477 Harrison Ave., LLC v. JACE Boston, LLC

Citations: 477 Mass. 162; 74 N.E.3d 1237Docket: SJC 12150

Court: Massachusetts Supreme Judicial Court; May 23, 2017; Massachusetts; State Supreme Court

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All slip opinions and orders are subject to formal revision and are superseded by the Official Reports. Errors should be reported to the Reporter of Decisions at the Supreme Judicial Court. The case involves 477 Harrison Ave. LLC vs. Jace Boston, LLC, concerning the application of Massachusetts' anti-SLAPP statute (G. L. c. 231, § 59H) in a dispute between neighboring property owners. The plaintiff acquired a property at 477 Harrison Avenue in 2011 for redevelopment, while the defendants, owning an adjacent parcel, opposed these plans through various legal actions.

The plaintiff subsequently filed a complaint for abuse of process and a violation of the Consumer Protection Act (G. L. c. 93A). The defendants responded with a special motion to dismiss, which was denied by the Superior Court. Upon appeal, the Supreme Judicial Court reviewed whether the defendants demonstrated that the claims were solely based on their petitioning activity. The court found that the defendants met this threshold for the abuse of process claim but not for the G. L. c. 93A claim, which the judge correctly denied dismissal.

With the defendants having met their burden regarding the abuse of process claim, the plaintiff must then show that the defendants' petitioning activities lacked a reasonable basis in law or fact and caused actual injury. The court noted that only part of the defendants' activities related to the abuse of process claim was shown to lack a reasonable basis. The case, in light of a recent decision (Blanchard v. Steward Carney Hospital, Inc.), is remanded to the Superior Court to allow the plaintiff to demonstrate that the entirety of its abuse of process claim was not intended to chill the defendants' legitimate petitioning activities. If successful, this will defeat the special motion to dismiss.

In anticipation of redevelopment, John Holland, the plaintiff's building manager, met with Arthur Leon, owner of JACE Boston, LLC, which owned the adjacent building at 1234 Washington Street. Leon allegedly requested Holland to postpone redevelopment of the plaintiff's property at 477 Harrison Avenue to facilitate the redevelopment of 1234 Washington. Richard J. Leon stated that Arthur Leon intended to wait for the plaintiff to go bankrupt to acquire 477 Harrison at a significantly reduced price. The plaintiff rejected this delay request, leading to ongoing disputes. 

The conflict escalated when the plaintiff sought zoning relief in early 2012. Leon's attorney opposed this request, but the Boston Zoning Board of Appeal (ZBA) unanimously approved the plaintiff's variances and permits. Following this, the defendants appealed the ZBA's decision. Concurrently, the plaintiff sought a project review from the Boston Redevelopment Authority (BRA), which Leon also opposed. In the summer of 2012, the defendants initiated a declaratory judgment action concerning rights related to the shared wall, citing a 1926 agreement that restricted the plaintiff's ability to demolish the wall below a specified height.

In September 2014, a Superior Court judge ruled that the 1926 agreement applied to both buildings, preventing the plaintiff from demolishing the wall below the agreed height. As redevelopment plans stalled, the plaintiff shifted its approach by abandoning its zoning relief request in September 2013 to pursue an "as of right project," which required a shorter permit process. A building permit was obtained in October 2013, prompting the defendants to appeal. Despite the appeal, the plaintiff notified the defendants of its intent to start work on the shared wall in November 2013. The defendants sought a preliminary injunction to stop the construction, but the court permitted the plaintiff to remove undisputed portions of the wall and allowed the plaintiff to temporarily access the defendants' property to protect their structure during the work. The revised project proposal did not include the previously planned penthouses and required only a conditional use permit.

In January 2014, the plaintiff began redeveloping its property, two years after notifying Leon of its plans. Before construction, the plaintiff provided the defendants with necessary permits, plans, and an insurance certificate. The defendants sought injunctive relief to prevent the plaintiff from entering their property, which was denied by a Superior Court judge, who permitted the plaintiff to enter the defendants' property to prevent damage. Conflict escalated in December 2014, when Leon reported Holland's employees on the defendants' roof and pursued a criminal complaint for trespassing, which was dismissed due to lack of probable cause.

