RFF Family Partnership, LP v. Link Development, LLC et al

Filing 1

COMPLAINT Verified Complaint against Robert V Wallace, Jeffrey B. Karll, Link Development, LLC, Russell and Associates LLC Filing fee: $ 350, receipt number 0101-3432030 (Fee Status: Filing Fee paid), filed by RFF Family Partnership, LP. (Attachments: # 1 Civil Cover Sheet, # 2 Civil Cover Sheet Category, # 3 Exhibit A - Certificate of Organization, # 4 Exhibit B - Foreclosure Deed, # 5 Exhibit C - Desert Pine Mortgage, # 6 Exhibit D- Certificate of Organization, # 7 Exhibit E - Managers Cert, Cert of Manager, # 8 Exhibit F - Desert Palm Mortgage, # 9 Exhibit G - BD Mortgage, # 10 Exhibit H - Amendment of Mortgage, # 11 Exhibit I - Certificate of Organization, # 12 Exhibit J - Superior Court Complaint, # 13 Exhibit K - Link Land Court Complaint, # 14 Exhibit L - Note, # 15 Exhibit M - Loan Agreement and mortgage, # 16 Exhibit N - Guaranty, # 17 Exhibit O - subordination agreements, # 18 Exhibit P - Assignment, # 19 Exhibit Q - Settlement Agreement, # 20 Exhibit R - Russell Land Court Complaint, # 21 Exhibit S - Land Court Decision, # 22 Exhibit T - Memorandum of Sale, # 23 Exhibit U - redacted P&S)(Briansky, Richard)

EXHIBIT

S

COMMONWEAI-TH OF MASSACHUSETTS
THE TRTÄ.L COTIRT
LÀND COURTDEPARTMENT

isËÂtr
ESSEX,

i0 Mrsc.425681

ss

(JCC)

RUSSELL & ASSOCL{TES, LLC
a Massachusetts Limjted Liability Company,
Plaiatiff,

ROBERT V. WALLACE. JR., âs Trustee of the
BD LENDING TRUST,
DESERT PINE, LLC, a Massachusetts Limited Liability
Compæty zM aDesert Paim, LLC, and/or, altemativeþ,
DESERT PALM, LLC, a Limited Liability Compaay of
C urrentl y Unlcrown Origrn,
RFF FAMILY PARTNERSHIP L]MITED PARTNERSHIP,
a Califomia Limited Parhrership,
THE TOWN OF SAUGUS, a Municipal Corporation, and
PITT PIPELINE COMPANY, iNC.,
a Massachusetts Corporation,
GEORGE BENJAMIN CONLEY, as Executor of the Will of
Elizab eth Conl ey, deceased,
Defendants,

and

LINK DEVELOPMENT, LLC,

a MassãChuSetls

Limited Liability

Company, and
PETER F. RUSSELL, ESQ., individually,
SHOPS AT SAUGUS,
a Delaware Limited Liabilily Compaly,

CARUSO MUSIC COMPANY, a Massachusetts Corporation,
l¡terested

P

a¡ti es

ORÐER ON DEFENDANT

R-F'F FAMILY PARTNERSHIP LIMITED PARTNERSHIP'S
SPECIAL MOTION TO DISMISS

The Plaintifflaw firm, Russeil & Associates, LLC ("Russell"), filed this action on Ma¡ch
2.5, 2010, seeking declarations as to the

priority of cerLain liens whìch it claims to hold on the

real property knor¡¡n as 1040 Broadway (Route 1 North) ín Saugus, Massachuseus (the

.?roperty',)_ The Property is about twenty-fwo Q2) acres in síze, and is comprised of one (1)
registered parcel a:rd three (3) unregístered parcels. The registered parcel is shown on Plan No.

75302-^,filed with original certiñcate of Title No. 10353 in the Southem Registry District for
Essex County. The tfuee (3) unregistered parcels a¡e described in deeds recorded

south District Registry of Deeds, respectively, in B ook 17407 ,Page 462,
194, and in Book 77407,Page

il

the Essex

ir Book 17843, Page

471.1

In its Verified Complaint, Russell seeks a declaration that it has a first priority lien on the
Property by virtue of an attomey's lien pursuant to G.L-c-227' $ 50, and seeks an order

reqûiring the recorder of tlis court to accept for filing, in connection with the registered parcel, a
docr.unent entitled "Certificate of Attorney's

Lien." Russell also

seeks a determination

ofthe

prioríry of its claimed attomey's lien on the th¡ee unregístered parcels. Finally, Russell seeks a
decla-¡ation that it holds a fust (or second) priority position lien on the Property as the result of a

200g assígnment of â mortgage oríginaliy granted by Link Development, LLC ('Linld',) to Desert
Pine, LLC ('Desert Pine").
On March 26, 2010, the

