What a Default in Court Means

Sometime ago, I blogged about the perils of ignoring a lawsuit.  The decision we received from the Appeals Court last week underscored the danger of failing to participate in the litigation process.  The appellant made a conscious decision to refrain from participating in the underlying litigation.  He failed to answer the Verified Complaint, he failed to attend his deposition, he failed to attend the assessment hearing personally to offer testimony to counter that of our client.  His counsel did not cross-examine our client at the assessment hearing, nor did he submit a brief regarding the legal issue raised during the assessment of damages.  The appellant also failed to participate in a number of related actions including two companion cases in Middlesex County.  

When a default is entered against a party, the factual allegations of the Verified Complaint are taken as true, and each of the claims against the defaulted party must be considered established as a matter of law.   Multi Technology, Inc. v. Mitchell Mgmt.Sys., Inc., 25 Mass.App.Ct. 333, 334-335 (1988).  "Such is the peril of a default. [Appellant's] failure to answer, or to respond to deposition notices and other discovery requests, deprived [Appellee] of any opportunity to supplement the factual record; the judge was permitted to take into account the fact that Appellant not only defaulted, but stonewalled discovery. See Multi Technology, Inc., supra at 335-336 ("In reaching [her] conclusions, [the judge] was allowed to hear any evidence material and relevant to the claims alleged in the complaint"). Cf. Mass.R.Civ.P.37(b), as amended, 423 Mass. 1406 (1996) (setting forth sanctions for discovery violations). [Appellant] cannot have it both ways."  Erez v. Batrin, 2015 Mass. App. Unpub. LEXIS 1046 (Mass.App.Ct. 2015).

Deciding whether to fight a lawsuit or let a default enter must be a calculated decision based  on the amount of money at stake, the amount of money you will have to spend to defend, whether the judgment could include an award of attorney's fees for or against you and, of course, the merits of your claim.  The Rules of Civil Procedure were amended in 2013 to require that plaintiffs provide defendants with notice of the damages sought prior to an assessment of damages.  However, by the time you receive this paperwork, a default has already been entered against you.  In other words, the only question is the amount of damages that will be awarded - not whether you are liable.  You should consult with an attorney to assist you in making that determination as these factors can be complicated.

The Business of Your Business

     Often times, I meet with clients who are starting their own business and need some advice.  Should they incorporate?  Do they need insurance?  How do they manage their finances?  When I talk to clients about these issues, I like to talk about managing the “business of the business”.  Doing so is not always fun or what we want to do as business owners.  Let’s face it – a painter would rather be painting than sending out bills.  A caterer would rather be in the kitchen than thinking about whether and how to take credit cards.  However, failing to do so can be detrimental to your business.  It is like having a rose bush and never pruning it.  Both will quickly get out of control.  This will, of course, only take more time and cost you more money, than if you had managed it regularly in the first place.

Selecting a Jury

As I sat in court in May and again in October, selecting my seventh and eighth juries for trials, I thought a bit about the process and how odd it must seem to someone who is called for jury duty.  I have actually had jury duty many times and even sat on a jury.  I know that when you are called for jury duty, you watch a video, but I thought I'd give a little bit of insight into what goes on during jury selection.

First, the lawyers receive a copy of the form that you fill out when you arrive for jury duty.  It contains some basic information such as where you live and work, your spouse's job, interactions with the legal system, age and how much education you have had. We get a chance to review those papers before you are chosen for jury duty.

After asking questions of the pool as a whole, the judge will start to "fill the box".  There are two general ways of doing this.  Some judges like to question each and every potential juror to make sure that they are unbiased and able to serve.  One judge shared with the attorneys that he feels that when you speak to a juror and ask them to serve, they are more likely to do so.  Other jurors will put the required number of jurors in the box and then will call up jurors who answered one of the general questions of for whom a lawyer has a question.  In either event, the lawyers end up huddled around the judge.  You may wonder what they are doing.  In all likelihood, they are discussing one or more of the jurors sitting in the jury box.