In January 2015, the plaintiff sought zoning relief to construct penthouses, facing written opposition from the defendants, but the Zoning Board of Appeals (ZBA) approved the request. The defendants appealed this decision to the Superior Court. Over three years after initiating redevelopment, the plaintiff filed a complaint against the defendants for abuse of process and violation of G.L. c. 93A. The plaintiff alleged the defendants misused legal processes to delay its development for ulterior motives, including bankrupting a related LLC and coercing the plaintiff into concessions.

In response, the defendants filed a special motion to dismiss under the anti-SLAPP statute, which was denied by a Superior Court judge, who found the defendants failed to show that the plaintiff's suit was solely based on their petitioning activities. The judge's decision was partially upheld on the abuse of process claim but reversed regarding the G.L. c. 93A claim, as the plaintiff did not demonstrate that the defendants' activities lacked a reasonable basis. The matter was remanded for the plaintiff to prove that the abuse of process claim was not a SLAPP suit.

The anti-SLAPP statute provides a procedural remedy for the early dismissal of lawsuits intended to suppress constitutional rights related to free speech and petitioning. The primary mechanism for this is a special motion to dismiss, which allows a defendant to seek dismissal of civil claims based on their exercise of the right to petition. To succeed, the defendant (special movant) must first demonstrate through pleadings and affidavits that the claims against them are solely based on their petitioning activities, which shifts the burden to the plaintiff (nonmoving party) to counter this motion.

The plaintiff can challenge the motion by showing, by a preponderance of the evidence, that the defendant's petitioning activity lacked reasonable factual support or legal basis and caused the plaintiff actual injury. Alternatively, the plaintiff may argue that their claim was not primarily intended to chill the defendant's petitioning but aimed to seek damages for personal harm from the defendant's alleged wrongful acts.

For the special movant to meet their threshold burden, they must prove that the claims are exclusively based on their petitioning activities, regardless of their motivation for such activities. The court assesses only relevant allegations linked to the specific causes of action.

An abuse of process claim, which requires proving that process was used for an ulterior purpose resulting in damage, is inherently tied to petitioning activity under the anti-SLAPP statute. While such a claim will often involve petitioning activities, it does not necessarily mean that it is solely based on them; the context of the claim matters.

A party's invocation of legal process can lead to an abuse of process claim under certain conditions, such as when it is used to exert pressure, exemplified by *Carroll v. Gillespie*, where a criminal complaint was filed to coerce payment. An abuse of process claim can also arise from the misuse of that process, independent of petitioning activities, as established in *Kelley v. Stop & Shop Cos.* and further explored in *Adams v. Whitman*. For instance, attempts to extort through process can form a basis for such a claim, highlighted in *Keystone Freight Corp. v. Bartlett Consol. Inc.*.

The focus is on whether the plaintiff has sufficiently alleged conduct relevant to the abuse of process claim beyond the defendants' 14 process invocations. The plaintiff contends their claim is supported by two elements: the defendants' insurance claims against the plaintiff's construction company and statements made by Leon suggesting ulterior motives behind the process use. However, these do not constitute substantial nonpetitioning bases for the claim. The insurance claims lack a clear connection to the process involved, as filing an insurance claim does not equate to invoking process as defined legally. 

While Leon's statements relate to the ulterior motive aspect of the claim, the inquiry centers on whether the defendants have met their burden in the context of a special motion to dismiss, which emphasizes the nature of the conduct itself rather than the motivations behind it. This is supported by precedents indicating that commercial motives do not negate petitioning activity. Ultimately, if the sole conduct in question is petitioning activity, there cannot be a substantial basis for an abuse of process claim, regardless of the underlying motives.

The threshold burden stage focuses on whether the conduct complained of solely pertains to the defendants' petitioning activity. In this case, the plaintiff's abuse of process claim does not rest on the defendants' statements, which explain their motivation but do not constitute the conduct at issue. The defendants successfully met their threshold burden regarding this claim.

In contrast, the plaintiff's G. L. c. 93A claim is based on the same factual allegations but involves non-petitioning activities, specifically the defendants' alleged filing of false insurance claims against the plaintiff's construction company. This allegation provides a substantial basis for the G. L. c. 93A claim, indicating that the claim is not solely related to the defendants' petitioning activity. The complaint suggests that these false insurance claims were part of unfair or deceptive practices aimed at financially harming the plaintiff's redevelopment projects. 

