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McLaughlin v. Amirsaleh, 65 Mass.App.Ct. 873, 844 N.E.2d 1105

Facts

Mojgan Amirsaleh and Amir Massoud Amirsaleh were divorced in California, with a judgment requiring the sale of their jointly owned property and equal division of the proceeds. Mojgan retained attorney Franklin K. Lane, who began lending her money and secured these loans with a mortgage on the property that exceeded the amount she was allowed to encumber. After the property was sold, Lane claimed the full amount of the mortgage, but the probate judge limited his recovery to $11,600, leading to Lane's appeal.

After the divorce but well before the sale of the property, Mojgan retained Franklin K. Lane, a California attorney, to represent her in various matters arising out of her divorce, including her debts.

Issue

Did the mortgage held by attorney Franklin K. Lane violate public policy in Massachusetts, and should it be recognized by the court?

We think it unnecessary to recite the additional procedural skirmishes among the parties. The important fact is that trial on McLaughlin's complaint was scheduled to begin on March 11, 2003.

Rule

Contracts that violate public policy will not be enforced, and attorneys are prohibited from acquiring a proprietary interest in litigation they are conducting for a client.

It is settled that a contract in violation of law or public policy will not be enforced.

Analysis

The court found that Lane's actions in obtaining the mortgage while representing Mojgan violated Massachusetts public policy, as he acquired a financial interest in the litigation that could compromise his professional judgment. The mortgage was deemed unenforceable because it exceeded the limits set by a California court order and was not in the best interest of the client.

Based on Massachusetts public policy, as found in the body of Massachusetts case law concerning contracts and in the ethical canons and rules governing the practice of law, we conclude that Lane's mortgage is not entitled to recognition in Massachusetts.

Conclusion

The Appeals Court vacated the lower court's judgment and remanded the case for a new determination of the amounts due to Mojgan's creditors, excluding any claims by Lane based on the invalid mortgage.

It follows from what we have said that the amended judgment is vacated, and the matter is remanded to the Probate and Family Court for the entry of a new judgment based on a recalculation of the amounts due McLaughlin and Mojgan's creditors without consideration of any rights claimed by Lane by reason of the mortgage.

Who won?

Ramin Shamoilzadeh prevailed in the case as the court's decision favored his claims over those of Lane, recognizing the public policy concerns surrounding Lane's mortgage.

The Appeals Court, Perretta, J., held that attorney's actions in representing client and obtaining mortgage violated public policy of Massachusetts, and thus court would decline to recognize or to give effect to the mortgage.

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