Bickford's Family Restaurants, Inc. v. Waltham Ventures, LLC. ( 2023 )

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule
23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28,
as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties
and, therefore, may not fully address the facts of the case or the panel's
decisional rationale. Moreover, such decisions are not circulated to the entire
court and, therefore, represent only the views of the panel that decided the case.
A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25,
2008, may be cited for its persuasive value but, because of the limitations noted
above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260
n.4 (2008).
§§ COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
22-P-6
BICKFORD'S FAMILY RESTAURANTS, INC.
vs.
WALTHAM VENTURES, LLC.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
This case arises from a real estate contract dispute. The
plaintiff, Bickford's Family Restaurants, Inc., which operated a
restaurant in Waltham, assigned the purchase option in its
commercial lease1 to the defendant, Waltham Ventures, LLC. In
addition to other consideration, the defendant agreed to a
deferred payment2 in the amount of $200,000, less credits,
subject to conditions discussed infra. Three years later, after
an inquiry by the plaintiff regarding status of the deferred
payment, the defendant stated its belief that, per the terms of
the parties' written agreement (contract), it did not owe the
1 The original lease was between the plaintiff and an entity
named DPS Waltham Development, LLC, which is not a party to this
appeal.
2 The deferred payment was, at times, referred to as a "kicker"
payment.
deferred payment because it had refinanced a loan secured by the
property without netting any funds in excess of the payoff
balance. The plaintiff sued, seeking enforcement of the
deferred payment clause and damages under G. L. c. 93A. A
Superior Court judge granted summary judgment in favor of the
plaintiff on the breach of contract claim and permitted the
c. 93A claim to proceed to trial. After a bench trial, a
different Superior Court judge found for the defendant on the
c. 93A claim and ordered the plaintiff to pay fees and costs.
Both parties cross-appealed. Discerning no error, we affirm.
Discussion. 1. Summary judgment. On appeal, the
defendant argues that the motion judge should not have granted
summary judgment to the plaintiff as to the breach of contract
claim because (1) the language of the contract unambiguously
supported the defendant's position and (2) summary judgment was
inappropriate insofar as the judge had concluded that certain
provisions of the contract conflict. We are not persuaded.
"Our review of a motion judge's decision on summary
judgment is de novo, because we examine the same record and
decide the same questions of law." G4S Tech. LLC v.
Massachusetts Tech. Park Corp., 479 Mass. 721, 730 (2018),
quoting Kiribati Seafood Co. v. Dechert LLP, 478 Mass. 111, 116
(2017). "The standard of review of a grant of summary judgment
is whether, viewing the evidence in the light most favorable to
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the nonmoving party, all material facts have been established
and the moving party is entitled to judgment as a matter of
law." G4S Tech. LLC, supra, quoting Casseus v. Eastern Bus Co.,
478 Mass. 786, 792 (2018).
"A contract is a promise or a set of promises for the
breach of which the law gives a remedy, or the performance of
which the law in some way recognizes as a duty." Sea Breeze
Estates, LLC v. Jarema, 94 Mass. App. Ct. 210, 215 (2018),
quoting I & R Mechanical, Inc. v. Hazelton Mfg. Co., 62 Mass.
App. Ct. 452, 454 (2004). "When contract language is
unambiguous, it must be construed according to its plain
meaning." Balles v. Babcock Power Inc., 476 Mass. 565, 571
(2017). "To determine whether the language at issue is
ambiguous, we look both to the contested language and to the
text of the contract as a whole." Id. at 572.
Here, we agree with the motion judge that the language of
paragraph 22 of the contract unambiguously supports summary
judgment in the plaintiff's favor. Paragraph 22 of the contract
states in full:
"Upon the earlier of (a) the third anniversary of the
Closing, or (b) the occurrence of a Capital Transaction,
Buyer shall pay Seller the Deferred Payment in the amount
of Two Hundred Thousand Dollars ($200,000.00), less credits
due to Buyer for (x) one-half (1/2) of the first six Non-
refundable Option Payments made hereunder, and (y) any
payments made by Buyer on account of Seller's failure to
perform its obligations hereunder, including the Lease. As
used herein, the term "Capital Transaction" shall mean the
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Buyer's sale of all, or substantially all of its interest
in the Property, either directly or [through] a transfer of
a membership interest in Buyer or a financing transaction
resulting in the recording of a mortgage or other security
instrument against the Property after completion of the
initial construction of the Project[], where such financing
transaction pays Buyer a net amount of $1,000,000.00 or
more over the payoff balance of the existing mortgage. If
the net amount received by Buyer is less th[a]n
$1,000,000.00 then the Deferred Payment amount required to
be paid at the time of the financing transaction shall be
reduced proportionately by the ratio of net amount received
by Buyer divided by $1,000,000. This obligation shall
survive the closing."
The plain language of this paragraph indicates that, given
the parties' agreement that no sale of the property has occurred
and that three years have passed since the defendant closed on
the property, the defendant must show, at a minimum, a genuine
issue of material fact regarding whether a new mortgage or
security had been recorded against the property in order to
avoid summary judgment on the claim of breach of contract. See
Sea Breeze Estates, LLC, 94 Mass. App. Ct. at 215. It has
failed to do so. See id. at 216-218 (summary judgment
appropriate where party fails to show genuine issue of material
fact regarding contract terms).
