Beal Bank,Plaintiff-Appellant v.Wedgewood Properties, Inc., et al.,Defendants-Appellees.

Corporate Disclosure Statement Form Pursuant To Fed. R. App. P. 26.1

The Defendant-Appellee Pitt Construction Corporation has no parent companies, subsidiaries or affiliates which have issued shares to the public.

1. Whether Judge Young abused his discretion or erred as matter of law in denying Beal Bank's request that Pittorino pay the attorney's fees which the Bank incurred in collecting sums due under a certain mortgage and promissory note executed by another party defendant?

From 1989 to 1991, Vanguard Savings Bank issued a number of loans to the Defendant-Appellee Felix J. Pittorino, some of which were guarantied by the property of the Pigeon Hill Estates Trust, of which Pittorino and one Ralph Amelia were trustees. Beal Bank, SSB v. Pittorino, 177 F.3d 65, 67 (1st Cir.1999). After Vanguard went into receivership in 1992, the Federal Deposit Insurance Corporation was appointed liquidat-ing agent and eventually assigned these unpaid loans to the Plaintiff-Appellant Beal Bank ("Beal" or "the Bank").Id.Beal then sued Pittorino both individually and as trustee of the realty trust together with Amelia as trustee and other related entities in order to collect on the unpaid loans. Id. This collection action was bifurcated so that the claims against Pittorino individually were severed from the claims against both him and Amelia as trustees of the Pigeon Hill Estates Trust. Id. After the jury trial against Pittorino individually in the District Court before Young, J., had pro-duced a verdict against Pittorino but before the trial against him and Amelia as trustees had taken place, the parties were able to enter into a settlement agreement which led to a judgment directing Pigeon Hill Trust to pay Beal $3 million. Id. A judgment entered consistent therewith on January 7, 1997.Id. ("the liability judgment") Post-judgment discovery by Beal concerning the assets of Pittorino and Amelia led the Bank to begin another civil action against both of them individually, Pigeon Hill Estates Trust and certain other defendants alleging that on May 10, 1996, after the jury verdict against Pittorino and while the claims against him and Amelia as trustees were still pending, they fraudulently conveyed the bulk of the Trust's assets to entities under their control but beyond the reach of the libility judgment such as Pitt Construction Corporation and Amelia's ALA Realty Trust in order to avoid its obligations to Beal. Id. The Bank sought to have these conveyances declared voidable under Massachusetts law. Id.

The District Court of Massachusetts, Young, J., ordered a jury trial for Amelia's claim of mutual mistake, granted summary judgment against him on his defense of estoppel and held a bench trial addressing the remainder of Beal's fraudulent conveyance claims. Id. at 67-68. The jury rejected Amelia's mutual mistake defense and, after a bench trial, the District Court ordered the conveyances set aside as fraudulent ("the fraudulent conveyance judgment"). A subsequent appeal by Amelia from this judgment was unsuccessful, see id. at 68-71.; and Pittorino's separate appeal therefrom was dismissed.

As part of Amelia's effort to put some of the building lots of the Pigeon Hill Estate Trust beyond the reach of Beal,he caused Pigeon Hill Estates Trust to convey certain lots in the development to his realty trust (ALA Realty Trust)(App. I:225). On May 10, 1996, ALA Realty Trust then executed a mortgage on these lots for $648,000 with Modern Building Company, Inc. ("Modern") to secure the repayment of Modern's note in favor of ALA Realty Trust for that amount(App. I:23-30; 155). In addition, on the same day and with Amelia having delivered a deed to Modern for these lots, Modern executed an additional note in the favor of ALA Realty Trust for $1,377,000 "[a]s additional consideration for said transfer..." (App.I:155; 156-160). The thrust of these documents was that Modern would endeavor to sell these building lots and that "upon the sale or conveyance of each lot, until both of said notes together with the interest due thereunder are paid in full, [Modern] will pay to Amelia or their nominee the sum of $125,000" (App.I: 155).

The mortgage instrument signed by Modern and securing its payment to Amelia's ALA Realty Trust of $648,000 provided inter alia that the holder of the mortgage, i.e., the mortgagee, upon default by Modern of the mortgage covenants, shall have the right upon foreclosure and redemption to collect form Modern "all costs, charges and expenses incurred up to the time of redemption..."(App.I:26). In addition, Modern as the mortgagor agreed to pay Amelia's ALA Realty Trust as the mortgagee all "liabilities" incurred from time to time in the management of the mortgage(App.I:26-27). Those "liabilities" included, among other things, any and all loans, advances and other credits made at any time by the Mortgagee to or on account of the Mortgagor and includes all liabilities and obligations of a financial nature and all costs, costs of collection, attorney's fees and any other amounts paid by the Mortgagee on behalf of the Mortgagor or on account of the Mortgagor's transactions with the Mortgagee. (App.I:27)(Emphasis supplied).

In the promissory note Modern executed in ALA Realty Trust's favor for the sum of $1,377,000, it also agreed that it would "pay on demand all costs of collection and reasonable attorney's fees incurred or paid by the holder in enforcing this Note, any provision herein, or any default" (App.I:159).

On December 16, 1997, Judge Young issued an order for final judgment in Beal's favor against Pittorino and Amelia stemming from their fraudulent conveyances of the building lots at Pigeon Hill Estates(App. I: 223-228). Besides declaring their conveyances of the lots to be fraudulent, judgment was entered against both of them and their associated entities in the amount of $1,693,050.33(App.I:224-225). In addition, Modern was ordered to pay to an escrow agent established by Beal all monies owed to Amelia's ALA Realty Trust (App.I:225). Moreover, Beal was given the right to enforce on behalf of Amelia's ALA Realty Trust any and all agreements it had with Modern, including the promissory note executed by Modern in favor of ALA Realty Trust for $1,377,000(App.I:225-226).

Modern was further forbidden from selling any of the lots it had received from Amelia's ALA Realty Trust on May 10, 1996, without crediting such sales against its mortgage obligation or the $1,377,000 note, accruing interest at 6% (App.I: 226-227). Beal was also given the rights of a successor in interest to the 1996 mortgage between Modern and Amelia's ALA Realty Trust(App. I:226). Moreover, if Modern or its succesors or assigns "abandon[ed] the Pigeon Hill project by failing to sell at least one Lot per year from the Lots described in [this judgment], Beal Bank may petition the Court for such additional relief as it seems necessary"(App.I:228).

Finally, Beal was ordered to pay the Clerk $17,500 as a sanction for its failure to serve the defendants promptly(App.I: 224). Beal's claim for attorney's fees relating to the prosecution of this fraudulent conveyance action was denied (App.I:224). Beal took no appeal from this aspect of the final judgment. Judge Young issued a further supplementary order to this final judgment on August 12, 1998, to be effective nunc pro tunc to the earlier judgment of December 16, 1997(App.I:229-234). Among other things, he found that both ALA Realty Trust and Modern had engaged in discovery misconduct which was neither fraudulent nor sufficient to warrant the rescinding of the judgment of December 16, 1997(App. I:229-230;233). However, Modern was enjoined from making any further payments to Amelia's ALA Realty Trust or any other entity in which Amelia had an interest; instead such payments were to be held in escrow until Beal has been paid in full the amounts owed it under the judgment of December 16, 1997(App.I:230). Because of its discovery misconduct, Modern was further ordered to convey to Beal Lot 111 of the Pigeon Hill Estates with Modern receiving a credit of $125,000 against its promissory note of $1,377,000, dated May 10, 1996 (App.I:233;II:49-50). Modern was also ordered to pay Beal the accrued interest of $41,065 on its $648,000 promissory note of May 10, 1996, at the rate of $10,266.25 per lot as the remaining four lots were sold (App.I:234).