When your number is called to sit in the jury box, there are a few things that can happen.  If the judge is speaking people before they are seating in the box, then the prospective juror can explain his or her answer to any question and lawyers are given the opportunity then to raise any issues or concerns they have about that juror.  Ultimately, you can either be excused from jury duty by the court or by the lawyers.  The court will excuse a juror for cause -- perhaps there is a language issue, where the juror cannot fully understand English, perhaps the juror knows one of the parties or one of the attorneys or perhaps the juror has some other connection to the facts of the case that make it so he or she cannot be objective.  These are some of the reasons, that the court decides someone is not able to sit on that jury.

Attorneys also get what are called peremptory challenges. These challenges allow attorneys to remove people from the jury any reason or perhaps even no reason, so long as it is not for a discriminatory reason.  For example, the attorney may decide that due to the nature of the case, he or she feels that it would be better if tradespeople (plumbers, electricians, etc.) were not on the jury.  An attorney can use a challenge to remove people of those professions from the jury.  An attorney can remove someone because of where they live or their education level.  You will not know why you are not hearing the case as a juror -- you will just know that you are not sitting on that jury.

Hopefully, this post gives you some insight into what is going on during jury selection the next time you are called for jury duty.

Epilogue:  I wrote this article last week not knowing that today, the Supreme Court heard arguments about a 30 year old case involving peremptory challenges.  Apparently, 20 years after the case was tried, the defendant's attorneys obtained a copy of the prosecutor's notes from the jury from a Freedom of Information Act request (or the equivalent under Georgia law).   This case highlights the problems with peremptory challenges when it is used for discriminatory reasons.

Changing the Locks and Providing Keys

A tenant calls the landlord and explains that she is under imminent threat of  domestic violence, rape, sexual assault or stalking at her apartment and that she wants the locks changed.  What can a landlord do?  What must a landlord do?

If the perpetrator is not a resident of the unit, the landlord is required to change the locks within two business days upon a tenant's request.  Prior to doing so, the landlord may request proof of the tenant's status as a victim and the landlord may request the perpetrator's name.  The landlord may also charge the tenant a reasonable fee for changing the locks. 

If the perpetrator is a resident of the same unit as the victim, then the victim must provide the landlord with a valid restraining order (protective order) from the court or a statement from law enforcement, that indicates the perpetrator poses an imminent threat.  

If the tenant makes the request of the landlord and the landlord does not change the locks within two business days, then the tenant may change the locks without the landlord's permission.  If a tenant does this, the new lock must be the same or better quality than the old lock and if the lease provides, promptly provide a key to the landlord.  If the landlord takes action to prevent the tenant from changing the locks, the landlord is liable for the greater of three months' rent or actual or consequential damages, plus reasonable attorney's fees.

Owners who act in good faith are not subject to damages and owners who refuse to provide a key to someone based on the reasonable belief that he or she is the perpetrator of a rape, sexual assault, stalking or domestic violence, are not liable.

The takeaway for landlords is that if you have a tenant who claims to be the victim of domestic violence, rape, assault or stalking and wants the locks changed, you must act quickly.  Verify the veracity of the tenant's story and if true, then change the locks promptly. Document everything.  If a tenant calls you to make this request, you can start to act on it, but have the tenant follow up in writing.  Obtain verification in writing and keep a copy for your file.  If the perpetrator asks for a copy of the key and you refuse to provide one, make a note in the tenant's file.

Landlord's Rights and Responsibilities When a Tenant is a Victim of Domestic Violence

In our last post, we discussed that a tenant can terminate a tenancy when he or she is the victim of domestic violence, assault, stalking or rape.  We mentioned that the landlord has the obligation to excuse the victim from the tenancy obligations, but there is additional information a landlord should know in dealing with these types of situations.

A victim/tenant must act promptly to terminate his or her responsibility under a tenancy promptly.  A tenant must notify the landlord within 3 months of the most recent act of violence and then move out within 3 months after giving the written notice.  If the tenant does not move out within the three months, then the notice to terminate is void.

