Appendix — Maharaj v. Sommer (No. 08-1006)
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\\ 081006 FEB 5 - 2009
i ____ OFFICE OF THE CLERK
SUPREME COURT OF THE UNITED STATES
Shantee MAHARAG, et al
Petitioner
Vv.
Scott E. SOMMER, et al
Respondents
PETITION FOR A WRIT OF CERTIORARI
to the Supreme Judicial Court for the
Mommonwealth of Massachusetts
APPENDIX
John G.S. Flym, Esq.
85 Bd Suchet, 75016 Paris, France
MA BBO # 172180
}-flym@neu.edu
+33616 18 89 98
TABLE OF APPENDICES
Volume 1
A. Notice of Denial of Petition for
Rehearing SJC-09855, September 8, 2008 ...
B. Maharaj’s Petition for Rehearing, S.JC-
ee SUN he, I i cence niiecssscccnncdecennscovcianes:
C. Opinion of the Massachusetts Supreme
Judicial Court, SJC-09855, 451 Mass. 615
SI ae ON ce a ae
D. Maharaj’s Post Argument Letter, No.
SIC-OOSSS, FUM]S 12, ZOOT......ccccosescossvsoresecsees
E. Opinion, Massachusetts Court = of
Appeals, No. 04-P-0591, 65 Mass.App.Ct.
et Ts NE Ge SR occa waccccaccancccccccccnecsocascccases
F. Appellants’ Petition for Rehearing,
Appeals Court of Massachusetts, March
20, 2006
G. Appellants’ Reply, Appeals Court of
Massachusetts, February 28, 2005...............
H. Opinion and Judgment of the Third
Circuit Court of Appeals, No. 01-1827,
Dea DO FOS sncicsncvcsessctnsnescansicnisisnssdansaccacacs
3-23
29-37
, 895-15
~
~]
-8Y
91-110
1
I. Memorandum and Order of the United
States District Court for the Eastern
District of Pennsylvania CA No. 95-5235,
March 1, 2G cccccpcceee iar trsavencos ens 123-128
J. Judgment on Receivership,
Massachusetts Superior Court, August 1,
ZOO . .......0.0000sn0ds0 5 eae dibeseeses «ss 129-131
K. Memorandum of Decision and Orders
on Pending Motions, Massachusetts
Superior Court, October 8, 1998.................... 138-155
L. Memorandum and Order, June 13
1996, United States District Court for the
Eastern District of Pennsylvania .................. 157-166
M. Memorandum and Order, April 19,
1996, United States District Court for the
Eastern District of Pennsylvania .................. 167-171
N. Memorandum of Decision and Order on
Defendant’s Motion to Dismiss. the
Complaint for Contempt, Mass.Sup. Ct.
June 1, 1905 ...c<.scccccueed meee eta ens sere cnsccesse 173-192
OQ. Monga’s Action For Declaratory
Judgment. Court of Common Pleas,
Montgomery County, Pennsylvania,
September 1:4, Tee rae acannccesss. 193-198
il
P. Order requiring Vanguard and IFTC to
place IRAs in Custodia Legis with Court,
Court of Common Pleas, Montgomery
County, Pennsylvania, September 22,
Si igsitaraskvidescvscrnieceeuts ioe kates 199-262
Q. Temporary Injunction, Massachusetts
Superior Court, October 13, 1995.................. 203-205
R. Temporary Injunction, Massachusetts
Superior Court, September 29, 1995............. 207-209
S. Receiver’s Ex Parte Motion for Entry of
Preliminary Injunction, .vlassachusetts
Superior Court, September 28, 1995............. 211-214
T. Affidavit of Suzanne F. Barton,
Massachusetts Superior Court, December
DSi aey faves vce de acekend sae eaten heer ae eee 215-219
U. Vanguard Letter to h. ceiver, John C.
Ottenberg, June BGO, POG4......cccccccsisescessesseaenss 221-222
V. Vanguard Letter to Receiver, John C.
Ottennerg,- October 5, LOGE isiscsercscsesstsssecccensss 223-225
W. Vanguard Letter to Attorney Thomas
D. Rees, Esq., Norristown, PA, October 1,
ee ee a
X. Affidavit of Jack A. Crichton,
Massachusetts Superior Court, July 13,
Bcc pikagh kina vines ceca nase ane eae eee 229-234
1V
Y. Receiver’s Request for Instructions
Regarding Vanguard Morgan Growth
Fund Account, Massachusetts Superior
COUPE, PAINE Fe EOS ics hssitkccvciseesssssisrcraserss
Z. Order Regarding Vanguard Morgan
Growth Fund Account, Massachusetts
Superior Court, August 20, 1992.................
AA. Order Regarding Founders,
Massachusetts Superir Court, August 20,
BB. Order Appointing Receiver,
Massachusetts Supertor Court, June 15,
uidk cae gat crecvve cated iets cmv aamcentaea esa aneeaiaivaneaat elas
CC. Affidavit of Cathy PP. Brooks,
Massachusetts Superior Court, June 10,
WI oa crt fee 2s Gag awe ana a aes
DD. Sommer’s Motion for Entry of
Permanent Injunction, Massachusetts
Superior Court, dune 12, LOO1..........ccccsceeseees
235-237
. 239-240
241-243
245-250
251-280
281-284
APPENDIX A
Massachusetts Supreme Judicial Court
No. SJC-09855
Dated September 8, 2008
NOTICE OF DENIAL
OF PETITION FOR REHEARING
Supreme Judicial Court
for the Commonwealth of Massachusetts
John Adams Courthouse
One Pemberton Square, Suite 1400, Boston,
Massachusetts 02108-1724
Telephone 617-557-1020. Fax 617-557-1145
Dated: September 8, 2RE: No. SJC-09855
SCOTT E. SOMMER, executor
Vs.
SHANTEE MAHARA., executrix, & another;
Vanguard Fiduciary Trust Company & others, third-
party defendants
NOTICE OF DENIAL OF PETITION FOR
REHEARING
The petition for Rehearing filed in the above
captioned case has been considered by the court and
is denied.
Susan Mellen, Clerk
Dated: September 8, 2008
To: Peter S. Brooks, Esquire
John C. Ottenberg, Esquire
John R. Baraniak, Jr., Esquire
Gael Mahony, Esquire
Pohn G.S. Flym, Esquire
Middlesex Superior Court
APPENDIX 5B
Massachusetts Supreme Judicial Court
No. SJC-09855
Dated July 28, 2008
MAHARAJ’S PETITION FOR REHEARING
John G.S. Flym
Prof.Emeritus
Northeastern University School of Law
400 Huntington Ave.
Boston, MA 02115
617.373.3348
j-flym@neu.edu
July 28, 2008
Via hand delivery
The Honorable Justice John M. Greaney
Presiding Justice
Supreme Judicial Court
One Pemberton Square, Suite 1400
Boston, MA 02108
Re:Sommer v. Mahara} - S.J C-09855
Petition for Rehearing;
Suggestion for Rehearing by the full Court
Dear Justice Greaney:
Pursuant to Mass.R.A.P. Rule 27, Ms. Maharaj
hereby petitions this Honorable Court to grant a
rchearing, and suggests that the case be reheard by
the full Court. The points of law and fact which it is
contended this Court's opinion dated June 13,
2008,'overlooks or misapprehends are:
I. The Superior Court's order directing that a
judgment debt be paid from proceeds of the IRAs
deprived Mahara) of her property without the due
|! Hereafter the “6/13 Opinion”,
process of law guaranteed by the United States and
Massachusetts Constitutions.
A. State law - M.G.L. c. 235 § 384A. This 1990 debtors’
protection act provides: “lhe right or interest of any
person in an ...Individual Retirement Account...shall
not be attached or taken on execution or other
process to satisfy any debt or liability...,” with two
exceptions - (i) an order concerning divorce, separate
maintenance or child support; (ii) an order
concerning a monetary penalty or restitution in a
criminal case. The statute further provides that,
disregarding rollovers, this exemption does not apply
to sums deposited into the IRAs within 5 vears prior
to entry of judgment, which exceed 7% of the debtor’s
total income for those 5 years. Add. 11. These
exceptions do not apply to Maharaj’s IRAs. App.
999Y — 999MM.
B. Federal law - Guidry/Patterson/Rousey and 26
U.S.C. § 408. The 6/13 Opinion overlooks 26 U.S.C. §
408 which, together with the trilogy Guidry v. Sheet
Metal Workers Pension Plan, 493 U.S. 365 (1990),
Patter:on v. Shumate, 504 U.S. 753 (1992), and
Rousey v. Jackaway, 544 U.S. 320 (2005), place IRAs
beyond the reach of judgment creditors, (absent a
relevant statutory exception). The s.atute defines
the term “Individual Retirement Account” as “...a
trust created or organized in the United States for
the exclusive benefit of an individual or his
beneficiaries, but only if the written governing
2 Unlike ERISA pension plans which are governed entirely by
federal statutes, state Individual Retirement Account
provisions, such as M.G.L. c. 235 § 384A, are not preempted by
federal law.
6
instrument creating the trust meets the following
requirements:...(4) The interest of an individual in
the balance in his account is nonforfeitable.” Add. 3.
Maharaj’s IRAs meet this requirement.
The 2005 Rousey decision confirms Patterson’s 1992
observation that the relevant federal statute
“...exempts '‘[RAs] from the bankruptcy estate....” Cf.
Orr v. Yuhas, 104 F.3d 612 (8rd Cir. 1997). Deciding
that ERISA plan interests are exempt from a
bankruptcy estate, Patterson holds that the phrase
“applicable nonbankruptey law,” (for purposes of
deciding whether a debtor’s interest in property is so
excludable), 1s not limited to state antialienation
la'vs.. Noting that in Guidry it had “...declined to
recognize any exceptions to ERISA’s antialienation
provision outside the bankruptcy context...(labor
union may not impose constructive trust on pension
benefits of umon official who breached fiduciary
duties and embezzled funds)...,” Patterson adds:
“Declining to recognize any exaceptions to that
provision within the bankruptcy context minimizes
the possibility that creditors will engage in strategic
manipulation of the bankruptcy laws in order to gain
access to otherwise inaccessible funds,” at 764
Guidry: Guidry was chief executive officer of the
Sheet Metal Workers’ International Association,
Local 9, and a trustee of its pension fund. After his
conviction for embezzling $377,000 of the union’s
funds, the union obtained a $275,000 judgment, and
the District Court imposed a constructive trust on
Guidry’s pension benefits, ruling: “In circumstances
~)
where the viability of a union and the members’
pension plans was damaged by the knavery of a
union official, a narrow exception to ERISA’s anti-
alienation provision is appropriate.” The Tenth
Circuit affirmed. Overruling the lower courts, Guidry
holds:
Nor do we think it appropriate to approve any
generalized equitable exception - either for employee
malfeasance or for criminal misconduct.... Section
206(d) reflects a considered congressional policy
choiec, a decision to safeguard a stream of income for
pensioners (and their dependents, who may be, and
perhaps usually are, blameless), even if that decision
prevents others from securing relief for the wrongs
done them. Jf exceptions to this policy are to be
made, it is for Congress to undertake that task.F N18
I'N18. See, for example, § 104(a) of the Retirement
Equity Act of 1984, 98 Stat. 1433, 29 U.S.C. §
1056(d)(3) (1982 ed., Supp. V), where Congress
mandated that the anti-alienation provision should
not apply to a “qualified domestic relations order.”
As a general matter, courts should be loath to
announce equitable exceptions to _ legislative
requirements or prohibitions that are unqualified by
the statutory text. The creation of such exceptions, in
our view, would be especially problematic in the
context of an antigarnishment provision. Such a
provision acts, by definition, to hinder the collection
of a lawful debt. A _ restriction on garnishment
therefore can be defended only on the view that the
effectuation of certain broad social policies
sometimes takes precedence over the desire to do
equity between particular parties. It makes little
sense to adopt such a policy and then to refuse
enforcement whenever enforcement appears
inequitable. A court attempting to carve out an
exception that would not swallow the rule would be
forced to determine whether application of the rule in
particular circumstances would be “especially”
inequitable. The impracticability of defining such a
standard reinforces our conclusion that’ the
identification of any exception should be left to
Congress.
Understandably, there may be a natural distaste for
the result we reach here. The statute, however, is’
clear....
at 376-77
The state and federal statutes prohibiting the seizure
of IRAs to satisfy a judgment debt are equally clear,
and applicable here.
C. ‘The procedure in Superior Court. Aside from a
passing remark that the IRAs “...may be protected
by statute...,” the 6/13 Opinion overlooks the
procedure as it evolved in Superior Court, as well as
the ample record evidence that the IRAs are valid
and exempt from Sommer’s reach. App. Y99Y
999MM.
The law requiring IRAs to be nonforfeitable, not
Monga’'s threats, was the Funds’ basis for refusing to
comply with the 1992 orders directing them to
surrender the TRAs, Add. 3, 11. From the outset in
1992, the Funds opposed Ottenberg’s demands for
the IRAs because, absent evidence of fraud,
complying with his demand would be illegal, and
Monga would be entitled to seek judicial relief
against them, App. 9V9DA-999X. Ottenberg faied to
provide any evidence of fraudulent transfers into the
IRAs.
Following the 1994 dismissal of Monga’s appeal,
Ottenberg in September 1994 brought an action for
contempt against the Funds for their refusal to obey
the 1992 orders, App. 314-333. Ottenberg’s substitute
complaint in February 1995 added contract and tort
counts; it also added a count joining Monga as a
defendant, COUNT XI of which’ seeks a
“Determination of Validity of {the IRA] Accounts ....”4
See Funds’ App. 269. On March 1 and 3, 1995,
Vanguard and Founders filed separate motions to
dismiss Ottenberg’s “Substitute Complaint”, Dkt.
299, App. 366-69, 370-72. Vanguard’s motion states:
“In his Memorandum in opposition to the Motions to
Dismiss, the Receiver admits that, under applicable
state Jaws, he can only reach those IRAs if they were
fraudulently established or funded. See Receiver’s
Memorandum [in Opposition to the IRA trustees’
Motions to Dismiss] at pp. 8, 10-11; “Receiver’s
Memorandum in Opposition to the IRA Trustees’
Motions to Dismiss,” p. 11, 2/17/1995, App. 365.
Vanguard and IFTC request that the Court require
the Receiver to prove that the IRAs are invalid and
can be reached by him, as that determination will be
dispositive of all other issues in this case,” 4 2, App.
366-69. The second paragraph of Founders’ motion
likewise records, “...the Receiver for the first time
concedes that he is not entitled to reach [Monga’s
IRA funds] ... if the accounts are valid IRAs. The
4 On August 12, 1997, well after Monga’s death, Ottenberg
again requested “... a hearing on the merits...” as to the validity
of the IRAs. Substitute Complaint to Effect Turnover of IRA
Accounts, (3rd prayer for relief) App. 520.
10
Receiver admits that valid IRA accounts are ‘exempt
from the claims of creditors of Mr. Monga.’ Receiver’s
Memorandum at 10.” App. 370-72. The only
“evidence” in the record is Ottenberg’s speculative
remark, “ The amount of funds in said IRA
accounts is extremely high for someone of Monga’s
age...,” “Receivers Substitute Complaint to Effect
Turnover of Accounts,” §) 51, 02/17/95, Dkt. 295.0.
Funds’ App. 269.
As the Superior Courts June 2, 1995 opinion
explains in denying the motion for contempt, “...it is
represented to the court by defendants that Monga
insists that the IRA accounts are exempt from
attachment by the Receiver. Until the validity of
these claims is determined, any action by defendants
exposes them to litigation,” App. 418.
Monga died in 1996. When the Superior Court issued
its October 8, 1998 decision, (which the 6/13 Opinion
affirms), the record evidence showed that the [RAs
were funded more than 5 years before the 1991
judgment against Monga - thereby resolving the
question whether Ottenberg could produce evidence
of fraud, App. 999Y-999MM. Arguing for the Funds
before the Appeals Court in 2006, Mr. Baraniak
candidly answered Judge Graham’s’ question,
admitting the [RAs were untainted by fraud. The
record leaves no room for controversy as to the TRAs
validity.
Overruling all objections to evidence submitted by
the parties, (including uncontroverted documents
showing that all deposits into the IRAs were made
before 1986), the Superior Court nonetheless
11
accepted Ottenberg’s 1998 theory that Monga could
be held to have forfeited his rights to the [RAs before
his death in 1996, which therefore did not pass to
Maharaj upon Monga’s death. The Superior Court
concluded that Maharaj could not assert a claim to
the IRAs, either for herself or on behalf of Monga’s
estate. The Superior Court stated that it thus found
no need to resolve the issue of the IRAs’ validity.
Add. 23, p.14.
In refusing to apply federal and state statutes which
prohibit the seizure of IRAs to satisfy a judgment
debt, the Superior Court deprived Maharaj of her
property rights in violation of the due process clauses
of the United States and Massachusetts
Constitutions.
II. The Superior Court’s order purporting to declare
that Monga had forfeited his rights to the IRAs, and
refusing to consider Maharaj’s claim that her IRAs
were exempt from. seizure to satisfy Monga’s
judgment debt, deprived Maharaj of her property
without the due process of law guaranteed by the
United States and Massachusetts Constitutions.
A. The Superior Court’s inherent powers. In
affirming the Superior Court's refusal to grant
Maharaj the “...right to be heard on her claim to the
IRA assets...,” the 6/13 Opinion overrules the
Appeals Court’s March 3, 2006 decision remanding
the case to Superior Court for a hearing on the
merits of Maharaj’s claims, Sommer v. Maharaj, 65
Mass.App.Ct. 657 (2006). Relying on the judiciary’s
inherent powers, the 6/13 Opinion finds this case to
be “...the rare example of one involving conduct so
12
egregious as to warrant the forfeiting of [such] a
right to be heard....” The 6/13 Opinion explains the
Superior Court’s reasoning as follows:
The judge’s basis for so doing was that Monga’s
continued defiance and flouting of court orders
“stripped him of all right to assert claims of statutory
exemption” for the IRA accounts. He had, in other
words, forfeited his right to make any such claims by
his continued disobedience. In the judge’s view,
Maharaj’s claim to the IRA accounts, as the
beneficiary, derived entirely from Monga. Because
Monga had forfeited the right to retain them, nothing
remained to pass to her on his death.
Overlooking Degen v. United States, 517 U.S. 820
(1996), a key precedent in the Appeals Court’s
analysis of the judiciary’s inherent powers, the 6/13
Opinion cites a number of cases all but one of which
precede Degen, (the one decided in 1998 fails to
mention Degen), choosing instead to rely upon
Chambers v. NASCO, Inc., 501 U.S. 32 (1991), a 5-4
opinion in’ which Justice Kennedy authored a
dissenting opinion in which the Chief Justice and
Justice Souter joined. Five years after Chambers,
Justice Kennedy wrote the unanimous opinion in
Degen.
