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COMMONWEALTH OF MASSACHUSETTS
Department of the Trial Court
HAMPDEN, ss. SUPERIOR COURT
C.A. No. HDCV 2013-00837
UC RIVERCHASE, LLC
Plaintiff,
Vv.
COLONY HILLS CAPITAL, LLC,
etal.
Defendants, HAMPDEN COUNTY
Vv. SUPERIOR COURT
FE
GLENN R. HANSON, et al., APR 15 2616
Third-Party Plaintiffs,
Vv.
KENT PECOY & SONS CONSTRUCTION, INC.
etal.,
Third-Party Defendants,
CONSOLIDATED WITH: HDCC’ v201 3-00738
MEMORANDUM IN OPPOSITION TO
GLENN R. HANSON, KRISTA A. HANSON AND
COLONY HILLS CAPITAL, LLC’S MOTION TO BIFURCATE
NOW COMES Plaintiff/Third-Party Defendant, UC Riverchase, LLC (“UCR”) in the
above-consolidated cases and hereby opposes the Motion of Defendants/Third-Party Plaintiffs
Glenn R. Hanson, Krista A. Hanson and Colony Hills Capital, LLC (“CHC”) to Bifurcate.
INTRODUCTION
Defendants/Third-Party Plaintiffs, Glenn Hanson, Krista Hanson, and CHC (collectively
the “Moving Parties”) seek to bifurcate the trial of the various claims, counterclaims and third-
Y§.a-
party claims in these two consolidated actions in a purported effort to promote judicial economy
by trying a so-called “linchpin” claim first. The resolution of this claim in the Moving Parties’
favor would supposedly avoid a longer jury trial on the multiple remaining claims between the
parties. As set forth in more detail below, this is a specious argument based on material
misstatements of fact contained in the Factual Background portion of Moving Parties’
memorandum.
FACTUAL BACKGROUND
The Moving Parties’ Memorandum in Support of their Motion to Bifurcate contains six
full pages of so-called factual background which is really argument in support of the Moving
Parties’ claim that a November 7, 2013, Notice of Default from UCR to CHC, and a subsequent
Notice terminating CHC as manager of the apartment complex on November 14, 2013 were both
improper. The Factual Background section of the Moving Parties’ Memorandum contains two
material misrepresentations. First, Moving Parties’ state that “Mr. Hanson and Kent Pecoy .. .
were both members and managers of Colony Hills but did not personally sign the Riverchase
Agreement.” (Moving Parties’ Memo. at p.3, emphasis added). In fact, Mr. Hanson executed the
Riverchase Agreement (at page 56) in his personal capacity as Guarantor as did Mr. Pecoy (at
page 54). (Riverchase Holding, LLC Agreement attached as Exhibit 1).
Next, the Moving Parties state that “the Riverchase Agreement prohibits UCR from
unreasonably withholding consent [in connection with CHC’s attempt to replace the prior
Property Manager, Greystar, with a new Property Manager, Provence]. (Moving Parties’ Memo.
at p.6). However, section 5.3 of the LLC Agreement, Limitations on Actions of Manager
[CHC], section (a) states “Notwithstanding anything to the contrary contained in this Agreement,
Company and Manager shall not do any of the following without the specific written consent of
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Class B Member [UCR] which consent may be granted or withheld in Class B Member’s sole
and absolute discretion, unless otherwise specified herein:” (Ex. 1, emphasis added). As
conceded by the Moving Parties, one of the triggers for UCR’s November 7, 2013 Notice of
Default was CHC’s request that UCR approve a proposed contract with a new Property
Manager—Provence. (Moving Parties’ Memo. at p.6).
LLC Agreement states that the majority of the enumerated Actions of Manager require
UCR’s consent which may be granted or withheld in [UCR’s] sole and absolute discretion.
(Ex.1 at §5.3(a), emphasis added). Section 5.3(a)(vii) provides that Manager may not, without
the prior written consent of UCR “extend, modify, renew, amend or terminate, in any material
respect, the Management Agreement or any other contract or agreement for the day-to-day
management of the property and which when first entered into required the consent of Investor.”
(Ex. 1, emphasis added). The actions of Hanson and CHC with regard to Greystar and Provence
violated sections 5.3(a)(iv) and 5.3(a)(vii) of the LLC Agreement, along with CHC’s initiation of
litigation against Kent Pecoy in contravention of sections 5.4(a) and 5.4(w) of the LLC
Agreement, and formed the basis of UCR’s November 7, 2013 Notice of Default. (See, Notice of
Default attached as Exhibit A to Moving Parties’ Memorandum).
ARGUMENT
1 Bifurcation Will Not Further the Goals Articulated in Mass Rule Civ. P. 42(b) as
Moving Parties are Unlikely to Prevail.
As a threshold matter, “[i]n general, the case law disfavors bifurcation, largely as a matter
of judicial economy.” Rabelo v. Nasif, 30 Mass. L. Rptr. 547 at *2 (December 27, 2012) (copy
attached as Exhibit 2). Further, while it is clear that a decision to bifurcate is one within the
sound discretion of the judge, “ [defendant] points to no case in this Commonwealth in which the
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decision of a judge not to bifurcate a civil proceeding has been the grounds for reversal. Further,
[defendant] has cited no such reversal by any other jurisdiction.” Dobos v. Driscoll, 404 Mass.
