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May 24, 2021, Entered
Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 ), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258 , 260 n.4 , 881 N.E.2d 792 (2008).PUBLISHED IN TABLE FORM
Wolohojian, Henry & Singh, JJ.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The plaintiff, Heidi Hache, individually and as next friend of her son Alexander Hache, appeals from an order denying her motion for a finding that Wachusett Mountain Ski Area, Inc. (Wachusett), committed fraud on the court and for sanctions, and from an order denying her motion for an increased rate of interest, attorney's fees, and costs under G. L. c. 231 , § 6F . We vacate the order denying the motion for a finding of fraud on the court and remand that matter for an evidentiary hearing.
Background. The plaintiffs sued Wachusett for negligently operating its ski area, causing then twelve year old Alexander to fall from a ski lift and suffer severe and permanent injuries.3
1. Falsified evidence. Wachusett produced documents and stated in its answers to interrogatories that the employee operating the lift on the day of the incident, Dylan Wilson, had received the requisite training pursuant to 526 Code Mass. Regs. § 10.09 .4 A training certificate produced by Wachusett stated that lift operator Wilson had completed an online training program under a profile with the username "jshepard."
Heidi noticed a deposition of Wachusett pursuant to Mass. R. Civ. P. 30 (b) (6) ,365 Mass. 780 (1974) (rule 30 [b]  ), and included a request for "[a]ny documents and [electronically stored information] relative to the identity of J. Shepard, his/her position at Wachusett Mountain and his/her involvement in any way with Dylan Wilson." On June 2, 2017, Wachusett responded that Wachusett had no such documents in its present care, custody, or control.
Wachusett's designee for the deposition of the corporation, Corey Feeley, testified to the following: Wilson was properly trained to operate the ski lift. Wilson had completed the training under the jshepard username because that username had been created for a prior hire, who had ultimately not become an employee, and Feeley did not want to pay another fifty dollar license fee. Wilson completed the training in November 2014 even though he did not begin work until February 2015. Feeley and a human resources director, Molly Buckley, had been unable to locate an application for employment by Shepard.5
After the Wachusett corporate deposition, Heidi subpoenaed training records from a third party training website [*2] identified as Bullwheel and learned that jshepard was a boy named Jacob Shepard. On July 27, 2017, Heidi deposed Shepard. He testified that he worked at Wachusett starting in late 2013 through April 2014 and resuming in late 2014 and into 2015 and that he interacted with Feeley once or twice per shift. In November of 2014, Shepard completed the online training under the jshepard username. He also provided payroll records and emails to prove his employment at Wachusett.
Over a year later, on October 30, 2018, Heidi deposed Jonathan Putney, an employee of Noverant, Inc., the company hosting the online training program. The Noverant records showed that on March 11, 2015 — after the incident — a user named "cfeeley" had altered the jshepard profile to display the name Dylan Wilson. The Noverant records also showed that on the same date, a username of "dwilson" was created and that this username completed the training course between March 13 and March 16, 2015.
2. Procedural background. After considerable procedural skirmishing, Wachusett conceded liability and causation and sought to limit evidence of the fraud at trial. Heidi cross-moved for a finding that Wachusett committed fraud on the court based on the evidence discussed above. Heidi contended that Wachusett falsified an employee training record to conceal the lack of training, produced the falsified record in discovery, directed the plaintiffs to that falsified record in interrogatory responses, testified under oath to the authenticity of the training record in a deposition of the company pursuant to rule 30 (b) (6) , and spoliated employment and payroll records to hide the fraud.
The judge ruled on Heidi's motion for a finding of fraud on the court as follows:
"The court will not permit the introduction of evidence of fraud to the extent that it only relates to proof of liability. However, if the proffered evidence becomes relevant on an issue relating to damages or the credibly of a witness, the court will consider the admissibility of that evidence at trial. Plaintiffs' cross motion is otherwise deferred until after trial."After a trial on the issue of damages, the jury returned a verdict for the plaintiffs in the amount of $3,275,000. Judgment in the amount of $4,560,105.20 entered on July 18, 2019.
