Opinion ID: 1437264
Heading Depth: 1
Heading Rank: 3

Heading: Reasonable likelihood of plaintiff's recovery of judgment in the instant case

Text: In order to assess the correctness of the Justice's ruling approving the attachment, we must first consider the pleadings upon which his determination was made. The record reveals that Northeast's motion for allowance of attachment of Leisure Living's real estate in the amount of $100,000.00 was supported in the Court below by the affidavits of George T. Kattar, president of the plaintiff corporation, while the defendant's opposition was formulated through affidavits of Bernard J. Mayer, Jr., the then president of the defendant corporation and John C. Wyman, the defendant's legal representative in a related case pending in the United States District Court for the District of Massachusetts. The Kattar affidavits expressly purport to be made on personal knowledge pursuant to Rule 4A(h) (footnote 1, supra) and contain the following factual assertions: On or about February 25, 1970 Mr. Kattar, as president of Northeast, and Mr. J. Allan Bowron, as president of Leisure Living, entered into an oral agreement the breach of which is the subject of the main action. It provided in part for Leisure Living to pay Northeast, or certain other named corporations as might be designated by Mr. Kattar, the sum of fifty thousand ($50,000.00) dollars per year as long as certain loans and notes payable to James Talcott, Inc. remained unpaid. In the deal, Northeast was granted the option to purchase twenty thousand (20,000) shares of Leisure Living stock. The verbal arrangement between the two companies was intended as security in the purchase by Leisure Living of certain lands owned by Sebago Estates, Inc. and Gunstock Acres, Inc. in connection with which the loans and notes payable to James Talcott, Inc. were executed. Indeed, Northeast undertook to guarantee these Talcott loans and notes for such time as they remained unpaid, and so did Mr. Kattar, individually and for Community Investment Corporation, of which corporation he was president and majority shareholder. In addition thereto, Mr. Kattar promised new guarantees of said loans and notes from Tri-State Development Corporation, American Heritage Properties, Inc., The Second Presidential Corporation and Castle Shores, Inc. Mr. Kattar had a controlling voice in said corporations by reason of his position of president or his ownership of the majority of the stock. The loans and guarantees involved in the agreement were in fact made. In further consideration of Leisure Living's undertaking, Mr. Kattar individually and for the named corporations, promised to provide during the life of said guarantees, such consulting services as Leisure Living Communities, Inc. would request from time to time. Pursuant to their contractual obligations, Mr. Kattar and the named corporations performed numerous consulting services to Leisure Living Communities, Inc. at their request, including but not limited to, assisting with a zoning problem, the purchase of sixty (60) acres of land desired by Leisure Living Communities, Inc., the preparation of a paper giving many suggestions on how to develop property, and the conducting of several sales conferences with salesman. Leisure Living, so Mr. Kattar's affidavit states, failed to make the payments of fifty thousand ($50,000.00) dollars per year to Northeast since October 25, 1971 and on July 30, 1971 refused Northeast's request to execute the purchase option of twenty thousand (20,000) shares of Leisure Living stock. Contrary to the Kattar affidavits which are based solely on personal knowledge of alleged positive facts, the Mayer affidavit is founded upon personal knowledge and upon information and belief based upon careful inquiry and accentuates the negative. It alleges that the affiant has no knowledge of any reference oral agreement, because a careful search of the records and other papers of Leisure Living reveals no such agreement, nor any act or undertaking pursuant thereto. Mr. Mayer further discloses that he bases part of his affidavit on the information received from an unnamed representative of James Talcott, Inc. to the effect that Talcott's records do not show any such act or undertaking of guaranty as claimed by Northeast and that in the opinion of said Talcott representative on February 25, 1970 Northeast Investment Co., Inc. was released from any pre-existing guaranty of indebtedness which might have existed and that no new guaranty was entered into by Northeast Investment Co., Inc. on or after that date. Mr. Mayer's affidavit further concludes that on the basis of his examination of Leisure Living's records and papers, it is my understanding and I therefore believe that the indebtedness to James Talcott, Inc. was assumed by a subsidiary of the company, New England Properties, Inc., and was to be repaid over a considerable period of time well in excess of one year. Mr. Mayer further states he has no knowledge of any consulting services performed by Northeast or Mr. Kattar subsequent to February 25, 1970. We need not concern ourselves with the Wyman affidavit as it merely confirms, through Mr. Kattar's deposition, that, whatever agreement there was, it contemplated a period of performance well in excess of one year, a fact which the parties do not seriously dispute. An analysis of the Mayer affidavit discloses that the facts therein alleged which would tend to dispute affirmatively the plaintiff's cause of action, to wit, that on February 25, 1970 Northeast Investment Co., Inc. was released from any pre-existing guaranty of indebtedness which might have existed and that no new guaranty was entered into by Northeast Investment Co., Inc. on or after that date were not based on the personal knowledge of the affiant, but are stated to be the opinion of an undisclosed representative of James Talcott, Inc. Mr. Mayer made oath that the foregoing statements by him made are true to the best of his knowledge and belief. Under Rule 4A(h), specific facts sufficient to warrant the findings necessary to the approval of the real estate attachment must be set forth and [they] shall be upon the affiant's own knowledge, information or belief; and, so far as upon information and belief, shall state that he believes this information to be true. (Emphasis supplied). Nowhere, does Mr. Mayer state that he believed the information which he received from the unnamed representative of James Talcott, Inc. to be true. Thus, the Mayer affidavit was deficient in the most important aspect of the facts it purported to present in opposition to the plaintiff's motion for an order permitting the attachment of the defendant's real property, a fact which the Justice below most probably took into consideration in his evaluation of the affidavits upon which he had to make his decision. But, where the trial justice makes his determination of an issue entirely on documentary evidence and affidavits without receiving any oral testimony from witnesses he can see and hear, an appellate court is then free to make its own findings from the same evidence, without reference to the findings of the single justice. The clearly erroneous rule (Rule 52(a), M. R.C.P.), which mandates that findings of fact be not set aside unless clearly erroneous and that due regard be given to the opportunity of the trial court to judge of the credibility of the witnesses, is not applicable in such instances. Allen v. Kent, 1957, 153 Me. 275, 136 A.2d 540; Matthews v. R. T. Allen & Sons, Inc., 1970, Me., 266 A.2d 240; Davis v. Interstate Motor Carriers Agency, 1970, 85 S.D. 101, 178 N.W.2d 204; Keyes v. Keyes, 1932, 51 Idaho 670, 9 P.2d 804; McDermott v. Halliburton, 1930, 220 Ala. 553, 126 So. 854. (Contra: Atkins, Kroll & Co. v. Broadway Lumber Company, 1963, 222 Cal.App.2d 646, 35 Cal.Rptr. 385, 12 A.L.R.3d 880). We have examined the affidavits submitted to the Court below and, taking into account the positive nature of the plaintiff's affidavits as opposed to the negative aspect of the defendant's counteraffidavits, we are convinced that Northeast has demonstrated a reasonable likelihood of recovery of judgment in its main action, provided it has made a similar showing respecting Leisure Living's affirmative defense of the statute of frauds, [4] which Northeast asserts ineffective by reason of its own part performance of the contract.