Opposition Brief — Picciotto v. Gilleran

— Supreme Court, U.S

No. 04-444 NOV 1 + 2004

OFFICE OF THE CLERK |

— FILED |

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in Che

Supreme Court of the Gnited States

MELITA PICCIOTTO AND ATHENA PICCIOTTO,

PETITIONERS,

VS.

MICHAEL C. GILLERAN AND OTHERS,

RESPONDENTS.

On Petition For Writ Of Certiorari

To The Supreme Judicial Court

For The Commonwealth of Massachusetts

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

RICHARD W. RENEHAN

GOULSTON & STORRS, P.C.

400 Atlantic Avenue

Boston, MA 02110

(617) 482-1776

Counsel of Record for

Respondent Law Firms

Of counsel:

Michael J. Stone, Esq.

Douglas Mansfield, Esq.

Robert T. Gill, Esq.

Timothy J. Dacey, Esq.

Blanchard Press, Inc. 617-426-6690

i

QUESTIONS PRESENTED FOR REVIEW

1. Whether the rulings of the Massachusetts

appellate courts in Melita Picciotto v. Robert V.

Costello, Appeals Court No. 2002-P-1003, raise

any federal question for this Court to review.

2. Whether the rulings of the Massachusetts

appellate courts in Travelers Indemnity Company

uv. Stefano Picciotto, Appeals Court Dockets

Numbers 2003-J-0274 and 2003-P-925, constitute

a final judgment within the meaning of 28 U.S.C.

§1257.

il

PARTIES AND CORPORATE

DISCLOSURE STATEMENT

This Brief in Opposition is submitted on behalf of

Michael G. Gilleran and the !aw firms with which he was

associated, Gilleran & Mortensen, P.C. and Pepe &

Hazard, LLP; Albert Zabin and the law firms of

Schneider, Reilly, Zabin & Costello, P.C. and Schneider

Reilly LLP; Joel Eigerman and the law firm of Roche,

Carens & DeGiacomo, P.C.; Edwin McCabe and the law

firm of The McCabe Group, P.C.; and Edward Greer

(collectively “Respondents” or “the Law Firms.”)

Gilleran & Mortensen, P.C., Schneider, Reilly,

Zabin & Costello, P.C., Roche, Carens & DeGiacomo, P.C..,

and the McCabe Group, P.C. have no parent corporations

and no publicly held company owns 10% or more of their

stock.

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TABLE OF CONTENTS

PAGE

rr i i Ce i os bk ok hn Ob be eed ews ee pes 1

GE FANUUIOOE, o ioc acs cccacsscecectvenas 6

NERS CECT e Pee ESET eee Tere eee TT 7

The Dismissal of Melita’s and Athena’s

Separate Lawsuit Raises No Substantial

EO PETES TP ere r rr rT 7

The denial of the Petitioners’ Petition

under Mass.Gen.Laws c. 231, §117 is not

ost ob 2006 pa des eke eee 8

The Petitioners have failed to demonstrate

that they have been denied a

ye) | Se 11

ES ere re ee ey Pe Tea ee ere 13

ER ee ee re 15

Supplemental Appendix. .................e cece 16

iv

TABLE OF AUTHORITIES

CASES

PAGE

Brown v. Massachusetts Port Authority, 371 Mass.

ee ee Pe 25d ee Wan eae een ee eawen 9

Foreign Car Center, Inc. v. Salem Suede, Inc.,

40 Mass.App.Ct. 15, 660 N.E.2d 687 (1996). ......... ‘1

Handy Cafe, Inc. v. Costello Distributing Co.,

334 Mass. 707, 137 N.E.2d 218 (1956) .............. 9

Jefferson v. City of Tarrant, 522 U.S. 75 (1997). ...... 8

Juan Nunez v. Stefano Picciotto et al.,

Suffolk Superior Court Civil Action No. 04-0289..... 12

Keen v. Western New England College,

23 Mass.App.Ct. 84, 449 N.E.2d 310 (1986). ......... 7

Market Street Ry.Co. v. Railroad Commission

of California, 324 U.S. 548 (1945).................. 8

Minnick v. California Department of Corrections,

Oe She Se ono 54 kek aad cede ew Ra een es 11

O’Brien v. Hanover Insurance Company, 427 Mass.