Fourteen days after the entry of judgment, Heidi served a posttrial motion for a finding of fraud on the court and imposition of sanctions, incorporating by reference her earlier cross motion seeking the same relief. She also moved for attorney's fees and other relief under G. L. c. 231 , § 6F . The judge held a nonevidentiary hearing on the motions, at which she asked Heidi's counsel whether he wanted an evidentiary hearing, to which he responded, "I'm happy to present evidence." After consideration of written submissions and the trial,6 on January 29, 2020, the judge denied the motions, finding "no evidence that Wachusett management, including the president and owner of Wachusett, Crowley, or Wachusett's attorneys, knew about the falsified records or the lack of training the [p]laintiff uncovered [*3] it."
On appeal, Heidi requests that we overturn the orders and enter a finding that Wachusett committed a fraud on the court; impose an increased rate of prejudgment interest of eighteen percent on the jury's verdict from July 18, 2016, to the date the judgment was paid; and award her attorney's fees of $78,547.50 and costs in the amount of $2,963.28 associated with the cost of discovering the fraud.
Discussion. 1. Standing. As an initial matter, Wachusett argues that Heidi does not have standing to appeal from the judge's denial of her motion for a finding of fraud on the court. Wachusett argues that Heidi was not harmed by the denial of her motion because Wachusett conceded liability and causation and recovered a multimillion dollar judgment. Similarly, in denying Heidi's motion, the judge relied on the fact that the jury returned a "substantial verdict" for the plaintiffs.
We conclude that Heidi has standing to challenge the order denying her motion for a finding of fraud on the court. The jury verdict was for compensatory damages only, which "are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant's wrongful conduct" (citation omitted). Aleo v. SLB Toys USA, Inc., 466 Mass. 398 , 412 , 995 N.E.2d 740 (2013). In contrast, sanctions for fraud on the court are intended to "deter such activity" and to "protect the integrity of the pending litigation and the [court]." Munshani v. Signal Lake Venture Fund II, LP, 60 Mass. App. Ct. 714 , 721 , 805 N.E.2d 998 (2004). Persons who "have themselves suffered, or who are in danger of suffering, legal harm" have standing to challenge injuries that are a "direct consequence of the complained of action." Ginther v. Commissioner of Ins., 427 Mass. 319 , 322-323 , 693 N.E.2d 153 (1998). A decision on the issue of fraud on the court, if it did occur, can itself have a deterrent effect. In addition, the potential remedy for fraud on the court may or may not be different than the remedy obtained through the stipulations Wachusett imposed on itself and the subsequent jury verdict and, as discussed in detail below, Heidi seeks compensation for the alleged fraud based on her fees and costs incurred and to deter such future conduct.
2. Timeliness. Wachusett argues that Heidi's motion for a finding of fraud on the court was untimely under rule 59 (e) and improper under rule 60 (b) of the Massachusetts Rules of Civil Procedure and the appeal from the order denying that motion therefore "fails." See Mass. R. Civ. P. 59 (e) (rule 59 ), 60 (b) (rule 60 ), 365 Mass. 827 (1974). Heidi's posttrial motion, however, relied on neither rule 59 nor rule 60 and indeed stated that she was not seeking to set aside the judgment under rule 60 . At the time Heidi filed the posttrial motion for a finding of fraud on the court, the judge had deferred a final ruling on the pretrial cross motion and Heidi incorporated that motion in her postjudgment motion. Thus her motion was timely. See Krutiak v. Cheshire, 71 Mass. App. Ct. 387 , 391-392 , 882 N.E.2d 370 (2008) (prejudgment motion, objection during trial, and requested instruction sufficient to preserve appellate review of sufficiency of evidence even where party did not file rule 59 motion). We therefore conclude that the issue was properly preserved.