Plaintif¡s Motion for Lis

Pendens was endorsed, ex parte

2 On

June 1, 2010, Defendant RFF Family Parbrership Limited Partnership ('RFF',) fited a special

Motion to Dismiss, pufsuâDt to G. L. c. 184, $ 15, seeking dismissal of the claims against it with
a¡ awa¡d of attomey's fees and costs,

as

well

as dissolution of the 1is pendens. The hearing on

RFF's Special Motion, originaily marked fo¡ Jüne

I

21 , 20 i

0, was ¡escheduled by the court

The Propeny is desc¡jbed in more detail in the Plahtiff s Veriûed Complai¡tpluirrtiif fil"¿ ;t" Motio¡ for Lis Pendens iEmediately after i6 ex parte Motioa for a Tempora¡y RestlaiÂing
o¡der v¡as denied. Defenda¡t RFF F¿mily Partnership Limited Parft¡e$hiP was represeDed at the Temporary
The otior
Restrainiog order proceeding and was aware oftle subsequeatly submitted Motion fo¡ Lis Pendens.
yet beenierved with the PlaintifPs Complai-ot or its ex pa'1e Motions, and had not yet made an
Oefenøati naa not

, fh"

appearaoce

il

lhe case.

(Cutler, J.) after Rrxsell fäiled to file

a

timely opposition (relying on RFF's assen! but without

obtaining leave of court). The rescheduled hearing u.as conducted on July 20, 2010. The
Plarntiff again failed to timely fìle its opposition, but was permitted an extension to July 30,2010

for good cause shown. Defendant RFF filed

a response

to the Piaintiffs Opposition on August

30,2010.
In its Special Motron to Dismiss, RFF asse¡ts that the Plai¡tiff

s

claim to hold

lìen on the Property under the attomey's lien statute should be dismissed
that the attomey's iien claimed by the Plaintiff does not constitute
pendens becatse

ii

does not involve an interest in real

a

as a matter

a

priority

of law, and

proper basis fo¡ the lis

property, RFF argues that Russeil has not

perfected its claimed attomey's lien in tle marurer provided by statute and that, at best, there is

a¡ inchoate 1ien. RFF further argues that, ônce choate,

an attomey's lien under G. L. c. 271, $ 50

atfaches oûly to the proceeds derived ûom a resolved claím or litigation and, therefore, cannot
altach lo the

Propefy, Additionally, RFF contends that the Plaintiff carmot have a first priority

lien on the Property by virtue of the mortgage assigned to Russell in 2009, because the assignor's
interest in that mortgage had previously been subordinated to a modgage held by RFF.

in the PlaintifPs Opposition, Russell contends that, notwithstandìng the provisions of

G.L- c.221,

$ 50, a statutory attorney's lien already attaches to the Property by virh-¡e

ofa

vohmtary agreement executed by Russell's corporate client, Link, on Decembe¡ 28, 2009,3
entitled 'Ce¡tificate of Attorney's Lien." Russell alternatìvely argues that the "Certificate

Attomey's Lien" should be treated

as an existing

of

lien on th eProperty independent of the

attomey's lien statute and, therefore, said Certificate must be accepted for registration

as

notice

of a¡ encumbrance on tle registered parcel. Russell also contends that its assignment was not

3

Li¡k

is tlle

plailtiff in

the pendrng Superior Cou¡t action aúd was record owner

instart actioû was commenced in Land Cou¡t.

of the P¡operty

at the

dme the

affected by the 2007 Mortgage Subordination Agreeinent because (1) fhe party executing the
agreement lacked authority to do so, and (2) the subordi-nation Agreement was not recorded o¡
registered prior to the 2009 assignment to Russell being put on record.
Section 15 of chapter i 84 provides, in relevant part, that

if

a memorandum of

lis pendens

is approved ex parte,a "any party aggrieved thereby may move at afìy time fol dissolution of the
memorandum. ..,' and that "[a] party may also fiie a special motion to dismiss the claimant's
action

if that party beiieves

frivolous." said section
dismiss

if it fin¿ls "that

that

tle action or claim supporting the memorandum ofüs

15 ñüther provides

tlat tle couf

"sha1t

pendens is

granf'a special motion to

the action o¡ clajm is Èivolous because (1) it ís devoid of any reasonable

factual support; or (2) it is devoid ofany argrrable basis in law; or (3) the action o¡ claim is
subject to dismissal based on a valid legal defense such

as the stafiIte

of frauds." If the court

allows the special motion to dismíss, "it shall award the movi¡g party costs ald reasonable
attomeys [sic] fees .. -." Section 15 also provides that

"[i]nthe

event there are un-adjudicated

claims remaining after the dismissal of any claim pursuant to which the memorandum of lis
pendens was recorded, the court shali order the entry ofpartial judgrnent with respect to the

clain

dismissed pursuant to this section."