A landlord must also know that the termination applies only to the victim.  No one else who resides in the unit is discharged from the rental obligations.  If, for example, a couple is residing in the unit and one moves out because the other is the abuser, then the remaining party is responsible for the rent.  Similarly, if three friends are renting an apartment and one must leave because she is being stalked by a former boyfriend, the other two roommates are now responsible for the whole rent due under the lease.  If the remaining tenant cannot pay the rent, the landlord may send a notice to quit without fear of a claim of retaliation by the remaining tenants. 

If a victim tenant is the sole occupant and vacates the unit and leaves behind belongings, the landlord may consider those belongings abandoned, unless the tenant indicates in writing that he or she will be responsible for those items and the action to be taken with respect to the belongings.

As a landlord, you can request proof that the tenant is, indeed a victim of domestic violence, sexual assault, rape or stalking, including the identity of the perpetrator.  If the landlord obtains the written proof requested, then that information must be kept confidential and not provide the information to anyone without written permission from the victim or required by court order or law.

You cannot deny renting to a tenant because that prospective tenant terminated a prior rental agreement or requested that locks be changed.  Any waiver of the provisions relating to termination or lock changes are void as a matter of law.  On the plus side, if you comply with the laws in sections 23 to 28 and any court order and act in good faith, then you may be able to escape liability from another household member as well as attorney's fees and multiple damages.

So, what is the bottom line?  Landlords who have a tenant who is or becomes a victim of domestic violence, sexual assault, rape or stalking must permit that tenant to move out on one month's notice and cannot discriminate against prospective tenants who had to leave their prior residence for those reasons.  You can ask the tenant for proof, but you have to keep it confidential and you can't legally ask a tenant to waive his or her rights under this law.  If you act in good faith and comply with the law, your liability will be limited and possibly eliminated.

Terminating your Tenancy Because of Domestic Violence

One of the things that I like about being a lawyer is that there is always an opportunity to learn something new.  Even though many cases seem similar, there is always something that makes the case unique and interesting.

Last month, I received a call from someone who had been a victim of domestic violence and needed some advice.  I explained to her that I do not practice in the areas of domestic violation, divorce or criminal law, but told her some steps she could take regarding the incident.  She was grateful for that information, but her question though focused on her living arrangements.  She and her spouse were renting an apartment and she wanted to know whether she could get out of her lease.

The Massachusetts Legislature addressed this issue about two years ago enacting sections 23-29 of Mass.Gen.L. ch. 186.  These seven sections permit a victim of domestic violence, rape, sexual assault or stalking to terminate a lease or change locks on the unit under certain conditions.  This post will focus on the conditions under which a tenant may break a lease.

If you are a tenant or co-tenant and need to move because you are a victim of domestic violence, rape, sexual assault or stalking or you are reasonably in fear of imminent serious physical harm from domestic violence, rape, sexual assault or stalking. then you may terminate your lease so long as you do the following:  notify the landlord in writing within three months of the most recent act against you.  You will still be responsible for 30 days of rent or one rental period, whichever is longer, but then you will have no further liability under your lease. In most cases, if you pay your rent monthly that means you will be responsible for one full calendar month of rent after notice.  

The landlord has the right to ask for proof that you are a victim of domestic violence, rape, sexual assault or stalking from what is known as a "qualified third party".  A “Qualified third party”, is defined by the statute as "a police officer, as defined by section 1 of chapter 90C, law enforcement professional including, but not limited to, a district attorney, assistant district attorney, a victim-witness advocate, probation or parole officer; an employee of the Victims Services Unit of the department of criminal justice information services; an application assistant in the address confidentiality program of the state secretary under section 2 of chapter 9A; a licensed medical care provider; an employee of the department of children and families or the department of transitional assistance charged with providing direct service to clients, or a manager or designated domestic violence or abuse advocate within either department; an active licensed social worker; a licensed mental health professional; a sexual assault counselor as defined in section 20J of chapter 233; or a domestic violence victims’ counselor as defined in section 20K of said chapter 233.".  

