A federal judge today ruled against the owner of a large industrial building in the South End who was seeking to have insurance companies cover his legal costs and potential damages in a suit brought by the developer of a Harrison Avenue condo building his property wraps around.
Arthur Leon was seeking protection from the millions of dollars he might be forced to pay should the developer of the now completed 18-unit Jordan Lofts building win his suit against Leon for doing everything he could to stop construction. That included trying to bring a criminal charge against the developer, John Holland, for allegedly trespassing on Leon's property - a charge a Boston Municipal Court clerk magistrate dismissed as unfounded.
A final pre-trial conference for the suit Holland filed in 2015 was supposed to be held this week with a Suffolk Superior Court judge.
Leon and Holland have been battling, first before the Boston zoning board, then in court, since 2012. In 2019, the state Supreme Judicial Court ruled against Leon in a pair of dueling complaints over which side was unconstitutionally trying to keep the other from "petitioning" government by filing either for or against the condos.
In her ruling today, US District Court Judge Indira Talwani ruled that Leon will have to stand alone when it comes to paying for lawyers and for any settlements of the 2015 lawsuit should he lose.
She sided with the four insurance companies Leon has used over the years and which he sued, agreeing that while their policies would indemnify Leon against a "malicious prosecution" lawsuit, what Holland actually filed was an "abuse of process" lawsuit, which their policies do not. cover.
Although the two sound similar to the non-lawyer - and even some lawyers and judges - Talwani concluded that the insurance companies were correct, that the two terms in fact mean different things and that Holland was not alleging that Leon was maliciously prosecuting him.
Talwani said Massachusetts courts have long maintained that "malicious prosecution" and "abuse of process" are not the same, that "malicious prosecution" involves "the commencement or continuation" of criminal charges. While there was one attempted criminal charge in the case, the case overall more readily fell into the category of "abuse of process," which involved attempting to use some administrative "process" for "an ulterior or illegitimate purpose," she concluded.
In essence, Holland contended that he had repeatedly won during the administrative process for starting construction - through the zoning-board approval, a 2013 court ruling that Holland could begin work, the 2014 ruling dismissing Leon's criminal trespassing complaint and another zoning-board ruling in 2015 approving penthouses Holland wanted to add - and that all this proved that Leon was engaged in an "abuse of process."
In their request to dismiss the case, the four insurers said, without taking a stance on the claims, that Holland was, in fact, alleging "abuse of process," or, as they put it, "intentional actions undertaken [by Leon and his company] to hinder and violate 477 Harrison Ave. LLC's asserted right to develop the property."
Talwani also cited rulings by the federal appeals court that covers Massachusetts that insurance companies would be expected to write their policies in conformance with state law, in this case that there is a difference between the two phrases and that insurers should not be expected to conflate the two when writing their policies.
Complete ruling (1.9M PDF).