Nor is there an issue because [*4] the plaintiff did not appeal from the judgment. "A question remaining to be decided after an order ending litigation on the merits does not prevent finality if its resolution will not alter the order or moot or reverse decisions embodied in the order." Budinich v. Becton Dickinson & Co., 486 U.S. 196 , 199 , 108 S. Ct. 1717 , 100 L. Ed. 2d 178 (1988). See Farnum v. Mesiti Dev., 68 Mass. App. Ct. 419 , 423-424 , 862 N.E.2d 425 (2007) (motion for attorney's fees is collateral matter not affecting underlying judgment).7 We now turn to the merits of the appeal.
3. Fraud on the court. a. Standard of review. Heidi asserts that the judge's finding that Wachusett did not commit a fraud on the court should be reviewed de novo. We do not agree. To find that a party has committed a fraud on the court, a judge must find "that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system's ability impartially to adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party's claim or defense." Rockdale Mgt. Co. v. Shawmut Bank, N.A., 418 Mass. 596 , 598 , 638 N.E.2d 29 (1994), quoting Aoude v. Mobil Oil Corp., 892 F.2d 1115 , 1118 (1st Cir. 1989). The question whether a party has committed a fraud on the court "is a case-by-case, fact-specific determination." Rockdale, supra at 599 . We therefore review for clear error or an abuse of discretion. See Munshani, 60 Mass. App. Ct. at 717-718 (discussing whether "findings" regarding fraud on court were "clearly erroneous"). See also Pina v. McGill Dev. Corp., 388 Mass. 159 , 166-167 , 445 N.E.2d 1059 (1983) (holding no abuse of discretion in denying motion alleging fraud on court).
b. Sufficiency of evidence of fraud on the court. In her denial of Heidi's posttrial motion for a finding of fraud on the court, the judge concluded that there was:
"no evidence before the court that Wachusett, its president/owner, or its attorney knew about the forged training records until Plaintiff's counsel uncovered them in the course of discovery. There is also no evidence that they intentionally provided forged documents or intentionally gave false answers to questions posed in depositions. Rather, as soon as Wachusett became aware of Feeley's misconduct, Wachusett conceded liability and gave up all efforts to assert comparative negligence despite the fact that this was a colorable defense. Thus, at no time was the court influenced by, or operating under false or fraudulent information."Without an evidentiary hearing, the judge was in no position to make these findings and, in that sense, the findings were insufficiently supported and clearly erroneous. Accordingly, we vacate the order and remand the matter for an evidentiary hearing.
There is no dispute that Feeley falsified the online training records to make it appear that the lift operator had been properly trained. The issue for resolution of the motion is whether the conduct could be attributed to Crowley, the president of the company, or the company itself. Without hearing evidence on this issue, it was clearly erroneous to find that neither Wachusett nor its officers knew of the fraudulent documents.
Certainly, Feeley was the company's rule 30 (b) (6) designee for deposition and the general rule is that "[t]he testimony [*5] provided by the corporate representative at a Rule 30 (b) (6) deposition binds the corporation" (citation omitted). See Gleason v. Source Perrier, S.A., 28 Mass. App. Ct. 561 , 569 , 553 N.E.2d 544 (1990) (where employee not designated for rule 30 [b]  deposition, deposition testimony could not bind corporation). But that is not all. This does not address the fact that Wachusett maintained that it had no "documents and [electronically stored information] relative to the identity of J. Shepard, his/her position at Wachusett Mountain and his/her involvement in any way with Dylan Wilson." Wachusett had a statutory and regulatory duty to keep Shepard's payroll and employment records for four years. See G. L. c. 151A , § 45 ; 430 Code Mass. Regs. § 5.01(1) , (3) . Feeley testified that it was common practice within human resources at Wachusett to keep such records for seven years. An evidentiary hearing will allow a determination as to why Wachusett did not have the records that it was required by law to keep. Feeley, the corporate deponent on whom Wachusett blames the majority of the misconduct in falsifying the training records, did not work in the payroll department and the judge's decision on the motion made no findings about why relevant records were never produced or if they were intentionally withheld or destroyed. Three Wachusett employees — Feeley, Baker, and Buckley — either testified to not knowing Shepard or were responsible for maintaining records about him and did not produce them. The judge also does not appear to have considered how the failure to produce these records may have prejudiced the plaintiffs, who were forced, at the very least, to subpoena and depose three third parties to investigate the identity of jshepard and uncover the falsified evidence.
