Tilman v. Brink

• Decision Date: 18 August 2009
• Docket Number: No. 08-P-498.,08-P-498.
• Citation: 74 Mass. App. Ct. 845,911 N.E.2d 764
• Parties: Dmitriy TILMAN & others<SMALL><SUP>1</SUP></SMALL> v. David O. BRINK & another.<SMALL><SUP>2</SUP></SMALL>
• Court: Appeals Court of Massachusetts

911 N.E.2d 764

74 Mass. App. Ct. 845

Dmitriy TILMAN & others¹ v. David O. BRINK & another.²

No. 08-P-498.

Appeals Court of Massachusetts, Suffolk.

Argued February 4, 2009.

Decided August 18, 2009.

William J. McCrevan, Jr., Boston, for the plaintiffs.

David O. Brink, pro se.

Present: KANTROWITZ, GRAINGER, & SIKORA, JJ.

KANTROWITZ, J.

A baseless suit was filed in the Boston Municipal Court Department. Ultimately, the judge ordered attorney's fees imposed against the attorneys and litigants who brought the complaint. Clearly the judge had the authority, under Rule 11 of the Massachusetts Rules of Civil Procedure, 365 Mass. 753 (1974), to act as she did against the attorneys. The issue presented is whether she was authorized to order fees against the litigants. We hold that she was not authorized to do so.

1. Background. To provide clarity and context it is important to discuss prior proceedings involving many of the same people involved in the present suit. See Dimtil Med. Supplies, Inc. v. Metropolitan Ins. Co., 69 Mass.App.Ct. 1117 (2007). Dmitriy Tilman owned Dimtil Medical Supplies, Inc. (Dimtil). On February 3, 1998, Dimtil sued Metropolitan Insurance Company (Metropolitan), seeking reimbursement for the costs of medical supplies Dimtil had provided various insureds of Metropolitan. Metropolitan counterclaimed, alleging that the supplies were medically unnecessary and the bills were excessive. Of significance, Metropolitan was represented by Audrey Parr, then of Morrison, Mahoney & Miller³; its claims adjuster was Karen Golab. Dimtil was represented by attorneys William McCrevan and Neil Cohen.

We now turn to the salient facts of the case at bar. While the Dimtil-Metropolitan suit was being played out, plaintiff Tilman, on the evening of August 10, 1998, and his friends—Vitaly Zakuta, Yelena Kratsberg, and Michael Leyfer—went to a movie at the Cleveland Circle Theater in Brookline. The four friends parted around 1:00 A.M., with plaintiffs Zakuta and Kratsberg as passengers in Tilman's car and Leyfer in his own car. Approximately thirty minutes later, Leyfer's car collided with Tilman's car.

Commerce Insurance Company (Commerce) was the insurer of both cars and, after an initial investigation, determined that Leyfer was responsible for the accident and began paying personal injury protection (PIP) benefits to Tilman ($3,890), Zakuta ($2,000), and Kratsberg ($2,110). McCrevan represented Tilman. It is unclear from the record whether Cohen represented Zakuta and Kratsberg at this time.

In March, 1999, Commerce retained the defendants, David Brink and his law firm, Smith & Brink, P.C. (S&B), to further investigate the plaintiffs' automobile insurance claims. Brink determined that the plaintiffs had provided materially false information and had engaged in an insurance scam.⁴ Based on this information, S&B notified the plaintiffs on December 20, 1999, that Commerce would not continue to pay their claims.

Some months later, in April, 2000, the Dimtil-Metropolitan case was tried in Superior Court, resulting in a mixed judgment. The judgment awarded $5,822.42 to Dimtil for unpaid reimbursements; $19,000 to Metropolitan on its G.L. c. 93A claim; and attorney's fees for each party.⁵ Dimtil received $34,000 in attorney's fees and $8,191.12 in costs⁶; Metropolitan received $40,000 in attorney's fees and $15,090.57 in costs. Both parties appealed.

Brink handled the appeal for Metropolitan. In or around April, 2001, he spoke with McCrevan, counsel for Dimtil, about a possible settlement prior to the appeal moving forward. During this conversation, McCrevan allegedly threatened that if Brink did not accept a settlement agreement favorable to Dimtil, he would make Brink pay. Brink did not speak with McCrevan again.⁷

Approximately four months later, in August, 2001, Tilman, Zakuta, and Kratsberg—through their attorneys McCrevan and Cohen—filed the instant Boston Municipal Court action against Commerce, Leyfer, Brink, S&B, and Karen Golab, the claims adjuster for Metropolitan.⁸ Against the latter three, the plaintiffs alleged intentional interference with economic relations and civil conspiracy, claiming that a "sham" investigation was conducted on behalf of Commerce that ultimately deprived the plaintiffs of automobile insurance payments.⁹ The sham investigation allegedly resulted from a March, 1999, telephone conversation between Metropolitan claims adjuster Golab and Audrey Parr, who had been counsel for Metropolitan but left her prior law firm to join S&B, the firm retained by Commerce, in the spring of 1999.¹⁰ The plaintiffs allege that in that conversation, Golab gave Parr information regarding Tilman's automobile insurance policy records, which had been received from the Registry of Motor Vehicles.