Be, ee CR CE 6 kbs Kc da eae wn neue 8

STATUTES

PAGE

Be Rie as GU 25 4 oh kaos aeee eee 6, 7,8

Meas.(jon.Laws ¢. 214, O28 «ook occ cas iccdavdsase 9

Mast Cea tues ©, Bek, Wk kha eeee see e eee eee 3

Mass.Gen.Laws, c. 231, §117........... 5. €, 7, 3, 3 ii

Maas.Gion. Laws. c. 37231, $60. . oo 6. cock wcnasacacvass 2

Sh. 2998; @: TENE 6 kn cide bee ee 9

RULES

Massachusetts Rule of Civil Procedure 12(b)(9) ...... 7

Massachusetts Rule of Civil Procedure 22........... 3

STATEMENT OF THE CASE

The Petitioners Melita and Athena Picciotto

request this Court to review two decisions of the

Massachusetts appellate courts for alleged constitutional

infirmities. Their Petition is the latest act in a lengthy

drama that began in 1983. The Respondents believe that

a brief review of the earlier scenes in this drama will

assist the Court in determining that the issues raised by

the Petition are either not ripe for review or raise no

substantial federal question.

The Petition has its genesis in a toxic tort action

filed in the Superior Court Department, Essex County

Division, of the Massachusetts Trial Court in March 1983

(the “Toxic Tort Action”). The plaintiffs in that action

included Stefano and Judith Picciotto (the parents of the

Petitioners Melita and Athena Picciotto), the Picciottos’

business, Foreign Car Center, Inc., and Juan Nunez, an

employee of Foreign Car Center. The plaintiffs alleged

that emissions from a neighboring tannery, Salem Suede,

Inc., injured the health of the individual plaintiffs and

the business of Foreign Car Center. After the plaintiffs

changed counsel several times, the case was tried to a

jury in 1993, resulting in a judgment for the plaintiffs.

The judgment was affirmed on appeal in 1996. Foreign

Car Center, Inc. v. Salem Suede, Inc., 40 Mass.App.Ct. 15,

660 N.E.2d 687 (1996).

The Petitioners Melita and Athena Picciotto

were not parties to the Toxic Tort Action. In 1994, while

the original case was pending on appeal, Mr. and Mrs.

Picciotto and Foreign Car Center filed a new state court

lawsuit against Salem Suede. The new lawsuit included

Melita and Athena Picciotto as plaintiffs, but no

2

discovery was taken in the new case and the case was

never tried.

After the judgment in the Toxic Tort Action was

affirmed on appeal, Salem Suede’s insurer, Travelers

Indemnity Company, disclaimed coverage. The plaintiffs

in the Toxic Tort Action brought a lawsuit against Salem

Suede, seeking to collect their judgment, and against

Travelers, claiming that Travelers engaged in unfair

claims settlement practices in violation of Massachusetts

law. Salem Suede then sought protection under Chapter

11 of the Bankruptcy Code. The lawsuit against

Travelers was removed to the Bankruptcy Court and

became an adversary proceeding in the Salem Suede

Chapter 11 case. On January 6, 1999, after the claimants

changed counsel several additional times, Travelers

agreed to settle all the claims pending against Salem

Suede (including the new lawsuit filed in 1994) for a lump

sum payment of $9 million. The Travelers settlement

agreement did not allocate the settlement proceeds

among the claimants, who by this time included Melita

and Athena Picciotto as well as the plaintiffs in the

original Toxic Tort Action, Mr. and Mrs. Picciotto, Foreign

Car Center, and Juan Nunez (collectively, the “Settling

Claimants”).

By the time of the settlement in 1999, the

Settling Claimants had been represented by eight

different law firms. Under Massachusetts law, an

attorney who has appeared on behalf of a party in a

lawsuit has a lien for the fair value of his services on any

proceeds of the lawsuit. Mass.Gen.Laws. c. 221, §50.

Given the likelihood that some of the law firms would

assert a lien, Travelers insisted on a provision in the

settlement agreement that it would not be required to

3

pay the settlement proceeds until all liens had been

resolved. In an effort to satisfy this provision, the

Settling Claimants demanded that the law firms release

their liens, but most of the law firms refused. Travelers

then paid the Settling Claimants $500,000, initiated an

interpleader action in the Superior Court for Suffolk

County pursuant to Massachusetts Rule of Civil

Procedure 22 (the “Interpleader Action”) and deposited

the balance of $8,500,000 with the clerk of the court. The

trial court dismissed Travelers from the Interpleader

Action and realigned the parties, designating as plaintiffs

five law firms which sought compensation for the work

they had performed (the “Law Firms”) and as defendants

the Settling Claimants (including Melita and Athena),

who denied that the Law Firms were entitled to any

compensation and counter-claimed for malpractice,

breach of fiduciary duty and other alleged wrongdoing.

