Law Office of Justin R. McCarthy

Earlier this week the Massachusetts Supreme Judicial Court upheld the dismissal of a wrongful death lawsuit filed against an Air BNB host.

The host/property owner entered into a short-term rental agreement in 2016. The man who rented the property claimed that he was using it over the weekend for a college reunion.

Instead the renter posted advertisements on social media announcing as “Splash Mansion Pool Party” by “Special Invitation & Girls Only.”

The party, which took place over Memorial Day Weekend, was so large that over a hundred people were in attendance by 1 a.m.

Around 3 a.m. a man standing near the pool was shot twice in the chest and died shortly thereafter. The shooter was never identified.

The decedent’s estate filed a wrongful death lawsuit against the property owner claiming that the property owner “committed a breach of his duty to conduct the rental of his home in a ‘reasonable, prudent, and legal manner’ and that, as a result, the decedent was shot and killed.”

The property owner moved to dismiss the lawsuit arguing that the estate failed to show he owed a duty to protect the decedent from injury by a third party.

The trial court agreed with the property owner and dismissed the case. The estate appealed the decision. The Supreme Judicial Court rejected the estate’s arguments on appeal and affirmed the trial court’s decision.

According to the SJC,

A viable negligence claim requires a showing that a defendant owes a duty of reasonable care to the plaintiff, the defendant committed a breach of that duty, the plaintiff suffered damage, and a causal relationship existed between the breach of duty and the damage.

The opinions states the this duty of reasonable care “depends upon the foreseeability of a risk of harm that the defendant has an ability to prevent” and “does not extend to taking affirmative steps to protect against dangerous or unlawful acts of third persons.”

In the case at hand, the estate failed to show that the property owner could reasonably foresee the harm to the decedent. Therefore, the wrongful death claim was rightfully dismissed.

The opinion also made clear that there is a distinction between hotels and restaurants and those who rent their residential property online.

The defendant argues that just as restaurants, hotels, and common carriers have a duty to protect their customers from third-party harm, the defendant, as a “short-term rental operator,” had the same duty vis-à-vis those lawfully on his property during a rental. This comparison misses the mark. Aside from the fact that there is no allegation of any relationship between the defendant and the decedent other than the fact that the decedent was shot and killed on property owned by the defendant, perhaps the biggest difference between the relationship between a business establishment and its customers and the defendant’s relationship to the decedent is that the defendant had no control over the premises during the rental period. As the plaintiff acknowledged in the complaint, at the start of the rental period the defendant gave [the renter] sole and exclusive possession of his [r]esidence for the three-day stay, with no visits, monitoring, or supervision by [the defendant].” In short, aside from ensuring that the property was in a reasonably safe condition when he turned the premises over to [the renter]…the defendant owed no additional duty of care to the decedent.

For the full opinion click here.

In recent years I’ve gotten several inquires from landlords and condominium associations regarding emotional support animals (ESA).

Although state and federal laws clearly prohibit discrimination against people with “service dogs”, the laws are less clear with emotional support animals. 

The Massachusetts’ discrimination law (M.G.L. c. 151B) states:

It shall be an unlawful practice…for…any organization of unit owners in a condominium or housing cooperative to refuse to rent or lease or sell or negotiate for sale or otherwise to deny to or withhold from any person or group of persons such accommodations because…such person is blind, or hearing impaired or has any other handicap.

The same the law requires condominiums and landlords to provide “reasonable accommodations” for such persons.

The mass.gov website quotes the Attorney General as saying,

M.G.L. c.151B may require that an owner modify his/her ‘no pets’ policy as a reasonable accommodation for a person with a disability who requires the use of a service or emotional support animal because of the person’s disability.[1]

I searched for the original source of the quote, but I could not find it.

Based on the foregoing, it seems that a credible claim of discrimination could be made against a landlord and condominium association that prohibited the ownership of emotional support animals at their property.

Anyone seeking permission to own such an animal should provide the property owner with an ESA Letter from a Licensed Mental Health Therapist.

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[1] https://www.mass.gov/info-details/massachusetts-law-about-service-animals

Most business people know that operating through a corporation or limited liability company (LLC) offers valuable legal protection.  If a business is sued, only corporate assets can be used to satisfy a judgment and the owner’s personal property is usually beyond the plaintiff’s reach.

However, in certain circumstances, courts may disregard the legal protection afforded to a corporation or LLC and permit a plaintiff to directly sue the business owner.  Such an action is referred to as “piercing the corporate veil.”

To accomplish this in Massachusetts, at least three factors must be present. 

 Confusion and Ambiguity

First, the owner is using his business entity or entities in a manner that creates confusion or ambiguity. 

