JOHN A. GIFFORD and DEBRA F. GIFFORD vs. ANDREW J. BURKE and CITIMORTGAGE, INC.
MISC 08-390774
December 21, 2016
SANDS, J.
JOHN A. GIFFORD and DEBRA F. GIFFORD vs. ANDREW J. BURKE and CITIMORTGAGE, INC.
SANDS, J.
This case (the "Partition Action") was commenced by Petitioners John A. Gifford ("John") and Debra F. Gifford ("Debra") (together, "Petitioners") on December 30, 2008. In their Petition for Partition, Petitioners sought to partition the property located at 15-15A Pierview Avenue in Revere, Massachusetts (the "Partition Property"), which, at the time, was owned jointly by Petitioners (fifty per cent interest) and Respondent Andrew J. Burke ("Respondent") (fifty per cent interest). [Note 1] By Order dated August 4, 2009 (the "Appointment Order"), this court appointed Robert Cotton as Partition Commissioner (the "Commissioner"). By Warrant dated December 23, 2009, this court authorized the Commissioner to sell the Partition Property at a private sale. Subsequently, the parties attempted to negotiate a settlement of the Partition Action, which ultimately was unsuccessful.
On July 30, 2010, Petitioners commenced a separate case (Land Court Case No. 10 MISC 435104 (AHS)), in which they sought to convert the Partition Property to condominium status (the "Specific Performance Action"), the filing of which had the effect of putting the Partition Action on hold. On August 26, 2010, Respondent moved to dismiss the Specific Performance Action, which, after a hearing, I allowed by Decision dated February 18, 2011 (the "Specific Performance Decision"). On March 18, 2011, Petitioners appealed the Specific Performance Decision to the Appeals Court (Appeals Court Case No. 2011-P-1758).
On June 21, 2011, this court issued an order (the "June 2011 Order") in this case outlining a bidding process between Petitioners and Respondent relative to the sale of the Partition Property. On September 14, 2011, this court issued another order (the "September 2011 Order"), which directed that Petitioners' interest in the Partition Propertybe sold to Respondent after Petitioners paid off the Mortgage. On September 28, 2011, Petitioners appealed the September 2011 Order to the Appeals Court. On the same date, that appeal (Appeals Court Case No. 2011-P-2003) was consolidated with Petitioners' related appeal of the Specific Performance Decision (Appeals Court Case No. 2011-P-1758) (together, the "Consolidated Appeal"). By Decision dated January 8, 2013 in the Consolidated Appeal, the Appeals Court affirmed the Specific Performance Decision and the September 2011 Order. The Supreme Judicial Court denied further appellate review in the Consolidated Appeal on February 14, 2013.
Following the dismissal of the Consolidated Appeal, on March 22, 2013, Respondent filed a Complaint for Contempt against Petitioners (the "Respondent Contempt Action") in the Partition Action, alleging that Petitioners had violated the terms of the September 2011 Order by not paying off the Mortgage on the Partition Property. On November 22, 2013, Petitioners filed a suggestion of bankruptcy, indicating that John had filed for Chapter 7 bankruptcy (the "John Bankruptcy Case") in the United States Bankruptcy Court for the District of Massachusetts (Case No. 13-16797), thus staying the Respondent Contempt Action. At a status conference held on July 26, 2014 in this case, the parties reported that, on May 12, 2014, John was granted a Chapter 7 bankruptcy discharge in connection with the John Bankruptcy Case (the "Discharge Order"). [Note 2] Following such discharge, a hearing on the Respondent Contempt Action was held on July 15, 2014, at which this court addressed the Twenty-first Report filed bythe Commissioner, as wellas the September 2011 Order. [Note 3] Thereafter, this court issued an Order dated August 14, 2014 (the "August 2014 Order"), in which, among other things, this court withheld a decision on the Respondent Contempt Action and the Commissioner's request for payment of his legal fees related to these actions, pending further information. [Note 4] [Note 5] [Note 6]
At a status conference held on September 30, 2014, this court determined that the matters raised in the August 2014 Order could not proceed until Respondent and/or the Commissioner received an order from the court presiding over the John Bankruptcy Case with respect to this court's jurisdiction over the outstanding Partition Action issues. [Note 7] By Order dated December 31, 2014 in the John Bankruptcy Case (the "Bankruptcy Order"), that court held as follows:
Upon consideration of the entire record of proceedings in this case, including, without limitation, the Debtor's Schedules of assets and liabilities, and the proceedings in the Land Court, this court finds and rules as follows 1) the fees for services rendered by the Commission after the commencement of this case do not constitute a claim that was affected by the Debtor's discharge in this case, and the Land Court is not interfering with the jurisdiction of this Court in entering any orders allowing or directing payment of the Commissioner's fees by the Debtor which arose after the petition date, November 22, 2013; 2) to the extent the Commissioner is owed any fees by the Debtor for pre[-]petition services, those claims have been discharged; and 3) any claim of Andrew Burke against the Debtor, that is the subject of the Land Court proceeding, has been discharged by the order of discharge entered in this case.
