Vincent R. COCCOLI, Sr.1 v. SACHEM CAPITAL PARTNERS, LLC, & others.2
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
This is an appeal from a Land Court judge's order striking the pro se plaintiff's first notice of appeal. The order must be affirmed because the plaintiff has failed to show that the judge erred in dismissing the appeal. Instead, the plaintiff's appellate brief raises issues relating to the merits of his underlying complaint, none of which are properly before us.
Background. We briefly summarize the relevant factual and procedural history of the case. In November 2016, Sachem Capital Partners, LLC (Sachem), extended a commercial promissory note in the amount of $200,000 to Millville Associates, Inc. (Millville Associates), and Fourwinds Development, LLC.4 The conditional approval letter for the loan named the plaintiff as a personal guarantor. The note was secured by a mortgage on a property located at 179 Thayer Street in the town of Millville (property).5 ,6 The note included a disbursement schedule that released $80,000 at the time of closing, and reserved the remainder to be disbursed according to the accompanying construction rider and draw schedule. Repayment of the interest was set to begin in January 2017 in monthly installments, but as of March 2017, Millville Associates had failed to make a single payment. Sachem then agreed to release reserve funds to be allocated to outstanding and future interest payments but, by August 2019, Millville Associates was in default and Sachem commenced foreclosure proceedings.7
On August 22, 2019, the plaintiff, purporting to represent both himself and Millville Associates, brought an action in the Land Court alleging various tort and contract claims against the defendants, as well as a wrongful foreclosure claim against Sachem.8 On the same day, the plaintiff filed an emergency motion for injunctive relief seeking to enjoin Sachem from proceeding with the foreclosure sale. After a hearing, the judge denied the plaintiff's request for injunctive relief and dismissed without prejudice the tort and contract claims as not within the jurisdiction of the Land Court.9 The judge concluded that the plaintiff, who is not an attorney, could not proceed on the wrongful foreclosure claim where the mortgagor was a corporation, but gave the plaintiff thirty days to allow an attorney to file an appearance. When no such appearance was filed, the judge dismissed the sole remaining count without prejudice.
A series of procedural matters followed. The plaintiff filed a notice of appeal (first notice of appeal).10 The Land Court judge issued an order to show cause as to why the appeal should not be struck, absent the appearance of counsel on behalf of Millville Associates, and subsequently struck the notice of appeal when the plaintiff failed to show cause. The plaintiff appealed from that order to a single justice of this court, who remanded the matter to the Land Court for reconsideration.11 On remand, the judge rescinded the order to strike the plaintiff's first notice of appeal, and allowed the notice of appeal to stand for thirty days pending the appearance of counsel for Millville Associates, subject to dismissal on motion by a defendant. Sachem so moved and, after a hearing, the notice of appeal was dismissed for failure to name Millville Associates as a party, see note 9, supra, and for failure to obtain counsel to represent Millville Associates, the proper party to the appeal.
The plaintiff then filed a second notice of appeal, which purported to appeal both the dismissal of the first notice of appeal as well as the initial order dismissing the plaintiff's underlying claims, and requested a stay pending appeal. The judge allowed Sachem's motion to strike the second notice of appeal in part, limiting the second notice of appeal to “the propriety of the court's dismissal of plaintiff's first notice of appeal.” The motion to stay was denied.
Discussion. Our review is limited to determining whether the judge erred in striking the plaintiff's first notice of appeal. See Reznik v. Mendes, 481 Mass. 1003, 1004 n.3 (2018) (second notice of appeal challenging order striking first notice of appeal “proceed[s] on the limited question whether the party had a right to appeal from the challenged order in the first place”). See also Elles v. Zoning Bd. of Appeals of Quincy, 450 Mass. 671, 673 (2008). We discern no error in the Land Court judge's conclusion that the plaintiff's appeal was improper.
As an initial matter, it is not clear that the plaintiff's first notice of appeal was properly taken. Rule 3 (c) of the Massachusetts Rules of Appellate Procedure, as appearing in 481 Mass. 1603 (2019), requires that the notice of appeal “designate the judgment, decree, adjudication, order, or part thereof appealed from” and name the “parties taking the appeal.” No such document appears in the record and the civil appeal entry form -- containing neither the subject of the appeal nor the proper appellant -- is not an adequate or permissible substitute. See Bateman v. Consolidated Rail Corp., 45 Mass. App. Ct. 916, 918 (1998) (notice of appeal defective where it failed to specify order from which appeal was taken). However, and notwithstanding any procedural defects, the Land Court docket reflects that a notice of appeal was filed and the judge ruled on Sachem's motion to strike the first notice of appeal.
In any event, the plaintiff's first notice of appeal was properly struck. “It is well settled under Massachusetts law that, with one very limited exception not applicable here, ‘corporations must appear and be represented in court, if at all, by attorneys.’ ” Dickey v. Inspectional Servs. Dep't of Boston, 482 Mass. 1003, 1004 (2019), quoting Varney Enters., Inc. v. WMF, Inc., 402 Mass. 79, 82 (1988). “There is no injustice in allowing natural persons to appear pro se, while requiring persons who accept the advantages of incorporation to bear the burden of hiring counsel to sue or defend in court.” Braxton v. Boston, 96 Mass. App. Ct. 714, 717 (2019), quoting Varney Enters., Inc., supra.