Having moved to Switzerland in 1988, Degen did not
return to the United States to face a 1989 federal
indictment for alleged drug smuggling over the prior
20 years. When he filed an answer in a related civil
action, contesting the Government’s attempt to
forfeit properties allegedly purchased with proceeds
from his drug dealings, the District Court struck his
13
claims and entered summary judgment against him,
holding that he was not entitled to be heard in the
forfeiture action because he remained outside the
country, unamenable to criminal prosecution. Degen
reversed, holding that the District Court lacked the
inherent power, supposedly based on the “fugitive
disentitlement doctrine,” to strip Degen of his right
to be heard. “A court’s inherent power is limited by
the necessity giving rise to its exercise,” at 829.
As Walsh v. Walsh, 221 F.3d 204 (1st Cir. 2000),
explains, Degen essentially discards all but two of
five commonly asserted rationales for fugitive
disentitlement in civil cases: (1) the risk of frustration
in determining the merits of the claim; and (ii) the
unenforceability of the judgment. In _ particular,
Degen expressly rejects two other rationales - (1)
“indignity visited upon the court,” and (2)
“deterrence” - holding that disentitlement is too
blunt an instrument for advancing those ‘substantial’
interests. 221 F.3d at 215.
The constitutional basis for Degen appears from two
cases upon which it relies, McVeigh v. United States,
78 U.S. 259 (1870), and Hovey v. Elliott, 167 U.S.
409, 413-414 (1897). McVeigh involved a forfeiture
proceeding of real and personal property belonging to
McVeigh. The court allowed the government’s motion
to strike the answer filed by his attorney on the
ground that, as a resident of Richmond within
Confederate lines, McVeigh was a rebel. MeVeigh
holds:
The order in effect denied the respondent a hearing.
It is alleged that he was in the position of an alien
enemy...Whatever may be the extent of the disability
14
of an alien enemy to sue in the courts of the hostile
country,... it is clear that he is liable to be sued, and
this carries with it the right to use all the means and
appliances of defence.
at 267
“A different result,” McVeigh notes, “would be a blot
upon our jurisprudence and civilization.”
Hovey involves the New York Court of Appeals’
refusal to give full faith and credit to a District of
Columbia Supreme Court judgment rendered against
defendants whose answer was stricken for contempt
of court. Agreeing with the New York decision, Hovey
holds:
The fundamental conception of a court of justice is
condemnation only after hearing. To say that courts
have inherent power to deny all right to defend an
action...is...to convert the court exercising such an
authority into an instrument of wrong = and
oppression....
at 413-14
Foliowing an exhaustive review of precedent, Hovey
concludes:
(This review of the authoritics demonstrates] the
unsoundness of the contention that courts of equity
have claimed and exercised the power to suppress an
answer, and thereupon render a decree pro
confesso...if such power obtained, then the ancient
common-law doctrine of ‘outlawry, and that of the
continental systems as to ‘civil death,’ would be a
part of the chancery law...violating the rudimentary
conceptions of the fundamental rights of the citizen.
at 444
In short, the right to be heard is a fundamental
aspect of due process.
Degen adds that it does not decide “...whether
enforcement of a disentitlement rule under proper
authority would violate due process...,” at 828,
(emphasis added). Congress responded by enacting
CAFRA, (Civil Asset Forfeiture Reform Act of 2000),
28 U.S.C. § 2466 (2000), which authorizes the
disentitlement of a fugitive in a criminal prosecution
from contesting a related civil or criminal forfeiture
action.
B. The Superior Court’s action viewed in light of
Degen. The 6/13 Opinion states that the Superior
Court’s refusal to consider Maharaj’s claim to the
IRAs was based on “...Monga’s continued defiance
and flouting of court orders....” Indeed, the Superior
Court’s order dated October 8, 1998, states, “Monga’s
continued defiance of court orders, right until the
time of his death, stripped him of all right to assert
claims [to the IRAs],” at p. 14. As characterized in
the Appeals Court’s 2006 opinion, “The judge’s order,
striking Maharaj’s claim to the IRA accounts,
advanced no apparent purpose other’ than
punishment for prior disobedience,” at 664.
As appears in footnote 12 of the Superior Court’s
order. which accompanies the text just quoted from
page 14 of the order, the judge applied Monga’s IRAs
as a substitute source of funds in satisfaction of the
16
judgment debt. In short, the judge purported to
create an exception to the federal and state statutes
which forbid the garnishment of IRAs to pay
judgment creditors.
In upholding the judge’s action, the 6/13 Opinion
misapprehends the law by effectively creating an
exception to those statutes based on inherent judicial
powers. Its reliance on a combination of factors such
as deterrence, and punishment further suggest a
misapprehension of the law as defined in Degen.° As
the Appeals Court noted, given the fact that the IRAs
were frozen, there was no risk of frustration in
determining cither their validity or in enforcing a
resulting judgment, and its conclusion that forfeiture
of the IRAs amounted to nothing other than
punishment is evident.
C. The procedure in Superior Court. As the 6/13
Opinion notes, the 1998 order was in response to
Ottenberg’s motion for summary judgment on his
1995 “amended substitute complaint” which
specified, as relief Ottenberg sought, a determination
of the IRAs validity. Funds’ App. 271. Until Monga
died, the IRAs remained his nonforfeitable property,
and they passed to his surviving spouse and sole
beneficiary, Maharaj, by virtue of law. IRS
Publication 590, Add. 5; App. 999NN; App. 999EE,
999LL.
The Superior Court's 1998 decision, purports to undo
this 1996 transfer to Maharaj, posthumously
“Additionally, a sanction imposed for noncompliance with
court orders ‘serve[s] not only to punish the offending party but
also to deter putative offenders in future cases.”
17
declaring Monga’s forfeiture to the IRAs as of his
death in 1996, and characterizing Maharaj’s rights
as entirely derivative. The Superior Court’s 1998
decision begins by refusing to review the validity of
prior orders entered in the case, (evidently in
response to the voluminous documents submitted by
the parties challenging such prior orders), and it
makes no relevant new finding.
The 6/13 Opinion thus misapprehends the facts when
it suggests that Maharaj herself was guilty of the
misconduct which lead to forfeiture of the [RAs. For
instance, the suggestion that Maharaj failed to turn
over documents or property is based on the
assumption that she had relevant material® - no such
finding was ever made, and the record evidence
shows that motions were granted allowing Maharaj,
indeed Monga as well, to proceed in forma pauperis.
Ottenberg on 8/31/98 filed an Amended Complaint
for Contempt against Maharaj individually and as
Executrix,’ claiming that Maharaj failed to obey the
receivership order, but when Maharaj appeared to
defend, he voluntarily withdrew this Complaint on
Sept. 15, 1998, Dkt. ## 433, 442. App. 49. One view
of the Superior Court’s peremptory action is that it
denied Maharaj the benefits of the procedures set
forth in Mass.R.Civ.P., Rule 65.3. It seems that the
remedial sanctions afforded by Massachusetts rules
6 Though the 6/13 opinion quotes from the 1992 order, it excises
the phrase “...belonging to the defendants....” It did not, indeed
it could not, order the surrender of property belonging to third
parties, e.g. members of Maharaj’s family whose assets she
managed since 19841. App. 963-968.
7 Ottenberg had earlher filed similar motions, 2/4/93 and
7/02/98, which were also dismissed
18 =
and statutes, had Ottenberg invoked them, would
have been adequate to resolve his claims against
Maharaj. The 6/13 Opinion misapprehends the law
in allowing the Superior Court to override the
procedures mandated by the pervasive
Massachusetts statutory sanctions scheme.
This Court is not the appropriate forum for resolving
controverted factual issues. The 6/13 Opinion states,
“...Maharaj has forfeited her right to pursue her
claim to the IRA assets because of the contumacious
conduct of Monga, which she facilitated....” Maharaj
is entitled to be heard on any claim that she engaged
in misconduct. The lack in the record of a decision
against Maharaj based on her own conduct is
illustrated by the Funds’ attempt to rely on
Mass.R.Civ.P. 37(b)(2). As the Appeals Court notes,
“While the record contains numerous accounts of
Monga’s disobedience of various discovery orders
over the course of the postjudgment proceedings, the
judge’s memorandum of decision makes only passing
reference to such instances, and there is no dispute
that Maharaj had produced the documents
pertaining to the IRA accounts by the time of the
summary judgment proceedings.” at 665.
D. Maharaj’s status as a defendant. Analogizing
dismissal of a complaint to the Superior Court’s
refusal to hear Maharaj, the 6/13 Opinion overlooks
binding authorities which stress the = distinction
between plaintiff and a defendant - see e.g. McVeigh,
supra. The Appeals Court rejected the lunds’
reliance on Mass.R.Civ.P. 41(b)(2), noting that it
apples only to plaintiffs, and adding:
19
...In view of the procedural posture of this case, we
would reject the application of rule 41 in any event.
Apart from the fact that Monga was a defendant in
the underlying action, Maharaj’s claim that the IRA
accounts were exempt from creditors arose in the
context of supplemental proceedings, initiated by
Sommer, to take possession of Monga’s property in
satisfaction of the judgment. Even ignoring the labels
in the pleadings, Maharaj’s claim can only fairly be
viewed as a defense to the taking of arguably exempt
property. Maharaj was not “in the customary role of
a party invoking the aid of a court to vindicate rights
asserted against another.” Societe Internationale
Pour Participations Industrielles et Commerciales,
S.A. v. Rogers, 357 U.S. 197, 210, 78 S.Ct. 1087, 2
L.Ed.2d 1255 (1958). See generally United States v.
Pole No. 3172, Hopkinton, 852 F.2d 636, 643 (1st
Cir.1988) (though technically a claimant, property
owner's action to recover his property after seizure
by the government was more in the nature of a
response).
at 664-65
Maharaj was entitled to defend her property. In
disentitling her the right to do so, the Superior Court
violated Maharaj’s rights to due process of law.
E. The Superior Court's posthumous order. Whatever
might be the scope of a court's inherent power, the
6/13 Opinion overlooks settled authority against the
entry of posthumous judgments. As the 6/13 Opinion
notes, the Superior Court's theory was that
Maharaj’s claims to the [RAs were derivative, and
therefore valid only insofar as Monga’'s claims were
valid. The limits on the Superior Court's power
20
therefore present a separate question concerning
Monga. In Massachusetts, prosecutions against
deceased defendants are abate. See e.g. Com. v. De
La Zerda, 416 Mass. 247, 248 (1993); cf. Durham v.
United States, 401 U.S. 481 (1971), Fletcher v.
Bryan, 361 U.S. 126 (1959). Whatever ambiguity
may be present when the defendant dies when his
conviction is on appeal, none is imaginable if death
occurs prior to conviction. As a matter of due process,
there is no distinction here relevant between the
right to liberty and the right to property.
Ottenberg never sought a forfeiture remedy during
Monga’s lifetime. The notion that he could so after
Monga’s death offends the most rudimentary notions
of due process. The Superior Court’s order stripping
Monga of his property in the IRAs thus denied
Monga his due process rights under the United
States Constitution. As executrix of Monga’s estate,
Maharaj is entitled to claim the benefit of those
rights on behalf of the estate.
II. Miscellaneous. Among other issues overlooked or
misapprehended in the 6/13 Opinion is the Gosine’s
trust fund. No theory has been suggested as to why
Maharaj’s nephew's property could be seized by
Ottenberg.
As for the Funds’ claim for reimbursement from the
IRAs, of costs and attorney fees, the TRA contracts
could not be interpreted to allow such extravagant
disbursement without violating the condition that
the IRAs be nonforteitable particularly vis-a-vis
their trustees. App. YY9YK-999X. Anv clause
purporting to authorize such disbursements would
violate the condition for validity of [IRAs that they be
nonforfeitable. Add. 3, 11, 21, 22; App. 999K-999X.
Much else might be said, particularly concerning the
6/13 Opinion’s factual narrative,» but such detail
§ For instance, the affidavit submitted by Cathy Brooks on June
10, 1992, before Ottenberg’s appointment, shows that the 6/13
Opinion misapprehends what Monga had already disclosed to
Sommer concerning the IRAs: paragraphs “b” and “g” of Cathy
Brooks’ affidavit detail the rollovers of the IRAs from Scudder
into Founders and Vanguard. App. 161, 162. Ottenberg’s
Memorandum dated February 17, 1995, concedes the validity of
these rollovers. App. 362
Another instance concerns Monga’s contempt citation. The 6/13
Opinion emphasizes that Monga’s contempt was never purged,
but it misapprehends Monga’s considerable efforts to do so, his
submissions of extensive affidavits with supporting documents,
and most of all the fact that, one month after the Appeals Court
Sommer | decision, Monga filed his appeal from the Superior
Court's denial! of his motions to purge the contempt. Monga died
waiting for the transcripts needed to prosecute that appeal
App. 226-264, 265-266, 286-287 288-292, 293-294, 295-296, 297.
305, 309-313, 391-401. Also App. 202-208, 669-743
Yet another involves instances of overreaching: (1) by the
Superior Court, as in its orders enjoining Monga from
prosecuting his IRA claims in Pennsylvania courts, Dkt. #4343,
344, 345, 346, 448; App. 39, 51, 1018; or its orders authorizing
attachments of Monga’s property in an aggregate amount of
$3.8 million, (M.G.L. 223 § 42A), Dkt.#t 97, 98, 99, 100, 123,
124, 147, 148; or authorizing Ottenbery to seize Monga’s mail
App. 200; (i) by Ottenberg, for instance in his seizure of
computers and downloading confidential information § stored
therein, App, 209-210, 211 2° 705 11; or Gn) by Cathy Brook
an attorney uubmitting an affidavit of transfers allegedly
violating a court injunction, but listing mostly transactions
predating said injunction, App. 147-160
Of course ne of the issues left unresolved when Sommer /
conditionally dismissed Monga appeal anvolved the trial
urt decision — t strike Vlonga counterclaim against
ommer, (for breach of fiduciary duties by starting a mp
seems unnecessary to whether or not this Court
should grant a rehearing. Hopefully, the two broad
due process themes - the IRAs’ exempt status and
Maharaj’s right to be heard - have been adequately
presented.
One closing remark, however, seems appropriate: by
its silence on the point, the 6/13 Opinion
misapprehends the prejudice suffered by Maharaj as
a result of Ottenberg’s, Sommer’s and the Funds’
obstinate refusal to honor her rights. If she is right,
she has been denied her IRAs for twelve years,
during which she has been forced to proceed mostly
pro se, and to get by as best she could. The
implications of this case for millions of IRA holders
in Massachusetts and elsewhere in the United States
are clear: if this can happen to Maharaj, it can
happen to any of them, especially during
economically hard times, thereby undoing the mantle
of protection Congress enacted for qualified pension
and retirement savings plans.
firm while Sommer remained a dircctor, officer and shareholder
of CORE and Subsurface), in order to avoid a compromise jury
verdict. Sommer 1, See Appellants’ Brief, pp. 17-24, in Appeal
No 92-P-749, and Appellants’ Reply Brief, dated 11/30/92
relyingg on Cain ov. Cain, 3 Mass. App. Ct. 467 (1975), among
several other cases.
The judgment in Sommer's favor may thus have been tainted,
and this may explain the relentless campaign of tactical
maneuvers he beyan immediately after the verdict which had
the effect. even if not the main purpose, of making life nearly
impossible tor Monga, (App. 202-208, 226-264, 288-289, 669
743, 702-11), culminating in the receivership and almost
inmediate lqpuidation ot Mona's HDusiNesses, (Ottenberg's
420/42 Report), and Ottenberg’s additional seizure ot Monga
and Mahara)'s statutorily protected ERISA pension tunds
Valued at SV6.840.57 when seized in LOO, App. 12468, 1244-50
For the reasons set forth above, Maharaj prays this
Honorable Court to grant her a rehearing.
Respectfully submitted,
“s/John G.S. Flym”
John G.S Flym
c/o M. Costello
32 Woodbourne Road
Jamaica Plain, MA 02130
617.522.3739
(in France)
Flym
85 Bd. Suchet
75016 Paris
+33 1465101 80
Cc.
Justice Robert J. Cordy
Justice Roderick L. Ireland
Justice Francis X. Spina
Copy by hand:
John Baraniak Jr., Esq.
Peter S. Brooks, Esq.
Gael Mahoney, Esq.
John C. Ottenberg, Esq.
25
APPENDIX C
Massachusetts Supreme Judicial Court
No. SJC-09855
451 Mass. 615 (2008)
June 13, 2008
Rescript September 25, 2008
OPINION
26
SCOTT E. SOMMER, executor, [FN1]
VS.
SHANTEE MAHARAJ, executrix, [FN2] & another
[FN3]; VANGUARD FIDUCIARY TRUST
COMPANY & others, [FN4} third-party defendants.
Middlesex. April 2, 2007. - June 13, 2008.
Present: GREANEY, IRELAND, SPINA, & CORDY,
JJ.
Judgment, Satisfaction. Receiver. Practice, Civil,
Receiver, Dismissal.
Individual Retirement Account.
CIVIL ACTION commenced in the Superior Court
Department on May 8, 1989.
After review by the Appeals Court, the Supreme
Judicial Court granted leave to obtain further
appellate review.
Peter S. Brooks for the plaintiff.
John C. Ottenberg, pro se.
John R. Baraniak, Jr., for Vanguard Fiduciary
Trust & others. Kristin Moody. for Dreyfus
Founders Funds, Inc., was present but did not
argue.
John G.S. Flym for Shantee Mahara).
a
CORDY, J. Paul F. Sommer and D. Dev Monga were
business associates with interests in two
corporations controlled by Monga. Shantee Maharaj
was Monga’s wife and an employee of the
corporations. In the breach of contract and fiduciary
duty litigation (brought by Sommer against Monga
and the corporations) underlying this case, a jury
returned a verdict in favor of the plaintiff, Sommer,
on June 7, 1991. What followed were years of
contumacious conduct by the principal defendant at
the time, Monga, in an effort to conceal assets and
avoid paying the judgment. Seventeen years later,
the litigation has survived both of their deaths.
The principal issue before the court is whether the
defendant, Shantee Maharaj, individually and as the
executrix of the estate of Monga (decedent), [FN5]
has forfeited the right to contest the seizure and
distribution of funds held in certain individual
retirement accounts (IRA accounts) to satisfy the
judgment entered against Monga in favor of Sommer.
A Superior Court judge allowed the receiver, John C.
Ottenberg, to access and distribute the IRA accounts
without affording Maharaj the opportunity to
contest, as she wished to, the seizure of the accounts,
which may be protected by statute from the claims of
creditors. On appeal, in 2006, the Appeals Court
vacated the judgment insofar as it allowed the
receiver to distribute the IRA assets. Sommer v.
{faharaj, 65 Mass. App. Ct. 657, 669 (2006) (Sommer
Il). We granted the application for further appellate
review of the receiver and the estate of Sommer and
now affirm the judge’s decision. [FN6]
28
1. Background. After receiving a judgment in the
amount of $482,904, Sommer set about trying to
enforce it. [FN7] As part of that process, he sought
and secured a permanent injunction’ prohibiting
Monga and his’ business’ corporations from
transferring or otherwise disposing of their assets.
