58 Swansea Mall Drive LLC v. Gator Swansea Property LLC
Judge Richard G. Stearns: ORDER entered denying 85 Motion to Dismiss (RGS, law1)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 15-13538-RGS
58 SWANSEA MALL DRIVE, LLC
GATOR SWANSEA PROPERTY, LLC
MEMORANDUM AND ORDER
ON DEFENDANT’S MOTION TO DISMISS
October 12, 2016
Defendant Gator Swansea Property,
seeks to dismiss
supplemental allegations and claims brought by plaintiff 58 Swansea Drive,
LLC, as part of its Third Amended Complaint, asserting that they improperly
rely on communications protected by the Massachusetts litigation privilege.
At issue are four letters sent by Gator Swansea in July and August of 2016
claiming 58 Swansea in default of its lease for: (1) failure to make certain
repairs; (2) non-payment of rent stemming from 58 Swansea’s refusal to pay
attorney’s fees incurred by Gator Swansea in defending this case; and (3) 58
Swansea’s permitting a tenant to erect a pylon sign panel on the leased
premises. 58 Swansea alleges that these claims of default are brought in bad
faith as part of a concerted campaign to force it out of the lease, in violation
of Mass. Gen. Laws ch. 93A, § 11. 58 Swansea also seeks a declaration that
its tenant has the right to erect the sign panel.1
In Massachusetts, “statements by a party, counsel or witness in the
institution of, or during the course of, a judicial proceeding are absolutely
privileged provided such statements relate to that proceeding.” Sriberg v.
Raymond, 370 Mass. 105, 108 (1976); see also Giuffrida v. High Country
Investor, Inc., 73 Mass. App. Ct. 225, 242 (2008). The privilege also extends
to statements “made preliminary to a proposed or contemplated judicial
proceeding.” Fisher v. Lint, 69 Mass. App. Ct. 360, 366 (2007). The privilege
is intended to protect persons from retaliatory tort actions based on their
participation in the judicial process. See Correllas v. Viveiros, 410 Mass.
314, 320 (1991); Restatement (Second) of Torts §§ 586-588. Gator Swansea
claims that the default letters fall within the privilege because they “relate to”
this action (or are in contemplation of future litigation over the lease).
Consequently, 58 Swansea cannot assert them as a basis for liability.
Gator Swansea styles its request as a motion to dismiss pursuant to
Federal Rule of Civil Procedure 12(b)(6), but the motion in part attacks
supplemental allegations offered by 58 Swansea in support of its Chapter
93A claim. To that extent, it is more properly understood as a motion to
strike under Rule 12(f). This point of procedure makes no difference to the
outcome; Rule 12(f) motions are at times deployed to strike privileged matter
from a complaint. See Mansor v. JPMorgan Chase Bank, 2016 WL 1676482,
at *2 (D. Mass. Apr. 26, 2016).
This argument is meritless. The law draws a distinction between
holding a speaker liable for the content of her speech, on the one hand, and
using that speech as evidence of her misconduct, on the other. The litigation
privilege applies in the former context, but not the latter. See Capital
Allocation Partners v. Michaud, 2012 WL 1948596, at *2 (Mass. App. Ct.
May 31, 2012). To give an illustration, the most common application of the
privilege is to bar defamation actions brought against a speaker based on her
statements in the course of a lawsuit for fear of undermining the truthseeking function of the judicial process. See, e.g., Correllas, 410 Mass. at
319-324; Sriberg, 370 Mass. at 108-109; Visnick v. Caulfield, 73 Mass. App.
Ct. 809, 811-813 (2009); Fisher, 69 Mass. App. Ct. at 167-170. Other causes
of action that might impede the participation of litigants, counsel, or
witnesses in the judicial process are also barred insofar as they rest on the
content of a speaker’s statements. For example, in Doe v. Nutter, McClennen
& Fish, 41 Mass. App. Ct. 137 (1996), the Massachusetts Appeals Court
rejected the plaintiff’s argument that a law firm’s threat to sue in response to
a Chapter 93A demand letter that she sent to a client of the firm gave rise to
claims of invasion of privacy, intentional infliction of emotional distress, and
violations of the Massachusetts Civil Rights Act. Id. at 138, 140-141.
By contrast, 58 Swansea’s supplemental claims and allegations neither
target the speaker (counsel who sent the letters) nor are they based on the
potentially defamatory content of the letters themselves.
Complaint cites the notices of default as evidence of Gator Swansea’s alleged
bad faith in its dealings over the lease. Where a party uses legal mechanisms,
such as letters from counsel, to terminate a contract in bad faith or to extract
concessions from a plaintiff in arguable violation of Chapter 93A, the
litigation privilege does not shield it from liability. See Capital Allocation
Partners, 2012 WL 1948596, at *1-2. Moreover, the letter regarding the sign
panel is evidence of the dispute that exists between the parties over
interpretation of the terms of the lease. To suggest that no claims could ever
arise from such a letter would lead to the absurd result that notices of default
would never be admissible in litigation over a lease if they were sent prior to
a “contemplated” lawsuit — as virtually all such notices are.
For the foregoing reasons, defendant’s motion to dismiss is DENIED.
/s/ Richard G. Stearns
UNITED STATES DISTRICT JUDGE
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