The Interpleader case was tried to a jury for 63

days, beginning in late September 2001 and ending with

a verdict on January 5, 2002. The jury found for the Law

Firms, awarding them substantial fees and rejecting all

of the Settling Claimants’ allegations of malpractice and

other misconduct. After deciding certain additional

issues that it had reserved for itself, the trial court

entered judgment on October 24, 2002. With interest at

12%, the total judgment in favor of the Law Firms came

to $3,509,376, plus costs of $255,094.09. (In their

Petition, Melita and Athena allege that they were

subjected to a “penalty interest rate,” Petition at 7, but

the rate applied by the trial court is applicable in all

Massachusetts contract actions. See Mass.Gen.Laws c.

231, §6C.) After the trial court denied their post-trial

motions, the Settling Claimants filed notices of appeal.

The court reporter is still preparing the massive trial

4

transcript, so the appeal in the Interpleader Action has

not yet been docketed with the Massachusetts Appeals

Court.

In May 2001, after discovery was complete in

the Interpleader action and shortly before jury selection

was scheduled to begin, Melita and Athena filed a

separate lawsuit against the Law Firms and sought to

have their new lawsuit consolidated with the

Interpleader Action. The trial court denied their motion

as untimely. After the jury verdict in the Interpleader

Action, the trial court dismissed the separate lawsuit on

the grounds that a prior action raising the same claims,

the Interpleader Action, was already pending. The trial

court also ruled that the issues raised by Melita’s and

Athena’s separate lawsuit were barred by collateral

estoppel. Melita and Athena appealed from the

judgment dismissing their separate lawsuit, but their

appeal was rejected by the Massachusetts Appeals Court

in a brief memorandum opinion, which is reproduced in

the Appendix to the Petition for Certiorari at pages d-e.

The Supreme Judicial Court denied Melita and Athena’s

request for further appellate review on June 30, 2004.

Petition Appendix at page a.

While the Interpleader Action was pending in

the trial court, the Settling Claimants (including Melita

and Athena) filed numerous motions seeking distribution

of the funds deposited by Travelers with the clerk of

court. In response, the trial court released funds to the

Settling Claimants totaling in the aggregate $ 3.2

million. Taken together with the $500,000 paid by

1 Acopy of the trial court’s Rulings Upon the Defendant

Parties’ Motions to Dismiss is included in the Supplemental

Appendix to this Brief at page 16.

5

Travelers when it filed the Interpleader Action, the total

amount distributed to the Settling Claimants prior to the

jury’s verdict came to $3.75 million.’ Dissatisfied with

these distributions, the Settling Claimants filed three

interlocutory appeals seeking the release of additional

funds, all of which have been denied by the

Massachusetts appellate courts.

The second case covered by the Petition now

before this Court arises from the most recent attempt to

obtain a distribution of the funds being held by the trial

court. In June 2003, Melita and Athena Picciotto filed a

petition with the Massachusetts Appeals Court pursuant

to Mass.Gen.Laws, c. 231, §117, a statute which

authorizes the appellate courts to suspend or modify any

order of the trial court pending appeal.’ The relief they

sought was an order directing the clerk of court to

distribute approximately $2 million to them as their

share of the Travelers settlement. A single justice of the

Appeals Court denied the petition “for failure to show

that the extraordinary relief sought is warranted under

these circumstances” (see Petition Appendix at page f)

and a three judge panel of the Appeals Court affirmed on

the grounds that Melita and Athena had failed to

demonstrate any abuse of discretion. Petition Appendix

at pages b-c. The Supreme Judicial Court denied further

appellate review on June 30, 2004 at the same time that

it denied further review in Melita and Athena’s separate

2 These calculations are based on the trial court’s Order

for Distribution to the Appellants for Fees and Costs of Appeal

dated April 15, 2004. Most distributions were made to an

attorney who represented all the Settling Claimants. However,

$200,000 of the funds were earmarked for a law firm that

represented Melita and Athena individually. See Petition at 6.

’The text of c. 231, §117 is set forth in the Statutory

Appendix to this Brief at page 15.

6

action against the law firms. Petition Appendix at page

a. This Petition for Certiorari followed.

SUMMARY OF ARGUMENT

The separate lawsuit brought by Melita and

Athena against the Law Firms was dismissed on

adequate state law grounds. The dismissal raises no

substantial federal question.

The Interpleader Action has not yet been

docketed with the Massachusetts Appeals Court and no

final judgment within the meaning of 28 U.S.C. §1257

has yet been rendered in that case. The statute under

which Melita and Athena proceeded, Mass.Gen.Laws, c.

