McLaughlin v. Amirsaleh

• Citation: 65 Mass. App. Ct. 873,844 N.E.2d 1105
• Decision Date: 03 April 2006
• Docket Number: No. 04-P-997.,04-P-997.
• Parties: James A. McLAUGHLIN<SMALL><SUP>1</SUP></SMALL> v. Mojgan B. AMIRSALEH & others.<SMALL><SUP>2</SUP></SMALL>
• Court: Appeals Court of Massachusetts

844 N.E.2d 1105

65 Mass. App. Ct. 873

James A. McLAUGHLIN¹ v. Mojgan B. AMIRSALEH & others.²

No. 04-P-997.

Appeals Court of Massachusetts, Norfolk.

Argued April 14, 2005.

Decided April 3, 2006.

Brad P. Bennion for Franklin K. Lane.

R. Jacob Walters, Brookline for Ramin Shamoilzadeh.

Present: PERRETTA, CYPHER, & GRAHAM, JJ.

PERRETTA, J.

This appeal has its genesis in a California judgment of divorce between Mojgan Amirsaleh (Mojgan) and Amir Massoud Amirsaleh (Massoud) that provided that property owned by them in Brookline (the property) was to be sold and the proceeds divided equally between them. The Probate and Family Court appointed the plaintiff James A. McLaughlin as a special master to sell the property. Subsequent to the divorce judgment but long before the sale of the property, Mojgan retained Franklin K. Lane, a California attorney, to represent her in various matters arising out of her divorce, including her debts. Lane soon began personally to lend Mojgan money. He secured those loans by taking a mortgage on the property in the amount of $140,000. The amount of the mortgage exceeded the amount of Mojgan's debt at the time of the mortgage as well as the limit on the amount of any encumbrance that she was allowed to put on the property. That limit, $50,000, was set by a California court order that Lane himself had earlier sought and obtained. Subsequent to the date of the mortgage and while purportedly acting on behalf of various corporations, Lane lent corporate funds to Mojgan.

After the property was sold, and based on the personal and corporate loans, Lane claimed entitlement to a payment in the full amount of the mortgage, $140,000. A Massachusetts probate judge determined that Lane's recovery should be limited to the amount of Mojgan's debts incurred at the time of the mortgage, $11,600. Lane appeals and argues that the mortgage entitles him to recover up to the $50,000 limit established in the order set by the court in California. Concluding that any recognition of Lane's mortgage would violate the public policy of Massachusetts, we vacate the amended judgment and remand the matter to the trial court for a redetermination of the amounts due Mojgan's creditors without regard to any claim by Lane based on the mortgage.

1. The facts. We recite the details of the complicated procedural history of this controversy. Although the California judgment of divorce was entered in December, 1991, the property was not sold until a little over ten years later, that is, on January 31, 2002. The purchase price was $325,000 and the net proceeds from the sale amounted to $252,317.13.

After the divorce but well before the sale of the property, Mojgan borrowed money from the defendant Ramin Shamoilzadeh (Ramin). Based on Mojgan's indebtedness to him, Ramin obtained a default judgment in California on November 9, 1992, in the amount of $99,579.31. A little over a week later, on November 17, 1992, the California court entered the order restricting Mojgan from "transferring, encumbering, hypothecating, selling or in any way disposing of [the property] without prior written consent of the other party or prior order of the Court first having been obtained." In January, 1993, Ramin sought and obtained a writ of attachment on the property from the Brookline District Court based on the November 9, 1992, judgment in his favor.

Sometime in 1993, after the restriction set out in the order of November 17, 1992, Lane undertook the representation of Mojgan in various legal matters that included her attempts to collect support arrearages Massoud owed. In the course of representing Mojgan, Lane was able to have set aside the default judgment obtained by Ramin on November 9, 1992, and to have dissolved Ramin's attachment on the property.

Having successfully removed the default judgment and the attachment, Lane began, as of November, 1993, to lend Mojgan money, primarily (as he later testified) for her and her minor child's living expenses.³ In June, 1994, Lane successfully sought to amend the order of November 17, 1992, which prohibited Mojgan from encumbering the property. The order, as amended allowed Mojgan "to encumber $50,000 of the Brookline property." About a month later, on July 8, 1994, Mojgan entered into a "Loan Agreement" with Lane.