Beal took further steps to assert against Modern the rights given it by the judgment to payment, collection and enforcement under both the mortgage and the promissory note executed by Modern in favor of Amelia's ALA Realty Trust. In the face of Modern's default by failing either to repay the debt or to sell the mortgaged lots, Beal pursued Modern in a separate civil action (Beal Bank v. Modern Building Co., Inc., Civil Action No. 98-11980-WGY) and collected monies which were applied toward the judgment consistent with an accounting reported by Beal to the lower court (App. I:11).

With matters in this posture, Beal allegedly uncovered certain "transfers" made by Pittorino which also were inconsistent with the earlier final judgment and on February 22, 1999, the Bank commenced this separate civil action against, among others, the Defendants-Appellees Felix J. Pittorino and Sandra L. Pittorino, both individually and as trustees of F&S Realty Trust; and Pitt Construction Corporation ("the Pittorino Entities")(App.I:1-6)(Beal Bank v. Wedgewood Properties, et al., Civil Action No. 99-10402-WGY). The matter was set down for trial for March 6, 2000, and then apparently settled for the sum of $708,000(App. I:237-254). The remaining issue of Beal's request for attorney's fees was referred "under supplementary process to a magistrate judge for further hearing" (App.I:244-245;255-258; II:3-4).

When the settlement was reported to the Court by the parties but then its scope disputed due to mathematical error, Judge Young found it necessary to hold a three-day trial in order to decide himself whether the parties had actually reached an enforceable settlement finally disposing of this litigation and whether Beal was entitled to attorney's fees (App.I:245-247;249-254;II:1-268).

After hearing three days of testimony by the counsel involved and closing arguments by all concerned, the District Judge determined in his findings of fact and rulings of law issued orally from the Bench on April 6, 2000, that there was, in fact, a settlement in Beal's favor and against the Pittorino Entities jointly and severally for the amount of $808,000 (App.I:19;21-22;II:251-260).

In entering this ruling, Judge Young also denied Beal's claim that the Pittorino Entities should now pay Beal's attorney's fees in the amount of $162,457.75 incurred by the Bank in prosecuting its claims against Modern under both the mortgage and note executed by Modern and Amelia's ALA Realty Trust in furtherance of his alleged scheme to put some of the lots of Pigeon Hill Estates beyond the reach of the liability judgment(App. II: 259-260;262-263). As the District Judge put it, Beal's argument for the award of attorney's fees prescinds from an analysis of its rights under a certain mortgage, to which interest it succeeded as part of the prior judgment.Those rights run against Modern Construction. No one else. (App.II:259-260). It accordingly denied Beal's request that the Pittorino Entities should pay any such attorney's fees incurred by the Bank(App.I:19; II:262).

A final judgment thereupon entered consistent with these oral findings and rulings of Judge Young on April 6, 2000(App. I:19;21-22). This appeal by Beal followed(App.I:19-20).

1. The fundamental precondition of requiring a party to pay the attorney's fees of another party is that it be imposed by statute or that it be founded upon an agreement by those parties sought to be charged. Neither requirement is met by Beal's proof below. All the Bank's evidence showed was that pursuant to Judge Young's Order for Final Judgment it had acceded to the rights of Amelia's ALA Realty Trust under both the mortgage instrument and the promissory note of May 10, 1996, with Modern Building Company, Inc. But neither of these documents explicitly or even impliedly allows Beal to impose upon the Pittorino Entities (which were not parties to either of these agreements) the obligation to pay the Bank its attorney's fees for prosecuting its claims against Modern for the collection of sums due it in the wake of Modern's default under the mortgage and note or for its discovery misconduct.

Moreover, once Beal received $1,300,000 from the sale of the thirteen (13) lots in the Pigeon Hill Estates and then discharged the subject mortgage on February 11, 1999, its right to any attorney's fees incident thereto merged into and was extinguished by the lower court's Order for Final Judgment of December 16, 1997. The District Judge therefore did not abuse its discretion and was correct as a matter of law in concluding on this record that Pittorino could not now be responsible for Beal's attorney's fees.

2. All of Beal's arguments on appeal fly in the face authoritative precedent which undermine its claim that attorney's fees are now due it from the Pittorino Entities. Indeed, its brief on appeal cites no persuasive decisional law indicating that Judge Young's determination was wrong as a matter of law or an abuse of discretion. This record justifiably invokes this Court's power under Fed. R. App. P. 38 to award the Pittorino Entities its costs and damages upon this frivolous appeal, including their reasonable attorney's fees.

1. The District Court Neither Erred As A Matter of Law Nor Abused Its Discretion In Denying Beal's Request For Attorney's Fees on This Record.

The District Court possessed the inherent power to pass upon the right of any party to charge another party for its attorney's fees in connection with any matter before it. Baumrin v. Cournoyer, 448 F. Supp. 225, 228(D. Mass. 1978) citing McInerney v. Massasoit Greyhound Association, Inc., 359 Mass. 339, 351; 269 N.E.2d 211(1971). Ainsworth v. Vasquez, 759 F. Supp. 1467, 1474-1475(E.D.Cal.1991). In this respect, Judge Young was authorized in the exercise of his sound discretion to inquire into the fees charged by the lawyers before him and regulate or curtail those fees if necessary in order to protect parties from the unfair, illegal imposition of such fees or to prevent otherwise unconscionable assessments. Little Rock School Dist. v. Pulaski County Sp. S., 921 F.2d 1371, 1391(8th Cir. 1990).

Thus the determination of whether Beal's attempted assessment of its attorney's fees upon the Pittorino Entities is warranted on this record was left to the sound discretion of Judge Young and his determination will not be reversed unless a clear abuse of that discretion has been demonstrated. Weeks v. Southern Bell Telephone and Telegraph Co., 467 F.2d 95, 97 (5th Cir. 1972) and cases cited. See U.S. v. Reid & Gary Strickland Co., 161 F.3d 915, 918(5th Cir. 1998).