The language of the statute does not require that the perpetrator of the acts be a co-tenant.  If a victim is residing somewhere and a stalker finds out, the victim can move assuming the process outlined in the statute is followed.

The remaining tenants are not released from liability and their lease remains intact.  If you residing with several people and you must move out based on this statute, your roommates will be on the hook for the totality of the rent without you.

Termination of a Lease - Exceptions for Military Personnel on Active Duty

Those who serve in the military put their lives on the line on a regular basis so that the rest of us can be free and enjoy all the rights and benefits as Americans.  As a small token of recognition of that sacrifice, Congress enacted the Servicemembers Civil Relief Act in 2003 (SCRA).  This relatively new act replaced the Soldier's and Sailor's Civil Relief Act that was originally enacted in 1918 and revised in 1940.

There are many provisions within the SCRA that a servicemember should familiarize him or herself with.  For this blog post,we are going to focus on a particular provision relating to the termination of leases.  Simply stated, if you are on active duty and you receive military orders to change your permanent base or to go on active duty for not less than 90 days, you may terminate your lease.  You may also terminate your lease if you decide to enter the military.  This provision applies to both residential as well as business and agricultural leases.  It effectively allows the lease to be terminated completely.  A spouse or dependent is not left stuck on the lease while the military member relocates to his or her new assignment. 

In order to properly terminate your lease, you must give written notice of your termination to your landlord along with a copy of your orders and give at least one full month's notice.  In other words, if your rent is due on May 1 and you get orders on May 6 to deploy on June 6 and you provide your landlord notice on May 7, you will still be responsible for June rent as the notice does not become effective until June 1.  If you receive notice on May 28 and provide notice to the landlord on May 29, your lease obligations still terminate on June 30.  However, if you do not deliver notice of your termination until June, then you are obligated to pay rent through July.

Landlords are well advised to promptly return any overpayment and properly handle the security deposit.  The failure to do so can subject you to a fine or imprisonment of up to one year.  This, of course, would be in addition to the remedies provided under Massachusetts law for the failure to comply with applicable statutes.

Landlords are not completely without remedies.  A landlord can petition the court for equitable relief.  Some examples where a landlord might want to seek equitable relief are as follows:  For example, imagine a scenario where the landlord spends a great deal of money building out a property to accommodate the tenant's new business and planned on recouping those expenses of the course of a multi-year lease. Six months into the tenant's occupancy, he decides to join the military.  The landlord may want to seek reimbursement for the build out.  A landlord could also ask the court to order the tenant to pay costs to re-rent the property.  Because the tenant has a statutory right to terminate the lease and landlords should be on notice about this possibility, the reasons for granting the equity will likely have to be fairly powerful or involve some form of deception by the tenant for a court to award relief.

In sum,  when renting to a person on active duty, landlord must familiarize themselves with special rules that might apply.  Tenants who are in the military should also be aware of their rights and the timing of notices they must give to extricate themselves from a lease.

Breaking a Lease

     What’s a tenant to do when they have a signed leased for their apartment that does not expire for months, but get a job in a different city?  Can you break the lease?  Is the tenant going to have to pay for all those months when he or she is no longer living there?  These are all questions that have arisen with our clients in the past six months.

     To answer those questions, let’s start with the basics.  A lease is a contract and when you sign the lease both parties are bound by its terms.  When signing a lease consider whether you plan to be in that location for the length of the lease.  If there is any chance you might have to move before the end of the lease term, then you might want to try and negotiate a 60 day termination clause or even a month-to-month lease.  

    Let’s assume you did not plan to look for a new job let alone move out of state, but the opportunity of a lifetime has fallen into your lap and you just cannot turn it down.  I am also assuming for this blog post that your soon to be new employer does not want to pay for your rent for the rest of the lease term.  The first thing you need to do is to pull out the lease and read it.  Does it have a termination provision?  Does it have a provision regarding subletting? 