Here, the plaintiff, a nonattorney, purported to appeal from the dismissal of a wrongful foreclosure claim brought on behalf of a corporation. The record reflects that Millville Associates, not the plaintiff, was party to the commercial loan transaction, and although the plaintiff recognizes that the property was owned by a corporation, he has not articulated why the failure of an attorney to appear and represent the corporation's interests renders the judge's order striking his notice of appeal improper. Indeed, the judge, following Braxton, allowed the appeal to stand for thirty days to allow for appearance of counsel on behalf of Millville Associates. See Braxton, 96 Mass. App. Ct. at 719 (“a notice of appeal filed by a pro se trustee or corporate officer on behalf of a trust, corporation, or similar legal entity is adequate to allow an appeal to proceed in this court, so long as an attorney promptly files an appearance”). The judge did not err in striking the appeal when the thirty days had expired and counsel had not appeared.
The plaintiff, however, contends that he may individually pursue this appeal because Millville Associates has been dissolved and he is the “sole beneficiary” of its corporate interests. To the extent that the plaintiff is arguing that the legal claims of a corporation pass to the sole officer or shareholder upon the dissolution of that corporation, his argument is unavailing.
“A corporation is an independent legal entity, separate and distinct from its shareholders, officers, and employees.” Spaneas v. Travelers Indem. Co., 423 Mass. 352, 354 (1996). “The law is settled that for such injury to a corporation, a stockholder has no right to maintain an action at law.” Hirshberg v. Appel, 266 Mass. 98, 100 (1929). See Quarterman v. Springfield, 91 Mass. App. Ct. 254, 262 (2017) (“As a general rule, a shareholder does not have standing to sue to redress an injury to the corporation in which he holds an interest”); In re Dein Host, Inc., 835 F.2d 402, 406 (1st Cir. 1987) (“Even a sole shareholder acquires no personal cause of action because of an injury -- real or threatened -- to the corporation”). And even after dissolution, corporate legal claims remain personal to the corporation for the duration of the “three-year statutory winding up period.” Pagounis v. Pendleton, 52 Mass. App. Ct. 270, 276 (2001). See G. L. c. 155, § 51; G. L. c. 156B, § 102. Contrary to the plaintiff's argument, corporate dissolution does not immediately extinguish the corporation's legal claims or liabilities, or give an officer or shareholder standing to assert or defend such actions in the corporation's stead. See Pagounis, supra (corporate officer lacks standing to assert claim belonging to corporation which dissolved less than three years earlier). Contrast Wilbur v. Tunnell, 98 Mass. App. Ct. 19, 25 (2020) (personal representative of estate may proceed pro se where no third-party interests are at stake).
Although the record does not indicate when Millville Associates was dissolved, it appears to have occurred after the hearing on the plaintiff's motion for injunctive relief and before the hearing held on the judge's order to show cause. Regardless of the timing, Millville Associates's dissolution has no effect on this proceeding because any claim it could have brought against Sachem prior to dissolution would survive during its winding up period. See Pagounis, 52 Mass. App. Ct. at 276 (corporate existence survives for purpose of prosecuting corporate claims).
Nor does the plaintiff's position as guarantor of the promissory note confer standing to challenge the foreclosure proceedings. The plaintiff's obligation as a guarantor arises from an agreement distinct from that undertaken by the mortgagor or the maker of the note. See SKW Real Estate Ltd. Partnership v. Gold, 428 Mass. 520, 523-524 (1998). See also Seronick v. Levy, 26 Mass. App. Ct. 367, 372 (1988), quoting Senior Corp. v. Perine, 16 Mass. App. Ct. 967, 968 (1983) (“liability of a guarantor does not flow from an ‘obligation secured by a mortgage of real estate’ but is independent of that obligation”).
While the plaintiff's appellate brief continues to press the claims raised in his underlying complaint, those claims are not properly before us, and we therefore express no view on them. As stated, the only question properly before us with the case in this posture is the correctness of the order striking the plaintiff's first notice of appeal. As to that, there was no error.
Order striking notice of appeal affirmed.
4. Fourwinds Development, LLC, was not a party to the underlying proceedings and is not party to this appeal.
5. Sachem subsequently assigned the mortgage to Sachem Capital Corporation. For the purposes of this memorandum and order, both entities are referred to as “Sachem.”
6. The note was additionally secured by a second mortgage on a property located at 0 Andrew Mountain Road in Naugatuck, Connecticut.
7. On September 13, 2017, Millville Associates transferred the property via quitclaim deed to a third Sachem business entity, Sachem Capital Realty, LLC. An attorney for Sachem represented to the Land Court that Sachem viewed the transfer as additional security for the loan, rather than a transfer of ownership. See Chatham Pharms., Inc. v. Angier Chem. Co., 347 Mass. 208, 210 n.3 (1964).
8. The complaint alleged seven claims for relief as against Sachem: count I (breach of contract); count II (fraud); count III (negligent misrepresentation); count IV (breach of covenant of good faith and fair dealing); count V (wrongful foreclosure); count VI (unfair and deceptive business practices); and count VII (tortious interference). As against the town of Millville, the complaint alleged three claims for relief: count I (breach of covenant of good faith and fair dealing); count II (fraud); and count III (tortious interference). The plaintiff did not allege specific claims for relief as against Jeff Villano or John Villano individually.
9. The plaintiff filed the dismissed tort and contract claims in the Superior Court on March 9, 2020. On January 4, 2021, a Superior Court judge allowed the defendants' motion to dismiss Coccoli's complaint.
10. Although the Land Court docket reflects this filing on October 30, 2019, a corresponding notice of appeal is not included in the record. The civil appeal entry form names only the plaintiff, individually, as the appellant.
11. The single justice noted that an order dismissing an appeal is not interlocutory and thus not subject to single justice review. Notwithstanding this irregularity, the case was remanded to the Land Court for reconsideration in light of Braxton v. Boston, 96 Mass. App. Ct. 714 (2019), which was decided after the order dismissing the plaintiff's first notice of appeal was entered.
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