In November, 1994, Mojgan filed a complaint in the Norfolk Division of the Probate and Family Court Department, seeking enforcement of the divorce judgment. A judge appointed McLaughlin to act as a special master and trustee to sell the property and to hold the sale proceeds in an escrow fund. Shortly thereafter, on December 15, 1994, Mojgan signed a document entitled "Note Secured by Mortgage" made payable to Lane in the amount of $140,000.⁴ The note replaced all prior notes, including any notes related to the earlier loan agreement of July 8, 1994. The note recited "value received" as consideration and was due on or before July 1, 1995. The same day, December 15, 1994, and notwithstanding the order limiting Mojgan's right to encumber her interest in the property to $50,000, Mojgan gave Lane a mortgage on the property in the amount of $140,000.⁵ Also on that day, Mojgan entered into "a letter agreement" with Lane, later amended, whereby Lane agreed to continue to represent her on the condition that she execute his "standard Legal Services Agreement" as well as the promissory note in his favor in the principal sum of $140,000, bearing interest at the rate of ten percent per year. As further provided, the note was to be secured by the mortgage on Mojgan's one-half interest in the property.

Next, on January 4 or 5, 1995, Ramin's action against Mojgan, in which Lane had earlier obtained a removal of the default judgment and a dissolution of the attachment, came on for trial in California. Mojgan was represented by Lane at that time, but neither she nor he appeared. After Mojgan was again defaulted, Lane requested, by a letter dated January 6, 1995, the assistance of Massachusetts counsel "to beat the recordation" of Ramin's judgment against Mojgan, which had yet to be entered on the docket in California. In short, Lane requested that the mortgage be recorded in Massachusetts before judgment in Ramin's favor could be entered on the California docket and before Ramin could again obtain and record a writ of attachment.

Lane did beat Ramin to the courthouse. The mortgage was recorded on January 9, 1995. About two weeks later, on January 25, the California court entered a judgment in Ramin's favor in the amount of $118,708.33. While Lane engaged in an unsuccessful, if not frivolous, appeal from that judgment,⁶ Ramin received a writ of attachment on the property on February 28, 1995. On May 4, 1995, a writ of execution on a money judgment issued.

Lane continued to represent Mojgan until the spring of 1999, at which time his license to practice in California was suspended because, according to him, he had failed to pay his State bar dues. In any event, McLaughlin was able to sell the property on January 31, 2002, for $325,000. The net proceeds from the sale amounted to $252,317.13. McLaughlin then filed the present complaint in the Probate and Family Court for interpleader and declaratory relief, asking that each of the defendants (see note 2, supra) be required to interplead and settle between themselves their respective rights to the sale proceeds and that the court declare their rights accordingly.

In July, 2002, Ramin filed his answer to the complaint. He asked the court to declare that he was a judgment creditor of Mojgan in the amount due him at that time, $118,813.88, plus interest, that his claims were superior to all other claims against the property, and that he be awarded one-half the sum held in escrow by McLaughlin.⁷ Lane also filed an answer to McLaughlin's complaint in which he sought a declaration that his mortgage against Mojgan's one-half interest in the property was valid, enforceable, and superior to all other claims against the property.

We think it unnecessary to recite the additional procedural skirmishes among the parties. The important fact is that trial on McLaughlin's complaint was scheduled to begin on March 11, 2003. At that time, however, it appeared to the probate judge that the validity of Ramin's claim may have been adjudicated in California. Although Ramin's attorney disputed that point, the judge granted the parties additional time to obtain a clarification of the "relevant" California judgment and continued the trial until June 23, 2003.

During the trial thereafter conducted, Ramin's attorney questioned Lane about the propriety of his actions under provisions of the California Rules of Professional Conduct concerning the avoidance of interests adverse to a client and under § 2033 of the California Family Law Code regarding real property liens taken by an attorney from clients in domestic matters. Lane denied that he had violated the California Rules of Professional Conduct in taking Mojgan's note and mortgage and expressed his opinion that § 2033 of the Family Law Code did not apply to him. At the close of the trial, Ramin's attorney represented that he had provided the court with an amended judgment indicating that the California court had not made any adjudication on the merits of his claim. While the trial judge voiced his understanding that there was a ruling to that effect somewhere in the case file, he concluded that any such decision would have no effect on his trial determination because the California amended judgment had not been placed in evidence.

2. The judgment. On these facts, the judge awarded payment from the funds held in escrow to be made to Lane in the amount of $11,600, and to McLaughlin in the amount of $29,027.25 for his reasonable fees and costs.⁸ The "remainder" of the fund was awarded to Ramin.⁹ As a consequence of the judgment, Mojgan received little if anything from her one-half share of the proceeds from the...