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Porrazzo v. Karofsky, corrected 7-29-98

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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1998 ME 182
Docket:	Cum-97-620
Argued:	May 4, 1998
Decided:	July 22, 1998

Panel:WATHEN, C.J., and ROBERTS, CLIFFORD, RUDMAN, and DANA, JJ.

PETER PORRAZZO et al.

v.

KENNETH L. KAROFSKY et al.

ROBERTS, J. 

	[¶1]  Kenneth and Joan Karofsky appeal from a judgment entered in
the Superior Court (Cumberland County, Calkins, J.) granting Peter and
Beatrice Porrazzo's motion for an attachment and trustee process and
denying the Karofskys' motion to dismiss.  On appeal they contend that the
court erred by failing to dismiss the Porrazzos' complaint as barred by the
statute of limitations and the doctrine of laches.  They further assert that the
court erred by finding that it was more likely than not that the Porrazzos
would prevail in their action and granting the Porrazzos an order of
attachment.  The Porrazzos cross-appeal from the court's order of
attachment and contend that the court erred by limiting the attachment to
Maine real estate.  We affirm the judgment.  

I.

	[¶2]  In March 1990 Peter and Beatrice Porrazzo entered into a loan
agreement with Sterling Properties, a Rhode Island limited partnership of
which Kenneth Karofsky was a partner, whereby they agreed to loan the
partnership $150,000.  Karofsky personally guaranteed the repayment of the
loan.  When the partnership defaulted on the loan, the Porrazzos obtained a
judgment against him from the Rhode Island Superior Court for
$242,200.83 plus post-judgment interest and costs.  
	[¶3]  In March 1997 the Porrazzos filed a complaint in the Superior
Court seeking relief pursuant to Maine's Uniform Fraudulent Transfer Act,
14 M.R.S.A. §§ 3571-3582 (Supp. 1997) and Mass. Gen. Laws Ann. ch. 109A,
§§ 1-13 (West 1995 & Supp. 1998).  The complaint alleged that between
1990 and 1993, Karofsky had transferred a number of assets to a variety of
different individuals, some of whom were insiders.  Two of these assets are
the subject of the present controversy.  The first is a parcel of real estate
located in Raymond that the Karofskys jointly purchased in 1983.  In March
1991 Kenneth transferred his interest in the property to his wife, Joan. 
The second asset is an interest in Karofsky Realty, a limited partnership{1}
that owns rental property in Massachusetts.  Kenneth transferred his
interest in Karofsky Realty to his wife sometime between 1989 and 1992.  
	[¶4]  The Porrazzos also filed a motion for attachment and trustee
process pursuant to M.R. Civ. P. 4A and 4B, requesting that the court attach
the Raymond property and Joan's interest in Karofsky Realty.  The Karofskys
opposed the motion for attachment and filed a motion to dismiss the action
on the grounds that the court lacked subject matter jurisdiction, that the
applicable statute of limitations had expired, and that the action was barred
by the doctrine of laches.  In September 1997 the court granted the
Porrazzos' motion for an attachment and trustee process, but limited the
attachment to Maine real estate.  The court also denied the Karofskys'
motion to dismiss.  This appeal and cross-appeal followed.  

II.

	[¶5]  Although interlocutory, we review an order of attachment by
virtue of the collateral order exception to the final judgment rule.  See, e.g.,
Spack v. Puorro, 689 A.2d 589, 589 (Me. 1997).  A denial of a motion to
dismiss an action as barred by the statute of limitations, however, is "plainly
interlocutory and not reviewable until a final judgment ha[s] been entered." 
Garrison v. Finks, 469 A.2d 440, 440 (Me. 1983).  The Karofskys contend
that although interlocutory, we should review the court's denial of their
motion to dismiss in the interests of judicial economy.  We disagree.  
	[¶6]  We have, in exceptional circumstances, entertained an
interlocutory appeal from a trial court's decision rejecting an affirmative
defense and denying a defendant's motion to dismiss.  See Department of
Human Servs. v. Lowatchie, 569 A.2d 197, 199 (Me. 1990).  As we explained
in Department of Human Servs. v. Hart, 639 A.2d 107 (Me. 1994), we will
only entertain appeals from a decision rejecting an affirmative defense in
those situations in which the application of an affirmative defense is clear
and an immediate review is necessary to promote judicial economy.  Id. at
107.  The present matter is not such a situation.  An evaluation of the merits
of the Karofskys' appeal would require us to resolve complex legal issues
involving conflict-of-law principles and the law of both Rhode Island and
Massachusetts.  Although such an assessment could avoid further litigation in
this case, it would ensure that every future trial court decision rejecting an
affirmative defense would be appealed on an interlocutory basis.  The final
judgment rule would then become a nullity and the sensible proposition on
which it is premised-"that 99 out of 100 times the trial justice will rule
correctly and that the occasional error will receive a sufficient although not
perfect cure by review after a final judgment is entered"-will be ignored. 
Lowatchie, 569 A.2d at 201 (Hornby, J., dissenting).  
	[¶7]  We also find unavailing the Karofskys' assertion that in order for
us to determine whether the court erred by finding that it is more likely
than not that the Porrazzos will recover a judgment in an amount equal or
greater to the attachment, we must consider whether the action is time-
barred by either the statute of limitations or the equitable doctrine of laches. 
This contention is merely an attempt to bootstrap their appeal from the
court's denial of their motion to dismiss with their appeal from its order of
attachment.  Pursuant to M.R. Civ. P. 4A(c) and 4B(c), a court can issue an
order of attachment if it finds "more likely than not that the plaintiff will
recover judgment ... in an amount equal to or greater than ... the attachment
[or the trustee process] ...."  In making this determination, the court
assesses the merits of the complaint and the weight and credibility of the
supporting affidavits.  See Plourde v. Plourde, 678 A.2d 1032, 1035 (Me.
1996).  If the applicability of an affirmative defense is clear, then a court can
consider the application of the defense in its determination whether the
requirements of Rules 4A(c) and 4B(c) have been met.  However, a court
need not address complex legal issues or rectify factual disputes in a
summary attachment hearing.  In sum, the court in this case was not
compelled to find that the action was time-barred by either the statute of
limitations or the equitable doctrine of laches.  
	[¶8]  Finally, both the Karofskys' contentions that the court erred in
finding it more likely than not that the Porrazzos will recover a judgment in
an amount equal to or greater than the attachment and the Porrazzos'
assertions that the court erred by limiting the attachment order to Maine
real estate are unconvincing.  We review an order of attachment for clear
error and abuse of discretion, Schneider v. Cooper, 687 A.2d 606, 608 (Me.
1996), and will not disturb the trial court's findings unless there is no
competent evidence to support a finding as to the plaintiff's likelihood of
success, Boisvert v. Boisvert, 672 A.2d 96, 98 (Me. 1996).  Contrary to the
Karofskys' contentions, there is competent evidence to support the court's
findings.  Moreover, the court did not act outside the bounds of its
discretion in limiting the attachment to Maine real estate.  See Sweeney v.
Hope House, Inc., 656 A.2d 1215, 1217 n.2 (Me. 1995) ("A court ... may
properly exercise some limited discretion in selecting the particular
property or credits to be attached up to the amount of the 'more likely than
not' judgment.").  
	The entry is:
				Judgment affirmed.
Attorney for plantiffs:
	
David L. Herzer, Esq., (orally)	
Norman, Hanson & DeTroy	
P O Box 04112-4600	
Portland, ME 04112-4600

Attorney for defendants:

Toby H. Hollander, Esq., (orally)
Hollander Law Offices
P O Box 536
Lewiston, ME 04243-0536