Opinion
15-P-1600
08-03-2017
John P. TALLARICO & another v. Paul R. TIERNEY, Jr.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiffs appeal from the allowance of the defendant's motions for summary judgment as to their legal malpractice claim, and for judgment on the pleadings as to their G.L.c. 93A claim. We affirm.
The complaint also included claims against Stephen and Marjorie Murphy, which were dismissed in a separate and final judgment in 2011. That judgment was affirmed by this court in an unpublished decision pursuant to our rule 1:28. Tallarico v. Murphy, 82 Mass. App. Ct. 1118 (2012).
Summary judgment may be granted where there is no dispute of material facts and the moving party is entitled to judgment as a matter of law. Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991). The allowance of a motion for summary judgment is reviewed de novo, viewing the evidence in the light most favorable to the nonmoving party. Bulwer v. Mount Auburn Hosp., 473 Mass. 672, 680 (2016).
We summarize the undisputed facts that are material to the motion for summary judgment. In 2005, the defendant, attorney Paul R. Tierney, Jr. (Tierney), assisted John Tallarico (Tallarico) and Michael Murphy (Murphy) in establishing a business. To obtain capital for the business, Tallarico and Murphy borrowed $200,000 from Murphy's parents and signed a promissory note. As security for the loan, Tallarico and his wife, Sarah Tallarico, and Murphy and his wife, Karen Murphy, signed $200,000 mortgages on their respective houses. Tierney drafted the promissory note and the mortgages.
By 2007, the business relationship between Tallarico and Murphy soured and the business was dissolved. On October 25, 2007, Tierney sent a demand letter on behalf of Murphy's parents to Tallarico requesting that he remit the full amount of the promissory note. On March 8, 2008, Tierney recorded the Tallaricos' mortgage, which later prevented them from refinancing. Tierney never recorded the Murphys' mortgage. At some point in 2010, after discovering that their mortgage had been recorded, the Tallaricos met with Tierney at his law office and unsuccessfully sought to have the mortgage released.
The Tallaricos filed this action against Tierney, alleging that he had committed legal malpractice and that he had engaged in unfair or deceptive acts or practices in violation of G.L.c. 93A, § 2, by falsely inducing them to sign the promissory note and mortgage and attempting to inequitably enforce the Tallaricos' mortgage. The parties filed cross-motions for summary judgment and Tierney filed a motion for judgment on the pleadings. A Superior Court judge entered summary judgment for Tierney on the legal malpractice claim. A second judge entered judgment on the pleadings on the G.L.c. 93A claim. The plaintiffs appeal.
Legal malpractice claim. "Actions of contract or tort for malpractice, error or mistake against attorneys ... shall be commenced only within three years next after the cause of action accrues." G.L.c. 260, § 4, as amended through St. 2003, c. 26, § 495. Here, the injury to the Tallaricos occurred on March 17, 2005, when Tallarico signed the promissory note and he and his wife signed the mortgage, but the action was filed more than three years later, on February 10, 2011. Accordingly, "the plaintiff bears the burden of alleging facts which would take his or her claim outside the statute." McGuinness v. Cotter, 412 Mass. 617, 620 (1992). To that end, the Tallaricos allege that the discovery rule and the doctrine of continuing representation bring their claim outside of the statute. We disagree.
Under the discovery rule, the statute of limitations begins to run when the plaintiff either discovers or reasonably should have discovered that he or she has been harmed. Passatempo v. McMenimen, 461 Mass. 279, 293-294 (2012). Furthermore, when the plaintiff has reasonable notice that a certain act has been a cause of harm, the plaintiff has a duty to inquire, and the statute of limitations starts to run. Ibid. It is not necessary that a plaintiff know the full extent of the harm at the time the claim begins to accrue. See Cantu v. St. Paul Cos., 401 Mass. 53, 57 (1987).
On October 25, 2007, Tierney sent Tallarico a demand letter seeking full payment of the promissory note. Several days later, on October 30, 2007, an attorney acting behalf of the Tallaricos responded to the letter. That demand letter placed the Tallaricos on reasonable notice of Tierney's tortious conduct. Furthermore, the actions they took in engaging an attorney to respond to the letter can constitute "the necessary coalescence of discovery and appreciable harm" to begin the running of the statute of limitations. Ibid. The Tallaricos were, therefore, on reasonable notice of the injury in October of 2007, rather than when, as they argue, the mortgage was actually recorded.