Maharaj was fuily cognizant of that injunction. The
injunction had little effect. As recounted in greater
detail in prior decisions of both the Superior Court
and the Appeals Court, Monga and Maharaj engaged
in a seemingly endless series of actions to avoid
paying the judgment. {[FN8] These actions included
extensive commingling and_ diversion of the
corporations’ assets, and the concealment of
hundreds of thousands of dollars of Monga’s assets.
[FN9j They also included the harassment of third
parties who had relevant financial information
sought by Sommer, based on which a_ second
injunction was entered against Monga.
We briefly recount the relevant facts and events that
brought the case to its current posture. [FN10] In
June and July of 1992, a Superior Court judge
entered two critical orders for the purpose of
securing assets for the enforcement of the judgment.
First, she found Monga in contempt tor failing to
provide discovery, and for transferring assets in
violation of the permanent injunction entered after
judgment. In light of Monga’s failure to appear to
answer on the contempt complaint, she also issued a
capias for his arrest. Monga, who had left the
jurisdiction, never purged himself of this contempt.
Second, based on findings with respect to the conduct
cf Monga and Maharaj in diverting and concealing
assets that ought otherwise be available to satisfy
29
the judgment, the judge appointed a receiver. The
receiver was directed to “collect, receive and take
possession and charge of all [the] assets” of Monga
and Maharaj. Monga and Maharaj were also ordered
“to deliver to said receiver all the property, moneys,
stock in trade and effects of every kind and nature ..
.1n their... possession or control, together with all
books, deeds, documents, vouchers, and papers
relating thereto.” It is apparent from the record that
neither Monga nor Maharaj delivered any preperty
to the receiver, and, at least during .he six years that
preceded the receivers filing of a motion for
summary judgment on his amended substitute
complaint (in July, 1998), never delivered any
records either.
After identifying the IRA accounts, the receiver
secured a court order directing that they be
transferred to, and held and administered by, him
until entitlement to the IRA assets was determined.
[FN11] The companies managing the IRA accounts --
Vanguard Fiduciary Trust Company;
Vanguard/Morgan Growth Fund, Inc.; Dreyfus
Founders Funds, Inc.; and Investors Fiduciary Trust
Company (collectively, the fund defendants) -- did
not initially turn over the accounts to the receiver, in
part because Monga threatened to sue them if they
did so. The fund defendants did, however, freeze the
accounts and, in 1995, in response to the receiver's
complaint to effect turnover ef the accounts, filed a
counterclaim and a cross claim in interpleader,
seeking to be relieved of liability for the accounts.
Monga then sued the funds in Pennsylvania, setting
off a complex scries of proceedings in State and
Federal courts in Pennsylvania and Massachusetts,
30
[KN12] all of which appear to have been eventually
dismissed. [FN13]
In January, 1994, Monga’s appeal in the underlying
breach of contract and fiduciary duty action was
decided. The Appeals Court ordered that the appeal
be dismissed unless, within sixty days of the
issuance of the rescript, Monga surrendered on the
outstanding capias and purged himself of contempt.
Sommer v. *619 Monga, 35 Mass. App. Ct. 761, 765
(1994) (Sommer I). Monga failed to do so, and in
June, 1994, an order of execution was issued
pursuant to the underlying judgment. In light of the
contempt, of which Monga had not purged himself,
the sum of $100,000 was added to the judgment as
penaity. On July 8, 1994, a Superior Court judge
ordered all creditors to file proof of claims with the
receiver by September 15, 1994. Monga appears to
have filed three proofs of claim, one for “vacation
pay, one for “Internal Revenue Taxes,” and a third
for “Legal Fees.” Neither Monga nor Maharaj filed
claims with respect to the [RA accounts which had
been ordered turned over to the receiver, but which
remained held by the fund defendants, albeit in a
frozen state, due to the threat, by Monga, of
lhtigation. As noted above, this threat was realized
when the fund defendants sought interpleader relief.
After Monga passed away in 1996, Maharaj, the
beneficiary of the IRA accounts, demanded that the
fund defendants pay the IRA assets to her. The fund
cefendants refused, and the IRA accounts were
ultimately ordered turned over to the receiver, and
then disbursed as part of the receivership estate. The
judge's order of October 8, 1998, which allowed the
31
receivers motion for summary judgment effecting
the surrender of the funds to him, is the subject of
this appeal. [FN14]
In ordering that the IRA accounts be transferred to
the receiver and ultimately disbursed as part of the
receivership estate, the judge refused to consider
Maharayj’s claim that the IRA assets were protected
by statute from the claims of creditors, and therefore
could not be reached to satisfy the judgment against
Monga. The judge’s basis for so doing was that
Monga’s continued defiance and flouting of court
orders “stripped him of all right to assert claims of
statutory exemption” for the IRA accounts. He had,
in other words, forfeited his right to make any such
claims by his continued disobedience. In the judge’s
view, Maharaj’s claim to the [RA accounts, as the
beneficiary, derived entirely from Monga. Because
Monga had forfeited the right to retain them, nothing
remained to pass to her on his death.
In reaching her decision, the judge relied in part on
the Appeals Court’s decision in Sommer I, supra at
761, in which the Appeals Court’ ultimately
dismissed Monga’s appeal trom the underlying
judgment against him on the basis of his fiagrant
disobedience of court orders. Because Monga had
already, by the time his appeal was heard, disobeyed
any number of court orders, was in contempt, and
was subject to an outstanding capias for his arrest,
the Appeals Court held that [dJeprivjing him] of the
right to pursue an appeal” did not violate either due
process or equal protection. Sommer I, supra at 765.
The judge, in turn, similarly determined that
Monga’s, and Maharaj’s, actions warranted depriving
32
Maharaj of the right to assert any claims to the IRA
assets. On appeal from that decision, however, the
Appeals Court concluded that denying Maharaj’s
right to a hearing on the merits of her claim to the
IRA assets, in reliance on the court’s reasoning in
Sommer I, was error. Sommer II, supra at 663. In the
Appeals Court’s view, the issues involving the LRA
accounts were not before the court when it decided
Sommer I. Further, as the court noted, the right to
appeal differs from the right to a trial. Sommer II,
supra at 662. The Appeals Court also rejected the
fund defendants argument that the trial court has
the inherent power to enforce its own orders and to
enter a judgment against Maharaj, stating in a
footnote that “[t]he cases appear to limit the sanction
of default against a defendant to instances of truly
egregious conduct... .” Id. at 664 n.12. The Appeals
Court vacated the judge’s order and judgment on
receivership and remanded the case for further
proceedings.
2. Discussion. We agree with the Appeals Court that
the issue of the exempt status of the IRA accounts
was not specifically before that court in Sommer [,
and that depriving a party of a right to appeal differs
from depriving a party of a right to a trial on the
merits. |FN15] This case, however, is the rare
example of one involving conduct so egregious as to
warrant the forfeiting of a right to be heard. We do
not take lightly our decision that the actions of
Monga and Maharaj lead to such a result -- certatnly
depriving a party of the right to be heard on the basis
of that party's conduct is the most severe of sanctions
-- but the extreme facts of this case countenance such
a decision.
33
The Superior Court has, as the fund defendants, the
receiver, and Sommer suggest, the inherent power to
enforce its own orders, “to manage [its] own affairs so
as to achieve the orderly and expeditious disposition
of cases.” Brockton Sav. Bank v. Peat, Marwick,
Mitchell & Co., 771 F.2d 5, 11 (1st Cir. 1985), cert.
denied, 475 U.S. 1018 (1986), quoting Link v.
Wabash R.R., 370 U.S. 626, 630-631 (1962). It has
long been understood that courts have the “power to
impose silence, respect, and decorum, in their
presence, and submission to their lawful mandates.”
Chambers v. NASCOQO, Inc., 501 U.S. 32, 43 (1991),
quoting Anderson v. Dunn, 6 Wheat. 204, 227 (1821).
See, e.g., John’s Insulation, Inc. v. L. Addison &
Assoc., Inc., 156 F.3d 101, 108 (ist Cir. 1998)
{discussing court's inherent power to impose
sanctions beyond authority granted by Federal Rules
of Civil Procedure). That power, to “be exercised with
restraint and discretion,” Chambers v. NASCQO, Inc.,
supra at 44, includes dismissal of a lawsuit, when
justified by a party’s extreme conduct.
Among the pertinent considerations in determining
whether conduct warrants dismissal are “the severity
of the violation, the legitimacy of the party’s excuse,
repetition of violations, the deliberateness vel non of
the misconduct, mitigating excuses, prejudice to the
other side and to the operations of the court, and the
adequacy of lesser sanctions.” Robson v. Hallenbeck,
81 F.3d 1, 2 Qst Cir. 1996). “As a minimal
requirement, there must be convincing evidence of
unreasonable conduct or delay. A judge should also
give sufficient consideration to the prejudice that the
movant would incur if the motion [to dismiss] were
denied, and whether there are more. suitable,
alternative penalties.” Monahan v. Washburn, 400
Mass. 126, 128-129 (1987).
Although “dismissal” is not technically what has
occurred in this case, the rationale for dismissing a
case on the basis of a party’s conduct is applicable in
this instance where the forfeiture of Maharaj’s right
to be heard on her claim to the IRA assets is based
on the actions of herself and Monga. The conduct at
issue here was unquestionably unreasonable. In
short, Monga and Maharaj did everything they could
to keep Sommer from enforcing the judgment. Court
orders were flouted at every turn and thew conduct
could not have been more deliberate. Further, the
prejudice suffered by Sommer, and now his estate, is
palpable. Not only was there an extreme delay in
payment of the judgment, but the conduct resulted in
significant portions of the receivership estate being
paid to cover the costs of years of litigation, in
numerous courts, reducing the amount available to
satisfy the judgment In the exceptional
circumstances of this case, no lesser sanction would
be suitable.
Additionally, a sanction imposed for noncompliance
with court orders “serve[{s] not only to punish the
offending party but also to deter putative offenders
in future cases.” Figueroa Ruiz v. Alegria, 896 F.2d
645, 649 (1st Cir. 1990). Cf. National Hockey League
v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643
(1976) (‘the most severe in the spectrum of sanctions
provided by statute or rule must be available to the
district court In appropriate cases, not merely to
penalize those whose conduct may be deemed to
warrant such a sanction, but to deter those who
35
might be tempted to such conduct in the absence of
such a deterrent’). A decision here that Maharaj has
forfeited her right to pursue her claim to the IRA
assets because of the contumacious conduct of
Monga, which she facilitated, serves not only to
sanction that conduct, but also as an indication that
such conduct is not to be tolerated.
3. Conclusion. In the extraordinary circumstances of
this case, the judge acted within her authority in
imposing an extraordinary sanction. If the conduct at
issue here does not warrant such a sanction, we are
hard pressed to imagine what would.
The October 8, 1998, decision of the Superior Court
judge is affirmed in all respects except the portion
that permanently enjoins Maharaj from prosecuting
the fund defendants in any Federal court. The
judgment on receivership is affirmed.
So ordered.
FN1 Of the estate of Paul F. Somme:
FN2 Of the estate of D. Dev Monga, the original defendant, who
died in 1996. Shantee Maharaj, his widow, was eventually
appoint d the executrix of his estate
PN3 John C. Ottenberg, receiver of D. Dev Monga: Core
[Environmental Resources, Im ind Subsurface Technolog
Ir
PNA Vanguard/Morgan Growth Fund, In Drevfus Pounders
Funds, Ine.: Citadel Service Co., In lnvestors Fiduciary Trust
Company, and Shantee Mahara
36
PN5 We refer to Shantee Maharaj in her dual roles as the
executrix of Monga’s estate and as an individual defendant
simply as Maharaj.
FN6 We affirm all aspects of the Superior Court judge’s October
8, 1998, decision and order that is the subject of this appeal,
save for that portion of the decision permanently enjoining
Maharaj from prosecuting Vanguard Fiduciary Trust Company;
Vanguard/Morgan Growth Fund, Inc.; Dreyfus Founders Funds,
Inc.; or Investors Fiduciary Trust Company in any Federal
court. On this point we agree with the Appeals Court that the
judge had no authority to issue such an injunction. Sommer v.
Maharaj, 65 Mass. App. Ct. 657, 665-666 n.16 (2006) (Sommer
IT).
FN7 For details of the underlying dispute leading to the
judgment see Sommer v. Monga, 35 Mass. App. Ct. 761 (1994)
(Sommer I), Monga’s appeal from the judgment, and Sommer I],
supra, the decision that led to the application for further
appellate review,
FN8 In addition to the Superior Court decision that is the
subject of this appeal, see Sommer I, supra, and Sommer LI,
supra.
FNQ Some of the details of such conduct are set forth in
comprehensive affidavits filed in support of Sommer'’s motion
for the appointment of a receiver in July, 1992.
FN1O A complete iteration of their actions, and the numerous
proceedings that resulted, in a number of courts, 1s impractical.
The facts detailed in the prior decisions and opinions of the
lawer courts paint a sufficient, but still only a partial picture
The Superior Court docket in the present action alone includes
more than 500 filings
I N11 The order appointing a receiver was “clarified” on July 6,
1992, speeifically to include the transfer to the receiver of the
IRA account with the Vanguard Fiduciary Trust Company
Additional orders were entered with respect to oher IRA
accounts as they were identified
FN1Z After Monga commenced the Pennsylvania action, the
funds moved for interpleader in both the Massachusetts and
Pennsylvania actions, seeking authorization to deposit the
tlue of the accounts into court and to be reheved of all turther
involvement
KN13 In this semes of proceedings, sanctions were twice
imposed against Monga and Mahara) in the United States
District Court for the District of Massachusetts (once in 1996
and again in 1997) for the filing of frivolous pleadings. These
sanctions remained unpaid as of October, 1998.
FN14 On August 1, 2000, final judgment entered on the
receivership, and the monies were disbursed. The receiver filed
a certificate of compliance on September 13, 2000.
FN15 The IRA accounts were, however, among the assets that
Monga was originally enjoined from disposing of, transferring,
or otherwise alienating. Monga’s actions in ignoring the
injunction, and in failing to disclose the very existence of the
IRA accounts, led to the dismissal of his appeal. The IRA
accounts, then, were not so separate from what was happening
at the time of Sommer I as the Appeals Court seems to suggest.
APPENDIX D
Massachusetts Supreme Judicial Court
No. SJC-09855
June 12, 2007
MAHARAS’S POST ARGUMENT LETTER
John G.S. Flym
Prof. Emeritus
Northeastern University School of Law
400 Huntington Ave
30ston MA 02115
617.373.3348
}.f{lym@neu.edu
April 18, 2007
(corrected for typographical errors 4/19/07)
Via Hand delivery
The Honorable Justice John M. Greaney
Presiding Justice
Supreme Judicial Court
One Pemberton Square, Suite 1400
Boston, MA 02108
Re: Sommer v. Maharaj - SJC-09855
Postargument letter
Dear Just 1¢ e Greaney:
This letter addresses issues raised by Attorney
Ottenberg’s (‘Ottenberg”) letter dated 1/5/07, by his
and other counsel’s April 2 oral arguments, and by
}
the Court, providing citations which hopefully the
Court will find useful in deciding this cuse
1. Ottenberyg’s letter claims that an order dated
j 9? directs Monga to turn over his IRA
A]
That document, docket (“‘Dkt.”) 191, actually dated
July 6, amends the receivership order of 6/15/92,
Dkt. 182, with the judge’s marginal handwritten
entry “allowed” - the text of the order was evidently
drafted by Sommer’s attorney. That 6/15 order was
supplanted, however, by a new receivership order
dated July 8, Dkt. 192, a new order incorporating,
among other changes, two new numbered
paragraphs as well as references to Envirotech -
without any mention of the IRAs. By contrast, on
8/20/92 Vanguard and Jfounders (the “Funds”’) were
ordered to turn over Monga’s IRAs to the receiver,
and Ottenberg was ordered to maintain those funds
in an IRA account, (the supplanted 6/15 order
contains no similar provision).
\
This courts recent decision in Parker _ v.
Commonwealth, 448 Mass. 1021, 1022 (2007), breaks
no new ground in reaffirming that to hold a party in
contempt, “...there must be a clear and unequivocal
command and an equally clear and undoubted
disobedience....’ Nickerson v. Dowd, 342 Mass. 462,
464 (1961). There exists no “clear and unequivocal
command” to Monga regarding his IRAs. Nor could
“an equally clear and undoubted disobedience” be
found, unless the Funds’ own litigation for years
against comphance with the &/20/92 orders be viewed
as contempt of court
2. During oral argument, Ottenberg asserted: “I
would also say that the Appeals Court um has
claimed that [conceded somehow that these accounts
were exempt. They were not exempt. Under the
appheable statute in 1992, in July of 1992, which
was the then current version of Chapter 235, Section
49
34(a), accounts -- the only accounts that were exempt
were ERISA-protected accounts.”
Both of these assertions are incorrect.
On March 1 and March 38, 1995, respectively,
Vanguard and Founders filed separate motions to
dismiss Ottenberg’s “Substitute Complaint’, Dkt.
299, App. 366-69, 370-72. The second paragraph of
Vanguard’s motion states: “In his Memorandum in
opposition to the Motions to Dismiss, the Receiver
admits that, under applicable state laws, he can only
reach those IRAs if they were fraudulently
established or funded. See Receiver’s Memorandum
at pp. 8, 10-11. Vanguard and IFTC request that the
Court require the Receiver to prove that the IRAs are
invalid and can be reached by him, as_ that
determination will be dispositive of all other issues in
this case,” (emphasis added). The second paragraph
of Founders’ motion likewise records, “...the Receiver
for the first time concedes that he is not entitled to
reach [Mongas IRA funds] ... if the accounts are
valid IRAs. The Receiver admits that valid IRA
accounts are ‘exempt from the claims of creditors of
Mr. Monga. Receiver’s Memorandum at 10.”
Nothing in the text of M.G.I.c¢.235, § 34a), as
adopted in 1990, or amended in 1991, 1992 and 1998,
supports Ottenbergs claim that the law exempting
IRAs from the reach of creditors changed at any
relevant time. See also ROUSEY v. JACOWAY, 544
U.S. 820 (2005) which contirms GUIDRY v. SHEET
METAL WORKERS PENSION PLAN, 493 U.S. 365
(1990) and PATTERSON v. SHUMATE, 504 U.S. 753
(1992): valid TRAs are excluded from a bankruptey
43
estate and beyond the reach of creditors. GUIDRY
set aside a constructive trust imposed on the pension
plan of an employee convicted of having embezzled
union funds. PATTERSON is) emphatic _ that
exceptions, if there are to be any, is a matter for the
legislative branch, not the judiciary.
3. The Court asked Ottenberg, “Did you ... ever
present any evidence that these IRAs were not
exempt?”