The court also held that all claims asserted by Respondent against John in connection with this matter had been discharged. [Note 8]
At a hearing before this court on January 30, 2015, the Commissioner filed his Twenty-third Report. [Note 9] Thereafter, by Order dated April 6, 2015 (the "April 2015 Order"), this court found as follows:
the Commissioner is entitled to be paid by Petitioners for 100% of the legal fees requested in his Twenty-first, Twenty-second, and Twenty- third Reports, in the amount of $30,635.00. As such, Petitioners shall pay to the Commissioner the sum of $30,635.00 within thirty (30) days of the entry of this Order. If Petitioners fail to timely comply with this Order, the Commissioner may seek additional relief against Petitioners in order to compel such compliance, including, without limitation, the entry of a monetary judgment against Petitioners in the amount of the Commissioner's unpaid legal bills and/or an order of contempt for non-compliance with this Order, and Petitioners may be held liable for any further legal fees as may be incurred by the Commissioner in connection with enforcing this Order.
In accordance therewith, this court concurrently issued a Judgment Confirming Partition (the "Judgment"). On April 17, 2015, Petitioners appealed the Judgment (as well as all related pre- Judgment orders) to the Appeals Court, which had the effect of tolling the deadline by which Petitioners were required to pay the directed sums. By decision dated April 4, 2016 (the "Appeals Court Decision"), the Appeals Court affirmed the Judgment, subject to a proviso that "[t]he commissioner's and [Respondent]'s requests for double costs and attorney's fees on appeal are denied." [Note 10] On April 25, 2016, Petitioners moved the SJC for further appellate review of the Appeals Court Decision, which was denied on June 30, 2016. A Notice of Rescript was filed with this court on July 12, 2016.
Following these events, on July 20, 2016 the Commissioner filed a Complaint for Civil Contempt against Petitioners in this case (the "Commissioner Contempt Action"), claiming non- payment of his legal fees in the amount of $42,196.05 (total fees of $48,254.51, less $6,058.46 that Petitioners had already paid, and which the Commissioner was holding in escrow), which included two additional bills (the "Appeals Court Bills") for fees incurred in connection with Petitioner's appeal of the Judgment. [Note 11] This following day, this court issued a Summons to Petitioners with a hearing date of August 17, 2016.
On August 15, 2016, Petitioners filed a Motion to Dismiss the Commissioner Contempt Action, arguing (a) that the Commissioner Contempt Action was premature and not within the jurisdiction of this court to hear, (b) that Debra should not have been named as a party (due to the automatic stay issued in the Debra Bankruptcy Case), and (c) that the Commissioner was barred by the Appeals Court Decision from seeking any legal fees pertaining to the appeal of the Judgment. [Note 12] The hearing on the Commissioner Contempt Action was held on August 17, 2016; at that hearing, John acknowledged that he had not paid the Commissioner's fees. [Note 13] Following this hearing, this court issued an order dated August 18, 2016, which scheduled an evidentiary hearing on the Commissioner Contempt Action for September 27, 2016 on the issue of John's non-payment of the Commissioner's fees. The parties filed a joint pre-trial memorandum on August 26, 2016. [Note 14] On September 12, 2016, John filed a motion seeking to "clarify the status" of this proceeding. On September 26, 2016, John filed a supplemental memorandum discussing the Commissioner's legal fees.
Neither party presented anywitness testimonyat the September 27, 2016 evidentiary hearing, although the Commissioner and John's counsel each made extensive presentations (under oath) of the issues relative to John's non-payment of the Commissioner's fees. [Note 15] [Note 16] The transcript of the evidentiary hearing was filed with this court on October 11, 2016. The Commissioner filed his post- hearing memorandum on October 13, 2016. John filed his post-hearing memorandum on October 20, 2016. The Commissioner filed a reply memorandum on October 31, 2016. John filed a reply memorandum on November 2, 2016. [Note 17] At that time the matter was taken under advisement.
