BAKIS v. HANNA (2020)

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

Defendant John S. Hanna appeals from an order entered in the Superior Court on June 25, 2019, allowing the plaintiffs' motion to dismiss Hanna's notice of appeal from the denial of his motion to dissolve or modify an injunctive order, and from an order entered on June 28, 2019, allowing the plaintiffs' motion for sanctions after a finding of civil contempt. We affirm the order dismissing the notice of appeal, and dismiss, without prejudice, the appeal from the order allowing sanctions.

Background. The plaintiffs, Peter and Nikolaos Bakis, filed a complaint against Hanna, an attorney who had represented them and their businesses for twenty-five years, alleging claims of breach of contract, breach of fiduciary duty, and misrepresentation.⁵ These claims stemmed from two loan transactions, one that the plaintiffs made to Hanna, and one that Hanna induced them to make to a third party. The complaint also named Hanna, as trustee of two real estate trusts, as a reach and apply defendant, and sought a temporary restraining order preventing Hanna, both personally and as trustee, from disposing of assets.

The plaintiffs filed the complaint on February 6, 2017, along with a motion for a temporary restraining order. The docket reflects an opposition filed by Hanna on February 21, 2017, as well as a number of hearings and continuances. Eventually, after a hearing held on May 31, 2017, a Superior Court judge issued a “temporary order,” entered on June 13, 2017, which provided as follows: “Until further notice of this court: Defendant and the reach and apply defendants will not (i) transfer, sell, hypothecate or encumber any real property owned or held by them, without exception, or (ii) transfer, sell, hypothecate or encumber any other property owned or held by them except as necessary in the ordinary course of business.” Hanna did not appeal from the issuance of this order.

On August 24, 2017, the plaintiffs filed a motion for sanctions, claiming that Hanna had violated the temporary order by selling a property held by one of his realty trusts. Hanna opposed the motion, and on September 22, 2017, an amended injunctive order, issued by a second judge, was entered. The amended order required Hanna, within ten days, to deposit with the court, or with an escrow agent acceptable to the plaintiffs, the sum of $156,000. The original injunction was to remain in effect until Hanna made the required payment, at which time it would be dissolved. Hanna did not appeal from this order.

When Hanna failed to make the payment, on October 24, 2017, the plaintiffs filed and served a complaint for contempt. While the parties were engaged in discovery and procedural skirmishes with respect to the contempt complaint, on January 31, 2018, Hanna filed, and on February 20, 2018, refiled an emergency motion to dissolve or modify the injunctive orders. Hanna asserted that the grounds underlying the injunctive orders had “so materially changed” that injunctive relief was no longer warranted. Specifically, Hanna claimed that since the injunctive orders issued, he had “amassed substantial evidence that proves that the funds that Plaintiffs remitted to him were provided to partially repay Mr. Hanna for money that he loaned, credits that he advanced, and legal services that he provided for the Plaintiff, Peter Bakis, and the entities that he owns or controls.” To support this assertion, Hanna relied on his own affidavit in which he discussed transactions that took place between April 2011 and October 2016.

Following a hearing on May 2, 2018, the first judge denied the motion to dissolve or modify in an order dated May 11, 2018, which entered on May 15, 2018. On May 31, 2018, Hanna filed a notice of appeal from the order denying the motion to dissolve or modify.

On July 23, 2018, the plaintiffs filed a motion to dismiss Hanna's notice of appeal. On June 25, 2019, the judge allowed the motion to dismiss, finding that “the appeal [was] not filed in a timely way and reject[ing] the defendant's argument that there were changed circumstances.” Hanna filed a timely notice of appeal from the order dismissing his notice of appeal. This appeal is before us now.

Meanwhile, on May 15, 2018, the first judge conducted an evidentiary hearing on the plaintiffs' complaint for contempt. The record before us does not include a transcript of the May 15 hearing, and the docket does not reflect the result of the hearing, but it is apparent from the record that the judge found Hanna in contempt. Accordingly, on August 22, 2018, the plaintiffs filed a motion for sanctions after contempt finding, seeking attorney's fees of $39,912.50. Hanna opposed the motion, and a hearing was held on March 14, 2019. In an order entered on June 28, 2019, the judge allowed sanctions in the amount of $27,494.50 as “a compensatory order in connection with its finding of civil contempt,” finding that “the fees expended in October 2017 and January, February, and May 2018 are reasonable in amount and rate charged and that they are causally related to the finding of contempt.” Hanna filed a timely notice of appeal from the order allowing sanctions. This appeal is also before us.

Discussion. 1. Appeal from order dismissing notice of appeal. Hanna asserts that he is entitled to appeal, as of right, under the second paragraph of G. L. c. 231, § 118, from the judge's order denying his motion to dissolve or modify the injunctions. The statute provides, in relevant part, that “[a] party aggrieved by an interlocutory order of a trial court justice in the superior court department ․ granting, continuing, modifying, refusing or dissolving a preliminary injunction, or refusing to dissolve a preliminary injunction ․ may appeal therefrom to the appeals court․ An appeal under this paragraph shall be taken within thirty days of the date of the entry of the interlocutory order.” Hanna argues that the motion judge erred, both substantively and procedurally, by dismissing his notice of appeal from the denial of his motion to dissolve or modify the injunctions.