While conduct "such as nondisclosure to the adverse party or the court of facts pertinent to the matter before it, without more, does not constitute fraud on the court," Sahin v. Sahin, 435 Mass. 396 , 406 , 758 N.E.2d 132 (2001), fraud on the court is a "case-by-case, fact-specific determination," Rockdale, 418 Mass. at 599 . Here, the plaintiffs presented evidence of false testimony; tampered with the online training program records; and, at least, failed to comply with records retention laws, and at most, destroyed such records.
The judge also found that there was no evidence that Wachusett's conduct hampered the judicial process. However, fraud on the court may also be found in cases where, "a party has sentiently set in motion some unconscionable scheme . . . unfairly hampering the presentation of the opposing party's claim or defense" (citation omitted). Sahin, 435 Mass. at 405-406 . Wachusett denied negligence from June 6, 2016, the date its answer was filed, until June of 2019. The plaintiffs thus prepared for trial for approximately three years with the understanding that they would be litigating every element of a negligence claim. While Wachusett ultimately conceded liability, the judge's finding that it did so "as soon as [it] became aware of Feeley's misconduct" is clearly erroneous. The plaintiffs deposed Feeley on June 9, 2017, and Shepard on July 27, 2017, but Wachusett did not make its first attempt to stipulate to liability [*6] for more than a year, until October 23, 2018, and even then continued to dispute causation.
On the record before us, then, the plaintiffs presented sufficient factual issues such that it was an abuse of discretion not to hold an evidentiary hearing on Heidi's motion for a finding of fraud on the court to determine how this one employee allegedly was single-handedly at fault for falsifying the training records and not producing employment records Wachusett should have had.8
Heidi also requests that we impose sanctions — specifically an increased rate of interest on the judgment and attorney's fees and costs — on Wachusett for the alleged fraud on the court. We are aware of no authority, nor does Heidi cite any, that allows us to set such a sanction, let alone to do so in the first instance. We decline to do so.
4. General Laws c. 231 , § 6F . After trial, Heidi also filed a G. L. c. 231 , § 6F , motion in the Superior Court for an increased rate of interest on the judgment, attorney's fees, and costs. The appeal from the order denying this motion is not properly before us because G. L. c. 231 , § 6G , requires that such an appeal be to a single justice of this court.9 See G. L. c. 231 , §§ 6F , 6G . See also Bailey v. Shriberg, 31 Mass. App. Ct. 277 , 282-283 , 576 N.E.2d 1377 (1991) ("the statute contemplates two separate appeals, one from the judgment, which goes to a panel of this court or the Supreme Judicial Court, and one from the award of attorney's fees under § 6F , which follows the separate route described above. . . . A panel has no jurisdiction over an appeal from the decision of a trial court on a motion for attorney's fees under § 6F ").
We vacate the order denying the motion for a finding of fraud on the court and remand for an evidentiary hearing.
By the Court (Wolohojian, Henry & Singh, JJ.10),
Entered: May 24, 2021.
Individually and as parent and next friend of Alexander Hache.
Brian Hache, individually. Brian Hache did not participate in this appeal.
As the Haches share a surname, we use first names to avoid confusion and we will use Heidi when referring to motions filed by the plaintiffs in the trial court.
Wilson died before providing any testimony in this case.
Another Wachusett employee, Dennis Baker, the lift department manager, also testified that he did not know who jshepard was and that he did not believe a jshepard had ever been employed as a lift operator or attendant.
Heidi did not include a trial transcript in the record on appeal.
We also note that rule 60 (b) permits a separate and independent action for a finding of fraud on the court, we conclude that the plaintiff's motion here is likewise a collateral motion and does not affect the underlying judgment.
We express no opinion on the outcome of such a hearing or whether the self-imposed stipulation of liability was a sufficient remedy.
There is a notice of appeal from the denial of this motion in the record, however, there is no indication that the plaintiffs pursued the appeal and there is no decision by the single justice in the record.
The panelists are listed in order of seniority.