Boston Business Litigation Blog -

Fraud in Massachusetts real estate and mortgage transactions has reached an epidemic level. It seems every week; there are new cases of fraud involving:

• lawyers,
• mortgage brokers,
• appraisers,
• realtors, and
• bank officials.

As recent as March 8, 2011, State Attorney General, Martha Coakley announced a new real estate fraud conviction involving a Massachusetts employee of a nationally prominent bank.

In just one year, (2007-2008) mortgage fraud increased 36% across the United States. Massachusetts has seen its share: just check this FBI report on nine recent prosecutions in the Commonwealth. Frustration with the mortgage fraud situation has led to proposed legislation from Governor, Deval Patrick and much public commentary and outcry, as Boston.com real estate blogger Scott Van Voorhis reports.

Although criminal prosecutions may sometimes provide for restitution, more often, businesses and individuals harmed by real estate fraud are turning to civil litigation against defendants who cause or contribute to damages from mortgage fraud. Available civil actions in Massachusetts for mortgage fraud may include:

• breach of contract;
• breach of fiduciary duty;
• unfair trade practices – breach of Mass. Gen. Laws ch. 93A which may allow for multiple damages and attorney’s fees;
• legal malpractice / lawyer liability;
• realtor malpractice;
• Mortgage broker liability.

In addition to the assets which may be available to satisfy potential judgments against parties found to have breached legal duties, there may also be insurance which covers negligent acts or omissions by various professionals involved with real estate practitioners. Persons damaged by mortgage fraud in Massachusetts should consult an experienced real estate fraud attorney.

Real  estate lawyers who want to hear the latest about mortgage fraud can attend the upcoming R.E.B.A. (real estate bar association) spring meeting  on May 2, 2011 in Westborough where  Victor A. Wild; Thomas J. Zappala; Ryan M. DiSantis; Nancy L. McCormick; Ann M. Ragosta; Matthew P. Galas  mortgage a fraud team of the U.S. Attorney's Office,  will discuss the development of large-scale mortgage fraud investigations, schemes used to commit real estate financing fraud, and the trial of United States vs. Levine, et al. The panelists will also share insights on how to spot the signs of mortgage fraud.

The new Chief Justice of the Massachusetts Supreme Judicial Court is the Honorable Roderick Ireland. He was administered the oath as Chief Justice on December 20, 2010 marking the pinnacle of a career spanning 33 years. In addition to his distinction as the first African-American Chief Justice in the court’s history, Justice Ireland has had the opportunity to contribute to the law in a wide array of areas from juvenile matters to business litigation.

In recent years, Justice Ireland has authored a number of opinions impacting business litigation issues in Massachusetts. Some notable business cases include:

         Boulanger v. Dunkin' Donuts Incorporated, 442 Mass. 635 (2004)

• DD shop owner signed a non-compete which stated he could not operate or work for a similar business within 5 miles of any Dunkin Donuts Worldwide for 2 years after selling his franchise.
• SJC, Ireland writing, held that covenant not to compete was reasonable.  Rejected the argument that such a covenant not to compete harms the public interest in liberty of employment.

          Aspinall v. Phillip Morris , 453 Mass. 431 (2009)

• Cigarette buyers brought class action against tobacco manufacturer for damages arising from alleged unfair/deceptive marketing of low tar cigarettes.
• SJC, Ireland writing, held that manufacturer’s use of descriptors was not exempt from proscription against unfair or deceptive practices.

          Pointer v. Castellani, 455 Mass. 537 (2009)

• President-member of LLC brought claims against other members for freeze-out.
• SJC, Ireland writing, held that liquidation of the LLC was not a proper remedy for freeze out, in the absence of authorization from the members.

          Amgen v. Commissioner of Revenue, 427 Mass. 357 (1998)

• Foreign Pharmaceutical Corporation appealed order from Appellate Tax Board which denied its application for abatement of MA excise tax on foreign corporations doing business in MA. 
• SJC, Ireland writing, held that actions in MA by the corporation’s clinical support specialists went beyond solicitation of orders and thus the corporation had to pay the excise tax

          Route One Liquors, Inc. v. Secretary of Administration and Finance, 439 Mass. 111 (2003)

• Parking lot owners and operators brought action against State Secretary of Administration and Finance for declaratory judgment that statute imposing excise tax on parking lots within a 3 mile radius of stadiums was unconstitutional
• SJC, Ireland writing, held that a license to operate a parking lot was a commodity on which an excise tax could be leveled

With a dynamic business litigation environment including increased financial regulatory activity, growing privacy concerns, and legal issues arising from expanding technology, there will be significant opportunity over the next few years for Justice Ireland and the Supreme Judicial Court to shape the law and impact business interests in Massachusetts.