In addition, if the District Court's determination that Beal was not entitled to an award of attorney's fees from the Pittorino Entities implicates rulings of law, those rulings will be reviewed de novo by this Court in order to insure that he applied the correct legal standard. U.S. v. Reid & Gary Strickland Co., supra, citing United States ex rel. Leno v. Summit Constr. Co., 892 F.2d 788, 790(9th Cir. 1989). In Massachusetts, a lawyer always bears the burden of proof in any proceeding to resolve a billing dispute, whether as a plaintiff he seeks to recover a fee or as a defendant he seeks to defend against a suit for a refund of a fee. Sears, Roebuck & Co. v. Goldstone & Sudalter, 128 F.3d 10, 17(1st Cir.1997) citing First National Bank of Boston v. Brink, 372 Mass. 257, 264-265; 361 N.E.2d 406(1977) and Smith v. Binder, 20 Mass. App. Ct. 21, 23 n.3; 477 N.E.2d 606(1985). In order to satisfy this burden of proof, the lawyer seeking the imposition of attorney's fees on a party must adduce more than purely speculative evidence that a fee is due; it must produce credible evidence of an agreed upon arrangement that the party charged will pay for the services performed. Id. See Beatty v. NP Corp., 31 Mass. App. Ct. 606, 613; 581 N.E.2d 1311(1991) (evidence of premium or bonus billing "so isolated and sui generis" that it does not constitute useful information bearing on the claimed fee arrangement generally).

With this standard of review in mind and considering Beal's burden of proof, the Pittorino Entities submit that Judge Young neither abused his discretion nor erred as a matter of law in denying Beal's request that the Pittorino Entities now pay Beal's attorney's fees. Those fees totaled $162,477 and were incurred by the Bank not in bringing claims against the Pittorino Entities but rather in prosecuting claims for discovery misconduct by Modern and for the collection of sums due from that party after it had defaulted under the 1996 mortgage and note it executed with Amelia and his ALA Realty Trust, instruments to which the Bank acceded under the fraudulent conveyance judgment.

Beal's proof below utterly failed to show that any of the Pittorino Entities were parties to either of these instruments, that any of them ever agreed orally or in writing to pay Beal's collection costs against this separate party or how any notions of equity or fair play can accommodate one party's obligation for attorney's fees being shifted to other separate parties who neither requested nor agreed to the rendition of those legal services. In view of this complete failure of proof by Beal, the District Judge's determination that the Pittorino Entities should not bear the burden of another party's attorney's fees was therefore proper. This Court should accordingly affirm the ruling below in all respects.

In the first place, absent a specific statute addressing the allocation of attorney's fees in some other way (Beal has not relied upon any such statute), it is a fundamental and self-evident principle that only those persons who have agreed expressly or impliedly to pay for attorney's fees can be held liable for such contractual obligations. Feick v. Fleener, 653 F.2d 69, 77(2d Cir.1981)(parties are not obligated to pay the fees of attorneys whom they have not retained). In Re John Rich Enterprises, Inc., 481 F.2d 211, 213(10th Cir. 1973). Baumrin, 448 F. Supp. at 228. Robert L. Rossi, Attorney's Fees (2d ed. 1995), Section 9.15 and authorities cited. Accord, F.D. Rich Co., Inc. v. United States ex rel. Industrial Lumber Co., Inc., 417 U.S.116, 126-131(1974); Berman v. Linnane, 424 Mass. 867,870-872; 679 N.E.2d 174(1997); Young v. Southgate Development Corp., 379 Mass. 523,524-525; 399 N.E.2d 27(1980); Mulhern v. Roach, 398 Mass. 18, 24;494 N.E.2d 1327(1986).

Thus provisions for attorney's fees in commercial paper such as a promissory note signed by a corporation can be enforced against the corporation itself but not against its stockholders, directors or owners who did not agree to pay such fees. North Arlington Medical Bldg., Inc. v. Sanchez Constr. Co., 471 P.2d 240(Nev. 1970). Similarly, where the indorser of a note expressly agreed to pay attorney's fees upon its default, he would be bound by that promise even though a judgment had been obtained against the makers for the face amount of the instrument. Washington Trust Company v. Fatone, 256 A.2d 490, 493-495(R.I. 1969). Moreover, in Massachusetts, when a defendant guaranties payment of a debtor's liabilities and the debtor's notes which he is guarantying clearly provide for payment of reasonable attorney's fees in the event of default, the guarantor will be deemed to have agreed to those provisions and will be obligated to pay those fees. F.D.I.C. v. Smith, 848 F. Supp. 1053, 1056(D. Mass. 1994) citing New England Merchants National Bank v. Hoss, 356 Mass. 331; 249 N.E.2d 635(1969). Accordingly, the required precondition to any asserted obligation to pay attorney's fees in the commercial context is a voluntary, knowledgeable assent by the person charged to be so bound, either in words or conduct.

In Rachlin & Co. v. Tra-Mar, Inc., 308 N.Y.S. 2d 153, 156 (App. Div. 1970), the plaintiff real estate brokers sought to collect a portion of their commission from the defendants-buyers upon the satisfaction of the third mortgage on the property, as agreed. Id. at 155. The note covering the third mortgage gave the payee the right to collect 10% of the amount due thereunder as attorney's fees and the plaintiffs-brokers were awarded that amount for their attorney's fees in their suit against the defendant-buyers for their fee. Id. at 155- 156. In reversing the fee award, the Rachlin court held that [t]he defendants are not in any way obligated to the plaintiffs by the provisions of the note covering the third mortgage for the payment of an attorney's collection fee of 10% of an amount due thereunder. The plaintiffs were not named as payees in and did not become holders of the note which was secured by the third mortgage. They do not possess any right of recovery thereunder derived from the payee...nor did they establish the right to recover thereunder as third party bene- ficiaries. Simply stated, the provisions of the note do not inure to the benefit of the plaintiffs and they were not entitled to recovery thereunder of attorneys' fees.

In the same sense, neither the mortgage nor promissory note executed by Amelia's ALA Realty Trust and Modern Building Company, Inc., to which Beal acceded under the fraudulent conveyance judgment and upon which it relies here, identifies any of the Pittorino Entities as parties; and neither instrument explicitly or even impliedly allowed Amelia' ALA realty Trust (and Beal through it)to impose upon the Pittorino Entities the obligation to pay attorney's fees for collection efforts by the Bank upon Modern's default or for its discovery misconduct. As in Rachlin, the necessary contractual nexus between the parties for imposing the obligation to pay attorney's fees is missing completely from this record. For this fundamental reason, the District Judge rightly denied Beal's request for attorney's fees.

On appeal, Beal ignores this fundamental flaw to recovery and argues that since the Pittorino Entities were jointly and severally liable with Amelia, his ALA Realty Trust and Modern under the fraudulent conveyance judgment, its successful collection efforts against Modern under both the mortgage and note have reduced the obligation of the Pittorino Entities as judgment co-debtors, thereby benefitting them and obligating them now as a matter of equity to pay the Bank's attorney's fees (Appellant's Brief at 13;17-18;23;25-27). But the Bank has cited no decisional law which has imposed upon a party in the absence of an agreement a duty to pay for another party's attorney's fees in these or any other circumstances. Indeed, the cases cited in its brief demonstrate that the party so charged has knowingly assented to such an undertaking.