Ottenberg replied, “Uh yes ....”. There is no basis for
this claim. The record, devoid of any “evidence”,
contains nothing other than Ottenberg’s speculative
1995 remark that the “...amount of funds in said IRA
accounts is extremely high for someone of Monga’s
age..., § 51 of “Receiver’s Substitute Complaint to
Effect Turnover of Accounts,” 02/17/95, Dkt. 295.0.
4. The Court asked Flym whether Monga had been
enjoined from transferring assets.
On June 12, 1991, (five days after the June 7 verdict,
but six days before the June 18 entry of judgment,
Dkt. ## 105-109), the trial court endorsed an order
permanently enjoining Monga from transferring
assets “... other than in the ordinary and usual
course of business.” © intro, (emphasis added).
Paragraph numbered 3 of this June 12 order added:
“The injunction will not unduly interfere with the
personal or business activities of the defendants, as
the injunction only would. prohibit the bulk or
unusual transfer of assets and would not interfere
with the defendants’ ability to continue 1n_ business,”
(emphasis added) Mongas transfers were in
comphance with this qualified order
Along with this qualified injunction, on June 12 the
trial court also ordered attachments in the amounts
of $500,000, $500,000, $700,000 and $700,000
respectively, Dkt. ## 97, 98, 99, 100, 117 Gtems 2 &
3). A number of additional trustee process
attachments were subsequent ordered: August 13,
1991, for $700,000, Dkt. 123, and a bank account,
Dkt. 124; September 19, 1991, another bank account,
Dkt. 128, and an attachment in the amount of
$500,000, Dkt. 129 - (most of these entries are in the
handwritten part of the docket sheet); December 19,
1991, “in the amount of $100,000 each,” Dkt.44 147,
148,
The docket sheet records Monga’s Notice of Appeal
on July 26, 1991, (without a Dkt. #).
In addition to the attachments, che trial court
allowed Sommer'’s” attorneys to take many
depositions. On November 29 and December 31,
1991, Monga sought protective orders against
disclosure of confidential information obtained by
Brooks from various banks, Dkt.4# 145, 151. A few
weeks later, Monga sought equitable rehef from
further discovery grounded. in part, on the fact that
Sommer had already secured his judgment, “...by
Reaching and Applying my stock in the Companies
which is appra sed for $1,228,000.00 by the plaintiffs
own expert witness at the tmal.” 1/27/92 Monga
Affidavit, p. 11. 4 42. . Instead, on January 30, 1992,
the tral court allowed Sommer's motion to take
Monga’s deposition, Dkt. 167. Pursuant thereto,
Monga turned over S780 copies of documents on
February 7, 1992 - Monga submitted an invoice for
45
$1,293.50 in copying expenses on March 12, 1992,
which Sommer refused to pay. 6/19/92 Monga
Affidavit, App. 202-208, {{ 12 at 205.
The docket is silent for three months from February
1992 until an entry May 21, 1992, “Notice sent to
clerk of Appeals Crt that record assembled,”
(between Dkt. 173-174).
Three weeks later, seven items were filed on
Wednesday, June 10, 1992, moving inter alia for the
appointment of Ottenberg as receiver, Dkt. ## 175
180. Six more items were filed the next Monday,
June 15, including a return of service “in hd to Don
Behoury, Office Manager Agent in charge of defts,
6/11/92”, Dkt. 181, as well as the receivership order
appointing Ottenberg, . Dkt. #182, authorizing him to
seize “... property belonging to the defendants and to
Mahara) ...,” /d. p. 2, §| 1, (emphasis added). : A pro
forma capias also issued against Monga, (the entry
has no docket number).
Among the seven documents filed on June 10 in
support of the receivership motion is an Affidavit by
attorney Cathy Brooks’ which, in paragraph
numbered 3, refers to the injunction issued a year
earlier, June 12, 1991. This affidavit’s first section is
entitled “I. Fraudulent Conveyance of Real Estate,”
comprising five numbered paragraphs which describe
assorted transactions - all of them predating not only
the 6/12/91 injunction, but also the jury verdict and
court judgment: August 21, 1990, (4 4): August 21,
1990, (% 5): August 31, 1990, September 26, 1990,
September 27, 1990, and September 29, 1990, (4 6);
September 10, 1990 and October 31, 1990, (© 7): and
46
October 31, 1990, ({| 8). Based upon this affidavit, on
June 15, 1992, the trial court endorsed the
receivership order submitted by Brooks which, on
p.2, 4 4), recites a “finding” that “... Monga has
fraudulently conveyed his rea] and personal property
to one or more third parties.”
The tria} court never addressed Monga’s detailed
affidavits, or their many supporting’ exhibits,
contesting the allegations of fraudulent conveyances
set forth in Brooks’ affidavits. Nonetheless, those
allegations are belied by the fact that on March 13,
1995, Monga was reduced to filing a motion to
proceed in forma pauperis, (on appeal from the
denial of his motion to purge the contempt charge),
Dkt. 300: Sommer had 10 days from receiving notice
of this motion to respond, /d.; on April 3, 1998,
Monga’s tn forma pauperis motion was allowed. The
allegations of fraud are also belied by the fact that
Monga died in 1996 leaving his widow destitute:
Maharaj) was forced to litigate pro se, (she had no
experience as a practicing attorney). Since Monga’s
death, she has largely depended on the charity of
friends.
5. The Court also inquired about the nature of the
receivership imposed on Monga.
The order dated July 8, 1992, Dkt. 192, - provides in
para h numbered 3 , °... the receiver is hereby
order . to conserve and manage the assets of the
defendants and Enviro’ech, and all of Core’s and
Subsurtaces subsidiaries and to operate the
defendants’ respective businesses ....° (emphasis
added). Ottenberg seized Monga’s companies and
home two days after the initial receivership order of
June 15. Last year, answering a question by Appeals
Court Judge Graham, Brooks stated that in 1989, “...
the companies were healthy, prospering and growing
rapidly...,” (minute 21 of the audio recording).
Although the attachments and litigious discovery
proceedings must have taken their toll, Ottenberg’s
July 14, 1992, report states that the three companies
he seized were in business, that Subsurface had
assets exceeding its debts and leased out a drilling
rig which it owned; that, “EnviroTech was actively
and substantially engaged in the environmental]
consulting and testing business, with substantial]
chents and apparently a substantial volume of
business,’ and that Core provided personnel,
equipment and facilities to EnviroTech. Dkt. 192.5,
]4| 8-12.
Notwithstanding the companies’ solvency and the
receivership mandate, Ottenberg recommended
liguidation of the companies on the ground that their
“...business credibility is obviously damaged by the
fact of the Receivership...,” and that the companies
would be deemed insolvent if the judgment then
being appealed was counted among the companies’
debts. Dkt. 192.5, 4 14. Ottenberg then requests
authority to fire the companies’ employees and then
liquidate Core, Subsurface and Envirotech. Dkt
192.5, pp. 3-4. The trial court granted these requests
by endorsement in the report's margin. Liquidation
of the companies did not serve the aim of satisfying
the judgment debt. It did. however, eliminate
Sommer's local competition
48
6. The Court also inquired about the Appeals Court
rescript entered February 14, 1994, Dkt. 247, that
Monga’s appeal would be dismissed unless’ he
surrendered on the capias within 30 days and purged
himself of contempt within 60 days.
Monga had repeatedly moved to set aside the
contempt judgment - see e.g. entries on 06/23/93,
08/03/93, 08/19/93, 11/04/93, 12/31/93, Dkt. AA 237,
240, 244.1, 245. Monga appealed the Superior
Court’s denial of his motions to set aside the
contempt on February 1, 1994, two weeks before the
Appeals Court rescript. After the rescript, on May 2,
1994, Monga requested instructions for purging the
charge of contempt, Dkt. 250. On June 3, 1994, the
Superior Court declared the judgment final and
ordered its execution; it also imposed an additional
$100,000 “... penalty assessed by this Court in
connection with the _plffs previous motion and
complaint for contempt ...,’ (emphasis added), Dkt.
257. On September 20, 1994, Monga filed his notice
of appeal and moved that the record be assembled.
Dkt. 272, 273. As noted above, Monga’s motion to
proceed with the appeal in forma pauperis was
allowed on April 38, 1995, Dkt. 8300. Monga died
betore his appeal could be heard, Entry 09/12/96,
Dkt. 357. What the Appeals Court might have
decided concerning the issues of contempt or
dismissal of the onmginal appeal from judgment 1s
unknowable.
7. Lastly, Mr. Baraniak presented the Funds as mere
stakeholders, with a contractual right to recoup their
legal expenses from Monga.
49
The reasons why this is legally incorrect are set forth
in Maharaj’s Petition for Rehearing filed on March 3,
2006, in the Appeals Court, 2004-P-0591, docket item
# 33, which supplements part 7 of “Appellants’ Brief”
below, pp. 42-45.
Vanguard Associate Counsel Suzanne F. Barton
(“Barton”) received a copy of the receivership order
on October 19, 1992, with a request that Vanguard
freeze Monga’s account and transfer the funds to
Ottenberg. Vanguard refused the transfer but froze
the IRA. 12/1/94 Barton Affidavit, 4/4] 4-5, App. 999E-
999H, attached as an exhibit to Vanguard’s 3/1/95
motion to dismiss Ottenberg’s substitute complaint,
Dkt. 299, App. 366-69.. Lronically, Vanguard argues
that Ottenberg’s Substitute Complaint should be
dismissed because, “The newly alleged counts for
breach of contract and conversion are premised on
the Receiver’s assertion that he succeeds to the
rights of Monga with regard to the IRA accounts.” Jd.
at 367, 4] second. Monga, before he died and Maharaj
afterwards, assert(ed) similar claims against
Vanguard.
On June 5, 1995, the court, relying “... on the
repeated representations of counsel that ... |[Monga’s
IRAs] will remain frozen and will not be dissipated
prior to the determination of the validity of the
accounts ...,’ denied Ottenberg’s request for a
preliminary injunction against the Funds. Dkt 319.
Had the Funds not continued for years to voluntarily
freeze Monga’s IRAs, by 1995 or earlier they likely
would have been contronted with having to show
cause Why they should not be held in contempt - the
IRAs’ validity would have been settled long ago. The
a0
same result would have obtained had the Superior
Court not unlawfully enjoined Monga’s Pennsylvania
lawsuit; likewise if Ottenberg had gone uhead the
contempt charges he repeatedly filed instead of
voluntarily dismissing them - thereby avoiding a
judicial ruling that his challenge to the IRAs’ validity
was specious. If there was waiver, it was surely
Ottenberg who waived any claim he migkt have had,
before Monga’s death, that Monga had waived his
rights to the IRAs. Of course, after Monga’s death,
the IRAs became property of his widow by operation
of law, and had the Funds complied with Maharaj’s
demand that the [RAs be turned over to her, that too
would have set in motion the end of htigation over
the IRAs’ validity.
The Funds’ role in prolonging this litigation is
evident, and their legal strategy no doubt was
designed to serve the Funds’ interests. They may
have been entitled to do that, but not at the expense
of the IRA beneficiaries, (who otherwise would risk
the extinction of their IRA under the banner of
Funds’ protective litigation). The Funds’ legal
obligations to Monga, transparent in their years of
litigation against the receiver, are defined by
contract, statute and jurisprudence. Whether
“stakeholders” or some other label be used _ to
characterize the Funds’ role, nothing supports their
claim to reimbursement by Monga and Maharaj for
legal expenses they incurred in this case
Respectfully submitted,
‘s/John G.S. Flym"
John GS. Flym
c/o M. Costello
39 Woodbourne Road
Jamaica Plain, MA 02130
617.522.3139
Gin France)
Flym
85 Bd. Suchet
75016 Paris
+33 14651 01 80
‘e.
Justice Robert J. Cordy
Justice Roderick L. Ireland
Justice Francis X. Spina
Copy by hand:
John Baraniak Jr., Esq.
Peter S. Brooks, Esq.
Gael Mahoney, Esq.
John C. Ottenberg, Esq.
iTn drafting this letter | have sought guidance from
the 21 decisions which mention a “postargument
letter” uncovered through Westlaw, 17 of them
issued by this Court and 4 by the Appeals Court
This reiterates Ottenbergs assertion Wn oral
argument: “Please keep in mind that in July of 1992
there was a very specific order directed to Mr. Monga
and Ms. Maharaj) to turn over those funds. They
never, ever complied with that order.”
sFlym relied upon ROUSI“Y in oral argument before
this Court.
\Ottenberg goes on, (after disclaiming any concession
of the IRAs validity, and claiming a change in the
law), “So there was both factual evidence that uh Mr
Monga did not have an IRA, upon wh-- evidence upon
which I relied, and in going forward. There was also
evidence that there had been a concerted course of
conduct to move assets from one name to another
name, to shield it in various ways. The real estate,
there were mortgages placed on the real estate.
There was a homestead exemption placed on the real
estate. There were tunds flying around the world, in
all different names.”
SMonga complained, “I beheve that the plaintiff and
his vastly experienced lawyers Cathy and Peter
Brooks have a_ personal agenda to destroy my
business, my credibility, my family hfe and
livehhood,.” rhid, at p. 3, § 7. and, “Ms. Brooks has
devoted a substantial portion of her 1/17/92 Aff. to
maligning me tor legitimately trying to protect the
continued well being and the viability of the
defendants from an onslaught of discovery and
trustee attachments even before yudgment was
entered in this lawsuit.” rbid. at p. 9, © 31.
6Ottenberg was required to post bond in the amount
of only five thousand dollars ($5,000.00), Dkt. 1838
several other cases in which Ottenberg was
appointed receiver ordered kim to post bond. in
amounts at least equal to the »wdement.
53
"The Appeals Court decision here under review
remands the case in part for a determination
whether Ottenberg seized property belonging to third
parties.
sAs noted above, the initial June 15, 1992 “Order for
Appointment of Receiver,” Dkt. 182, was supplanted
by a new order dated July 8, 1992, Dkt. 192,
authorizing the seizure of EnviroTech.
YThe facts surrounding the issuance of a capias
herein do not readily lend themselves to a
determination of the boundaries of appropriate
sanctions under the rule of law for, whatever they
may be, Ottenberg’s post mortem forfeiture invention
conflicts with established jurisprudence, however
convenient it may have been as a deus ex machina to
arbitrarily end this case. Nonetheless, it may be
worth recalling Mr. Justice Cardozo’s analysis ot
“...prineciple[s] of justice so rooted in the traditions
and conscience of our people as to be ranked as
tundamental....”°9 PALKO v. CONNECTICUT, 302
U.S. 319, 325 (1937), by reference to “... established
procedure of Continental KMurope a, 4. et aco. ih
that context, it may also be worth noting that the
Kuropean Court of Human Rights has found that an
appellate court’s refusal to decide the merits of a
prisoner's appeal on the ground that he had failed to
turn himself in violates Article 6.1 of the 1950
“Convention for the Pretection of Human Rights and
KFundamental Freedoms.” (which guarantees the
right to an equitable process) Stift v. Reloium, (N°
16848/99), February 24, 2005. Paragraph 30 of Stift,
reaffirming prior decisions against other European
nations rendered in 1998. 1999 and 2001, explains
54
that, on the facts of that case, the balance between,
on one hand, the need to assure execution of judicial
decisions and, on the other, the need to protect rights
of access to appellate tribunals and rights of defense,
tipped in favor of the latter.
i09Footnote 1 of this motion states, “... [Ottenberg’s]
claim that the ‘amount of funds in said [RA accounts
is extremely high for someone of Monga’s age’
(Substitute Complaint § 51) cannot serve as the
basis for a determination that the JRAs were
fraudulently funded.”
itl would also hke to call the Court's attention to the
fact that Sommer died in December 2005, and to the
pending “Motion to substitute as named appellants
the Estate of Paul Sommer and Scott Sommer in lieu
of Paul F. Sommer’, filed in this Court on November
7, 2006, docket # 9.
APPENDIX E
Massachusetts Court of Appeals,
No. O4 P-0591
65 Mass.App.Ct. 657 (2006),
Dated March 3, 2006
OPINION
56
65 Mass.App.Ct. 657 (2006)
March 3, 2006
PAUL F. SOMMER vs. SHANTEE MAHARAJ,
executrix, [FN1] & another [FN2];
VANGUARD FIDUCIARY TRUST COMPANY &
others, [F-N3)} third-party defendants.
Case No. 04-P-591.
Middlesex. October 14, 2005. - March 3, ZOO6.
Present: RAPOZA, GRAHAM, & KATZMANN, JJ.
Further appellate review granted, 447 Mass. 1110
(2006).
Employee Retirement Income Security Act. Pension.
Retirement. [Individual Retirement Account.
Receiver. Practice, Civil, Judgment, Dismissal, Moot
case. Superior Court, Jurisdiction. Jurisdiction,
Personal.
CIVIL ACTION commenced in the Superior Court
Department on May &, 1989.
Following review by this court, 35 Mass. App. Ct. 761
(1994), additional postjudgment motions were heard
by Judith Fabricant, 4J
John G.S. Flym for Santee Mahara).
John R. Baraniak, -Jr. (Kristin Moody with him) tor
Vanguard Fiduciary Trust Company & others.
8
~]
Peter S. Brooks for the plaintiff.
John C. Ottenberg, pro se.
GRAHAM, J. This is an appeal by the estate of D.
Dev Monga and the decedents widow, Shantee
Maharaj, from a Superior Court judge’s orders
allowing a court-appointed receiver to access and
distribute their individual retirement accounts to
satisfy a judgment entered in favor of Paul F.
Sommer, the plaintiff in the underlying shareholder
dispute. Although such accounts are generally
protected from the claims of creditors, the judge
ruled that the decedent and Maharaj forfeited their
rights to contest the seizure because they disobeyed
an earlier court order to turn over the accounts to the
receiver. We vacate the relevant orders and reverse
In part.
l. Background. Sommer and the decedent, Monga,
were shareholders in two corporations, Core
Environmental & Engineering Resources, Inc. (Core),
and Subsurface Technologies, [nc. (Subsurface).
Their original dispute came to the Superior Court in
1989, when Monga, the companies’ founder and
controlling shareholder, terminated his business
relationship with Sommer and purportedly offered to
repurchase Sommers shares under the provisions ot
the parties’ written agreement. Sommer refused
Monga’s offer and sued Monga. Core and Subsurface
for breach of contract and fiduciary duty. A jury
found in Sommer’s favor, and judgment entered
against Monga, Core and Subsurface on June 18,
1991, in the amount of 3478.904.03. Monga and the
aS
companies appealed, but the appeal was eventually
dismissed. See Sommer v. Monga, 35 Mass. App. Ct.
761 (1994), cert. denied, 513 U.S. 1169 (1995).
[FN4]
Sommer initiated postjudgment proceedings to
discover and secure assets and to enforce the
judgment against Monga, Core and Subsurface. To
that end, on June 12, 1991, the trial judge issued an
injunction prohibiting Monga and the companies
from transferring or otherwise alienating their assets
other than in the ordinary course of business.