G L. c. 184, $ 15 (emphasís

added)'

For the r'easons set forth below, RFF's Specia-l Motion to Dismiss is ALLOWED

PÄRT

ANd

IN

DENIED TN PART.

Atómev's Lien
With respect to the PlaintifPs request for a declaraiory judgrnent that it holds an
attomey's lien on the Properly pursìJant to G. L. c. 221, $ 50, I find that the clarm is unsupported
by either law or fact a¡d is, therefo¡e, î:ivolous. More specifically, I find that this claim does not

o

P.-FF

was present ai the hearing when the lis pendens v'as argued, although the othe¡ ¡amed Defendants were not.

constitute the type of claim "affectfing] the title to reai property''5 on whích to base a
memorandum of lis pendens under G. L. c. 184, $ 15, and is also not within this cou¡t's

jurisdiction.
Pursuant to G. L. c. 271, $ 50, an attomey's lien attaches to the 'þroceeds derived" from

the "cause of action, counterclaim or claim" and the 'Judgnent, decree or other order in his

client's favor entered or made" in the litigation or other claim where the subject legal
representalion occurred. Here, the litigation on which Russell bases iis attomey's 1íen claim is

not yet resolved, but remains pendi;,rg in Suffolk Superior Court,6 and Russell has not requested

"the fsuperior] cou¡t in which the proceeding is pending" to "determine and enforce the lien." G

L. c. 221, $ 50- As the subject of /å¿f litigation was never before the Land Court, this Court has
no role with respect to determination o¡ enfo¡cement of the claimed attomey's lien.
Moreover, rnder G. L. c.221, $ 50 an attomey's lien would not, in eny event, attach

directly to the Property, but rather would attach only to the monetary proceeds (if any) &om tÏe
proceedings in whích Russell has represented the Property owner. See In re Leading Edge
Products, Inc.,U.S. Dist. LEXIS 7597 (D. Mass. May 28, 1991) at *3 ("the

ue in g 50 of the

word 'proceeds' (as opposed to a broader term, such as 'benefits') indicates that the secfion's
drafters contentplated [a cash] fi:nd."); cf. Ropes

&

Gray, LLP v. Jalbert,454 Mass. 407 (2009)

(an attomey's lien which attached to the client's claim

-

a patent

application and patent

-

is

i¡choate until proceeds are derived f¡om the sale of rhe patent or patent applicatton). Therefore,
Russell's attomey's lien claim is not one affecting title to real property.T

I "¡O¡r the use and occupation tbereofor the buildings thereon."
ó
Suffolk Superior Court Docket No. 06-5242.

A claiú affeots litle ifit involves a plaintiff's interest i¡ real estate, including a lien o¡ simila¡ eocumb¡ance o¡
such real estate. llolfe v. GormaVy,440 Mass. 699,706 (2004)?

i fi¡d, the¡efo¡e,

that Russell',s claim asserting a statutory attomey's lien onthe Property

in a first priority encurnbrance position is both devoid ofreasonable factual zupport and lacking
any arguable basis ín 1aw.8 RFF's Speeial Motion to Dismiss the

Plahtiff

s attorney' s

lien claim

is.ALLOWED'
Ailowance of RFF's Special Motion to DisrLiss with respect to Russoll's attomey's lien
claim does oot, however, require the dissolution of the memorandum oflis pendens, since I fnd
that Russell's other claim against RFF

-

its claim for a decla¡atory judgrnent regardi-ug the

priority ofPlaintifPs assigned mortgage on the Properly
sta¡rda¡ds set forth in G. L. c. 184, $

-

is t?o/ subject to dismissal r:nder the

i5.

Priori8 of the Plaintifls Assimment of Morteage
According to the document¿tion submitted with Russetl's complai-ot and with RFF's
special Motion to Dismíss, Link gralted

a Êrst

mortgage on the Property to Desert Palm, LLC,

in 2005, as security for a 2 milüon dollar loan (the "Desert Palm Moftgage"). ln 2006,

Li¡k

granted a mortgage on the Property to Defendant BD Lendirg Trust, as security for a $600,000

loan(the"BDMortgagd').OnOctober10,2006,theDesertPal¡nMortgageandtheBD
the
Mortgage were both put on record in the Essex Registry District as encr:mbrances on
registeretl parcel, together

8

witl

an instrument purporting to subordinate the Desert Palm

to the Special Motion
I have considered, but âlso ¡eject, the altemative argÌmeot prese'ted ia Russell's Opposition

toDismiss,thatitholdsapriorifylienonthePropeÍyindepend¿n/oftheAttomey'sLienshnrte,byvirtueofa
dåted Deceøbef 28,
uoirroøry gr*t orü"o memo¡iaIze¿ ia trt" ¿ocument entitled "ceftificale of Attomey's Lien,"
ZóOS- Thã utgo

