)(9). See also Tompkins v. Tompkins, 65 Mass. App. Ct. 487 , 493 (2006) (collateral attacks on another court’s judgments are impermissible).

There is one further issue to address. The plaintiffs commenced this action on September 22, 2011 by filing an unverified complaint asserting their right to title to 75 and 77 Walnut Street. On September 23, 2011, without seeking or obtaining judicial endorsement to record a memorandum of lis pendens (see G.L. c. 184, §15), [Note 2] the plaintiffs recorded a copy of the complaint in the Worcester District Registry of Deeds at Book 47863, Page 123 where, as the plaintiffs intended, it was referenced against both properties, clouding their titles. This was improper, in violation of G.L. c. 184, §15 (which requires judicial endorsement for any such recording), and should never have been accepted by the Registry. Accordingly, it is null and void, of no effect, shall be STRICKEN from the Registry records, and the Registry is ORDERED to both strike it and to remove all marginal references to it.

Judgment shall enter accordingly.

SO ORDERED.