Sommer soon learned, however, that Monga and his
wife, Maharaj, had been mingling their assets and
those of the companies and transferring them beyond
Sommer’s reach. At the same time, Monga failed to
comply with discovery requests and interfered with
Sommer’s attempts to elicit discovery from third
parties. On January 28, 1992, the trial judge granted
Sommer’s motion for a_ preliminary injunction,
ordering Monga to appear for his deposition, to
produce requested documents, to stop harassing
third parties from whom Sommer had_= sought
discovery, and to stop filing frivolous and repetitive
motions in an attempt to interfere with Sommer’s
discovery efforts.
Monga’s defiance continued nevertheless, and on
June 10, 1992, Sommer filed a complaint for
contempt and moved for the appointment of a
receiver. When Monga failed to appear for a June 15,
1992, hearing on Sommers complaint, the judge
issued a capias for Mongas arrest and entered a
judgment of contempt against him. As a result of his
failure to surrender to the capias and purge himself
59
of the contempt, this court dismissed Monga’s appeal
from the underlying judgment. See Sommer v.
Monga, 35 Mass. App. Ct. at 764-765.
Also on June 15, 1992, the judge granted Sommer’s
request for a receiver, appointing John C. Ottenberg,
and instructing him to take control of the defendants’
and Maharaj’s assets. In his efforts to locate and
collect the assets, Ottenberg discovered certain
individual retirement accounts (the IRA accounts) in
Monga’s name. These included an account with
Vanguard Fiduciary Trust Company and
Vanguard/Morgan Growth Company (Vanguard),
and two accounts with Dreyfus Founders Fund and
Investors Fiduciary Trust Company (collectively, the
fund defendants). Ottenberg also uncovered two
accounts in Maharaj’s name, one a revocable trust at
the Central Cooperative Bank, the other with
Fidelity Service Company, both held by Maharaj as
trustee for the benefit of her nephew, Adhiraj
Deepak Gosine, under the Uniform ‘Transfers to
Minors Act, G. L. c. 201A, §§ 1 et seq. [FN5]
Ottenberg obtained an order from the Superior Court
requiring the transfer of the [RA accounts to the
receivership estate. When neither Monga nor the
fund defendants complied, Ottenberg filed = a
complaint in Superior Court on January 5, 1995,
against the fund defendants and Monga, to effect
turnover of those accounts. This spawned a new
round of legal activity on several fronts. Ultimately,
as of June 1, 1995, the fund defendants complied
with a Superior Court order to freeze the IRA
accounts, pending resolution of the competing claims.
60
Monga died of cancer on August 23, 1996. Shortly
after, Maharaj instructed the fund defendants to pay
the funds in the IRA accounts to her, as the named
beneficiary on the accounts. The funds refused.
Ottenberg then amended his complaint to add
Maharaj as a defendant, [FN6] and moved for
summary judgment on his claim to recover the funds,
as set forth in his August 12, 1997, “Receiver’s
Amended Substitute Complaint to Kffect Turnover of
Accounts.”
A hearing was held in the Superior Court on
September 24, 1998, by which time some twenty
motions were before the judge. On October 8, 1998,
the judge issued her “Memorandum of Decision and
Orders on Pending Motions.” In disposing of the
various matters before her, the judge declined to
reach the merits of the competing claims to the IRA
accounts, ruling instead that Monga’s estate and
Maharaj had forfeited any right to contest their
seizure. On August 1, 2000, the judge entered a
judgment on receivership, and Ottenberg disbursed
the receivership estate. [FEF N7] Monga’s estate and
Maharaj filed this appeal.
2. The IRA accounts and due process considerations.
On appeal, Monga’s estate and Maharaj principally
challenge the forfeiture of the IRA accounts. They
point to the protections afforded such accounts,
firmly established by Federal and State statutes and
United States Supreme Court decisional law. As
explained by the Supreme Court with respect to
pension benefits under the Employee Retirement
Income Security Act of 1974 (ERISA), 29 U.S.C. §§
LOOL et seq. (2000), the prohibition on alienation of
61
pension benefits, pursuant to 29 U.S.C. § 1056(d)(1)
(2000), “reflects a considered congressional policy
choice, a decision to safeguard a stream of income for
pensioners (and their dependents, who may be, and
perhaps usually are, blameless), even if that decision
prevents others from securing relief for the wrongs
done them.” Guidry v. Sheet Metal Workers Natl.
Pension Fund, 493 U.S. 365, 376 (1990). Thus, the
Supreme Court, in Patterson v. Shumate, 504 U.S.
753, 760 (1992), held that a bankrupt debtor's
interest in an ERISA-qualified pension plan was to
be excluded, pursuant to its anti-alienation
provision, from the property of a bankruptcy estate.
Based on these well-accepted principles, Monga’s
estate and Maharaj argue that public policy and due
process protections cut against the judge's denial of
their right to litigate the receiver's seizure of the TRA
accounts. Ottenberg and the fund defendants have
acknowledged that valid IRA accounts, like ERISA
pension benefits, would be exempt from the claims of
Monga’s creditors. See, e.g., G. L. c. 235, § 34A. [FN8]
But on appeal, they insist that Monga’s and
Maharajs claims to the funds, however valid, were
properly forfeited because they flouted the judge's
orders.
The judge rehed on our analysis in Sommer vy.
Monga, 35 Mass. App. Ct. at 764-765. in ruling that
Monga’s defiance of the order to turn the IRA
accounts over to the receiver effected a waiver of any
right to assert a sfatutory exemption for those funds
[FN9] It is critical to note, however, that our analysis
In Sommer was addressed to Monga’s right to press
an appeal while persisting Wn contumacy and
62
avoiding a capias for his arrest; neither the [RA’s
exempt status nor the receivership were before the
court in that appeal, and that decision does not hold
that Monga waived any rights relating to the
receivership or collection of the judgment. Long held
principles of due process limit the application of that
reasoning to Maharaj’s right to be heard on the
merits of her claim.
In reaching our decision in Sommer, we made clear
that dismissing Monga’s appeal did not implicate due
process concerns. Id. at 764-765. In so stating, we
relied in part on National Union of Marine Cooks &
Stewards v. Arnold, 348 U.S. 37, 41, 44-45 (1954), in
which the Supreme Court, dismissing the appeal of a
party in contempt, was careful to distinguish the
right to an appeal, which is a creature of statute,
from the right to a trial, which derives from the due
process clause of the United States Constitution. Id.
at 41-42. With respect to the latter, the Supreme
Court referenced the seminal case of Hovey v. Elliott,
167 U.S. 409 (1897), with an explanation that bears
repeating:
“The constitutional objection raised by petitioner was
long ago considered in Hovey v. Elliott, 167 U.S. 409.
In that case, the Supreme Court of the District of
Columbia went further and attempted to deprive a
detendant of his right to answer the suit brought
against him. Having stricken defendant's answer,
the court entered judgment against him as a
punishment for his refusal to deliver to a court-
appointed receiver certain funds which were the
subject matter of the litigation. When the State of
New York later refused to honor that judgment, this
63
Court, in affirming the action of the Court of Appeals
of New York, held that the District of Columbia had
deprived defendant of his property without due
process of law by denying him his constitutional
right to a day in court.”
National Union of Marine Cooks & Stewards v.
Arnold, 348 U.S. at 41-42. See Hammond Packing
Co. v. Arkansas, 212 U.S. 322, 350 (1909) (Hovey
prohibited a denial of the right to defend as a “mere
punishment” tor the defendant's refusal to follow a
court order to pay disputed sums into court). Our
Supreme Judicial Court acknowledged the principle
in Campbell v. Justices of the Superior Court, 187
Mass. 509, 510-511 (1905), citing Hovey v. Elliott,
supra, for its holding that the denial of a defendant's
right to present his defense because of a contempt
would be a taking of property without due process of
law. [F N10]
Our decision in no way undermines the basic
principle that a party may forfeit his or her right to
an appeal where he or she does not purge himself or
herself of contempt. The subject of the instant
appeal, however, deals with receivership issues that
arose after this court's decision in Sommer v. Monga,
supra. Review of the litigation reveals that those
issues were indeed viewed as separate and distinct
from the litigation that resulted in our 1994 decision.
Indeed, the Superior Court judge's June 1, 1995,
decision on the receiver's request for a preliminary
injunction noted that the receiver had filed a
substitute complaint seeking a determination
“whether the various mutual fund IRA accounts are
valid IRA accounts and, as such, allegedly exempt
64
from attachment by creditors.” We conclude that the
denial of Maharaj’s right to a hearing on the merits,
in reliance on our reasoning in Sommer v. Monga, 35
Mass. App. Ct. 764-765, was error.
The fund defendants offer alternative grounds to
justify the judge’s action, none of which we find
persuasive on this record. They point to the trial
court's inherent power to enforce its own orders. It is
widely recognized, however, that the court’s inherent
power to strike a defense and enter judgment agains!
a defendant “is limited by the necessity giving rise to
its exercise.” Degen vy. United States, 517 U.S. 820,
829 (1996). [FN11] See Yousif v. Yousif, 61 Mass.
App. Ct. 686, 689 (2004). Here, the judge pointed to
Monga’s “continued defiance” in refusing to turn over
the IRA accounts as the reason for denying Maharaj
the opportunity to present a defense to the
application of those accounts toward the underlying
judgment. But the record indicates that the IRA
accounts, as of June 1, 1995, had been frozen by the
fund defendants, and that, by the time of the hearing
in 1998, Maharaj had provided discovery regarding
the accounts. Compare Yousif v. Yousif, supra at 690-
G91 (dismissal of the husband's appeal warranted
because his flight from the jurisdiction seriously
impaired the wite’s ability to collect on her
judgment). [FN12] The judge's” order, striking
Maharaj's claim to the IRA accounts, advanced no
apparent purpose other than punishment for prior
disobedience. [FN13)
The fund defendants additionally refer us_ to
Mass. R.Civ.P. 41(¢b)(2), 365 Mass. 803 (1974), which
permits a judge to dismiss an action when a plaintitf
65
fails to prosecute his or her claim or to comply with a
court order. By its express language, [FN14] rule
41(b)(2) apples only to a litigant in the role of a
“plaintiff.” In view of the procedural posture of this
case, we would reject the application of rule 41 in any
event. Apart from the fact that Monga was a
defendant in the underlying action, Maharay’s claim
that the IRA accounts were exempt from creditors
arose in the context of supplemental proceedings,
initiated by Sommer, to take possession of Monga’s
property in satisfaction of the judgment. Even
ignoring the labels in the pleadings, Maharay’s claim
can only fairly be viewed as a defense to the taking of
arguably exempt property. Maharaj was not “in the
customary role of a party invoking the aid of a court
to vindicate rights asserted against another.” Societe
Internationale Pour Participations Industrielles et
Commerciales, S.A. v. Rogers, 357 U.S. 197, 210
(1958). See generally United States v. Pole No. 3172,
Hopkinton, 852 F.2d 636, 643 (1st Cir. 1988) (though
technically a claimant. property owner’s action to
recover his property after seizure by the government
was more in the nature of a response).
A final justification offered by the fund defendants
for striking Maharays claim is’) Mass.R.Civ.P.
37(b)(2), as amended, 390 Mass. 1208 (1984), for
failure to comply with the judge's discovery orders.
While the record contains numerous accounts of
Monga’s disobedience of various discovery orders
over the course of the postjudgment proceedings, the
judges memorandum of decision makes only passing
reference to such instances, and there is no dispute
that Mahara} had produced the documents
pertaining to the IRA accounts by the time of the
66
summary judgment proceedings. [IF N15] Again, to
avoid running afoul of due process protections, “the
sanction must be specifically related to the particular
‘claim’ which was at issue in the order to provide
discovery.” Insurance Corp. of Ireland, Ltd. v.
Compagnie des Bauxites de Guinee, 456 U.S. 694,
707 (1982). In these circumstances, Monga’s earlier
recalcitrance in providing discovery abeut his assets
would not support the judge’s decision to strike
Maharayj’s claim to the IRA accounts in 1998.
Based on the foregoing, we find erroneous that
portion of the judge’s October 8, 1998, order
forfeiting Maharaj’s right to challenge the seizure of
the IRA accounts, and we remand the case to the
Superior Court for a hearing on the merits of her
claim that the TRA accounts were valid and
statutorily protected from Monga’s creditors. But we
atfirm the judge’s dismissal of the fund defendants
from any further proceedings in the Superior Court
on the matter. [FN16] Nothing in our decision
changes the fund defendants’ entitlement to their
fees and expenses, to be paid from the IRA accounts.
These awards were grounded in the respective
custodial agreements entered into between Monga
and the fund defendants at the time he established
those accounts. [F-N17], {F-N18}
3. Jurisdictional matters. Mahara} insisted
throughout the postjudgment proceedings that the
Superior Court lacked personal jurisdiction over her,
fashioning her submissions to the trial court with the
designation “special appearance.” The judge
disagreed, ruling that the court’s jurisdiction over
Maharay was established by her inclusion in the 1992
67
receivership orders. On appeal, Maharaj continues to
object to personal jurisdiction, pointing out that she
was never named a party, never received service of
process, and moved to Florida one and one-half years
before the 1992 order was issued appointing the
receiver.
The record overwhelmingly establishes the Superior
Court's jurisdiction over Maharaj. Pursuant to
Mass.R.Civ.P. 65(d), 365 Mass. 834 (1974), [FN19] a
nonparty who is aligned with a party, whether as an
agent or employee or through participation with a
party, may be subject to the directives of an
injunction so long as he or she received actual notice
of the order. Maharaj does not dispute that she had
actual notice of the June 12, 1991, injunction
prohibiting the disposal of the assets of Monga and
the companies. Maharaj was present at the triai, and
she functioned as Monga’s law clerk throughout the
proceedings. Her affidavit stated that she herself
went to Superior Court on July 17, 1991, to obtain
copies of the judge’s orders. As to her active concert
and participation with Monga, the record is replete
with evidence, which is no longer open to dispute,
[F N20] concerning their jointly held properties and
bank accounts and the ongoing mingling and
dispersing of their assets and those of the companies
after the injunction was issued. Monga _ himself
described Maharaj as a “key employee” of Core and
Subsurface, and the record demonstrates that she
continued to draw significant amounts of money from
the bank accounts of those companies after the
Injunction was issued. Based on those facts alone.
Maharaj came within the injunction’s reach.
68
Because ihe record makes clear that Maharaj aided
and abetted Monga in disobeying the injunction,
Maharaj became “liable to the same process for
enforcing obedience to the order as if [she] were a
party’ pursuant to Mass.R.Civ.P. 71, 365 Mass. 837
(1974). [FN21} See Bird v. Capital Site Mgmt. Co.,
423 Mass. 172, 178-179 (1996). See Reporters’ Notes
to Mass.R.Civ.P. 71, Mass. Ann. Laws, Rules of Civil
Procedure, at 466 (“An order against such a person
may be enforced by the same methods as if the
person were a party”), citing 12 Wright & Miller,
Federal Practice & Procedure 82 (1973). Issuance of
the receivership orders was the judge’s remedial
response to Monga’s and Maharaj’s’” repeated
violations of the tnjunction. As a consequence, the
judge’s findings of Mahazaj’s complicity with Monga’s
course of conduct, and Maharaj’s contacts with the
proceedings in the Superior Court, established
personal jurisdiction over her sufficient to support
her inclusion in the receivership orders. See Azarian
v. Ettinger, 13 Mass. App. Ct. 1077, 1077-1078
(1982).
For much the same reason, however, we. reject
Sommer’s contention that Maharaj lacked standing
to pursue this appeal under the usual rule that only
a named party may appeal. Maharaj was expressly
named in the receivership orders and had a direct
interest in the IRA accounts as the named
beneficiary. See, e.g.. Dopp v. HTP Corp., 947 F.2d
006, 512 (1st Cir. 1991) (nonparty appellant allowed
“when a lower court specifically directs an order at a
non-party or enjoins it from a course of conduct);
United States v. Kirschenbaum, 156 F.3d 784, 794
(7th Cir. 1998) (defendant's wife, a nonparty who did
69
not intervene in the trial court, had standing to
appeal an injunction that froze assets in her name).
See also Corbett v. Related Cos. Northeast, Inc., 424
Mass. 714, 718 (1997) (appeal permitted in rare
instances where nonparty “has a direct, immediate
and substantial interest that has been prejudiced by
the judgment, and has participated in the underlying
proceedings to such an extent that the nonparty has
intervened ‘in fact’ “). [FN22]
Ottenberg, for his part, asserts that the appeal! is
moot and that we should decline to exercise appellate
jurisdiction because Monga failed to obtain a stay
pending appeal, the receivership estate was
disbursed in 2000, and the receiver was discharged;
hence, no funds remain from the IRA accounts
should their validity be proven on remand. For this,
Ottenberg relies primarily on an_ unpublished
bankruptcy decision from the United States Court of
Appeals for the Tenth Circuit, which, by its own
terms, has no precedential value.
The United States Court of Appeals for the I irst
Circuit has explained that, at least in the bankruptcy
context, “[t]he failure to obtain a stay 1s not sufficient
ground for a finding of mootness.” Rochman v.
Northeast Util. Serv. Group (In re Public Serv. Co. of
N.H.), 963 F.2d 469, 478 (1st Cir. 1992). This is true
even if the absence of a stay results in consummation
of a reorganization plan prior to resolution of the
appeal. See Institut Pasteur v. Cambridge Biotech
Corp., 104 F.3d 489, 491 (1st Cir.), cert. denied, 521
U.S. 1120 (1997). Rather, “|t]he case is moot if the
requested rehef would be either inequitable or
impracticable in hght of the change in
circumstances.” Rochman v. Northeast Util. Serv.
Group (In re Public Serv. Co. of N.H.), 963 F.2d at
473 (footnote omitted). Significant among those
circumstances would be the extent to which funds
were distributed to third persons or to parties that
are no longer within the court’s jurisdiction. Id. at
475. See Hicks, Muse & Co. v. Brandt (In re Healthco
Intl., Inc.), 136 F.3d 45, 48-49 (1st Cir. 1998) (test of
mootness of appeal from bankruptcy order was not
met where there was no showing that distributions
“could not be recovered with relative ease”). Compare
Rochman v. Northeast Util. Serv. Group (In re Public
Serv. Co. of N.H.), 963 F.2d at 475 (appeal dismissed
as moot where setting aside reorganization plan
would involve $1.5 billion in financing arrangements
and affect “many thousands of innocent third
partics’).
The same considerations should hold true in the case
of an appeal from the outcome of recetvership
proceedings. See Matter of the Receivership of
Harvard Pilgrim Health Care, Inc., 484 Mass. 51, 59
n.11(2001) (rejecting contention that the appeal was
moot because the receivership had been terminated
and the plan already tmplemented). Since the bulk of
the assets from Monga’s receivership estate were
distributed among relatively few parties, most of
whom, it appears, remain within the trial court's
jurisdiction, we do not view the relief that may result
on remand as so inequitable or impracticable as to
render the appeal moot. See generally Hayes v.