634, 644 (1989); Adams v. Adams, 459 Mass. 361, 392 (2011). Finally, in a case cited by
Moving Parties (Moving Parties’ Memo., p. 9), Hewlett-Packard Co. v. Genrad, Inc., 882
F.Supp. 1141 (D. Mass. 1995), discussing the federal cognate rule, the Court noted that the
moving party generally bears the burden of establishing the necessity for separate trials and the
resulting prejudice of conducting a single trial. Jd. at 1157.
The heart of the Moving Parties’ argument is that “Unless and until there is a finding that
Colony Hills defaulted on the LLC Agreement and was properly terminated, resolution of the
related claims by the parties would necessarily result in the needless extension of the main trial
with added expense and waste of time and resources to the parties, jurors and the Court.”
(Moving Parties’ Memo., p. 8-9). They repeat this argument multiple times by characterizing the
issue described above as a “narrow lynchpin issue” as well as stating “a determination by the
Court that there was no basis for the Notice of Default and the subsequent termination was
ineffective and improper would dispose of most, if not all, of the remaining claims made by
UCR.” (Moving Parties’ Memo.., at p. 9).
The Moving Parties dangle the prospect avoiding a longer, comprehensive trial
addressing all of the parties’ claims and counterclaims if they are successful in their proposed
bifurcated trial. The Moving Parties fail, however, to acknowledge that their prospects for
success on this issue are small, given the Court’s December 16, 2013 Temporary Restraining
Order which states, in relevant part, “After review of the extensive submissions offered by the
respective parties, it appears that the plaintiff [UCR] is likely to succeed on the merits of its
complaint with respect to its allegation that the defendants Colony Hills and Glenn and Krista
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Hanson are in default under the contract and have fraudulently interfered with the management
of the subject property for their own benefit and to the wrongful detriment of the plaintiff's
majority interest . . .” (Order, 12/16/13 as set forth in Docket No. 1379CV00837 attached as
Exhibit 3) (emphasis added). Given the Court’s prior finding in this regard, it is clearly more
likely than not that a bifurcated trial solely on the issue of whether CHC defaulted will result in a
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finding adverse to the Moving Parties, thus requiring a second trial which would substantially
increase the time and resources of the Court and the parties. The Motion to Bifurcate should be
denied.
2 Judicial Economy Will Not Be Served by Bifurcation.
In Sanchez v. Witham, 2003 Mass. App. Div. 48 (March 31, 2003), the trial court’s
denied defendant’s motion to bifurcate trial on plaintiff’s negligence claim against another
motorist from her Chapter 176 D claim against defendant motorist’s insurer. The Sanchez court
agreed “that it would be wasteful of judicial resources to have two separate trials in which some
of the same witnesses would testify to the same facts.” Id. at *2. In Reardon v. Carter, 23 Mass.
L. Rptr. 229 (April 2, 2007), the court discussed precedent for decisions denying bifurcation
where severance of claims can lead to the wasteful situation of conducting two separate trials
with some of the same witnesses testifying to the same facts. Id. at *2.
Here, the same witnesses will be testifying to the same facts. The Answer and Verified
Counterclaim, Cross-Claim and Third Party Complaint of Glenn Hanson and CHC (attached as
Exhibit 4) contain numerous counts focusing on whether the November 7, 2013 Notice of
Default was justified. The same witnesses to the same facts will be required to adjudicate the
claims, which the Moving Parties allege must be tried to a jury. For example, Count I for breach
of contract against Pecoy and UCR, alleges that UCR “unreasonably with[held] consent for
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Colony Hills to contract with Provence...” and made “false claims of default by Colony Hills
when no actual fault has occurred. Count IV for unfair and deceptive trade practices seeks “
written acknowledgement that Colony Hills’ authority is as alleged by CHC. Count VI for
declaratory judgment seeks a declaration as to Colony Hills’ right to continue as manager of the
Property, right to contract with Provence to serve as Property Manager and the absence of any
right of UCR to declare Colony Hills in default or to terminate Colony Hills. Count IX for
specific performance seeks specific performance of UCR’s alleged obligation to recognize and
honor the rights of Colony Hills to serve as Manager of Riverchase Holding and select a Property
Manager for the property, as well as UCR’s obligation to refrain from withholding consent
unreasonably. Count X for injunctive relief seeks to enjoin UCR from declaring defaults and
terminating Colony Hills. Count XII for libel, slander and defamation alleges UCR defamed
Hanson and CHC by claiming they were in default under the contract.
CONCLUSION
The Moving Parties’ Motion to Bifurcate should be denied as they have not met their
burden of establishing the necessity of separate trials, and bifurcation is wasteful of judicial
resources to have two separate trials with the same witnesses testifying about the same facts.
Respectfully submitted,
UC RIVERCHASE, LLC
Dated: April___, 2016 By its attorneys,
~.
Denar a Barron /-/
Denise A. Brogna (BBO#662920)
BROGNA LAW APC
57 Hickory Lane
Boxford, MA 01921
(978) 561-1390
Denise@brognalaw.com
COV) —
Christopher Maffucci (BBO #645972)
Casner & Edwards, LLP
303 Congress Street
Boston, MA 02210
(617) 426-5900
maffucci@casneredwards.com
CERTIFICATE OF SERVICE
I, Christopher Maffucci, Esq., hereby certify that I served a copy of the above document
via U.S. Mail and email, on April / , 2016 upon all counsel of record.
(C4 ——
Christopher Maffucci
58452.0/639255.1