Of even date hereof, the court has issued a Decision on the Commissioner's Complaint for Civil Contempt (the "Complaint Decision"). NOW, THEREFORE, for the reasons stated in the Complaint Decision, it is hereby:
ORDERED and ADJUDGED that John's Motion to Dismiss the Commissioner Contempt Action is DENIED; and,
ORDERED and ADJUDGED that the Commissioner is entitled to payment for the Appeals Court Bills, provided they are reasonable; and,
ORDERED and ADJUDGED that the full amount of legal fees set forth in the Appeals Court Bills is entirely reasonable; and,
ORDERED and ADJUDGED that the Commissioner is entitled to payment from Petitioners of the entirety of the Appeals Court Bills, to wit: $17,619.51 (Invoice # 5023 for $13,644.51 and Invoice #6166 for $3,975.00); and,
ORDERED and ADJUDGED that the full amount of legal fees set forth in the Commissioner's bills pertaining to the Commissioner Contempt Action(i.e., $6,750.00) is reasonable; and,
ORDERED and ADJUDGED that the Commissioner is entitled to payment from Petitioners of the entirety of his legal fees incurred in connection with the Commissioner Contempt Action, to wit: $6,750.00 (Invoice #6175 for $2,850.00 and Invoice #6178 for $3,900.00); and,
ORDERED and ADJUDGED that no further sanctions against John for his non-compliance with the April 2015 Order and the Judgment are warranted; [Note 18] and,
ORDERED and ADJUDGED that, within fifteen (15) days of the issuance of the Contempt Decision, Kiley shall release from escrow and pay to the Commissioner the sum of $24,369.51 that Kiley is presently holding in escrow. [Note 19]
SO ORDERED.
FOOTNOTES
[Note 1] On July 1, 2014, the parties jointly moved to add CitiMortgage, Inc. (the "Bank") as a nominal party to this case based on the fact that the Bank, at the time, held a mortgage granted by Petitioners and secured by the Partition Property (the "Mortgage"). By Order of the same date, this court allowed the motion to join the Bank.
[Note 2] It also should be noted that, on November 14, 2013, Debra filed a separate Chapter 13 bankruptcy in the United States Bankruptcy Court for the District of South Carolina (Case No. 13-06828) (the "Debra Bankruptcy Case"). On January 10, 2014, that court confirmed a Chapter 13 bankruptcy plan, which provided for Debra to surrender possession of the Partition Property, and for a termination of the automatic bankruptcy stay issued in connection with that case with respect to the Partition Property. This court has no knowledge or information as to the current status of the Debra Bankruptcy Case and/or Debra's compliance with her bankruptcy plan, other than an August 4, 2016 letter from Huong T. Lam, Esq. (Debra's bankruptcy counsel), stating that "Mrs. Gifford is still in an active Chapter 13 bankruptcy" and claiming that Commissioner's naming of Debra as a Defendant in the Commissioner Contempt Action (defined infra) "is in violation of the automatic stay." The parties later resolved this issue by agreeing in their Joint Pre-Trial Memorandum filed on August 26, 2016 that Debra would not participate in the Commissioner Contempt Action. The court hereby clarifies that nothing in this Judgment or the corresponding Decision shall be deemed to override the automatic stay (or any other order or discharge) issued in the Debra Bankruptcy Case, nor to authorize any action and/or claim contrary thereto.
[Note 3] The Commissioner's Twenty-first Report requested payment of four legal bills of the Commissioner dated February 18, 2014 (Invoice No. 4003), June 25, 2014 (Invoice No. 4018), July 1, 2014 (Invoice No. 4020), and July 10, 2014 (Invoice No. 4021), which were annexed to said report, and which together totaled $14,775.00.
[Note 4] The August 2014 Order also discussed various issues related to the Commissioner's fees, but withheld a decision on the issue of whether the Commissioner was acting within the scope of his duties as partition commissioner when addressing a case filed by Petitioners against the Commissioner on November 29, 2013 in Suffolk County Superior Court (Docket No. 2013-4225) (the "Superior Court Action"), in which Petitioners asserted consumer protection claims under G. L. c. 93A relating to the Respondent Contempt Action. The August 2014 Order also referenced the four legal bills of the Commissioner that were annexed to the Commissioner's Twenty-first Report.
[Note 5] At the time of the August 2014 Order, the Commissioner was holding in escrow a deed dated March 24, 2013 conveying the Partition Property from the Commissioner to Respondent (the "Commissioner's Deed") pursuant to the September 2011 Order, pending the discharge of the Mortgage. Based on a settlement with the Bank, the Mortgage was discharged and the Commissioner's Deed was released from escrow and recorded in the Suffolk County Registry of Deeds on August 21, 2014 at Book 53378, Page 48.