Lichtenberg, 422 Mass. 1005, 1006 (1996) (husband's
appeal from a modification judgment that was
subsequently terminated did not render his appeal
moot, since he intended to seek repayment of monies
41
he paid to wife under the judgment prior to its
termination).
Conclusion. We vacate the order, entered October 8,
1998, and judgment on receivership, entered August
1, 2000. The case is remanded to the Superior Court
for further proceedings and entry of such orders as
are 1n accordance with this opinion.
So ordered.
FN1 D. Dev Monga was originally named as a
defendant; after his death in 1996, Maharaj
eventually was appointed the executrix of his estate.
See note 6, infra.
FN2 John C. Ottenberg, receiver of D. Dev Monga
and Core Environmental & Engineering Resources,
Inc. Ottenberg was appointed receiver in 1992, after
judgment entered against the originally named
defendants in 1991.
FN3 Vanguard/Morgan Growth Fund, Inc.; Dreyfus
Founders Funds, Inc.; Citadel Service Co., Inc.;
Investors Fiduciary Trust Co.; and Shantee Mahara).
FN4 See our discussion, infra.
FN5 As of June, 1998, the IRA accounts had a total
value of approximately $170,000. Maharaj’s trust
accounts totaled approximately 7.000 when they
were turned over to the receiver in 1992.
72
FN6 Edmund J. Brokans was the original
administrator of Monga’s estate, but was replaced by
Mahara).
FN7 Of the $214,750.54 remaining in the
receivership estate, Ottenberg distributed amounts
as follows: $60,000 to Brooks & Lupan, Sommer’s
attorneys; $12,000 to Choate, Hall & Stewart, the
fund defendants’ attorneys; $43,265.55 to the
receiver's law firm (according to Monga’s estate and
Maharaj, Ottenberg’s firm was paid a total of
$147,000 over the course of the receivership); and the
remaining funds to Sommer.
FN8 Chapter 235, § 34A, as appearing in St. 1998, c.
374, § 1, provides, in relevant part: “The right or
interest of any person in an annuity, pension, profit
sharing or other retirement plan subject to the
federal Employee Retirement Income Security Act of
1974 ... shall be exempt from the operation of any
law relating to insolvency and shall not be attached
or taken on execution or other process to satisfy any
debt or liability of such person.”
FNS For simplicity’ss sake, when we refer to
Maharaj’s claim to the IRA accounts we include the
claim of Monga’s estate.
FN10 The case of Goya Foods, Inc. v. Unanue-Casal,
275 F.3d 124 (1st Cir.), cert. denied, 537 U.S. 1002
(2002), relied upon by the receiver and fund
defendants here, involved dismissal of an appeal in
response to the defendants’ fhght from the
jurisdiction to avoid a money
~
73
judgment against them. It is not instructive
regarding the denial of a right to trial on the merits.
FN11 Degen involved the application of the fugitive
disentitlement doctrine, the analysis of which was
subsequently codified in the Civil Asset Forfeiture
Reform Act of 2000, 28 U.S.C. § 2466 (2000).
FN12 The cases appear to limit the sanction of
default against a defendant to instances of truly
egregious conduct, most typically for fraud on the
court in the form of falsifying or destroying evidence.
See, e.g., Brockton Sav. Bank v. Peat, Marwick,
Mitchell & Co., 771 F.2d 5, 11-12 (ist Cir. 1985), cert.
denied, 475 U.S. 1018 (1986).
FN13 The judge relied on the same reasoning to rule
that Maharai waived her right to defend against
seizure of two accounts she held as trustee for her
nephew. Based on our holding above, the judge could
not properly deny Maharaj a hearing on the merits of
the validity of those trust accounts, merely as
punishment for her failure to turn over the trust
accounts voluntarily.
"N14 Rule 41(b)(2) provides, in relevant part: “On
motion of the defendant, with notice, the court may,
in its discretion, dismiss any action for failure of the
plaintiff to prosecute or to comply with these
rules or any order of the court.”
FN15 In fact, the record indicates that the receiver
had withdrawn his earlier motion for sanctions
against Monga under rule 37(b){2) by the time of the
summary judgment proceedings.
FN16 The judge also permanently enjoined Maharaj
from “instituting or prosecuting against Vanguard,
[Investors Fund Trust Company], or any of them,
any proceeding in any [S]tate or United States court
or administrative tribunal regarding the Monga IRA
accounts.” Maharaj maintains that the judge, sitting
in a State court, lacked authority to issue injunctions
restraining further actions against the fund
defendants in Federal courts. On this point, the law
is well-established in Maharaj’s favor, and none of
the appellees appear to contend otherwise. See, e.g.,
Donovan v. Dallas, 377 U.S. 408, 412-414 (1964);
General Atomic Co. v. Felter, 434 U.S. 12, 16 (1977).
The language in the judge’s order enjoining Maharaj
from filing suit in Federal court is to be struck.
FN17 Article VI, § 6.3, of the Vanguard IRA
Custodial Agreement, and Article 8 of the Investors
Fiduciary Trust Company IRA Custodial Agreement,
provided that custodial fees and reasonable expenses
incurred in managing the accounts could be charged
to the account.
FN18 We dispose of the remaining issues raised on
appeal concerning the receivership estate as follows:
Maharaj argues that there was no basis for the
Superior Court judge’s order for the lhquidation of
Core and Subsurface in 1992. Our review of the
record found ample support for the judge’s order,
given Mongas extended absence from — the
jurisdiction, and the companies’ weak financial
picture and uncertain prospects. Mahara) also claims
that the judge erred in discharging Ottenberg
hecause he failed to file annual reports with the
Superior Court for the years 1996-2000, as required
by Mass.R.Civ.P. 66, 365 Mass. 834 (1974). It
appears from the record that this issue was not
preserved for appeal.
FN19 Rule 65(d) provides, in relevant part: “an
injunction or restraining order ... is binding only
upon the parties to the action, their officers, agents,
servants, employees, and attorneys, and upon those
persons in active concert or participation with them
who receive actual notice of the order by personal
service or otherwise.”
FN20 The brief of Monga’s estate and Maharaj
acknowledges that “for purposes of this appeal, the
default contempt order is taken as established.”
FN21 Rule 71 provides, in relevant part: “when
obedience to an order may be lawfully enforced
against a person whois not a party, he is liable to the
same process for enforcing obedience to the order as
if he were a party.”
FN22 We also disagree with Sommer that the appeal
should be dismissed under the principles of Goya
Foods, Inc. v. Unanue-Casal, 275 F.3d at 128 (appeal
dismissed under’ the _ fugitive’ disentitlement
doctrine). In that case, unlhke Maharaj here, the
appellants remained fugitives at the time of the
appeal.
APPENDIX F
AppealsCourt of Massachusetts
No. 2004-P-0591
March 20, 2006
APPELLANTS’ PETITION FOR REHEARING
78
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
No. 2004-P-0591
THE ESTATE OF D. DEV MONGA
SHANTEE MAHARAJ
Appellants
PAUL F. SOMMER
SOMMER ENVIRONMENTAL TECHNOLOGIES,
INC.,
JOHN C. OTTENBERG, Receiver,
VANGUARD FIDUCIARY TRUST COMPANY
VANGUARD/MORGAN GROWTH FUND, INC.
FOUNDERS FUNDS, INC.
INVESTORS FIDUCIARY TRUST COMPANY
Appellees
APPELLANTS’ PETITION FOR REHEARING
Letter to the Hon. Phillip Rapoza
Justice of the Massachusetts Appeals Court
Dear Justice Rapoza:
79
Pursuant to Mass.R.A.P. Rule 27, 1, John G.S.
Flym, (“Flym”), attorney for the above-named
appellants, hereby pray this Honorable Court to
grant a rehearing in the above-captioned case with
respect to certain significant points of law or fact
which | believe the court’s March 3, 2006 opinion
(hereafter the “Court’s Opinion”) overlooked or
misapprehended.
A. Vanguard's fees and expenses.
This Court’s Opinion remands the case to the
Superior Court for a hearing on the merits of
Maharaj’s claim that the IRA accounts were valid
and statutorily protected from Monga’s creditors.
However, it affirms dismissal of the fund defendants
from any further proceedings, as well as the award to
Vanguard of fees and expenses payable from the IRA
accounts.9
1. The court below awarded fees on the assumption
that Maharaj had no valid claim to the IRAs.
Counsel for the funds,10 as well as receiver
Ottenberg,!11 have long conceded that, absent
* As the Fund Appellees Opposition Brief, footnote 14, makes
clear, the trial court awarded $92,000 in attorneys’ fees and
costs to Vanguard - Founders did not seek reimbursement.
' Nearly 14 years ago, Vanguard's counsel wrote the first of a
series of letters resisting Ottenberg’s demand that the IRAs be
turned over to him, absent evidence of fraud. (See Appellants’
Reply brief, pp. 10 12; and App. Y99E 999H. Counsel Barton
enclosed a copy of the Vanguard's IRA Agreement stating that,
“Article 8.4 of the Agreement provides that the Monga IRA
shall be governed by Pennsylvania law.” Barton further stated,
80
evidence of fraud, the IRAs are valid. Responding to
a question by Justice Graham at the time of oral
argument before this Court last October, John
Baraniak, Esq., counsel for the funds, conceded that
there is no evidence of any fraudulent conveyance
into the Monga IRAs. There is thus little doubt that
the IRAs are valid, and that Maharaj will prevail
below on the merits of her claim to the IRAs. It is
inconceivable how an award of legal fees to the
funds, payable from the Maharaj’s_ statutorily
protected retirement savings, could be justified.12
2. The general rule against awarding legal fees.
“As you know, Pennsylvania law prohibits attachment of IRA
assets.” See App. 999C. On June 30, 1994, Vanguard Counsel
Paul F. Gallagher reaffirmed this position, telling Ottenberg:
In reviewing our file I have not come across anything that
would cause us to change the position that was set forth in
Ms. Barton's correspondence to you of October 5, 1992.
Namely, that jurisdiction as to the question of whether Mr.
Monga’s [RA assets are attachable lies with Pennsylvania
ccurts. Accordingly, we must decline your request to transfer
aseets to you,
adding, “... we can only take such action if we are ordered to do
so by a Pennsylvania court ....” (App. at 999D).
1! On 8/17/95, Ottenberg filed his Opposition to Vanguard, [FTC
and Founders’ Motions to Dismiss his Complaint, 4] 1 of which
asks the court to “... determine the JIRAs’] rightful possession
and ownership ....” Ottenberg’s accompanying memorandum
concedes that he can only reach the IRAs if they were
fraudulently established or funded. “Receiver'’s Merncvandum in
Opposition to the IRA Trustees’ Motions to Dismiss,” at pp. &,
10-11.
= A total of nearly $300,000 was awarded - $147,000 to the
receiver, $92,000 to the funds, and $60,000 to Sommer’s counse!
te
Brooks. Lacking Ottenberg’s annual reports, the sources of
these payments remain unclear.
81
The general rule is “...to prohibit recovery of
attorney’s fees and expenses in a civil case in the
absence of either an agreement between the parties,
or a statute or rule to the contrary...,” Preferred Mut.
Ins. v. Gamache, 426 Mass. 93, 95 (1997).
3. The general rule is for awarding legal fees, if at
all, against the losing party.
The general rule is illustrated by Mass.R.A.P.
Rule 26, “...if a judgment is reversed, costs shall be
taxed against the appellee unless otherwise ordered
... Thus, if Vanguard is entitled to recover litigation
expenses related to the IRAs, that would have to be
against the losing parties, Sommer, Brooks and/or
Ottenberg, each of whom prolonged the dispute about
the IRAs for over a decade without a shred of
evidence to support their position. As early as 1992
when Vanguard's in-house counsel Barton refused to
hand over the [RAs, these appellees knew that,
absent evidence of fraud, they had no claim to the
IRAs.
4. Vanguard’s contract does not authorize the award
of legal fees payable from the IRA.
Footnote 17 of the Court’s opinion misapprehends
the language of Vanguard’s contract with Monga,
Article VI, § 6.3 of which simply provides:
reimbursement for all reasonable expenses
incurred by it in the management of the Account ...
App. 999N
By contrast, Article VIII, “ 8 of Founders’ contract
explicitly provides:
82
.. expenses incurred by the Custodian with respect
to ... any controversies concerning the Custodial
Account, including, but not limited to, fees for legal
services rendered by the Custodian and related costs
App. 999R, (emphasis added)
At most, Vanguard’s contract might be vicwed as
ambiguous, but it is hornbook law that such
ambiguities are interpreted against the drafter:
These are prototypical contracts of adhesion, in
which Monga had no possibility of negotiating the
terms of his contracts with either fund.
The more plausible reading is that Vanguard, (a
Pennsylvania company), was well aware that it
might have adopted a provision such as the one set
forth in Article VIII, 4 8 of Founders’ (a Missouri
company) contract and, for its own reasons, chose not
to do so. As of 2003 Vanguard’s website advertised,
inder its “Plain Talk” heading,13 the distinctive
advantage its low operating expenses offers to
investors:
Management expenses, which are one part of
operating expenses, include investment advisory fees
as well as other costs of managing a fund — such as
account maintenance, reporting, accounting, legal,
(emphasis added)
it See attached Affidavit of Michael costello.
83
In short, Vanguard’s litigation expenses are included
in its management expenses, which are to be paid
from gross income. Any doubt on this question should
be resolved in Maharaj’s favor.
5. The funds broke their contracts with Monga and
Maharaj.
In the circumstances of what occurred below,
awarding fees to the funds, payable from Maharaj’s
IRAs, would add insult to injury. The funds’ 1992-
1995 correspondence with the receiver establishes
the fact that their duty was to resist any effort on the
part of creditors to reach the IRAs, in keeping with
26 U.S.C. 408, 42 Pa. C.S.A. Section 8124 (b) (1); Mo.
Ann. Stat. Section 513.430 (10) (f; and M.G.L. Ch.
235, Section 34A, as well as under their own
contracts.14 Instead, after Ottenberg filed his 1995
complaint naming the funds as party defendants, the
funds chose to voluntarily freeze the IRAs,15 -
'4 Vanguard’s IRA Agreement, Article VIII, Section 8.2 provides
that there is a “Prohibition Against Assignment ... no interest,
right or claim in cr any part of the Account ... shall be
assignable, transferable, or subject to... garnishment,
attachment, execution or levy of any kind, and the Custodian
shall not recognize any attempt to effect any of the preceding.”
Similarly, Paragraph 9, Page 20 of Founders’ IRA Agreement
provides that “No interest. right or claim in or to any part of the
Custodial Account, nor any assct held therein or benefits
provided hereunder shall be subject to ahenation, assignment,
garnishment, attachment, execution or levy of any kind
‘> The funds chose to freeze the [RAs voluntarily. The court
below never issued an order directing that the funds give the
IRAs to the Receiver.
84
thereby further breaching their contracts with
Monga.16
Moreover, as the funds’ contracts provide, and as
IRS Publication 590 makes clear, Maharaj had the
right after Monga’s death to treat the IRAs as her
own:
Surviving spouse. If you are a surviving spouse
who is the sole beneficiary of your deceased
spouse’s IRA, you may elect to be treated as the
owner and not as the beneficiary.
http://www.irs.gov/publications/p590/chO 1. html#d0e5
724. Two wecks after Monga’s death in 1996,
Maharaj exercised that right by demanding that the
funds turn over the IRA assets to her. They refused.
Vanguard told the receiver since 1992 that he
should seek an order from a Pennsylvania court if he
wished to reach the IRAs. The receiver was told that
the procedure for enforcing a Massachusetts order
was to “domesticate” that order in Pennsylvania. He
refused to do so, and the funds ultimately colluded
‘© As Judge Giles’ Order dated April 18, 1996, in Action 95-6637
(E.D. Pa.) notes:
the Funds [Vanguard and Founders] apparently realized
that therr liability to Mr. Monga may not be extinguished by
compliance with the order of the Massachusetts court
p.2
The Order continues
.. A Bossachusetts order releasing the funds to Mr
Ottenbe,
Founders
. would not insulate the Funds [Vanguard and
] from an action by Mr. Monga
4
p. *
with the other appellees. As footnote 16 of this
Court’s Opinion notes,
the judge [below], sitting in a State court, lacked
authority to issue injunctions restraining further
actions against the fund defendants in Federal
courts. On this point, the law is well-established in
Maharaj’s favor, and none of the appellees appear to
contend otherwise. See, e.g., Donovan v. Dallas, 377
U.S. 408, 412-414, 84 S.Ct. 1579, 12 L.Ed.2d 409
(1964); General Atomic Co. v. Felter, 434 U.S. 12, 16,
98 S.Ct. 76, 54 L.Ed.2d 199 (1977). The language in
the judge’s order enjoining Maharaj from filing suit
in Federal court is to be struck.
The appellees wisely chose not to “contend otherwise”
before this Court, but that is little comfort for Monga
or Maharaj. It certainly was not the posture the
funds adopted in the Pennsylvania cases: Had those
been allowed to follow their course, all issues
concerning the IRAs would long ago have been
resolved. The funds and the other appellees share
responsibility for preventing such resolution.17
17 This Court’s Opinion states:
Ultimately, as of June 1, 1995, the fund defendants
complied with a Superior Court order to freeze the IRA
accounts, pending resolution of the competing claims ...
No such Order exists. The June 1992 ex-parte Massachusetts
order appointing the Receiver makes no mention of the IRAs.
The two ex-parte Massachusetts orders regarding the IRAs
obtained by the Receiver on July 7, 1992, and August 20, 1992
were declaratory in nature. and were not directed to anyone in
particular, No order exists which required the Funds to “freeze”
the IRAs: As Judge Lenk’s 1995 Order specifically states that
the Funds were “voluntarily” freezing the [RAs
86
Under the circumstances, to sanction the award
legal fees against Maharaj, payable from her
statutorily protected retirement savings, would be
inequitable.
B. The ERISA accounts.
While this Court’s opinion, footnote 13 addresses
seizure of the minor’s educational trust fund, it omits
reference to Monga and Maharaj’s ERISA accounts,
valued at $26,840.57 when seized in 1992, App. 1246,
1249-50. See Appellants’ Brief, pp. 11-12. The ERISA
accounts were protected by the same laws which
protect the TRAs, and their seizure was illegal for the
same reasons. See this Court’s opinion, footnote 8.18
C. Ottenberg’s actions as receiver.
1. Liquidating the companies.
This Court’s footnote 18 also” states’ that
liquidation of Core and Subsurface in 1992 was
justified because of “...the companies’ weak financial
picture and uncertain prospects ....” The record does
As Patterson long ago made clear, the [IRAs were beyond the
reach of the receivership cause not the slightest evidence of
fraud had been produced in connection with the IRAs by the
time Vanguard chose the Massachusetts forum. Vanguard’s
legal and contractual obligation was clear: It should have
Oobeved the Pennsylvania order directing it to deposit the TRAs
with the Pennsylvania court prothonotary. See, Ottenbery’s
July 10, 1998 Affidavit, 5. Dkt.# 601; App. 999L.J
‘Ss The lower Court permitted Ottenberg to seize these ERISA
accounts In 1992 pending a hearing on the merits of Monga’s
claim that these were valid retirements savings protected from
creditors’ claims, a hearing whieh was never conducted
87
not support this view. During oral argument last
October 2005, Attorney Peter S. Brooks, (“Brooks”),
was asked by Justice Graham, “Sixteen years ago,
what was the state of the businesses?” Brooks
answered: “The state of the businesses was they were
healthy, they were prospering, they were growing
rapidly.” Three years later, on 7/14/92, Ottenberg
filed a report showing the companies were solvent,
the value of Core’s and Subsurface’s assets is greater
than their outstanding debts, and adding:
EnviroTech was actively and substantially
engaged in the environment consulting and
testing business, with substantial clients and
apparently a substantial volume of business....