In New England Merchants National Bank v. Hoss, supra, for example, the guarantor there knowingly assented to and appreciated the scope of his guaranty, one which included the payment of the maker's attorney's fees. 356 Mass. at 335; 249 N.E.2d at 637. In BayBank v. Bornhofft, 427 Mass.571,572-573; 580; 694 N.E.2d 854(1998), the defendant there agreed and acknowledged that she was liable for attorney's fees as a co-maker of the note. Id. Similarly, in Wornat Development Corp. v. Vakalis, 403 Mass. 340, 349; 529 N.E.2d 1329(1988), the original promissory note sued upon expressly provided for reasonable attorney's fees. Id. And in American Service & Supply Co., Inc., 348 Mass. 720, 721; 206 N.E. 2d 94(1965), the note explicitly bound the maker to pay for reasonable attorney's fees upon default and collection. Id.

All of this law reaffirms the Pittorino Entities' argument here that before they can be charged with the Bank's attorney's fees for its efforts to collect from Modern on the 1996 mortgage and note with Amelia's ALA Realty Trust, it must be found that they expressly or impliedly agreed to such an undertaking. There has been no such showing by Beal on this record.

Nor is it inequitable to deny Beal the right to force the Pittorino Entities to pay its attorney's fees. It was not at the Pittorino Entities' request that Beal decided first to pursue Modern upon the note and mortgage it acceded to under the fraudulent conveyance judgment. Beal made this decision based upon its own best interests and nothing else. The fact that the Pittorino Entities as judgment co-debtors incidentally benefitted by the Bank's efforts (by having the amount of the judgment for which it was responsible reduced) is no reason to make them now pay Beal's attorney's fees incurred in the effort.

The general rule (in the absence of a "common fund," which circumstance is not present here) is that an attorney may not recover fees from third parties who directly benefitted from his efforts. Anderson v. Jones & Laughlin Steel Corp., 515 F. Supp. 651, 652(W.D. Pa.1981). In order to obligate the Pittorino Entities for any portion of its attorney's fees, Beal was bound to show that they were benefitted and that such benefit was somehow "unjust." Simmons v. U.S. Fidel-ity & Guaranty Co., 405 A.2d 675, 677(Conn. 1978). But the mere fact that a party was incidentally benefitted by the efforts of another party acting in its own self-interest is not the kind of benefit which can be characterized as unjust so as to trigger any obligation to pay that party's attorney's fees in the absence of an agreement to do so. Id. Accord, Feick v. Fleener, 653 F.2d at 77; Ramey v. Cincinnati Enquirer, Inc., 508 F.2d 1188, 1200(6th Cir. 1974) and cases cited.

After all, a person confers a benefit upon another if he "performs services to or at the request of the other." Transnational Corp. v. Rodio & Ursillo, Ltd., 920 F.2d 1066, 1071 (1st Cir. 1990) quoting Restatement of Restitution, Section 1 (1927)(emphasis supplied) and citing Restatement(Second) of Contracts, Section 370, comment a.(1979). Where there is no lawyer-client relationship between Beal and the Pittorino Entities, no request by the Pittorino Entities for any action by Beal and only incidental benefits accruing to the Pittorino Entities as a result of Beal's actions carried out in its own self-interest, there can be no basis in law or in equity for imposing upon the Pittorino Entities the duty to pay the Bank's attorney's fees. The District Judge rightly recognized this benefits analysis in his remarks from the Bench(App. II: 259).

There is another reason to justify Judge Young's decision to deny Beal's request for attorney's fees on this record. Once Beal, in pursuit of Modern's default under both the mortgage and promissory note it executed with Amelia's ALA Realty Trust, received $1,300,000 from the sale of the thirteen (13) lots in the Pigeon Hill Estates and then discharged the subject mortgage on February 11, 1999, without seeking any attorney's fees, its right to such relief thereunder merged into and was extinguished by the lower court's Order for Final Judgment of December 16, 1997.

The relevant decisional law has uniformly regarded Modern's obligation to pay the note and to pay the costs of collection upon the mortgage's default as a single obligation which Beal was required to assert in a single civil action, one which was extinguished when it discharged the mortgage on February 11, 1999. Rockland-Atlas National Bank v. Murphy, 329 Mass. 755, 760-761; 110 N.E.2d 638(1953) and cases cited. Accord, Production Credit Ass'n v. Laufenberg, 420 N.W.2d 778, 779-780(Wis. App. 1988). Citizens Bank of Windsor v. Landers, 570 S.W.2d 756, 764(Mo. App. 1978). Midland Bank v. Zuckerman, 285 N.Y.S.2d 354, 355-356(App. Div. 1967). Roe v. Smyth, 16 N.E.2d 366,368(C.A.N.Y.1938)(Lehman, J.).The Bank's present claim for an award of attorney's fees from the Pittorino Entities is therefore moot on this record. For all these reasons, then, Judge Young neither abused his discretion nor erred as a matter of law in denying Beal's request for attorney's fees.

2. Beal's Appeal Is Frivolous and Justifiably InvokesThe Sanctions of Fed. R. App. P. 38.

"The purpose of Rule 38 is to discourage litigants from wasting the time and resources of both their opponents and the judicial system with arguments that are without merit." Toscano v. Chandris, S.A., 934 F.2d 383, 387(1st Cir. 1991) quoting Transnational Corp. v. Rodio & Ursillo, Ltd., 920 F.2d at 1072. An appeal is frivolous within Rule 38 when the appellant's legal position is "doomed to failure," when the overwhelming weight of authority is against the appellant's position, where the appellant can set forth no facts in support of its position or where there simply is no legitimate basis for pursuing an appeal. Kowalski v. Gagne, 914 F.2d 299, 309(1st Cir. 1990). Applewood Landscape & Nursery Co. v. Hollings-worth, 884 F.2d 1502, 1508-1519(1st Cir. 1989). See Fairfield 274-278 Clarendon Trust v. Dwek, 970 F.2d 990, 996(1st Cir. 1992).

In pursuing this appeal, Beal has cited no decisional law which could rationally support its position that it is now entitled to payment of its attorney's fees by the Pittorino Entities in the absence of any agreement that they do so. Moreover, it has adduced no facts here which could logically lead to such a result. It must have known that its appeal on this record was "doomed to failure." At most, Beal's showing here is the kind of "purely speculative evidence" which this Court has authoritatively stated is simply not enough to carry the day. See Sears, Roebuck & Co. v. Goldstone & Sudalter, 128 F.2d at 17.

The record here therefore justifiably invokes this Court's power under Fed. R. App. P. 38 to award the Pittorino Entities its costs and damages upon this frivolous appeal, including their reasonable attorney's fees incurred in preparing this response to Beal's brief as well as their counsel's participation in any oral argument which this Court may order.

For all of the reasons identified herein, this Court should summarily affirm the District Court's ruling below in all respects, award the Pittorino Entities their costs and attorney's fees incurred by this frivolous appeal or provide them with such other relief as is fair and just in the circumstances.