     If your lease has a provision about terminating early, then you can follow those provisions and give the landlord notice that you are terminating the lease.  For example, some leases will provide that with 60 days’ notice, the lease can be terminated.  What this generally means is two full months’ rent.  If you give notice on May 15, you would still have to pay June and July rent, but then no longer obligated.  If your landlord took last month’s rent at the beginning of the lease term, then you really only are coming out of pocked for one month’s rent which is a fair cost to break the lease.  Make sure you notify your landlord in writing.  If the lease specifies how notices are to be delivered, follow the lease instructions.  Some leases may require notice by certified mail or by fax and may not recognize an email notification.

     Many leases have clauses that prohibit subletting, but some do not.  If your lease does not prohibit subletting, then get those notices out on craigslist, the bulletin board at your workplace or school and put it on social media.  Keep in mind that if you do sublet, you are still responsible for the rent, so if the subletter does not pay you, you still have to pay the landlord. 

     If your lease does not have an early termination clause and prohibits subletting, then what?  You are not completely out of luck.  The next thing you need to do is to tell the landlord as soon as possible of your plans, including the date that you plan to vacate.  You can call the landlord or tell him or her in person, but follow up with an email confirming the conversation.  Ask your landlord if he or she will let you out of the lease early.  It may be that the landlord has a friend or relative looking to move in to the building.  If that is the case, then agree on a move out get and put your agreement in writing that your lease terminates as of a particular date.  You can ask your landlord about subletting, as most leases simply require the landlord’s permission to sublet.  You should tell the landlord you are willing to help get the word out and offer to post the unit within your network of family, friends, neighbors and work colleagues.  Let the landlord know that you will make the unit available to show to prospective renters.  You need to make sure that the unit is in clean and showable condition.  After all, you want someone to rent the place.  A unit with laundry scattered all over the floor and dirty dishes in the sink, is not going to be as easy to rent as a clean, uncluttered unit.  You have to de-clutter and pack anyway to move, so box up your belongings and rent storage if necessary. 

 
     The landlord cannot just turn a blind eye to your early departure and sit back and collect the rent.  A residential landlord has a duty to mitigate damages.  What does that mean?  It means that once you notify the landlord, he or she must take reasonable steps to re-rent the unit.  If a landlord does not promptly put it on the market, seeks to charge substantially more rent or does not market the property, then the landlord may lose the right to seek the unpaid rent from you.  
  
     Practically, here is how these cases can play out.  In one case, we recently represented a couple who had executed a two year lease and found out just after the first year, that the husband was being transferred.  The landlord was notified in August and the tenants even agreed to move out early so the unit could be re-rented by September 1 – a prime time for lease turnovers.  The tenant offered to circulate the available apartment throughout her network of friends, including some list servs of which she was a member.  The landlord, however, declined the tenants’ offers saying he preferred to just give it to his real estate broker.  The unit was not listed for several weeks – too late to catch the September 1 turnover date.  It was also put on the market for several hundred dollars more than the rent my clients were paying.  In that case, we were able to negotiate with the landlord and successfully terminated the tenants’ lease for just one month’s rent.  In another case, we represented a couple who had to relocate because of a new job and had about eight months remaining on their lease.  They had been in the unit for about eight years when they had moved out.  The carpet had never been replaced, nor was the kitchen updated.  In that case, the landlord began promptly showing the unit, but received feedback that the carpet had significant wear and tear.  The tenant requested that the carpet be replaced.  The landlord not only replaced the carpet, but without the knowledge or consent of the tenant, gut the entire apartment, including the kitchen and bath, making the unit uninhabitable for at least a month.  In that case, we were able to negotiate a settlement where the tenants were able to terminate their lease and receive a refund of rent as well. 

     Ultimately, the best solution is when the landlord and tenant can reach an agreement so that the tenant can stop paying the rent and the landlord can have some confidence that the unit will be re-rented quickly for at least the same amount of money.