4, 12. Dkt.# 192.5.
Despite Monga’s supposed “extended absence from
the jurisdiction,” the companies were under his
direction and thriving. Nothing imaginable could
have occurred between ttenberg’s 7/14/92 report,
and his request within 3 weeks of his appointment,
tc liquidate the companies. Ironically, Ottenberg’s
“justified” his request on the ground that the
receivership itself was adversely affecting the
companies’ prospects! See Appellants’ Brief, footnote
39. The companies’ liquidation violates Richardson v.
Clinton Wall Trunk, 181 Mass. 580, 583 (1902).
2. Annuai reports.
This Court’s footnote 18 states, “It appears from
the record that this issue was not preserved for
appeal.” Argument 8.a. of Appellant's Brief, p. 45,
88
succinctly addresses the issue. The record shows that
Monga and Maharaj for years complained about the
Receiver’s failure to observe’ his — statutory
obligations, and repeatedly sought judicial sanctions.
There was no waiver of this issue on appeal, just a
lack of space to expound the self-evident.
D.Sommer’s death and the need to name a
representative.
On March 6, 2006, Attorney Peter S. Brooks
(“Brooks”), belatedly disclosed that appellee Sommer
had died during the pendency of this appeal.19
Mass.R.A.P. Rule 30 (a) provides that if the deceased
party has no representative, “... proceedings shall
then be had as the appellate court or a single justice
may direct.”
Absent an alternate representative for Mr.
Sommer, Appellants request that Mr. Brooks be
named as his representative, that he be charged with
advising Appellants about the status of probating
Mr. Sommer’s will and ensuring that Mr. Sommer’s
estate not be dissipated.
Respectfully submitted,
John G.S. Flym, Prof. Emeritus
Northeastern Univ. school of Law
400 Huntington Ave.
Efforts by Filyvm to obtain relevant information from Brooks
by e-mail and by telephone have been unproductive, other than
to reveal that Sommer died some time in December 2OUO5S
8Y
Boston, MA 02115
617.373.3348
j).flym@neu.edu
Pro bono Attorney for Appellants
March 20, 2006
9]
APPENDIX G
AppealsCourt of Massachusetts
No. 2004-P-0591
February 28, 2005
APPELLANTS’ REPLY
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
No: 2004-P-0591
THE ESTATE OF D. DEV MONGA
SHANTEE MAHARAJ
Appellants
PAUL F. SOMMER, SOMMER ENVIRONMENTAL
TECHNOLOGIES, INC.
JOHN C. OTTENBERG, Receiver
VANGUARD FIDUCIARY TRUST COMPANY
VANGUARD/MORGAN GROWTH FUND, INC.
FOUNDERS FUNDS, INC., INVESTORS
FIDUCIARY
TRUST COMPANY
Appellees
APPELLANTS’ REPLY
Pursuant to MRAP Rule 16(c), the above-named
Appellants submit this Reply to the Briefs of
Appellees Sommer, Sommer Kenvironmental,
Qttenberg, Vanguard, Founders, and [FTC.,
1. Appellees failed to request, during Monga’s
hfetime, an Order that Monga had waived his mght
93
to a determination of the exempt status of his IRAs
and other protected retirement savings.
Although Appellees filed dozens of pleadings
during the fours years which elapsed between the
default contempt order issued in 1992 and up
through Monga’s death in 1996, not once in those
tour years did any Appellee file a motion in the lower
court seeking an Order that Monga had waived his
right to a determination of the exempt status and
ownership of the IRAs and his other retirement
savings.
On 7/13/98, two years after Monga’s death,
Ottenberg filed a “Motion for Summary Judgment
And/Or Sanctions”, alleging that Monga had waived
his rights to a determination of the exempt status
and ownership of the IRAs, as well as of the minor
nonpartys UTMA funds. Dkt. ## 400-402. On
October 8, 1998, more than 2 years after Monga’s
death, the lower court granted summary judgment
against Monga, accepting without citation of
authority Ottenberg’s belated theory that Monga had
“waived” his right to an adjudication of the [RAs’
exempt status.
2. The Jower court’s Orders prior to 1998 explicitly
stated that the merits of the IRAs’ status would be
decided.
For example, the Order dated 8/20/92, Dkt. # 204,
addressed to The Citadel Service Co., Inc., transfer
agent for Founders Funds, states in part:
2) The receiver is ordered to maiatain said funds
In an account, designated as an IRA account, and
thereafter entitlement to these funds shall be
94
determined in later proceedings in this case.
(Doerfer, J.)
(emphasis added)
To the same effect, see Order dated, 8/20/92, Dkt. #
206, addressed to The Vanguard Morgan Growth
Fund, which provides in part:
... 2) The receiver is ordered to maintain said in an
account designated as an IRA _ account; and
thereafter entitlement to these funds shall be
determined in later proceedings. (Doerfer, J.) .
(emphasis adde@)
See also another Order dated 8/20/92, Dkt. # 208, as
well as Dkt. # 194, (7/28/92): Dkt. # 211, (10/07/92):
& Dkt. # 217 (10/19/92).
3. Before 1998, Ottenberg repeatedly asked the lower
court to determine the merits of the [RAs’ status.
For example, on 1/5/95, Ottenberg filed a
“Complaint to Effect Turnover of IRA Accounts,”
naming Vanguard, IFTC and Founders’ as
defendants, seeking a determination of the IRAs’
validity, Dkt. # 285
4. Before 1998, Ottenberg conceded that he could
reach the [RAs only if they were fraudulently
established or funded.
On 98/17/95, Ottenberg filed his Answer to
Vanguard, IFTC and Founders Counterclaims, © 1 of
Which asks the court to “... determine the [IRAs’]
rightful possession and ownership ....” Ottenberg’s
accompanying memorandum concedes that he can
95
only reach the IRAs if they were fraudulently
established or funded, and admits that valid IRAs
are “... exempt from the claims of creditors of Mr.
Monga ....” “Reeciver’s Memorandum in Opposition to
the IRA Trustees’ Motions to Dismiss,” at pp. 8, 10-
11.
Almost a year after Monga’s death on 8/23/96,
Ottenberg filed an amended Substitute Complaint to
Effect Turnover of Accounts on 8/13/97, adding
Monga’s widow, Maharaj, and the administrator
Monga’s estate, Atty. Edmunds Brokans as parties.
Dkt. # 373: App. 513-30, once again requesting:
“.. a hearing on the merits as to the validity of the
[RAs ....” “That after a hearing on the merits, this
Court determine that the IRA accounts referred to
above are not valid IRA accounts, exempt from the
claim of creditors, but rather that said funds are in
fact available for distribution in the receivership
proceeding....”
Substitute Complaint to Effect Turnover of IRA
Accounts, (3rd prayer for relief) App. 520.
5. Before 1998, the Funds opposed turning over
Monga’s IRAs absent proof that the IRAs had been
fraudulently established.
On 9/26/94 and 10/18/94, Ottenberg filed
complaints seeking to have Vanguard, Founders and
[FTC found in contempt for refusing to turn over the
IRAs. Vanguard, Founders and IFTC opposed
turning over the IRAs to Ottenberg on the ground
that they were exempt from reach by creditors
Vanguard and IFTC'’s 3/1/95 Motion to Dismiss
Receivers Substitute Complaint and = Reply — to
96
Receivers Memorandum in Opposition to Motion to
Dismiss also requests the court to:
require Ottenbeig to prove that the IRAs are
invalid ... as that determination will be dispositive of
all other issues in this case. If Ottenberg cannot
prove that the IRAs were fraudulently established or
funded, then Ottenberg has no right to proceed
against the assets in any forum and this matter must
be dismissed ....
App. 366-369.
Similarly, Founders argued:
In the Receiver’s Memorandum, the Receiver for
the first time concedes that he is not entitled to reaci.
the funds invested in Founders Funds in IRA
accounts in the name of D. Dev Monga if the
accounts are valid IRAs. The Receiver admits that
valid IRA accounts are “exempt” from claims of
ereditors of Mr. Monga ...
In light of this, Founders Funds submits that the
appropriate next step is for the Receiver to go
forward on his newly pled Count XI against Mr.
Monga to attempt to prove that these accounts are
not in fact valid TRA accounts. Founders Funds
should not be required to expend any further legal
expenses in responding to the Receiver until the
Receiver has proven that he has a right to reach
these funds
In addition, since the Receiver concedes that he 1s
not entitled to reach these funds unless he has
proven that thes are not valid [RAs there Is no basis
oT
for transferring these funds to the Receiver’s control
at this time ... The transfer of the funds may also
impair the value of these funds since the Receiver
would not be investing the funds in the same
investment vehicle in which they are currently
invested. There is no reason to put these funds at
risk unless and until the Receiver establishes that
they are not valid IRAs ...
Furthermore, the Receiver has not provided a factual
basis for his claim that these are not valid IRA
accounts. The only basis provided by the Receiver for
its claim that these accounts are not valid IRA
accounts is the allegation that the amount of funds in
said IRA accounts “is extremely high for someone of
Mr. Monga’s age.” Substitute Complaint, Count XI.
Founders Funds should not be required to turn over
funds or further defend this action based upon such a
vague and unsupported allegation ....
Dkt. # 299. App. 370-372. Likewise, Vanguard and
IFTC’s 12/16/97 Answer to Receiver’s Amended
Substitute Complaint to Effect Turnover of Accounts,
p. 13, 4 5, asks “That the Court determine the rights
of the claimants to the IRA Accounts.” Dkt. # 381.
6. Summary judgment may not be granted where
material issues are in dispute, and the IRAs must be
assumed to be valid.
It is axiomatic that summary judgment may not
be granted if material issues are in dispute. See e.g..,
Liberty Mut. Ins. v. Zoltek, 419 Mass. 704, 706
(1995). All factual controversies must be resolved in
favor of the non-moving party. Pederson v. Time, 404
Mass. 14, 17 (1989). Thus, for purposes of
Ottenberg’s 1998 motion for summary judgment, it
must be assumed that the IRAs are valid.
Among the issues of fact in dispute are
Ottenberg’s vague but repeated allegations, between
1992 and 1998, that the [IRAs were funded by
Monga’s alleged diversion of moneys otherwise
reachable to satisfy the judgment. Ottenberg’s
2/17/95 “Substitute Complaint to Effect Turnover of
Accounts,” adding Monga as a defendant, (again)
seeks a determination of the IRAs’ validity, alleging
only that the amounts in the IRAs were “high for
someone of Mr. Monga’s age.” Receiver’s Substitute
Complaint, Count XI, Dkt. # 295. Monga was then
52. Long before 1998, Ottenberg knew - because the
record evidence left no doubt on this question - that
the IRAs are untainted. The Appellee Funds
certainly knew as much, and therefore until 1998
contested the lower court's nght to order the IRAs
turned over to Ottenberg.
In fact, there has never been any doubt that the
IRAs are valid. The uncontested documentary
evidence before the court, well before 1998, but also
when it granted summary judgment, showed beyond
any doubt that the IRAs are valid. See footnote 16 of
Appellants’ Bnief herein. See also, App. 9994-99988
Faced with the fact that this truth would
unavoidably emerge in the course of a hearing as to
the IRAs’ exempt status, Ottenberg shifted tacties
after Moneva’'s death, and for the first time in 1998.
99
sought to avoid an inquiry into the truth of the
matter by inventing his waiver theory.
7. Summary judgment may not be granted where
material issues are in dispute, and the allegations of
misconduct by Appellants are in dispute.
Ottenberg dismissed all of his various motions for
contempt against Monga, (see pp. 35-41. of
Appellants’ Bnef herein), so that the only ostensible
basis for the 1998 penalty waiver is the default
contempt order obtained by Sommer on_ 6/15/92,
allegedly for violations of a discovery order and
fraudulent conveyance of assets otherwise reachable
to satisfy the judgment. Following his appointment
as receiver, Ottenberg simply adopted Sommer’s
allegations regarding fraudulent conveyances.
Sommers 1992 default contempt order is an
insufficient basis for refusing to recognize that the
IRAs are statutorily protected from a judgment
creditor's claims
Monga made repeated efforts to purge the default
contempt order, see e.g. Monga’s 9/24/92 “Motion for
Leave to File a Motion to Remove Default Judgment
and Finding of Contempt”, Dkt. # 209, App.265-266:
Motion tor Leave to File a Motion to Remove Default
Judgment and Finding of Court” filed 10/30/92, Dkt
# 222, See, also Ap; 286-287; “Motion = for
Reconsideration of Order Denving Motion to Removes
Default Judgment and Finding of Contempt with
Monga’s Affidavit dated July 7, 1993; Affidavit of
Comphance Under Rule 9A, filed 8/3/93, Dkt. # 237,
\pp PMR-89O, 243-G4: “Motion For Leave to F
LOO
Renewed Motion for Reconsideration of Order
Denying Motion to Remove Default Judgment and
Finding of Contempt,” filed 11/04/93. Dkt. # 240,
App. 295-296; Monga’s Motion for Leave to File
Renewed Motion for Reconsideration of Order
Denying Motion to Remove Default and Finding of
Contempt, filed in court and allowed 12/31/93. Dkt. #
244.1. Monga’s Motion for Instructions for Purging of
Contempt, Request for Oral Argument and Rule YA
Affidavit. 5/2/94, Dkt. # 250.
Monga also sought to appeal the lower court’s
denial of his efforts to purge the default contempt
order. See e.g. Monga’s Notice of Appeal from the
courts’ 12/31/93 order, filed 2/1/94. Dkt. # 246;
Monya’s Motion to Direct Clerk to Assemble Record
filed 9/20/94, Dkt. # 273. Despite his repeated
requests, the record was not assembled _ before
Monga’'s death.
Particularly relevant is the “Affidavit of D. Dev
Monga’, dated 9/1/92, App. 226 - 264, which in thi
course of 38 pages, addresses and puts 1n issue, each
and every one of Sommer's allegations, under the
following headings
\llegations Re: Convevance of Real Estate
\legations Re: Transfer of Operating Account
and Escrowed Funds
Allegations Ri: Intermingling, Depletion and
Concealment of A;
\llegation Re: Refusal to Provide Evidence With
Re pect | » the Couipal \sset
101
Allegations Re: Efforts to Prevent or Impede
Discovery Concerning Assets from Third Parties
Allegations Re: Recent Developments
[In short, all of the factual allegations suggested as
predicates for the 1998 penalty waiver summary
judgment were, and are, in dispute.
8. Issue preclusion in Massachusetts.
Since the Appellees insist that no issue of fact
existed to preclude summary judgment, another way
of trying to understand the lower court’s action is to
examine the question of Monga’s alleged misconduct
in terms of issue preclusion.
In Massachusetts issue preclusion turns on the
existence of four conditions:
.(1) there was a final judgment on the merits ...; (2)
the party against whom estoppel is asserted was a
party ... ; and (3) the issue in the prior adjudication 1:
identical to the issue in the current adjudication
land (4)] the issue decided ... must have been
essential to the earher judgment
Commissioner of Dept. of Employment & Training \
Dugan, 428 Mass. 138, 142 (1998)
In the instant case, (1) there was no judgment on
the merits of the 1992 default contempt order; (2
there was no judgment on the merits as to the
validity of Monga’s exempt retirement savings, or
nonparty assets, including the minor’s UTMA tunds;:
(3) the issues decided by the lower court on appeal!
herein are not identical to the 1942 detault contempt
judgment: (4) the issuc of whether the IRAs and
A |
Monga’s other retirement savings are exempt from
102
the reach of judgment creditors was not essential to
the 1992 default contempt judgment.
As Tregha v. MacDonald, 430 Mass. 237, 241
(1999), holds:
(j}Judgment by default in the technical sense
that the issues have not been lhtigated does not
warrant issue preclusion for the very reason that
the issues have not been litigated or decided...
See also Commissioner of Dept. of Employment &
Training v. Dugan, 428 Mass. 138, 142 (1998). The
above quote from Treglia v. MacDonald applies to the
1992 default contempt judgment, and a fortiori it
applies to the order and judgment which rely on said
default contempt judgment, and all of the other
allegations of misconduct which were neither
litigated nor decided
Moreover. the procedure followed by the court
below violates Due Process. As Kremer v. Chemical]
Const (‘orp ~456 U-S. 461 (1982), holds:
We have previously recognized that the judicially
created doctrine of collateral estoppel does not
ipply when the party against whom the earlier
decision is asserted did not have a “full and fan
opportunity. to litigate the claim or issue
tedetermination of issues 1s Warranted if there 1s
reason to doubt the quality, extensiveness, or
fairn tf procedures tollowed in prior litigation.”
FN22. While ur previou expression of the
requirement of a full and fair opportunity to ltigate
have been in the context of collateral estoppel or
| ie preciuslol it 1 clear tron what follow that
103
invocation of res judicata or claim preclusion 1s
subject to the same limitation
FN24. The Court's decisions enforcing the Full Faith
and Credit Clause of the Constitution, Art. IV, § 1.
also suggest that what a full and fair opportunity to
litigate entails is the procedural requirements of due
process.
at 480-81 (emphasis added)
Appellants challenge the “... quality, extensiveness
or fairness of procedures followed in ...” the court
below. Appellants have been denied a full and fan
opportunity to establish the validity of the IRAs, the
other protected retirement savings, and the minor
nonparty’s UTMA funds
9. The 1998 penalty waiver judgment violates the
principle of abatement of prosecutions against
deceased persons
In any event, apart from the inappropriateness of
granting summary judgment, (for the reasons stated
in items 6-8 above), the penalty warver issued by the
lower court violates the principle of abatement of
prosecutions after Monga’s death. See Argument | of
Appellants’ Brief, pp. 19-27
10. The Fund Appellees may not rely on an illegal
order to deny Monga and Mahara) their statutorily
protected rights in the IRAs
Monga’s TRAs were established long befor
Sommer even knew Monga, are tully protected b
(Conyvress} nal and State statutes. and are rial ubect
to the claims of a judgment creditor. See Argument
part 2, pp. 22-32 of Appellants’ Bnet here:
Since thie [R.A WORE to ele CX Lid . ror)
creditors’ claims ma f f [tl ‘ Ive? bray rude}
104
was framed in general terms which omitted any
mention of IRAs, Monga cannot be faulted for not
turning over the IRAs to the _ receiver. Three
subsequent orders explicitly addressed the IRAs, but
they were directed at Vanguard and other parties,
not Monga.20 In its finding of waiver two years after
Monga’s death, the lower court overreached - just as
its antisuit injunction can have “... no preclusive
effect on the merits of ... litigation...” in
Pennsylvania, Baker by Thomas v. General Motors
Corp., 522 U.S. 222, 236 (1998).