We also consider unavailing the Tallaricos' reliance on the continuing representation doctrine, which, they assert, prevented the cause of action from accruing until some point in 2010. Under this doctrine, a cause of action does not accrue while "the attorney in question continues to represent the plaintiff's interests in the matter in question." Murphy v. Smith, 411 Mass. 133, 137 (1991). "The doctrine ‘recognizes that a person seeking professional assistance has a right to repose confidence in the professional's ability and good faith, and realistically cannot be expected to question and assess the techniques employed or the manner in which the services are rendered.’ " Ibid. (quotation omitted). However, there is no evidence that the Tallaricos' one-time meeting with Tierney at some point in 2010, during which he apparently agreed to speak with Murphy's parents about the promissory note, was an extension of his original representation. Rather, Tallarico appeared to acknowledge that his attorney-client relationship with Tierney had ended in 2007, when his new attorney sent Tierney a letter which read, in part, "I am informed by my client that you have represented him in the past." If anything, the 2010 meeting with Tierney could be viewed as renewing a prior attorney-client relationship, but that still had no impact on the accrual of the cause of action. Accordingly, the Tallaricos' claim was time barred and the judge properly entered summary judgment in Tierney's favor.
General Laws c. 93A claim. We review the grant of a motion for judgment on the pleadings de novo. Commonwealth v. Fremont Inv. & Loan, 459 Mass. 209, 212 (2011). A defendant's motion for judgment on the pleadings under Mass.R.Civ.P. 12(c), 365 Mass. 754 (1974), is a request for dismissal of the complaint because it "fails to state a claim upon which relief can be granted." Jarosz v. Palmer, 436 Mass. 526, 529 (2002), citing Smith & Zobel, Rules Practice § 12.16 (1974). "A motion for judgment on the pleadings limits the judge and the reviewing court to the surface of the complaint and the answer." Ridgeley Mgmt. Corp. v. Planning Bd. of Gosnold, 82 Mass. App. Ct. 793, 801 (2012).
The motion judge ruled that the Tallaricos were not entitled to relief under G.L.c. 93A, § 9, because the "complaint fails to allege service of a demand letter and the ... letter sent to defendant is inadequate to serve the purpose of a demand letter," and were not entitled to relief under G.L.c. 93A, § 11, as they were "not engaged in trade or commerce when they mortgaged their residence."
The Tallaricos contend that, because their claim arose in a business context, their claim for relief under G.L.c. 93A, § 11, was improperly dismissed. That section permits an action by "[a]ny person who engages in the conduct of any trade or commerce and who suffers any loss of money or property, real or personal, as a result of the use or employment by another person who engages in any trade or commerce of an unfair method of competition or an unfair or deceptive act or practice." Ibid., as amended by St. 1986, c. 363, § 1.
At oral argument, the Tallaricos abandoned the theory that they are entitled to relief under G.L.c. 93A, § 9.
In making an inquiry into the applicability of § 11 to a particular case, the court must first determine whether there was "a commercial transaction between a person engaged in trade or commerce [and] another person engaged in trade or commerce." Szalla v. Locke, 421 Mass. 448, 451-452 (1995). If so, then the court must determine "whether the individuals were acting in a ‘business context.’ " Id. at 452. This includes a consideration of "the nature of the transaction, the character of the parties involved, and the activities engaged in by the parties." Begelfer v. Najarian, 381 Mass. 177, 191 (1980). The court may also consider factors such as "whether similar transactions have been undertaken in the past, whether the transaction is motivated by business or personal reasons ..., and whether the participant played an active part in the transaction." Ibid. There is a "sharp distinction between a business person and an individual who participates in commercial transactions on a private, nonprofessional basis." Lanter v. Carson, 374 Mass. 606, 610 (1978).
Contrary to the Tallaricos' assertions, the pleadings contain no allegation that the Tallaricos were engaged in trade or commerce or that they were acting in a business context. Although the complaint specifically alleges that "[a]t all relevant times, Attorney Tierney has been engaged in the conduct of trade and commerce in the Commonwealth of Massachusetts," it is silent as to whether the Tallaricos were similarly engaged in trade or commerce.
The complaint does allege that "Attorney Tierney formed an attorney client relationship with Mr. and Mrs. Tallarico with respect to the Tallarico [m]ortgage." It further alleges that the "execution of the Tallarico [m]ortgage was obtained through fraud and deceit," and that the mortgage is "preventing [the Tallaricos] from refinancing, conveying, alienating and otherwise enjoying the use of their home and their equity therein." However, these allegations make it clear that, while the loan was used to finance Tallarico's business, the Tallaricos signed the promissory note as private individuals. See Begelfer v. Najarian, 381 Mass. 177, 190-191 (1980) (defendants were not acting in a business context where they financed a loan for a real estate project and their "participation in the real estate transaction underlying the loan was minimal"). Accordingly, we also discern no error in the judge's allowance of the motion for judgment on the pleadings on the c. 93A claim.
Judgments affirmed.