231, §117, gives the appellate court discretion to temper

the effect of a judgment or other trial court order pending

appeal, but is not intended to substitute for full appellate

review in the ordinary course. No abuse of discretion has

been shown in this case. The Petitioners may seek

appellate review of all orders entered by the Trial Court,

including any orders relating to the distribution of funds

and any alleged improprieties in the conduct of the trial,

once the appeal from the judgment in the Interpleader

Action has been docketed.

In any event, the premise of the Petition for

Certiorari, that Melita and Athena are entitled to $2

million of the Travelers settlement, is in fact in dispute.

There is no judgment or written agreement demon-

strating their entitlement to that amount. A separate

declaratory judgment action to determine the respective

interests of the Settling Claimants in the remaining

escrow fund is now pending in the Massachusetts

7

Superior Court. The Petition for Certiorari seeks to do an

end run around the pending case and should be denied

for that additional reason.

ARGUMENT

I. The Dismissal of Melita’s and Athena's

Separate Lawsuit Raises No Substantial

Federal Question.

Melita and Athena Picciotto ask this Court to

grant certiorari in two cases: first, their appeal from the

judgment of the Suffolk Superior Court dismissing their

separate lawsuit against the law firms; and second, their

appeal from the denial of their petition pursuant to

Mass.Gen.Laws c. 231 §117 for relief pending appeal.

The first of these cases is undoubtedly a final judgment

within the meaning of 28 U.S.C. §1257, but the case

raises no substantial federal question.

In dismissing Petitioners’ separate lawsuit, the

trial court ruled that dismissal was required because

there was a prior lawsuit, the Interpleader Action,

raising substantially the same issues already pending in

the courts of the Commonwealth. Supplemental

Appendix, infra at 20-21. The trial court’s ruling was

firmly based in state law. Massachusetts has a well-

settled rule against claim splitting that is now

incorporated in Massachusetts Rule of Civil Procedure

12(b)(9). See Keen v. Western New England College, 23

Mass.App.Ct. 84, 86-7, 449 N.E.2d 310, 311-12 (1986) and

cases cited. The trial court also ruled that the claims that

Melita and Athena sought to raise in their separate

lawsuit had already been rejected in the Interpleader

Action, either by the court in granting partial summary

8

judgment for the law firms or by the jury in their verdict

on the remaining claims, and were therefore barred by

collateral estoppel. Supplemental Appendix, infra at 21-

22. Under Massachusetts law, a judgment may be final

for purposes of issue preclusion even though an appeal is

pending. O’Brien v. Hanover Insurance Company, 427

Mass. 194, 201, 692 N.E.2d 39, 44 (1998). Noticeably

absent from the trial court’s ruling and from the brief

memorandum opinion of the Appeals Court is any

discussion of the Constitutional issues that the

Petitioners seek to bring before this Court.

Since the Petitioners’ separate lawsuit against

the Law Firms was dismissed on state law grounds, there

is no basis for granting certiorari in that case.

II. The denial of the Petitioners’ Petition

under Mass.Gen.Laws c. 231, §117 is not

a Final Judgment.

To qualify as “final judgment” within the meaning

of 28 U.S.C. §1257, the state court judgment must be

“final as an effective determination of the litigation and

not of merely interlocutory or intermediate steps

therein.” Market Street Ry.Co. v. Railroad Commission of

California, 324 U.S. 548, 551 (1945) quoted with approval

in Jefferson v. City of Tarrant, 522 U.S. 75, 81 (1997).

Measured against this standard, the denial of Petitioners’

Petition under Mass.Gen.Laws c. 231, §117 does not

qualify as a final judgment.

Mass.Gen.Laws c. 231, §117 provides, in relevant

part:

After an appeal has been taken from a final

judgment of the superior court,....the appellate

9

court may, by an order, on terms or otherwise,

suspend the execution or operation of the order

appealed from, pending the appeal, and may

modify or annul any order made for the protection

of the rights of the parties, pending the

appeal;....(emphasis supplied).