[Note 6] The April 2015 Order (defined, infra) eventually dismissed the Respondent Contempt Action.
[Note 7] At this status conference, the Commissioner filed his Twenty-second Report -- which requested payment of an additional legal bill dated September 23, 2014 (Invoice No. 4027) for $8,100.00 -- as well as an affidavit of reasonableness with respect to his legal fees.
[Note 8] Respondent has asserted various claims in this case, including a request for his legal fees and expenses incurred in connection with the partition and sale of the Partition Property, as well as a request that Petitioners be compelled to turn over monies they received in connection with renting out the Partition Property. The Bankruptcy Order did not specify which of those claims were been discharged. Nonetheless, this court interprets the Bankruptcy Order to mean that all such claims (to the extent they accrued prior to John's bankruptcy discharge) were discharged. This court has advised Respondent that, should he wish to challenge this court's interpretation of the Bankruptcy Order, he should seek further clarification from that court.
[Note 9] The Commissioner's Twenty-third Report requested payment of two additional legal bills dated November 18, 2014 (Invoice No. 4030) and January 28, 2015 (Invoice No. 5005), which together totaled $8,803.00. The Commissioner also noted that, of the legal bills he had submitted, a duplicate charge of $750.00 should be deducted from Invoice No. 4021 (as this court's August 2014 Order had directed) and a charge of $293.00 (representing a filing fee that was never made) should be deducted from Invoice No. 4030.
[Note 10] On April 20, 2016, Petitioners filed with the Appeals Court a Petition for Rehearing, which was denied on the same day.
[Note 11] The Appeals Court Bills are Invoice #5023 dated August 28, 2015 (April 1, 2015 to August 31, 2015) for $13,644.51, and Invoice #6166 dated May 4, 2016 (February 1, 2016 to April 30, 2016) for $3,975.00.
[Note 12] Petitioners also sought to be excused from appearing at the August 17, 2016 hearing.
[Note 13] At the hearing, the Commissioner filed his Twenty-fourth Report, in which he opposed the motions filed by Petitioners and submitted an additional legal bill -- Invoice #6175 dated August 16, 2016 (July 1, 2016 to August 17, 2016) for $2,850.00.
[Note 14] In it, the parties stated that "[a]bsent proof that the [automatic] stay is not in place, Mrs. Gifford will not appear [at the evidentiary hearing] and will not provide discovery."
[Note 15] Three exhibits were submitted into evidence at the hearing: the transcript of the oral argument of Petitioners' appeal of the Judgment before the Appeals Court, a portion of the appellate brief submitted by the Commissioner in connection with that appeal, and an affidavit of the Commissioner dated September 27, 2016, which attached an additional legal bill (Invoice #6178).
[Note 16] Following the hearing, by order dated September 29, 2016, this court directed that certain funds obtained by John (in connection with a refinancing of property owned by John, discussed further below) for payment of the Commissioner's fees be held in escrow pending this court's directives as to distribution. On October 6, 2016, John filed a status report as to the holding of the escrow funds, indicating that David D. Kiley ("Kiley") had been designated as the escrow agent, that $24,369.51 had been wired to Kiley to be held in escrow, and that $24,576.54 had been wired to the Commissioner on October 4, 2016.
[Note 17] John never sought the court's permission to file this reply memorandum.
[Note 18] Should John fail to timely comply with this Order, the court will revisit this conclusion.
[Note 19] John previously represented that he would not appeal the $6,750.00 attributable to the Commissioner Contempt Action if ordered to pay that sum, but he made no such assurances with respect to the Appeals Court Bills. In the event that John appeals the $17,619.51 attributable to the Appeals Court Bills, Kiley shall continue to hold that amount in escrow pending such appeal, but Kiley shall immediately release to the Commissioner the $6,750.00 attributable to the Commissioner Contempt Action as directed herein. If this court's findings on the issue of the Appeals Court Bills are upheld on appeal, Kiley shall release the balance of the funds held in escrow within fifteen (15) days of the final disposition of John's appeal.
Notably, this court's prior directives with respect to the Commissioner's right to be compensated for his fees incurred in connection with seeking to enforce the April 2015 Order and Judgment remain in effect, and thus would allow the Commissioner to be compensated by John for any fees incurred in connection with any such prospective appeal, if warranted. As further previously directed, only upon payment in full for all fees due to the Commissioner will the Commissioner be released from his duties as partition commissioner.