Robert J. Annese
BBO# 019800
1171 Massachusetts Avenue
Arlington, Massachusetts 02476
(781)646-4911

UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT. No. 00-1750. Beal Bank, Plaintiff-Appellant, v. Wedgewood Properties, Inc., et al., Defendants-Appellees. ON APPEAL FROM A JUDGMENT OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Brief For the Defendants-Appellees Felix J. Pittorino et al.
Robert J. Annese BBO# 019800 1171 Massachusetts Avenue Arlington, Massachusetts 02476 (781)646-4911
Corporate Disclosure Statement Form Pursuant To Fed. R. App. P. 26.1 The Defendant-Appellee Pitt Construction Corporation has no parent companies, subsidiaries or affiliates which have issued shares to the public. STATEMENT OF THE ISSUES PRESENTED FOR REVIEW. 1. Whether Judge Young abused his discretion or erred as matter of law in denying Beal Bank's request that Pittorino pay the attorney's fees which the Bank incurred in collecting sums due under a certain mortgage and promissory note executed by another party defendant? 2. Whether this appeal by Beal Bank is frivolous? STATEMENT OF THE CASE AND FACTS. From 1989 to 1991, Vanguard Savings Bank issued a number of loans to the Defendant-Appellee Felix J. Pittorino, some of which were guarantied by the property of the Pigeon Hill Estates Trust, of which Pittorino and one Ralph Amelia were trustees. Beal Bank, SSB v. Pittorino, 177 F.3d 65, 67 (1st Cir.1999). After Vanguard went into receivership in 1992, the Federal Deposit Insurance Corporation was appointed liquidat-ing agent and eventually assigned these unpaid loans to the Plaintiff-Appellant Beal Bank ("Beal" or "the Bank").Id.Beal then sued Pittorino both individually and as trustee of the realty trust together with Amelia as trustee and other related entities in order to collect on the unpaid loans. Id. This collection action was bifurcated so that the claims against Pittorino individually were severed from the claims against both him and Amelia as trustees of the Pigeon Hill Estates Trust. Id. After the jury trial against Pittorino individually in the District Court before Young, J., had pro-duced a verdict against Pittorino but before the trial against him and Amelia as trustees had taken place, the parties were able to enter into a settlement agreement which led to a judgment directing Pigeon Hill Trust to pay Beal $3 million. Id. A judgment entered consistent therewith on January 7, 1997.Id. ("the liability judgment") Post-judgment discovery by Beal concerning the assets of Pittorino and Amelia led the Bank to begin another civil action against both of them individually, Pigeon Hill Estates Trust and certain other defendants alleging that on May 10, 1996, after the jury verdict against Pittorino and while the claims against him and Amelia as trustees were still pending, they fraudulently conveyed the bulk of the Trust's assets to entities under their control but beyond the reach of the libility judgment such as Pitt Construction Corporation and Amelia's ALA Realty Trust in order to avoid its obligations to Beal. Id. The Bank sought to have these conveyances declared voidable under Massachusetts law. Id. The District Court of Massachusetts, Young, J., ordered a jury trial for Amelia's claim of mutual mistake, granted summary judgment against him on his defense of estoppel and held a bench trial addressing the remainder of Beal's fraudulent conveyance claims. Id. at 67-68. The jury rejected Amelia's mutual mistake defense and, after a bench trial, the District Court ordered the conveyances set aside as fraudulent ("the fraudulent conveyance judgment"). A subsequent appeal by Amelia from this judgment was unsuccessful, see id. at 68-71.; and Pittorino's separate appeal therefrom was dismissed. As part of Amelia's effort to put some of the building lots of the Pigeon Hill Estate Trust beyond the reach of Beal,he caused Pigeon Hill Estates Trust to convey certain lots in the development to his realty trust (ALA Realty Trust)(App. I:225). On May 10, 1996, ALA Realty Trust then executed a mortgage on these lots for $648,000 with Modern Building Company, Inc. ("Modern") to secure the repayment of Modern's note in favor of ALA Realty Trust for that amount(App. I:23-30; 155). In addition, on the same day and with Amelia having delivered a deed to Modern for these lots, Modern executed an additional note in the favor of ALA Realty Trust for $1,377,000 "[a]s additional consideration for said transfer..." (App.I:155; 156-160). The thrust of these documents was that Modern would endeavor to sell these building lots and that "upon the sale or conveyance of each lot, until both of said notes together with the interest due thereunder are paid in full, [Modern] will pay to Amelia or their nominee the sum of $125,000" (App.I: 155). The mortgage instrument signed by Modern and securing its payment to Amelia's ALA Realty Trust of $648,000 provided inter alia that the holder of the mortgage, i.e., the mortgagee, upon default by Modern of the mortgage covenants, shall have the right upon foreclosure and redemption to collect form Modern "all costs, charges and expenses incurred up to the time of redemption..."(App.I:26). In addition, Modern as the mortgagor agreed to pay Amelia's ALA Realty Trust as the mortgagee all "liabilities" incurred from time to time in the management of the mortgage(App.I:26-27). Those "liabilities" included, among other things, any and all loans, advances and other credits made at any time by the Mortgagee to or on account of the Mortgagor and includes all liabilities and obligations of a financial nature and all costs, costs of collection, attorney's fees and any other amounts paid by the Mortgagee on behalf of the Mortgagor or on account of the Mortgagor's transactions with the Mortgagee. (App.I:27)(Emphasis supplied). In the promissory note Modern executed in ALA Realty Trust's favor for the sum of $1,377,000, it also agreed that it would "pay on demand all costs of collection and reasonable attorney's fees incurred or paid by the holder in enforcing this Note, any provision herein, or any default" (App.I:159). On December 16, 1997, Judge Young issued an order for final judgment in Beal's favor against Pittorino and Amelia stemming from their fraudulent conveyances of the building lots at Pigeon Hill Estates(App. I: 223-228). Besides declaring their conveyances of the lots to be fraudulent, judgment was entered against both of them and their associated entities in the amount of $1,693,050.33(App.I:224-225). In addition, Modern was ordered to pay to an escrow agent established by Beal all monies owed to Amelia's ALA Realty Trust (App.I:225). Moreover, Beal was given the right to enforce on behalf of Amelia's ALA Realty Trust any and all agreements it had with Modern, including the promissory note executed by Modern in favor of ALA Realty Trust for $1,377,000(App.I:225-226). Modern was further forbidden from selling any of the lots it had received from Amelia's ALA Realty Trust on May 10, 1996, without crediting such sales against its mortgage obligation or the $1,377,000 note, accruing interest at 6% (App.I: 226-227). Beal was also given the rights of a successor in interest to the 1996 mortgage between Modern and Amelia's ALA Realty Trust(App. I:226). Moreover, if Modern or its succesors or assigns "abandon[ed] the Pigeon Hill project by failing to sell at least one Lot per year from the Lots described in [this judgment], Beal Bank may petition the Court for such additional relief as it seems necessary"(App.I:228). Finally, Beal was ordered to pay the Clerk $17,500 as a sanction for its failure to serve the defendants promptly(App.I: 224). Beal's claim for attorney's fees relating to the prosecution of this fraudulent conveyance action was denied (App.I:224). Beal