The relief that the statute contemplates is clearly

interlocutory in character. Under §117, the appellate

court may make appropriate orders to protect the rights

of the parties while the case is pending on appeal, but

these orders are temporary in nature and are not

intended as a substitute for appellate review of a final

judgment on a full record. Decisions under the

predecessor of §117, Mass.Gen.Laws c. 214, §22, confirm

that the statute permits the appellate court to “preserve

the status quo upon conditions,” Brown v. Massachusetts

Port Authority, 371 Mass. 395, 403, 357 N.E.2d 928, 932

(1976), but does not authorize the court to decide the

merits of the appeal. Handy Cafe, Inc. v. Costello

Distributing Co., 334 Mass. 707, 708, 137 N.E.2d 218,

218-19 (1956).*

The Massachusetts appellate judges who dealt with

Melita and Athena’s petition understood the limited role

they were supposed to play under the statute. The single

justice who first dealt with the petition ruled that the

Picciottos had failed “to show that the extraordinary relief

sought is warranted in these circumstances.” Petition

Appendix at page f. The appellate panel who reviewed the

‘ Mass.Gen.Laws c. 214, §22 formerly granted the

Supreme Judicial Court the power to suspend or modify orders

of the trial court pending appeal. When Massachusetts

adopted new rules of appellate procedure, the legislature

enacted c. 231, §117, which confers the same power on the

“appellate courts.” St. 1973, c. 1114. |

10

single justice’s decision affirmed it on the grounds that “the

Picciottos have failed to demonstrate any abuse of

discretion in the denial of relief.” Petition Appendix at

page e. Both the single justice and the appellate panel

treated the Picciottos’ petition as raising a question of

discretionary relief. Neither dealt with the constitutional

issues that the Picciottos ask this Court to review.

Denial of the Petition for Certiorari will not

foreclose the Petitioners’ right to seek appellate review of

their constitutional claims. The Petitioners have filed a

notice of appeal in the Interpleader Action. The

transcript is being prepared and in due course the appeal

will be docketed with the Massachusetts Appeals Court.

The Petitioners will then be able to press their

constitutional claims in the Massachusetts appellate

courts and, if appropriate, in this Court, based on a full

record of what transpired in the trial court.

Indeed, some of the incidents that the Petitioners

cite to show that proceedings in the trial court were

“without dignity or decorum,” Petition at 3, can only be

reviewed on a full record. For example, the Petitioners

claim that a partner of one of the attorneys seeking fees

had an ex parte meeting with the trial judge, at which he

offered the trial judge a “prestigious social position.”

Petition at 5, n.3. In a memorandum denying the

Petitioners’ motion to disqualify, however, the trial judge

explained that the ex parte meeting was a brief encounter

in a courthouse corridor, and the “prestigious social

position” was an offer to serve in the alumni organization

of a law school, an offer which the trial judge immediately

refused.’ There cannot be meaningful review of this issue

> The trial court explained its position in a Ruling upon

the Picciotto Parties’ Motion for Recusal dated February 2,

11

without a full appellate record. Compare Minnick uv.

California Department of Corrections, 452 U.S. 105, 127

(1981).

Similarly, the Petitioners complain that the jurors

heard evidence “while dressed in Halloween costumes.”

Petition at 11. Respondents recall, however, that the

jurors in the Interpleader Action sought permission from

the trial court to wear costumes on Halloween day. The

trial court consulted the attorneys for the parties,

including the attorney for the Picciottos, and, hearing no

objection, granted the jurors’ request. The full record will

show whether this incident was an affront to the dignity

of the court, as the Petitioners claim, or a harmless

diversion to relieve the tedium of a very long trial.

Since the state appellate courts have not

completed their review of the Interpleader Action—

indeed, have not begun their review—the Petition for

Certiorari to review the denial of the Picciottos’

daughters’ petition under Mass.Gen.Laws c. 231, §117

should be denied.

Ill. The Petitioners have failed to

demonstrate that they have been

denied a Property Interest.

The premise of the Petitioners’ claim is that they

have been denied an unquestioned right to $2 million of

the $9 million settlement with Travelers Indemnity

Company. Yet the Petitioners fail to cite any judgment or

other court order establishing their right to $2 million,

and in fact there is none. The pleadings in the

eo

2002. That ruling will be part of the appellate record once the

appeal in the Interpleader Action is docketed.

12

Interpleader Action did not address the allocation of the

settlement proceeds among the Settling Claimants.

Moreover, the settlement agreement with Travelers does

not allocate the proceeds among the Settling Claimants.

What then is the basis for the Petitioners’ assertion that

$ 2 million is theirs by right?

Although the Petition for Certiorari is silent on

the question, discovery in the Interpleader Action

demonstrated that the Petitioners’ claim is based on an

oral allocation agreement among the Settling Claimants

reached at some point during the settlement negotiations

with Travelers. The precise terms of that agreement are,

however, hotly disputed. In January 2004, Juan Nunez,

one of the Settling Claimants, filed suit in Suffolk

Superior against the other Claimants, including Melita

and Athena, seeking a declaratory judgment concerning

the distribution of whatever settlement funds remain

after payment of the judgment in favor of the Law Firms.