Whatever the scope of the lower court’
jurisdiction, its order concerning the IRAs could be
enforced only in Pennsylvania. Thus, in 1996, two
years prior to the lower court's 1998 ruling, Judge
Giles held in Monga’s Pennsylvania Federal action
against the Appellee Funds:
“... Additionally, the Funds |Vanguard and Founders]
apparently realized that their hability to Mr. Monga
may not be extinguished by compliance with the
order of the Massachusetts court
Moreover. should the M issachu ett court orde?
become final, and retain vive? st? 10) the Fund: the
Funds could tile an action in federal court in
Pennsvivania seeking a declaratory judgment as to
the ownership of the monies. A Massachusetts ordet
releasing the funds to Mr. Ottenberg would not
Insulate the Fund Vanguard and Founders} from
LOS
an action by Mr. Monga " See, E.D.Pa. No. 95
663 7.
Indeed, Vanguard's in-house counsel recognized
the fact that an order by the lower court releasing
the [RAs to Mr. Ottenberg would not insulate the
Funds. as evidenced by the 12/1/94 Affidavit of
Associate Counsel Suzanne F farton, and four
letters, dated 10/1/92, 10/5/92, 10/13/92 and 6/30/94,
written by Garton and Assistant General Counsel
Pan! F Gallagher. See App. 999A-999H. In her
\ffidavit, |
Vis. Barton explain
On June 19. 1992. | received a copy of |a
Massachusetts] rder appointing John C
()ttenberg as Receiver of D. Dev Monga lhe
Receiver requested that Vanguard freeze Monga
[IRA] account ind ‘forward the funds to the
Receiver. On -lune 24. 199 Vanguard froze the
IRA! account
\ I un t Vanguard, | ha t mn im {
i! e\ 1 | pute w | parti have
ttempted to attach or otherwise a rt control
harehn i nal n i | I ual
fund managed — bi Vanguard Group In
106
Since October 1992, other counsel for Vanguard and
I have repeatedly encouraged the Receiver to
domesticate his Massachusetts’ judgment by
bringing it to the Pennsylvania courts for
enforcement. However, we have never seen a copy of
a final judgment against Monga issued by either the
courts of Massachusetts or the courts of
Pennsylvania.”
See App. 999E-999H.
On October 5, 1992, Vanguard wrote to Ottenberg,
. we determined that it will be necessary for you to
obtain an order from a Pennsylvania court of
appropriate jurisdiction before we comply with your
request to transfer the Monga IRA... .”
Ms. Barton enclosed a copy of the Vanguard’s IRA
Agreement stating that, “Article 8.4 of the
Agreement provides that the Monga IRA shall be
governed by Pennsylvania law.” Barton’ further
stated, “As you know, Pennsylvania law prohibits
attachment of IRA assets.” See App. 9YYC.
On June 30, 1994, Paul F. Gallagher, Vanguard's
Counsel reaffirmed this position to Ottenberg:
“In reviewing our file | have not come across
anything that would cause us to change the
position that was set forth in’ Ms. Barton's
correspondence to vou of October 5, 1992. Namely,
that jurisdiction as to the question of whether Mr.
Monga’s TRA ussets are attachable les with
Pennsvlvania courts. Accordingly, we must
decline your request to transfer asseis to you.”
Gallagher stated,“ we can only take such action of
We al ordered to do so by a Pennsylvania court “
See App. G99D
11. This case in a nutshell.
Granting the inherently charged context of a
receivership proceeding intended to. satisfy a
judgment, and the risk that a judgment debtor may
seek to avoid satisfaction of the judgment, the mirror
risk is to sanction thuggery in the name of legal
process. This case illustrates the latter risk.
The validity of the IRAs is clear, and it places the
entire case in context. To understand how this case
evolved as it did, this Court need only look at how
the receivership began. Within weeks of his
appointment, and while Monga’s appeal of the
underlying judgment was pending, (an appeal this
Court recognized as possibly meritorious), Ottenberg
liquidated the only assets Monga possessed which
could have satisfied the judgment debt, and thereby -
as Ottenberg himself observed - destroyed the assets’
value. Ottenberg then cast about to seize whatever
he could find which might have the remotest
connection to Monga.
Ottenberg launched an endless series of ex parte
proceedings, App 24-60, with the lower court
routinely endorsing whatever Ottenberg requested.
Like a castle built on sand, Ottenberg’s case turns
entirely on speculation and assertions contradicted
either by Monga’s (and others’) Affidavits, or by the
record.
One of Sommers and Ottenberg’s refrains has
been the claim that Monga diverted assets to defeat
satisfaction of the judgment. However, the record
reveals that Ottenberg seized and liquidated Monga’s
108
businesses, his home, and his bank accounts. What
else, (apart from statutorily protected retirement
savings such as the IRAs), would one expect to find?
Ottenberg also seized all of the documents contained
in Monga’s home and businesses, (including illegal
seizures of mail belonging to third parties). In
addition, Ottenberg had well over 5000 documents
produced by Monga in the course of Sommer’s
discovery, as well as several of Monga’s depositions.
Despite all of this available evidence, Ottenberg has
failed to prove a single instance of fraudulent
conveyance by Monga.
Another of Appellees refrains concerns Monga
relocating to Pennsylvania. It is hard to understand
what non-Kafkaesque scenario Appellees have in
mind here. Monga up to then had enjoyed a highly
successful! career as a petroleum engineer. Monga’s
Affidavit dated 9/1/92, App. 226-264, explains that,
having lost his home as well as his multi-million
dollar business. (before his appeal could be heard
which might have’ reversed the underlying
judgment), and being under relentless attack by
Sommer and Ottenberg, Monga had little choice but
to try to rebuild his personal and professional hfe
elsewhere.
Monga, a petroleum engineer and environmental
consultant, moved to PA in 1995 because the location
was ideal to pursue new environmental related
business with manufacturers of environmental
equipment, a business which would not involve
capital expenditures. Monga envisioned that he
would provide the essential expertise as a consultant,
and the equipment manufacturers would provide the
necessary equipment. There were also other
environmental consulting opportunities in the
109
PA/NJ/DE area with chemical companies such as
Dupont.
One of Sommer’s and Ottenberg’s predilections
has been to cast innocent transactions in a suspicious
hight. This Court does not need much imagination to
take judicial notice that someone of Monga’s heritage
might well have a large family, with relatives spread
over the face of the earth. Monga in fact had a large
family, as does his wife Maharaj, with relatives
living in Europe, Asia, and North America. In the
pre-internet, pre ATM world of this case, having
dollar accounts in the Unmited States and
international fund transfers were common practices
in Asian communities, and it is common to this day
for family members residing in the United States to
accept bank statements and manage accounts for
relatives living abroad.
If given a chance, Appellants will show on remand
to the lower court that not a single penny was
diverted by Monga in order to avoid satisfaction of
the judgment debt. See also Appellants’ Brief p. 38,
n. 30. The proof of the pudding, so to speak, is that
Monga’s widow, Maharaj, is virtually penniless -
which 1s why she is being represented pro bono. The
notion that Monga diverted large sums of money
without providing for his wife is absurd. But then, on
remand, Sommer and Ottenberg should welcome an
opportunity to try to show that Maharaj, (who has
been reduced to living rent free in a friend’s house).
is somehow engaged in an elaborate charade.
CONCLUSION
The pubhe interest in TRAs is self-evident - tens of
millions of Americans are invested in IRAs, and
government policy encourages such participation.
110
This population, as well as retirement fund
managers such as Vanguard and Founders, are
entitled to rely on the protection afforded by Federal
and State law for IRAs against reach either by
creditors or by receivers.
For this, along with the procedural and
substantive issues set forth above as well as in
Appellants’ Brief herein, Appellants pray this
Honorable Court to set aside the 1998 Order and
2000 Judgment.
Appellants further pray this Court to grant such
other and/or further relief as it may deem
appropriate in the circumstances of this case.
Respectfully submitted,
John G. 5S. Flym, Prof.
Northeastern U. Law Schoo!
400 Huntington Ave.
Boston, MA 02115
617.373.3348
j.tlym@neu.edu
BBO # 172180
Pro Bono Attorney for Appellants
ii}
APPENDIX H
United States Court of Appeals
for the Third Circuit
No. 01-1827
filed July 30, 2002
OPINION
|
NO: 01-1827
D. DEV MONGA
JOHN C. OTTENBERG, ESQ.. Individually and as
Receiver,
BERRY, OTTENBERG & DUNKLESS;: VANGUARD
GROUP, INC.: VANGUARD FIDUCIARY TRUST
COMPANY: VANGUARD/MORGAN GROWTH
FUND, iINC.; PAUL F. SOMMER; PIETER S.
BROOKS; BROOKS AND LUPAN; FOUNDERS
FUNDS, INC.; INVESTORS FIDUCIARY TRUST
COMPANY
The Estate of D. Dev Monga, by its Executrix,
Shantee Maharaj (“Mahara}’),
Appellant
*(Pursuant to Rule 12(a), F.R.A.P.)
On Appeal From the United States District Court tor
the Eastern District of Peansylvania
(D.C. Civ. No. 96-cv-5235)
District Judge: Honorable Hlerbert J. Hutton
Submitted Under Third Cireuit LAR 34. lia)
April 12, 2002
sefore: ALITO, ROTHT AND FUENTES, CIRCUTT
JUDGES
(iiled July BO. POO?)
113
OPINION
PER CURIAM
The Estate of D Dev Monga (‘Monga’), by its
Kxecutrix, Shantee Maharay (“Maharaj”), appeals the
dismissal of a complaint filed by Monga against John
> Ottenberg; Berry, Ottenberg & Dunkless:
Vanguard Group, Inec.; Vanguard Fiduciary Trust
Company: Vanguard/Morgan Growth Fund, Inc.:
Investors Fiduciary Trust Company; and Founder
Funds, Inc. Because this is an appeal from th
district court's dismissal of Monga’s complaint, we
exercise plenary review. See Moore v. Tartler, 986
I’. 2d 682, 685 (3d Cir. 1993).
fhe circumstances surrounding this appeal began
with a 199 ] Massachusett Superior Court
(‘Massachusetts court’) judgment in the amount of
$478,904 against Monga and twe corporations which
he controlled. Following the entrv of judgment, the
Massachusett court entered injunctive order:
prohibiting Monga trom transferring his assets away
from the jurisdiction. Despite the injunction, Monga
mingled and concealed «assets ind = traudulently
conveyed both real and por mal property tf One !
more third int 1 7 ittempt to fru
itt the judgmer
lL pune ye t \1 tf apy l
Poh Ott | iby hn att practi iY
bas it \ i ‘ ‘ te ! I
Nionga ot (Dt ' ! {
) \1 i i 1 in !
114
Retirement Accounts (“IRAs”), of which Vanguard
and Investors Fiduciary Trust Company (‘the
Funds”) are the custodians. The Funds then froze
Monga’s IRAs. Thereafter, the Massachusetts court
entered another order. directing that all of Monga’s
assets, including the IRAs, be transferred to the
Receiver Monga, however, resisted the
Massachusetts court’s orders, claiming that neither
he nor the Funds were subject to the jurisdiction of
the Massachusetts court, and that in any event, the
IRAs were exempt from attachment or execution
In August 1995, while litigation over the TRAs
continued in Massachusetts, Monga filed this pro se
action in the District Court for the Eastern District
of Pennsylvania. In this action, Monga seeks a
declaratory judgment that the IRAs are exempt from
creditors under federal and Pennsylvania law, as
well as damages tor various federal and state tort
claims against Ottenberg Berry. Ottenberg &
Dunkless (Dunkl ) a Massachusetts law firm;
and the Fund
Prior to the resolution f either the litigation in
Massachusett or the first Pennsylvania action,
Monga filed an action in the Court of Common Plea
of Montgomery County, Pennsvivania, in Septembe1
QQ in Which he again reque ted i declaratory
sudement that the IRAs were exempt from creditor
I Septet } S999 rchIONn ’ entuallyvy removed
{ t} liste ( it ft | ern Pennsylvania
(‘second enn wa tro Nleanwhal
October G4 \1 rchu urt ued an
115
pursuing Monga’s claims in Pennsylvania any
further
in January 1996, the district court entered an order
in the second Pennsylvania action dismissing
Monga’s compiaint as to Ottenberg for lack of
personal jurisdiction. Relying on the January 1996
oruer, the district court in this action dismissed all
claims against Ottenberg, concluding that claim
preclusion barred the exercise of personal
jurisdiction over Ottenberg. In addition, the district
court dismissed all claims against Dunkles
concluding that the
Massachusetts law firm lacked the requisite contacts
with the Commonwealth of Pennsylvania to warrant
the exercise of personal! jurisdiction. All proceedings
in this action were then stayed and the case was
placed on the suspense docket after Monga was
diagnosed with cancer. Monga died in August 1996
Since then. his widow and the executrix of his estate
Mahara} has pursued the litigation in
Mi issachu ett and Penn vivania
On August 1. 2000. the Massachusetts court entered
a Judgment on the Receivership, distributing the
receivership among Monga ereditor ind
discharging Ottenberg as Receiver. In the judgment.
the Massachusetts court specifically addressed the
IRAs at issue here, providing that the accounts wer
‘to be turned Ve! forthwit! 1 the receiver, to
distribution ! C} Wtors ubyec | to the una
claim for wmtorney Tee ana mivathion <« [ * The
Mla ichusett court fetermined that Monga
continued detian this Court orders, right until
the time of | deat! tripped hit tf all right t
116
assert claims of statutory exemption for these
account Because Maharays claim to the assets
derived solely from Monga’s, the court concluded that
she had no present interest in the accounts. Thus the
court had “no occasion to consider which of the
various statutory exemptions...would apply, and
what proportion of the assets would be exempt
Thereafter, more than five years after this action wa:
placed on the suspense docket, the Funds filed a
motion to dismiss in the district court.1 The district
court granted the motion in March 2001. Maharaj
then filed this appeal from the June 1996 and March
2001 district court orders dismissing Monga’s 1995
complaint. For the reasons that follow, we wul
The Distri t Court prop rly dismissed Mi ngas
( ymplaint a to Ottenberg based on the doctrine of
issue preclusion. Issue preclusion bars re-litigation of
an issue identical to that in a prior action. See
Kdmundson v. Borough of Kennett Square, 4. F.3d
186, 189 (3d Cir. 1993). “The prerequisites for the
application of issue preclusion are satisfied when: (1)
the issue sought to be precluded [is] the same as that
involved in the pmeor action; (2) that issue [was
actually litigated; (3) 1t was determined by a final
and valid judgment: and (4) the determination [was
i
essential to the prior judgment. Burlington N.R_-R
(‘o vo Hyundai Merchant Marine Co., 63 F.3d 1227
» | eo ' i & GO") Citat ! mad Quotlu is
mitted). Issue preclusion apples wit! jual force to
1 | r determination § | ry court that at lack
pel Irisdiction over a part See Baldwin
L117
26 (1931) (adjudication of personal jurisdiction issue
precludes subsequent re-litigation of same issue); see
also Matosantos Commercial Corp. v. Applebee's
Int'l. Inc., 245 F.3d 1203, 1209 (10th Cir. 2001)
Here, all four prerequisites for the application of
issue preclusion are met. The issue of the exercise of
personal jurisdiction over Ottenberg was specifically
determined by the district court in the second
Pennsylvania action, and the determination resulted
in a final, valid judgment.2 Monga was a party to the
prior litigation and had a full and fair opportunity to
litigate the issue of — personal jurisdiction
Accordingly, Monga was barred by the doctrine of
issue preclusion from arguing in this action that the
district court had personal jurisdiction over
Ottenberg.
The Whistriet Court properly dismissed Monga’s
complaint as to Dunkless for lack of personal
jurisdiction. Pursuant to Fed. R. Civ. P. 4(e), a
district court may assert personal jurisdiction “over
non-resident defendants to the extent permissible
under the law of the state where the district court
sits.” Pennzoil v. Colell & Assoes. Inc., 149 F.8d 197,
200 (3d Cir. 1998). “Pennsvivania’s long-arm statute
12 Pa. Cons. Stat. Ann. Sect. 522(b), authorize
Pennsylvania courts ‘to exercise personal jurisdiction
over nonresident defendants to the constitutional
limits of the due process clause of the fourteenth
amendment.” Remick v. Manfredy, et al., 238 F.3d
248, 255 (4d. Cir. 2001) (quoting Mellon Bank «East)
PSEFS. Nat'l Ass’a v. Farino, 960 F.2d 1217, 1221 (3d
Cir. 1992)) the plaintiff bear the burden = of
establishing that a defendant “purposefully avail
itself of the privilege of conducting activities within
118
the forum State thus invoking the benefits and
protections of its laws.” Asahi Metal Indus. Co., Ltd
V. Superior Court of California, 480 U.S. 102, 109
(1987) (citations and quotations omitted)
Personal jurisdiction may be exercised under two
distinct theories, general jurisdiction or specific
jurisdiction. See Remick, 238 F.3d at 255. General
jurisdiction requires a showing that a defendant had
“continuous and systematic” contacts with the forum
state, and exists even if a plaintiffs cause of action
arises from the defendant's non-forum related
activities. See Vetrotex CertainTeed Corp. v. Consol
Fiber Glass Prod. Co., 75 F.3d 147, 151 n.3 (3d Cir
1996) (citations omitted). Specifie jurisdiction, on the
other hand, exists only if a plaintiffs cause of action
rises out of a defendant's forum-related activities,
such that a defendant “should reasonably anticipate
being haled into court there.” Id. (quoting World
Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
297 (1980). Monga’s assertion of personal jurisdiction
is based solely on the theory of specific jurisdiction
In his submission to the district court, Monga failed
to make any distinction between Ottenberg and
Dunkless for purposes of personal jurisdiction, and
only offered evidence related to Ottenberg'’s actions
In this matter
4
As is clear from the protracts {1 proceedings at issue
I
here the entire matter irose from the entry of a
pudement avainst Monegan Massachusett ma
Monga’ repeated atten! fo Trustrate thistaction
| thre judgement ‘Winat ugh NMlonva a erted that
Ottenberg attempted to seize fund the TRA
evidence that in hi effort to do so Ottrenberg
directed any activity at Pennsylvania. Ottenberg
neither registered the Massachusetts judgment in
Pennsylvania, nor did he obtain a writ of execution
from a court in this jurisdiction. Instead, all matters
related to Ottenberg’s position as Receiver
originated, and were conducted, in Massachusetts
Thus, the district court correctly concluded that
Monga failed to establish that Dunkless had the
necessary “minimum contacts’ with Pennsylvania,
such t hat the e
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