"nt

that the Certificate c¡e¿tes a

lier

iûdepeûdent of the stÂbrte is fully u¡dercut by the language

usedintheCertilcateitself'lndeodtheCertificateexpressly¡e¿ogt¿esaqdPurPortstogaqtalien.þrÍsuanttoG.

tbat the lieD i,s
c.221, g 50,, to secu¡e a debt owed to Russeil for legal services_ The certíficate also states
..e¡forceáble uode¡ G. L, c.221, 50." However, even ifthe Ce¡¡ificate we¡e read (as the Plabtiffwould have it) as
$
i! coDlìèction with the Property, there is no
a separate, volurtary lieà granted as secudty for â debt owed to Russell
ofrecord prior to úe
¡easonabtá bas¡s foi Russell's claim that such a lieo would have priority over eDcumbraoces
executio¡ of tbe Certi6cate.

l.

Mortgage to the BD Mortgage.e No information has been submitted to this court documenting
whether these three instruments were
bt 20A7 , Link granted

a

a-lso recorded

to encumber the un¡egistered parcels.

moltgage on the Property to RFF as secwity for a loa¡r in the

amount of 1 .4 million dolla¡s (the "RFF Modgage"). The RFF Mortgage, which was signed on

October 15, 2007 by Jeffrey B. Karll

as

Managei of Link, was put on record ìn the Essex

Registry District on October 16,2007. Submitted as an exhibit to RFF's Special Motion to
Dismiss was a copy of a "Subordination Agreemenf 'pur¡rorting to subordinate the Desert PaIm
Mortgage to the RFF Modgage. The Subordination Agreement v/as

siped on Oøober 17, 2007

by Jeffrey Karll, as Manager of "Desert Pine, LLC flVa Desert Palm, LLC." According to the

affidavit ofJef&ey B. Karll, he, as'lnanager ofDesert Pine LLC a/k/a Desert Palm LLC,"
assigned the Desert Palrn Mortgage to Russell. The Assignment to Russell was put on ¡ecord in

the Essex Registry Dist¡ict on February 26,2009. RFF has presented no evidence thal the
Subrogation Agreemenl was ever put on record. There has also been no evidence produced that
the RFF Mortgage or the Assignment to Russell was ever recorded on the unregistered parcels of
the Property.
The lìmited documentation presented in the proceedings demonstrates that fuller inquiry

ínto the facts will be required before any determinations can be made regarding the validity and

priority offhe various mortgages, assignments, and subordination documents. Indeed, some of
the sâlient facts are presently being litigated in the Superior Court action. I find that the

PlaintifPs claim fo¡ declaratory j udgrnent concerning the priority ofits 2009 assignment is not
lacking ìn facn-ral or lega1 support

as

to be deemed fi:ivolous at this stage of the proceedings.

Therefore, RFF's is not entitled to dismissal of said declaratory judgrnent claim. Further,
9

The çicumsla¡lces surroìrndirg lhe BD Mortgage a¡e the subject of tìe pending Supe¡io¡ Cou¡t action in whicb
Russeli has been representirg Link,

so

because that decla¡atory judgment claim does í¡volve a question

ofútle to an i¡terest in real

propefty, dissolution oftfre üs penders is not appropriate at this time.

Accordingly, it is hereby
ORDERED ttrat Defendant RFF's Special Motion to Dismiss is ALLOWED with
respect to Piaintif s cl¡im tþ¿1 ¡¡ ¡o1¿" a priority lien on the Propøty in the folln of an attomey's
lien r¡nde¡ G. L. c. 221, $ 50; and it is frrther
ORDERED that Defendant RFF's Speciat Motion to Dismiss is ALLOWED with
respect to the PlaintifPs claim that it holds a priority lien on the Property independent of
provísions of the attorney' s lien stahrte, G. L. c. 221, $ 50; and it is further
ORDERED tlrat an award of Defendant RFF's costs a¡d reasonable attomey's fees,
prlrsuarit to G. L. c. 184, $ 15, shall be made after said Defendant has submitted appropriate
documentation of the costs and fees it incu¡red in comection with its Special Motion to Dismiss
the attorney's lien claim; and it is fi-rther
ORDERED that Defendant RFF's Special Motion to Dismiss is DENIED

as ro the

Plaintiffs claim for declaratory judgrnent that it holds an assignment of mortgage with first o¡
second priority ove¡ the RFF Mortgage; and it is î.rther
ORDERED that RFF's request to dissolve the lis pendens ìs DENIED.
SO ORDERED.

Q¡Løíu"

(

court (cutler, J.)

onor,
Debo¡ah J. Patterson, Recorder

Dated: 3 December 2010

A'TFIJÉCOFY
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RECoRDEÊ