took no appeal from this aspect of the final judgment. Judge Young issued a further supplementary order to this final judgment on August 12, 1998, to be effective nunc pro tunc to the earlier judgment of December 16, 1997(App.I:229-234). Among other things, he found that both ALA Realty Trust and Modern had engaged in discovery misconduct which was neither fraudulent nor sufficient to warrant the rescinding of the judgment of December 16, 1997(App. I:229-230;233). However, Modern was enjoined from making any further payments to Amelia's ALA Realty Trust or any other entity in which Amelia had an interest; instead such payments were to be held in escrow until Beal has been paid in full the amounts owed it under the judgment of December 16, 1997(App.I:230). Because of its discovery misconduct, Modern was further ordered to convey to Beal Lot 111 of the Pigeon Hill Estates with Modern receiving a credit of $125,000 against its promissory note of $1,377,000, dated May 10, 1996 (App.I:233;II:49-50). Modern was also ordered to pay Beal the accrued interest of $41,065 on its $648,000 promissory note of May 10, 1996, at the rate of $10,266.25 per lot as the remaining four lots were sold (App.I:234). Beal took further steps to assert against Modern the rights given it by the judgment to payment, collection and enforcement under both the mortgage and the promissory note executed by Modern in favor of Amelia's ALA Realty Trust. In the face of Modern's default by failing either to repay the debt or to sell the mortgaged lots, Beal pursued Modern in a separate civil action (Beal Bank v. Modern Building Co., Inc., Civil Action No. 98-11980-WGY) and collected monies which were applied toward the judgment consistent with an accounting reported by Beal to the lower court (App. I:11). With matters in this posture, Beal allegedly uncovered certain "transfers" made by Pittorino which also were inconsistent with the earlier final judgment and on February 22, 1999, the Bank commenced this separate civil action against, among others, the Defendants-Appellees Felix J. Pittorino and Sandra L. Pittorino, both individually and as trustees of F&S Realty Trust; and Pitt Construction Corporation ("the Pittorino Entities")(App.I:1-6)(Beal Bank v. Wedgewood Properties, et al., Civil Action No. 99-10402-WGY). The matter was set down for trial for March 6, 2000, and then apparently settled for the sum of $708,000(App. I:237-254). The remaining issue of Beal's request for attorney's fees was referred "under supplementary process to a magistrate judge for further hearing" (App.I:244-245;255-258; II:3-4). When the settlement was reported to the Court by the parties but then its scope disputed due to mathematical error, Judge Young found it necessary to hold a three-day trial in order to decide himself whether the parties had actually reached an enforceable settlement finally disposing of this litigation and whether Beal was entitled to attorney's fees (App.I:245-247;249-254;II:1-268). After hearing three days of testimony by the counsel involved and closing arguments by all concerned, the District Judge determined in his findings of fact and rulings of law issued orally from the Bench on April 6, 2000, that there was, in fact, a settlement in Beal's favor and against the Pittorino Entities jointly and severally for the amount of $808,000 (App.I:19;21-22;II:251-260). In entering this ruling, Judge Young also denied Beal's claim that the Pittorino Entities should now pay Beal's attorney's fees in the amount of $162,457.75 incurred by the Bank in prosecuting its claims against Modern under both the mortgage and note executed by Modern and Amelia's ALA Realty Trust in furtherance of his alleged scheme to put some of the lots of Pigeon Hill Estates beyond the reach of the liability judgment(App. II: 259-260;262-263). As the District Judge put it, Beal's argument for the award of attorney's fees prescinds from an analysis of its rights under a certain mortgage, to which interest it succeeded as part of the prior judgment.Those rights run against Modern Construction. No one else. (App.II:259-260). It accordingly denied Beal's request that the Pittorino Entities should pay any such attorney's fees incurred by the Bank(App.I:19; II:262). A final judgment thereupon entered consistent with these oral findings and rulings of Judge Young on April 6, 2000(App. I:19;21-22). This appeal by Beal followed(App.I:19-20). Summary of the Argument. 1. The fundamental precondition of requiring a party to pay the attorney's fees of another party is that it be imposed by statute or that it be founded upon an agreement by those parties sought to be charged. Neither requirement is met by Beal's proof below. All the Bank's evidence showed was that pursuant to Judge Young's Order for Final Judgment it had acceded to the rights of Amelia's ALA Realty Trust under both the mortgage instrument and the promissory note of May 10, 1996, with Modern Building Company, Inc. But neither of these documents explicitly or even impliedly allows Beal to impose upon the Pittorino Entities (which were not parties to either of these agreements) the obligation to pay the Bank its attorney's fees for prosecuting its claims against Modern for the collection of sums due it in the wake of Modern's default under the mortgage and note or for its discovery misconduct. Moreover, once Beal received $1,300,000 from the sale of the thirteen (13) lots in the Pigeon Hill Estates and then discharged the subject mortgage on February 11, 1999, its right to any attorney's fees incident thereto merged into and was extinguished by the lower court's Order for Final Judgment of December 16, 1997. The District Judge therefore did not abuse its discretion and was correct as a matter of law in concluding on this record that Pittorino could not now be responsible for Beal's attorney's fees. 2. All of Beal's arguments on appeal fly in the face authoritative precedent which undermine its claim that attorney's fees are now due it from the Pittorino Entities. Indeed, its brief on appeal cites no persuasive decisional law indicating that Judge Young's determination was wrong as a matter of law or an abuse of discretion. This record justifiably invokes this Court's power under Fed. R. App. P. 38 to award the Pittorino Entities its costs and damages upon this frivolous appeal, including their reasonable attorney's fees. Argument. 1. The District Court Neither Erred As A Matter of Law Nor Abused Its Discretion In Denying Beal's Request For Attorney's Fees on This Record. The District Court possessed the inherent power to pass upon the right of any party to charge another party for its attorney's fees in connection with any matter before it. Baumrin v. Cournoyer, 448 F. Supp. 225, 228(D. Mass. 1978) citing McInerney v. Massasoit Greyhound Association, Inc., 359 Mass. 339, 351; 269 N.E.2d 211(1971). Ainsworth v. Vasquez, 759 F. Supp. 1467, 1474-1475(E.D.Cal.1991). In this respect, Judge Young was authorized in the exercise of his sound discretion to inquire into the fees charged by the lawyers before him and regulate or curtail those fees if necessary in order to protect parties from the unfair, illegal imposition of such fees or to prevent otherwise unconscionable assessments. Little Rock School Dist. v. Pulaski County Sp. S., 921 F.2d 1371, 1391(8th Cir. 1990). Thus the determination of whether Beal's attempted assessment of its attorney's fees upon the Pittorino Entities is warranted on this record was left to the sound discretion of Judge Young and his determination will not be reversed unless a clear abuse of that discretion has been demonstrated. Weeks v. Southern Bell Telephone and Telegraph Co., 467 F.2d 95, 97 (5th Cir. 1972) and cases cited. See U.S. v. Reid & Gary Strickland