We address the substance first. The original injunctive orders, enjoining Hanna from disposing of assets that could be used in satisfaction of a judgment against him, were entered on June 13, 2017. His time to appeal under G. L. c. 231, § 118, second par., elapsed on July 13, 2017, without Hanna taking any action. The order requiring him to deposit $156,000 with the court or in escrow was entered on September 22, 2017. Any appeal from that order had to be taken by October 22, 2017; Hanna did not appeal.

On January 31, 2018, Hanna filed, and on February 20, 2018, refiled his “emergency motion” to dissolve or modify the injunctive orders. He purports to appeal from the order denying that motion, entered on May 15, 2018. Although a literal reading of the statute appears to support Hanna's claim that he has the right to appeal from the denial of a motion to dissolve or modify an injunction, it is well established that a literal reading would eviscerate the general rule disfavoring piecemeal appeals by allowing “artful pleaders with potentially perpetual opportunities to appeal from orders that continue, modify, or refuse to dissolve or modify injunctions.” Manousos v. Sarkis, 382 Mass. 317, 322 (1981). What Hanna has attempted to do here is not allowed: “When the time in which an appeal may be taken from the original order has expired, as it has here, an appeal may not be had in the absence of changed circumstances by simply moving to modify or dissolve the injunction and then appealing from the denial of the motion.” Id.

Hanna argues that his motion to modify or dissolve was proper because it did in fact allege changed circumstances. The change in circumstances, he contends, was his presentation of “new information” that undermined the plaintiffs' claims against him. This new information was presented in the form of an affidavit, with Hanna as the affiant, supported by numerous exhibits, concerning events and transactions that occurred from 2011 through 2016, before the plaintiffs initiated this lawsuit or sought injunctive relief. Nothing in Hanna's motion or affidavit demonstrated that circumstances had indeed changed between June 2017, when the original injunction entered, and February 2018, when he sought to modify or dissolve it. Nothing in his motion or affidavit suggested that the information presented in the motion to dissolve or modify was unavailable for Hanna to amass in opposition to the plaintiffs' original requests for injunctive relief. On the merits, the motion judge did not err as a matter of law or fact in determining that Hanna's appeal was not timely, and that he failed to demonstrate changed circumstances to warrant restarting the clock.

Hanna also asserts that the motion judge did not possess the authority to dismiss the appeal, and by so doing usurped this court's authority. While we agree that Mass. R. A. P. 10 (c), as appearing in 481 Mass. 1618 (2019), does not appear to contemplate dismissal of a civil appeal in the circumstances presented here, some appellate decisions have suggested that trial court judges may dismiss appeals under other circumstances. See, e.g., Zieminski v. Berkshire Div. of the Probate & Family Court Dep't, 408 Mass. 1008, 1009 (1990) (affirming Probate and Family Court judge's dismissal of three notices of appeal and suggesting that appellant could have sought reinstatement of appeals in Appeals Court). Where, as here, the propriety of the appeal turns on whether a litigant has demonstrated changed circumstances, the motion judge is in at least as good a position as the appellate court to assess whether the facts on the ground have changed between the issuance of the original injunction and the motion to dissolve. We need not decide the question, however, because Hanna was not prejudiced by the motion judge's dismissal of his appeal. This court would have reached the same result.

b. Appeal from order allowing sanctions for contempt. Hanna also purports to appeal from the issuance of the order allowing the plaintiffs' motion for sanctions after the contempt finding. It is unclear whether a party found in civil contempt is entitled to an immediate appeal from a judgment of contempt, or whether a finding of contempt is an interlocutory order and must be appealed together with the final judgment. See Scott-Jones v. Lu, 447 Mass. 1006, 1006 (2006) (“the judgment of civil contempt is an appealable final judgment”); Matter of Roche, 381 Mass. 624, 625 n.1 (1980) (“An adjudication of civil contempt against a nonparty constitutes a final judgment appealable pursuant to Mass. R. A. P. 1 [c]” [emphasis added] ); Darmetko v. Boston Hous. Auth., 378 Mass. 758, 762 n.6 (1979) (“A contempt order issued during the course of a proceeding has been held not to be a final order appealable by a party. A civil contempt proceeding has been said to be reviewable in connection with an appeal from a final judgment in the main action” [citations omitted] ). In any event, here, although the judge allowed the motion for sanctions, she never entered a judgment of contempt. Accordingly, the plaintiff's appeal is not properly before us. See Commercial Wharf E. Condominium Ass'n v. Boston Boat Basin, LLC, 93 Mass. App. Ct. 523, 532 n.20 (2018) (suggesting dismissal was appropriate where “no final contempt judgment has entered,” but exercising discretion to reach appeal for reasons of judicial economy). We dismiss this aspect of Hanna's appeal without prejudice for Hanna to appeal the order together with any final judgment in this matter should he elect to do so.⁶

Conclusion. The order of June 25, 2019, dismissing the defendant's notice of appeal, is affirmed. The appeal from the order of June 28, 2019, allowing sanctions in the amount of $27,494.50, is dismissed without prejudice.

So ordered.

Affirmed.

FOOTNOTES

5.   The plaintiffs later amended their complaint to add a claim under G. L. c. 93A.

6.   The plaintiffs' request for attorney's fees and costs under Mass. R. A. P. 25, as appearing in 481 Mass. 1654 (2019), is denied.