In his complaint, Mr. Nunez alleges that, under the oral

allocation agreement, he is entitled to receive $3 million

net of any payments to the Law Firms. Mr. Nunez also

estimates that, if the Law Firms are paid and he receives

the full amount to which he is entitled, the balance

remaining in the registry of the court for distribution to

Mr. and Mrs. Picciotto, Foreign Car Center, and the

Picciotto daughters will be approximately $180,000.°

Before they can argue that they have been

deprived of $2 million without due process of law, Melita

and Athena Picciotto must establish that they have a

right to $2 million. They have not yet done so. Their

6 See the Complaint filed by Mr. Nunez in Juan Nunez

v. Stefano Picciotto et al., Suffolk Superior Court Civil Action

No. 04-0289.

13

Petition for Certiorari is an attempt to short-circuit the

lawsuit brought by Mr. Nunez to establish the respective

rights of the Settling Claimants to the remaining

proceeds. For this additional reason, the Petition for

Certiorari should be denied.

CONCLUSION

For the foregoing reasons, the Petition for

Certiorari of Melita and Athena Picciotto should be

denied.

Richard W. Renehan

Goulston & Storrs

A Professional Corporation

400 Atlantic Avenue

Boston, MA 02110

617-482-1776

Counsel of Record for the

Respondent Law Firms and Attorney

for Michael Gilleran,

and the Law Firms of Shafner,

Gilleran & Mortensen, P.C. and

Pepe & Hazard LLP

14

Of counsel:

Michael J. Stone, Esq.

Peabody & Arnold, LLP

30 Rowes Wharf

Boston, MA 02110-3342

Counsel to: Albert Zabin and the law firms of Schneider,

Reilly, Zabin & Costello, P.C. and Schneider Reilly LLP

Douglas Mansfield, Esq.

Casner & Edwards, LLP

303 Congress Street

Boston, MA 02210

Counsel to: Edwin McCabe and the law firm of The

McCabe Group, P.C.

Robert T. Gill, Esq.

Peabody & Arnold, LLP

30 Rowes Wharf

Boston, MA 02110

Counsel to: Joel Eigerman and the law firm of Roche,

Carens & DeGiacomo, P.C.

Timothy J. Dacey, Esq.

Goulston & Storrs, P.C.

400 Atlantic Avenue

Boston, MA 02210

Counsel to: Edward Greer

15

STATUTORY APPENDIX

Massachusetts General Laws c. 231

Section 117. Temporary appellate relief from final

judgments pending appeal.

After an appeal has been taken from a final judgment of

the superior court, the land court, the housing court of the

city of Boston, the western division of the housing court

department, the northeastern division of the housing

court department, the southeastern division of the

housing court department or the housing court of the

county of Worcester, the appellate court may, by an order,

on terms or otherwise, suspend the execution or operation

of the final judgment appealed from, pending the appeal,

and may modify or annul any order made for the

protection of the rights of the parties, pending the appeal;

but, until such order has been modified or annulled, the

justice of the superior court by whom the final judgment

appealed from was made, or any other justice of said

court, or the justice of the land court, the judge of the

housing court of the city of Boston, the western division of

the housing court department, the northeastern division

of the housing court department, the southeastern

division of the housing court department, or the housing

court of the county of Worcester, by whom the judgment

appealed from was made, may make any proper

interlocutory orders, pending such appeal, including

orders for the appointment of receivers, of injunction, of

prohibition, and orders for continuing in force such orders

previously made, or for modifying or dissolving them. The

justice or judge who makes any such interlocutory orders

may enforce them by appropriate proceedings, pending

the appeal.

16

SUPPLEMENTAL APPENDIX

Rulings Upon the Defendant Parties’ Motions to Dismiss

in

Melita Picciotto v. Robert V. Costello et al., :

Suffolk Superior Court

Civil Action No. 01-2319-G.

Ruling

1. All defendants have effectively moved to dismiss

all claims of the plaintiffs Melita Picciotto and

Athena Picciotto. Those motions include the

following.

(a) The motion to dismiss the first amended

verified complaint, docketed as entry 6 on or

about August 9, 2001, and submitted by

defendants Robert V. Costello, Albert P.

Zabin, and JoAnne D’Alcomo, individually

and as partners in a partnership known as

Schneider, Reilly, LLP; defendant Schneider,

Reilly, Zabin & Costello, P.C.; and Schneider,

Reilly, LLP (collectively “the SRZC parties”). ‘

(b) Defendant Edward Greer’s joinder in the

SRZC motion to dismiss the amended

complaint docketed as entry 16 on or about

August 22, 2001.