To establish a G. L. c. 93A claim, the plaintiff must show: (1) the defendants engaged in unfair competition or deceptive acts, (2) the plaintiff suffered a loss of money or property, and (3) a causal connection between the loss and the defendants' actions. The acts related to the false insurance claims are distinct from the defendants' use of process, and since these claims do not constitute petitioning, the defendants did not meet their burden regarding this claim, affirming the trial judge's denial of their motion to dismiss.

Regarding the plaintiff's second-stage burden, since the defendants met their threshold burden for the abuse of process claim, the plaintiff can defeat the special motion to dismiss by demonstrating that the defendants' petitioning activity was illegitimate and caused actual injury. If the plaintiff cannot prove this, it can instead show that its primary motive in bringing the claim was to seek damages for personal harm rather than to interfere with the defendants' petitioning rights.

The legitimacy of the defendants' petitioning activities is central to the plaintiff's abuse of process claim, which hinges on whether each instance of petitioning lacked a reasonable legal or factual basis. The plaintiff has failed to demonstrate this for all instances except for Leon's application for a criminal complaint against Holland. Critical factors in assessing this second-stage burden include that mere affidavits contradicting the defendants' factual basis or showing unsuccessful petitioning activities do not suffice. The focus is on whether the petitioning activities possess any reasonable merit, not their success. Additionally, the motivation behind the defendants' actions is irrelevant to the legitimacy of the petitioning activities themselves, though it may be pertinent under a different framework regarding whether the claim constitutes a "SLAPP" suit. The record indicates six instances of petitioning by the defendants, including communications with various governmental bodies and legal filings. The plaintiff primarily contests the factual and legal basis of Leon's police report and criminal complaint against Holland. However, the argument that the police report lacks a reasonable basis fails, as it accurately reflects Leon's observations of the plaintiff's workers on his roof, which the evidence suggests was indeed the case.

The police report is deemed to have a reasonable basis in fact and law, supporting the events described. However, the plaintiff's argument regarding Leon's application for a criminal complaint is stronger. This application was filed in response to the plaintiff's construction workers and materials on the defendants' property and was dismissed due to lack of probable cause. Importantly, this application followed a Superior Court order granting the plaintiff the right to trespass to prevent damage, which, combined with the lack of probable cause, suggests the criminal complaint was unfounded. The plaintiff has shown actual injury from the complaint, including embarrassment and concern over financial repercussions, qualifying as "actual injury" under the anti-SLAPP statute. 

The interpretation of the anti-SLAPP statute raises the question of whether all petitioning activities must lack legitimacy to defeat a motion to dismiss. The statute aims to protect valid petitioning activities, thus any petitioning shown to lack a reasonable basis is not covered. The remaining petitioning activities, which the plaintiff has not demonstrated as illegitimate, remain protected. Therefore, unless the plaintiff can prove its entire abuse of process claim is not a "SLAPP" suit, it may only proceed with claims related to Leon's application for a criminal complaint. The case is remanded to the Superior Court for the plaintiff to demonstrate that its claim is not a "SLAPP" suit, and the plaintiff also contends that the "preponderance of the evidence" standard infringes on its right to a jury trial as guaranteed by the Massachusetts Declaration of Rights.

The court finds no merit in the plaintiff's argument regarding the right to a jury trial, clarifying that this right does not extend to any question a party wishes to submit to a jury. Instead, it is limited to questions of fact that are material to the merits of a claim. A special motion to dismiss addresses a legal question separate from the merits of the plaintiff's claim, specifically whether the defendant's petitioning activity is protected under the anti-SLAPP statute. The judge's determination that the plaintiff has met their burden does not equate to a ruling on the merits but rather assesses whether the defendant's prior actions are shielded by the statute. This process is akin to the doctrine of qualified immunity for government officials, where the inquiry remains independent of the underlying action's merits. The plaintiff must show that their abuse of process claim was not primarily aimed at chilling the defendant's legitimate petitioning activities, but rather to seek damages for harm caused by the defendant's alleged wrongful acts. The court affirms the denial of the defendants' special motion to dismiss regarding the plaintiff's G. L. c. 93A claim and vacates it concerning the abuse of process claim. Since the plaintiff has not proven that the defendants' petitioning activities lack a reasonable basis, the case is remanded to the Superior Court for further proceedings in line with this opinion.