Corporate formalities also may be disregarded “when there is a confused intermingling of activity of two or more corporations engaged in a common enterprise with substantial disregard of the separate nature of the corporate entities, or serious ambiguity about the manner and capacity in which the various corporations and their respective representatives are acting. My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 614, 619

Wrongful Purpose

Second, the confusion and ambiguity are used for wrongful purposes such as fraud. According to the Massachusetts Appeals Court:

There is present in the cases which have looked through the corporate form an element of dubious manipulation and contrivance [and] finagling .” Evans v. Multicon Constr. Corp., 30 Mass. App. Ct. 728, 736 (1991). See United States v. Bestfoods, supra at 62 (veil piercing appropriate when, “inter alia, the corporate form would otherwise be used to accomplish certain wrongful purposes, most notably fraud, on the shareholder’s behalf”); 1 W.M. Fletcher, Cyclopedia of Corporations, supra at § 43, at 296 (“although corporations are related, there can be no piercing of the corporate veil without a showing of improper conduct”). See Evans v. Multicon Constr. Corp., 30 Mass. App. Ct. 728, 736 (1991). 

Absence of Business Structure

Finally, to pierce the corporate veil, a plaintiff must show that the corporation at issue failed to operate within a legitimate business structure. 

Ultimately, the decision to disregard settled expectations accompanying corporate form requires a determination that the parent corporation directed and controlled the subsidiary, and used it for an improper purpose, based on evaluative consideration of twelve factors:

“(1) common ownership; (2) pervasive control; (3) confused intermingling of business assets; (4) thin capitalization; (5) nonobservance of corporate formalities; (6) absence of corporate records; (7) no payment of dividends; (8) insolvency at the time of the litigated transaction; (9) siphoning away of corporation’s funds by dominant shareholder; (10) nonfunctioning of officers and directors; (11) use of the corporation for transactions of the dominant shareholders; and (12) use of the corporation in promoting fraud” (emphasis added). Attorney Gen. v M.C.K., Inc., supra at 555 n.19, citing Pepsi-Cola Metro. Bottling Co. v. Checkers, Inc., 754 F.2d 10, 15-16 (1st Cir. 1985) (categorizing My Bread Baking Co. factors).

Need legal help? Email justin@jrmccarthy.com

What happens to a couple’s real estate after a divorce is determined by their separation agreement.

Almost every divorce is settled through a “separation agreement” made by the parties. These agreements are typically prepared by the parties’ attorneys. However, Massachusetts Probate & Family Court will provide couples with a separation agreement template if they are handling the divorce without lawyers.

The separation agreement becomes binding after it is reviewed by the court and the presiding judge signs a judgment.

This judgment (referred to as a NISI judgment) has two dates: (1) the date the judge signs the document and (2) the date the judgment becomes absolute, i.e., final and enforceable.

If you are buying real estate that has been the subject matter of a divorce, it’s important that you review the terms of the separation agreement and make certain that they have been fully satisfied before taking title to the property.

It’s also essential to wait until the court’s judgment is “absolute” rather than taking title to the real estate immediately after the judge signs the document.

If you have questions about real estate law, please contact me at justin@jrmccarthy.com.

Generally, three things are needed to file a lawsuit in Massachusets.

1. A cover sheet which provides the basic information about the case, e.g., the parties’ names and addresses, the claims at issue, and the amount in controversy. In Superior Court this form is called a “Civil Action Cover Sheet”. In District court it is a “Statement of Damages”. Both forms are available online.
2. A complaint which gives a detailed description of the facts and laws at issue as well as a demand for relief from the court.
3. Finally, you need a check for the filing fee and the summons. It usually costs $195 to file in District Court and $295 to file in Superior Court. Summons cost $5 each. You should call the court you are filing in to confirm the cost.

The Massachusetts Appeals Court has ruled that a landlord is not liable for his tenant’s pit bull after the dog ran from the landlord’s property and attacked a pedestrian.

The plaintiff was riding his bike past the landlord’s house with his dog jogging along side him on a leash.

The pit bull ran into the street and attacked the leashed dog while knocking the plaintiff to the ground. The plaintiff suffered injuries due to the fall.

He sued the landlord for negligence and the trial court judge dismissed the lawsuit through summary judgment. The plaintiff appealed and the Appeals Court issued a ruling affirming the trial court’s decision.

According to the Appeals Court

As a general rule, a landowner does not owe a duty to take
affirmative steps to protect against dangerous or unlawful acts
of third persons…There is an exception to this general rule where there is a special relationship between the landowner and a plaintiff in which a plaintiff would reasonably expect a landowner to take steps to protect the plaintiff from harm…We have previously held that such a special relationship exists between a residential landlord and a tenant, such that a landlord has a duty of reasonable care to protect a tenant from harm by another tenant’s pit bull on the premises…However, no Massachusetts appellate court has extended such a duty to a passer-by injured by a tenant’s dog after the dog leaves the landlord’s property. We decline to do so here.