(c) The joinder in the SRZC motion to dismiss

the amended complaint docketed as entry 7

on or about August 7, 2002, and submitted by

defendants Michael C. Gilleran individually

and as a partner in the partnership known as

17

Pepe & Hazard, LLP, Pepe & Hazard LLP,

and Gilleran & Mortensen, P.C. (collectively

“the Gilleran parties”).

(d) The motion of defendant Joel Eigerman to

dismiss the amended complaint, docketed as

entry 11 on or about August 11, 2001.

(e) The motion of defendants Edward McCabe

and the McCabe Group, P.C., to dismiss the

first amended complaint, docketed as entry

12 on or about August 16, 2001.

(f) The motion of the defendant Travelers

Indemnity Company to dismiss Count Six of

the amended complaint.

2. Upon consideration of the original and the

amended complaint, all motion materials, all

opposition materials, and all pertinent record

materials in the prior action of Zabin, et al. v.

Picciotto, et al., Suffolk Superior Court Civil

Action No. 99-1594-A, the court hereby ALLOWS

all defendants’ motions to dismiss with prejudice

the claims of the amended complaint (i.e. all

claims)of the present action.

18

GROUNDS

1. The claims of the amended complaint reduce to

the charge that each of the defendants wrongfully

interfered with receipt by Melita and Athena

Picciotto respectively of $1.5 million and $.5

million agreed by the six Picciotto parties

(Stefano, Judith, Foreign Car Center Corporation,

Melita, Athena, and Juan Nunez) to be

distributional shares of the Travelers settlement

of January 6, 1999, for Melita and Athena. The

means of interference was the assertion of fee

claims by the lawyers and law firms and their

litigation efforts effectively causing the placement

of the majority of the settlement proceeds into

escrow until adjudication of their fee claims; and

the Interpleader action of Travelers Indemnity

Company effectively accomplishing the same

result. The claims of the lawyers and law firms

and the action of Travelers became Zabin, et all. v.

Picciotto, et al., Suffolk CA 99-1594. That action

has proceeded through extensive pretrial

discovery and motion practice resulting in

summary judgment disposition of certain Picciotto

parties’ counterclaims; and through an extensive

trial resulting in jury verdicts in favor of all the

lawyers and law firms for substantial fees and

reimbursable expenses to be paid by the Picciotto

parties.

2. In this action, filed more than two years after

commencement of Civil Action 99-1594-A, Melita

and Athena charge the following against the

attorneys, law firms, and/or Travelers Indemnity

Company.

a |

19

(a) Count One. Tortious interference with the

entitlement to their settlement shares by the

Gilleran parties by reason of those parties’

post-settlement efforts to collect fees for

services rendered to the Picciotto parties,

including communication with Travelers and

assertions of claims and escrow measures in

Civil Action 99-1594-A.

(b) Count Two. ‘Tortious interference with the

same settlement share entitlements by reason

of the efforts of the SRZC parties to detain the

settlement proceeds in escrow and to pursue

fee collection in Civil Action 99-1594-A.

(c) Count Three. Tortious interference of the same

kind on the part of the individual attorneys

Robert V. Costello and Michael C. Gilleran.

(d) Count Four. Tortious interference and bad

faith assertion of Chapter 93A claims by

individual attorneys Costello and Greer.

(e) Count Five. Tortious civil conspiracy by all the

individual attorneys and their law firms to

characterize the claims and entitlements of

Melita and Athena as valueless and to deprive

them of those entitlements by excessive fee

liens and detention of settlement proceeds in

Civil Action 99-1594-A.

(f) Count Six. Tortious civil conspiracy by _

Travelers Indemnity Company with the

Gilleran parties to deprive the Picciotto

parties, and Melita and Athena in particular, of

-

20

their settlement proceeds, by tactics in Civil

Action 99-1594-A, including the evasion of

discovery and the detention of the majority of

settlement funds in interpleader escrow.

3. Prior pending action. Mass. R. Civ. P. 12(b)(9).

Melita and Athena are parties to Civil Action 99-

1594-A. They have been represented by counsel

throughout that litigation. In the course of that

prior pending proceeding they have made in

substance the same claims against the same

attorneys and law firm as appear in the present

Counts One through Five; and at all times could

have made precisely the same claims as the

present ones in Civil Action 99-1594-A. Those

essential common claims are that the attorneys do

not have valid fee and lien claims; and that their

detention of the settlement proceed in the

interpleader escrow fund is _ therefore

unmeritorious and wrongful. These claims at all

times formed essential issues of the prior pending

action.