Co., 161 F.3d 915, 918(5th Cir. 1998). In addition, if the District Court's determination that Beal was not entitled to an award of attorney's fees from the Pittorino Entities implicates rulings of law, those rulings will be reviewed de novo by this Court in order to insure that he applied the correct legal standard. U.S. v. Reid & Gary Strickland Co., supra, citing United States ex rel. Leno v. Summit Constr. Co., 892 F.2d 788, 790(9th Cir. 1989). In Massachusetts, a lawyer always bears the burden of proof in any proceeding to resolve a billing dispute, whether as a plaintiff he seeks to recover a fee or as a defendant he seeks to defend against a suit for a refund of a fee. Sears, Roebuck & Co. v. Goldstone & Sudalter, 128 F.3d 10, 17(1st Cir.1997) citing First National Bank of Boston v. Brink, 372 Mass. 257, 264-265; 361 N.E.2d 406(1977) and Smith v. Binder, 20 Mass. App. Ct. 21, 23 n.3; 477 N.E.2d 606(1985). In order to satisfy this burden of proof, the lawyer seeking the imposition of attorney's fees on a party must adduce more than purely speculative evidence that a fee is due; it must produce credible evidence of an agreed upon arrangement that the party charged will pay for the services performed. Id. See Beatty v. NP Corp., 31 Mass. App. Ct. 606, 613; 581 N.E.2d 1311(1991) (evidence of premium or bonus billing "so isolated and sui generis" that it does not constitute useful information bearing on the claimed fee arrangement generally). With this standard of review in mind and considering Beal's burden of proof, the Pittorino Entities submit that Judge Young neither abused his discretion nor erred as a matter of law in denying Beal's request that the Pittorino Entities now pay Beal's attorney's fees. Those fees totaled $162,477 and were incurred by the Bank not in bringing claims against the Pittorino Entities but rather in prosecuting claims for discovery misconduct by Modern and for the collection of sums due from that party after it had defaulted under the 1996 mortgage and note it executed with Amelia and his ALA Realty Trust, instruments to which the Bank acceded under the fraudulent conveyance judgment. Beal's proof below utterly failed to show that any of the Pittorino Entities were parties to either of these instruments, that any of them ever agreed orally or in writing to pay Beal's collection costs against this separate party or how any notions of equity or fair play can accommodate one party's obligation for attorney's fees being shifted to other separate parties who neither requested nor agreed to the rendition of those legal services. In view of this complete failure of proof by Beal, the District Judge's determination that the Pittorino Entities should not bear the burden of another party's attorney's fees was therefore proper. This Court should accordingly affirm the ruling below in all respects. In the first place, absent a specific statute addressing the allocation of attorney's fees in some other way (Beal has not relied upon any such statute), it is a fundamental and self-evident principle that only those persons who have agreed expressly or impliedly to pay for attorney's fees can be held liable for such contractual obligations. Feick v. Fleener, 653 F.2d 69, 77(2d Cir.1981)(parties are not obligated to pay the fees of attorneys whom they have not retained). In Re John Rich Enterprises, Inc., 481 F.2d 211, 213(10th Cir. 1973). Baumrin, 448 F. Supp. at 228. Robert L. Rossi, Attorney's Fees (2d ed. 1995), Section 9.15 and authorities cited. Accord, F.D. Rich Co., Inc. v. United States ex rel. Industrial Lumber Co., Inc., 417 U.S.116, 126-131(1974); Berman v. Linnane, 424 Mass. 867,870-872; 679 N.E.2d 174(1997); Young v. Southgate Development Corp., 379 Mass. 523,524-525; 399 N.E.2d 27(1980); Mulhern v. Roach, 398 Mass. 18, 24;494 N.E.2d 1327(1986). Thus provisions for attorney's fees in commercial paper such as a promissory note signed by a corporation can be enforced against the corporation itself but not against its stockholders, directors or owners who did not agree to pay such fees. North Arlington Medical Bldg., Inc. v. Sanchez Constr. Co., 471 P.2d 240(Nev. 1970). Similarly, where the indorser of a note expressly agreed to pay attorney's fees upon its default, he would be bound by that promise even though a judgment had been obtained against the makers for the face amount of the instrument. Washington Trust Company v. Fatone, 256 A.2d 490, 493-495(R.I. 1969). Moreover, in Massachusetts, when a defendant guaranties payment of a debtor's liabilities and the debtor's notes which he is guarantying clearly provide for payment of reasonable attorney's fees in the event of default, the guarantor will be deemed to have agreed to those provisions and will be obligated to pay those fees. F.D.I.C. v. Smith, 848 F. Supp. 1053, 1056(D. Mass. 1994) citing New England Merchants National Bank v. Hoss, 356 Mass. 331; 249 N.E.2d 635(1969). Accordingly, the required precondition to any asserted obligation to pay attorney's fees in the commercial context is a voluntary, knowledgeable assent by the person charged to be so bound, either in words or conduct. In Rachlin & Co. v. Tra-Mar, Inc., 308 N.Y.S. 2d 153, 156 (App. Div. 1970), the plaintiff real estate brokers sought to collect a portion of their commission from the defendants-buyers upon the satisfaction of the third mortgage on the property, as agreed. Id. at 155. The note covering the third mortgage gave the payee the right to collect 10% of the amount due thereunder as attorney's fees and the plaintiffs-brokers were awarded that amount for their attorney's fees in their suit against the defendant-buyers for their fee. Id. at 155- 156. In reversing the fee award, the Rachlin court held that [t]he defendants are not in any way obligated to the plaintiffs by the provisions of the note covering the third mortgage for the payment of an attorney's collection fee of 10% of an amount due thereunder. The plaintiffs were not named as payees in and did not become holders of the note which was secured by the third mortgage. They do not possess any right of recovery thereunder derived from the payee...nor did they establish the right to recover thereunder as third party bene- ficiaries. Simply stated, the provisions of the note do not inure to the benefit of the plaintiffs and they were not entitled to recovery thereunder of attorneys' fees. In the same sense, neither the mortgage nor promissory note executed by Amelia's ALA Realty Trust and Modern Building Company, Inc., to which Beal acceded under the fraudulent conveyance judgment and upon which it relies here, identifies any of the Pittorino Entities as parties; and neither instrument explicitly or even impliedly allowed Amelia' ALA realty Trust (and Beal through it)to impose upon the Pittorino Entities the obligation to pay attorney's fees for collection efforts by the Bank upon Modern's default or for its discovery misconduct. As in Rachlin, the necessary contractual nexus between the parties for imposing the obligation to pay attorney's fees is missing completely from this record. For this fundamental reason, the District Judge rightly denied Beal's request for attorney's fees. On appeal, Beal ignores this fundamental flaw to recovery and argues that since the Pittorino Entities were jointly and severally liable with Amelia, his ALA Realty Trust and Modern under the fraudulent conveyance judgment, its successful collection efforts against Modern under both the mortgage and note have reduced the obligation of the Pittorino Entities as judgment co-debtors, thereby benefitting them and obligating them now as a matter of equity to pay the Bank's attorney's fees (Appellant's Brief at 13;17-18;23;25-27). But the Bank has cited no decisional law which has