Earlier this month an online Reddit community known as wallstreetbets banded together to purchase stocks that elite hedge funds had bet against.

Their collective action caused GameStop stock to skyrocket from $17 on January 1 to an incredible $469 on January 28.

The community’s actions will likely result in a tremendous loss for the hedge funds that bet against the stock.

Much of the trading done by wallstreetbets was facilitated by an online brokerage firm called Robinhood.

A few days ago Robinhood inexplicably froze trading on GameStop stock.

This action immediately prompted a class-action lawsuit against Robinhood and its subsidiaries in US District Court for the Southern District of New York.

According to the complaint:

On or around January 11, 2021, stocks in GameStop Corp. (“GME”) began to rise.

At that time, Robinhood allowed retail investors to trade GME on the open market.

On or about January 27, 2021 Robinhood, in order to slow the growth of GME and deprived their customers of the ability to use their service, abruptly, purposefully, willfully, and knowingly pulled GME from their app. Meaning, retail investors could no longer buy or even search for GME on Robinhood’s app.

Upon information and belief, Robinhood’s actions were done purposefully and
knowingly to manipulate the market for the benefit of people and financial intuitions who were not Robinhood’s customers.

Since pulling the stock from their app, GME prices have gone up, depriving investors of
potential gains.

Additionally, in the event GME goes down, Robinhood has deprived investors of
“shorting” GME in the hopes the price drops.

In sum, Robinhood has completely blocked retailer investors from purchasing GME for no legitimate reason, thereby depriving retailer investors from the benefits of Robinhood’s services.

The complaint argues that Robinhood violated rules established by the Financial Industry Regulatory Authority, particularly Rule 5310 which states that brokerage firms like Robinhood “must make every effort to execute a marketable customer order that it receives promptly and fully.”

The plaintiffs allege that Robinhood’s actions constitute (1) a breach of contract, (2) a breach of the implied covenants of good faith and fair dealing, (3) a breach of fiduciary duty, and (4) negligence.

They are asking the court for an immediate injunction ordering Robinhood to allow trading of GameStop stock and monetary and punitive damages for the financial harm Robinhood has allegedly done to its customers.

If you are being harassed in Massachusetts, you can apply for a “harassment prevention order” in district court. The application form is on the state’s website along with guidelines for what constitutes harassment. Applicants will usually go before a judge within hours of filing the application. If the judge decides to issue the order, a copy will be sent to the police and served on the person who is harassing you.

Need legal help? Email justin@jrmccarthy.com

Parler–the new social media alternative to Twitter and Facebook–filed a lawsuit against Amazon earlier this week after Amazon abruptly removed the company from its cloud service platform.

Amazon’s actions essentially killed the rapidly growing app and Parler wasted no time filing a lawsuit for injunctive relief and money damages.

According to the complaint filed in the United State District Court for the Western District of Washington, Parler contracted with Amazon as its cloud service provider when the site was formed. Parler saw its membership grow exponentially after the November 2020 election. The complaint states

less than a week after Election Day, between November 3rd and November 8th, Parler’s app experienced nearly on million downloads…This resulted in Parler rocketing to be the #1 free app in the iOS App Store, up from #1,023 just a week earlier…Likewise, in that same week the Parler app went from 486th to 1st in the Google Play rankings.

Parler’s membership surged again in 2021 when President Trump was banned from Twitter. On that day alone, Parler membership increased in the United States by 355%.

Amazon, which just last month signed a multi-year deal with Twitter to provide cloud servicing, withdrew its platform from Parler with only a single day’s notice. As justification for its actions, Amazon claimed that Parler was used to facilitate protests on the Capitol on January 6.

Parler’s complaint asserts that Amazon’s actions violate Section 1 of the Sherman Act which prohibits businesses from conspiring to retain trade or commerce. The complaint also claims that Parler’s contract with Amazon required at least 30 day’s notice before the servicing agreement could be terminated. Amazon allegedly breached its contract with Parler by ending its service agreement without proper notice. Finally, Parler claims that Amazon’s actions amount to tortious interference with the contracts formed between Parler and its members.

Parler is asking for an order from the court directing Amazon to maintain Parler’s site according to the terms of their contract and for money damages for the financial harm Amazon’s actions have caused.

Over the past year or two I’ve seen a growing number of high-budget ads for “title fraud insurance.” As with all forms of insurance, its persuaive sales people tell you nightmare stories about what might happen to you if you don’t buy their product. But are these stories true? Can someone really “steal” ownership of your home? In this video I discuss title fraud insurance and whether its worth the investment.

Need legal help? Email justin@jrmccarthy.com