(a) In Civil Action 99-1594-A, the court addressed

these assertions by all the Picciotto parties

against all attorney parties as counterclaim

counts for (a) abuse of process, and (b) civil

rights violations; and entered summary

judgment against the Picciotto parties upon

those counts. Docket entry 367 dated June 19,

2001.

(b) Further, the validity of the claims to fees and

recovery of expenses by each attorney and law

firm went forward to trial and resulted in

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favorable verdicts for each. Docket Entry 498

dated January 7, 2002.

(c) Consequently the present claims by Melita

and Athena Picciotto were contained in the

prior pending action. They are repetitive and

unnecessary in the form of the present lawsuit.

They require dismissal under Mass. R. Civ. P.

12(b)(9). See Guindon Insurance Agency, Inc.

v. CU Ins. Co., 15 Mass. App. Ct. 931, 932

(1983), and cases cited. “Everything raised on

the second action, to the extent that it was not

simply a carbon copy of the first, should have

been the subject of a motion to amend the

complaint.”

4. Collateral estoppel. In addition, the present claims.

of tortious interference and conspiracy effectively

went forward to adjudication on their merits in

Civil Action 99-1594-A. The entry of summary

judgment against the counterclaim counts against

the attorneys for abuse of process and civil rights

violation (by reason of their pursuit of their fee

claims in 99-1594-A) comprised on adjudication.

The resulting jury verdicts finding an entitlement

to fees and expenses on the part of each of the

attorneys and law firms constitutes an

adjudication against the Picciottos' allegation of

the wrongful or tortious character of the attorneys’

post-settlement efforts by litigation and

negotiation to collect their claimed fees and

reimbursable expenses. These adjudications

necessarily reject the present claim of wrongful

interference and conspiracy asserted by Melita

and Athena. Their collateral estoppel force is

22

conclusive. It furnishes a dispositive affirmative

defense and ground for dismissal with prejudice as

a mater of law under Mass. R. Civ. P. 12(b)(6).

Bagley v. Moxley, 407 Mass. 633, 637 (1990); and

Osserman v. Jacobs, 369 Mass. 201 and n.3 (1975).

Consequently, collateral estoppel under Rule

12(b)(6) furnishes a separate, independent, and

adequate ground for dismissal for all claims

against the attorney parties in Counts One

through Five.

5. As to Count Six against Travelers Indemnity

Company for conspiracy, dismissal with prejudice

is appropriate upon multiple independent

grounds.

(a) Under the undisputed terms of the Settlement

Agreement of January 6, 1999, and of the

Amended Settlement Agreement of March 12,

1999, all Picciotto parties (including Melita

and Athena) effectively agreed to the escrow

and interpleader process employed Travelers.

(b) The court, by supervision of and distributions

from the escrow fund, controlled the flow of

money to the Picciotto parties. They cannot

impute fault or liability to Travelers for the

rulings and orders of the court.

(c) Travelers refusal to accept the discovery

demands of the Picciotto parties in Civil Action

99-1594-A resulted in and from rulings of the

discovery master and judge, not from

unilateral conduct by Travelers.

=-

23

(d) The plaintiffs Melita and Athena have failed to

plead any facts amounting to the “peculiar

power of coercion” necessary for the cause of

action of tortious civil conspiracy in

Massachusetts. See Massachusetts School of

Law v. American Bar Association, 952 F. Supp.

884, 890 (D. Mass. 1997); Neustadt v.

Employees Liability Assurance Corp., Ltd., 303

Mass. 321, 324-326 (1939) (full discussion and

collection of authority); and Caverno v. Fellows,

286 Mass. 440, 443-444 (1934). That omission

entitles Travelers to dismissal as a matter of

law under Rule 12(b)(6).

24

CONCLUSION

1. The attorneys and law firms are entitled to

dismissal with prejudice of Counts One through

Five by reason of the presence of those claims in

the prior pending action of Suffolk Civil Action no.

99-1594-A. Mass. R. Civ. P. 12(b)(9).

2. As an independent and adequate ground for 2

dismissal with prejudice of Counts One through

Five, collateral estoppel precludes those claims by

reason of their prior adjudication against Melita

and Athena Picciotto in Suffolk Civil Action No.

99-1594-A, Mass. R. Civ. P. 12(b)(6).

3. Undisputed facts furnish Travelers, with a

conclusive affirmative defense against the claim of

civil conspiracy in Count Six. Independently, the

absence of any allegations-of a “peculiar power of

coercion” leave the claim incomplete as a matter of

law. Mass. R. Civ. P. 12(b)(6).

Mitchell J. Sikora, Jr.

Justice of the Superior Court

Dated: April 5, 2002