imposed upon a party in the absence of an agreement a duty to pay for another party's attorney's fees in these or any other circumstances. Indeed, the cases cited in its brief demonstrate that the party so charged has knowingly assented to such an undertaking. In New England Merchants National Bank v. Hoss, supra, for example, the guarantor there knowingly assented to and appreciated the scope of his guaranty, one which included the payment of the maker's attorney's fees. 356 Mass. at 335; 249 N.E.2d at 637. In BayBank v. Bornhofft, 427 Mass.571,572-573; 580; 694 N.E.2d 854(1998), the defendant there agreed and acknowledged that she was liable for attorney's fees as a co-maker of the note. Id. Similarly, in Wornat Development Corp. v. Vakalis, 403 Mass. 340, 349; 529 N.E.2d 1329(1988), the original promissory note sued upon expressly provided for reasonable attorney's fees. Id. And in American Service & Supply Co., Inc., 348 Mass. 720, 721; 206 N.E. 2d 94(1965), the note explicitly bound the maker to pay for reasonable attorney's fees upon default and collection. Id. All of this law reaffirms the Pittorino Entities' argument here that before they can be charged with the Bank's attorney's fees for its efforts to collect from Modern on the 1996 mortgage and note with Amelia's ALA Realty Trust, it must be found that they expressly or impliedly agreed to such an undertaking. There has been no such showing by Beal on this record. Nor is it inequitable to deny Beal the right to force the Pittorino Entities to pay its attorney's fees. It was not at the Pittorino Entities' request that Beal decided first to pursue Modern upon the note and mortgage it acceded to under the fraudulent conveyance judgment. Beal made this decision based upon its own best interests and nothing else. The fact that the Pittorino Entities as judgment co-debtors incidentally benefitted by the Bank's efforts (by having the amount of the judgment for which it was responsible reduced) is no reason to make them now pay Beal's attorney's fees incurred in the effort. The general rule (in the absence of a "common fund," which circumstance is not present here) is that an attorney may not recover fees from third parties who directly benefitted from his efforts. Anderson v. Jones & Laughlin Steel Corp., 515 F. Supp. 651, 652(W.D. Pa.1981). In order to obligate the Pittorino Entities for any portion of its attorney's fees, Beal was bound to show that they were benefitted and that such benefit was somehow "unjust." Simmons v. U.S. Fidel-ity & Guaranty Co., 405 A.2d 675, 677(Conn. 1978). But the mere fact that a party was incidentally benefitted by the efforts of another party acting in its own self-interest is not the kind of benefit which can be characterized as unjust so as to trigger any obligation to pay that party's attorney's fees in the absence of an agreement to do so. Id. Accord, Feick v. Fleener, 653 F.2d at 77; Ramey v. Cincinnati Enquirer, Inc., 508 F.2d 1188, 1200(6th Cir. 1974) and cases cited. After all, a person confers a benefit upon another if he "performs services to or at the request of the other." Transnational Corp. v. Rodio & Ursillo, Ltd., 920 F.2d 1066, 1071 (1st Cir. 1990) quoting Restatement of Restitution, Section 1 (1927)(emphasis supplied) and citing Restatement(Second) of Contracts, Section 370, comment a.(1979). Where there is no lawyer-client relationship between Beal and the Pittorino Entities, no request by the Pittorino Entities for any action by Beal and only incidental benefits accruing to the Pittorino Entities as a result of Beal's actions carried out in its own self-interest, there can be no basis in law or in equity for imposing upon the Pittorino Entities the duty to pay the Bank's attorney's fees. The District Judge rightly recognized this benefits analysis in his remarks from the Bench(App. II: 259). There is another reason to justify Judge Young's decision to deny Beal's request for attorney's fees on this record. Once Beal, in pursuit of Modern's default under both the mortgage and promissory note it executed with Amelia's ALA Realty Trust, received $1,300,000 from the sale of the thirteen (13) lots in the Pigeon Hill Estates and then discharged the subject mortgage on February 11, 1999, without seeking any attorney's fees, its right to such relief thereunder merged into and was extinguished by the lower court's Order for Final Judgment of December 16, 1997. The relevant decisional law has uniformly regarded Modern's obligation to pay the note and to pay the costs of collection upon the mortgage's default as a single obligation which Beal was required to assert in a single civil action, one which was extinguished when it discharged the mortgage on February 11, 1999. Rockland-Atlas National Bank v. Murphy, 329 Mass. 755, 760-761; 110 N.E.2d 638(1953) and cases cited. Accord, Production Credit Ass'n v. Laufenberg, 420 N.W.2d 778, 779-780(Wis. App. 1988). Citizens Bank of Windsor v. Landers, 570 S.W.2d 756, 764(Mo. App. 1978). Midland Bank v. Zuckerman, 285 N.Y.S.2d 354, 355-356(App. Div. 1967). Roe v. Smyth, 16 N.E.2d 366,368(C.A.N.Y.1938)(Lehman, J.).The Bank's present claim for an award of attorney's fees from the Pittorino Entities is therefore moot on this record. For all these reasons, then, Judge Young neither abused his discretion nor erred as a matter of law in denying Beal's request for attorney's fees. 2. Beal's Appeal Is Frivolous and Justifiably InvokesThe Sanctions of Fed. R. App. P. 38. "The purpose of Rule 38 is to discourage litigants from wasting the time and resources of both their opponents and the judicial system with arguments that are without merit." Toscano v. Chandris, S.A., 934 F.2d 383, 387(1st Cir. 1991) quoting Transnational Corp. v. Rodio & Ursillo, Ltd., 920 F.2d at 1072. An appeal is frivolous within Rule 38 when the appellant's legal position is "doomed to failure," when the overwhelming weight of authority is against the appellant's position, where the appellant can set forth no facts in support of its position or where there simply is no legitimate basis for pursuing an appeal. Kowalski v. Gagne, 914 F.2d 299, 309(1st Cir. 1990). Applewood Landscape & Nursery Co. v. Hollings-worth, 884 F.2d 1502, 1508-1519(1st Cir. 1989). See Fairfield 274-278 Clarendon Trust v. Dwek, 970 F.2d 990, 996(1st Cir. 1992). In pursuing this appeal, Beal has cited no decisional law which could rationally support its position that it is now entitled to payment of its attorney's fees by the Pittorino Entities in the absence of any agreement that they do so. Moreover, it has adduced no facts here which could logically lead to such a result. It must have known that its appeal on this record was "doomed to failure." At most, Beal's showing here is the kind of "purely speculative evidence" which this Court has authoritatively stated is simply not enough to carry the day. See Sears, Roebuck & Co. v. Goldstone & Sudalter, 128 F.2d at 17. The record here therefore justifiably invokes this Court's power under Fed. R. App. P. 38 to award the Pittorino Entities its costs and damages upon this frivolous appeal, including their reasonable attorney's fees incurred in preparing this response to Beal's brief as well as their counsel's participation in any oral argument which this Court may order. Conclusion. For all of the reasons identified herein, this Court should summarily affirm the District Court's ruling below in all respects, award the Pittorino Entities their costs and attorney's fees incurred by this frivolous appeal or provide them with such other relief as is fair and just in the circumstances. Respectfully submitted, Robert J. Annese BBO# 019800 1171 Massachusetts Avenue Arlington, Massachusetts 02476 (781)646-4911
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