Brink and S&B filed a motion to dismiss, which was denied on October 2, 2001. More than a year later, on January 9, 2003, Brink and S&B filed a motion for summary judgment (which Golab joined orally). In opposition, the plaintiffs filed voluminous documentation, without organization or annotations, alleging that the bases for their claims were contained therein. The motion for summary judgment was allowed on April 7, 2003, on all counts involving Brink, S&B, and Golab. The judge found that Tilman's allegation that his automobile insurance policy records were shared via Golab with Brink or anyone at Commerce "amounts to no more than speculation."¹¹, ¹² Moreover the judge observed, there was no evidence that, in the conversation between Golab and Parr, "the [car][a]ccident was mentioned, discussed, or even ... was within the knowledge of either party." The plaintiffs did not appeal from the summary judgment.

On November 25, 2003, Brink and S&B filed a motion for attorney's fees, upon which the judge delayed acting until the remaining claims against Commerce and Leyfer came to final judgment. Once that occurred,¹³ Brink and S&B renewed their motion, on June 14, 2006. The motion requested attorney's fees, costs, and associated expenses, totaling $30,617.08, arguing that the plaintiffs' complaint was solely intended to "harass, intimidate and embarrass" Brink and S&B. They also argued that the plaintiffs sought retribution for the role that S&B attorneys played in investigating the insurance claims and that by including claims against Brink and S&B the plaintiffs intended to deprive Commerce of its chosen attorney in their action against Commerce.

After a hearing, the defendants' motion was granted on September 15, 2006, pursuant to Mass.R.Civ.P. 11(a), 365 Mass. 753 (1974), and the "court's inherent supervisory powers." The judge ruled that "[a]ttorneys, who are duty bound to maintain the highest ethical standards possible in all circumstances, act as gatekeepers who ensure ... that the business of the court is not demeaned by unfounded, fraudulent, frivolous, or spiteful actions. ... These obligations were lost in the fervor of over-zealous advocacy in this case." The judge awarded payment of $30,000 in attorney's fees, ordering Tilman to pay $26,000, and apportioning $1,000 each from Zakuta and Kratsberg, $1,250 from Attorney McCrevan, counsel to Tilman, and $750 from Attorney Cohen, counsel to Zakuta and Kratsberg.

On December 20, 2007, the Appellate Division of the Boston Municipal Court Department affirmed the award of attorney's fees and dismissed the plaintiffs' appeal, concluding that the trial judge "was well within her discretion" and that "[t]he Plaintiffs have failed to demonstrate clear error." The Appellate Division held that "[t]he trial judge's findings and conclusions provide ample support for the determination that the Plaintiffs acted in bad faith in bringing the action against [Brink and S&B]." The plaintiffs timely appealed.

The plaintiffs argue that it was error for the Appellate Division to affirm the Boston Municipal Court judge's award of attorney's fees against the plaintiffs' attorneys and against the plaintiffs pursuant to rule 11 and the inherent powers of the court. We affirm the award against the attorneys, but reverse the award as imposed against the litigants.

2. Sanctions against attorneys. It is well settled that District Court judges have authority to award attorney's fees against attorneys pursuant to rule 11.¹⁴ See Crystal Constr. Corp. v. Hartigan, 56 Mass.App.Ct. 324, 333-334, 778 N.E.2d 915 (2002). Rule 11(a) provides, in pertinent part, that "[t]he signature of an attorney to a pleading constitutes a certificate by him that he has read the pleading; that to the best of his knowledge, information, and belief there is a good ground to support it; and that it is not interposed for delay." A "good ground" requires that the pleadings be supported by "reasonable inquiry and an absence of bad faith." Bird v. Bird, 24 Mass.App.Ct. 362, 368, 509 N.E.2d 289 (1987). See New England Allbank for Sav. v. Rouleau, 28 Mass.App.Ct. 135, 140-142, 547 N.E.2d 61 (1989); Doe v. Nutter, McClennen & Fish, 41 Mass.App. Ct. 137, 141-143, 668 N.E.2d 1329 (1996). "[R]ule 11(a) authorizes a judge to impose attorney's fees and costs where an attorney has failed to show a subjective good faith belief that the pleading was supported in both fact and law." Van Christo Advertising, Inc. v. M/A-COM/LCS, 426 Mass. 410, 416, 688 N.E.2d 985 (1998). See Psy-Ed Corp. v. Klein, 62 Mass.App. Ct. 110, 113, 815 N.E.2d 247 (2004). On review, "our function is to determine whether the judge abused [her] discretion, which includes considering whether proper legal standards were applied and whether there was reasonable support for the judge's evaluation of the facts." Van Christo Advertising, Inc. v. M/A-COM/ LCS, 426 Mass. at 417, 688 N.E.2d 985.

Here there was a sufficient basis for the judge to find bad faith and to order attorney's fees against McCrevan and Cohen pursuant to rule 11. Putting aside the vitality of the legal theory for initially filing suit, neither attorney investigated the telephone...