Paragraph 22 defines a "capital transaction" as, inter
alia, "a financing transaction resulting in the recording of a
mortgage or other security instrument." The undisputed record
reflects that the defendant's April 10, 2014 agreement with RBS
Citizens, N.A., titled "Amendment to Construction Mortgage,
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Assignment of Leases and Security Agreement and Other Loan
Documents," was an amendment of the existing mortgage between
those parties, rather than a new mortgage. Indeed, the
defendant concedes as much in its brief. Because the amendment
did not result in the recording of a new mortgage or other
security instrument, it was not a capital transaction as defined
by paragraph 22. Therefore, the defendant's failure to generate
any additional funds through the refinancing and amendment of
its existing mortgage did not eliminate its obligation to make
the deferred payment.
The defendant further argues that summary judgment was
improper because the judge concluded that certain provisions of
paragraph 22 in the contract conflict and there was a factual
dispute as to the evidence necessary to harmonize that conflict.
We are not convinced. See G4S Tech. LLC, 479 Mass. at 730.
Assuming without deciding that any conflict in the plain meaning
of the contract language exists, such a conflict only deals with
the extent to which the payment would be reduced in the event
that a capital transaction occurred.3 The plain language of the
contract, however, shows that a capital transaction did not
occur, meaning that any reduction of payment in the event of
such an occurrence is immaterial to the grant or denial of a
3 The defendant has not explicitly identified any other conflict
in its brief before this panel.
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motion for summary judgment. See Balles, 476 Mass. at 571. See
also G4S Tech. LLC, 479 Mass. at 730.
2. Chapter 93A. On cross appeal, the plaintiff argues
that the trial judge's findings do not support his decision to
award judgment to the defendant on the c. 93A claim. We
disagree.
"General Laws c. 93A, § 11, prohibits unfair or deceptive
acts or practices among those engaged in trade or commerce."
Diamond Crystal Brands, Inc. v. Backleaf, LLC, 60 Mass. App. Ct.
502, 506-507 (2004), citing Anthony's Pier Four, Inc. v. HBC
Assocs., 411 Mass 451, 474 (1991). "Not every breach of
contract constitutes a violation of G. L. c. 93A, but a knowing
violation of contractual obligations for the purpose of securing
unwarranted benefits does" (citation omitted). Diamond Crystal
Brands, Inc., supra at 507. "Courts must consider whether the
nature, purpose, and effect of the challenged conduct is
coercive or extortionate." Id., citing Massachusetts Employers
Ins. Exch. v. Propac-Mass, Inc., 420 Mass. 39, 42-43 (1995).
"The standard of review is well established. The findings
of fact of the judge are accepted unless they are clearly
erroneous. We review the judge's legal conclusions de novo"
(citation omitted). T.W. Nickerson, Inc. v. Fleet Nat'l Bank,
456 Mass. 562, 569 (2010). "In an action alleging violations of
G. L. c. 93A, 'whether a particular set of acts, in their
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factual setting, is unfair or deceptive is a question of fact.'"
H1 Lincoln, Inc. v. South Washington St., LLC, 489 Mass. 1, 13-
14 (2022), quoting Casavant v. Norwegian Cruise Line Ltd., 460
Mass. 500, 503 (2011). "But whether conduct found to be unfair
or deceptive 'rises to the level of a chapter 93A violation is a
question of law.'" H1 Lincoln, Inc., supra at 14, quoting Baker
v. Goldman, Sachs & Co., 771 F.3d 37, 49 (1st Cir. 2014).
Here, the plaintiff does not contest the trial judge's
findings of fact. Instead, it argues that the facts found by
the judge require a finding that the defendant's actions
constituted a violation of c. 93A. We disagree. Admittedly,
the trial judge was highly condemnatory of the defendant's
conduct. He stated, among other things, that the defendant's
manager had made "a significant error in understanding the
contract," that the manager's position on the dispute was
"extremely weak," that "[h]is interpretation of the contract was
baseless," that his signing the contract while "not
understanding a key provision" was "unreasonable" and that
"[h]is refusal to pay was also unreasonable." The judge further
found that "[t]hese unreasonable positions were adopted after
[the manager] realized his error [in misunderstanding the
agreement]." However, the trial judge explicitly rejected the
plaintiff's request for findings that the manager's actions were
"extortionate in intent and effect" and that the defendant
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"simply did not want to pay [the plaintiff] and came up with an
excuse to justify avoiding its contractual obligations."
Furthermore, the judge found that the manager's "understanding
of the contractual agreement was that he would not have to pay a
'kicker' or bonus to the plaintiff if it took him longer than
three years to make a big profit," and that the manager "entered
into a written contract contrary to what he thought he was
agreeing to."
Taken together, these findings show that, while
unreasonable, the defendant's behavior was the result of an
honest disagreement about the terms of the contractual
obligations. However incompetent, the defendant's conduct was
nothing more than the product of genuine misunderstanding as to
the meaning and effect of paragraph 22. Without more, we cannot
conclude that the defendant's conduct constituted a violation of
c. 93A. See Diamond Crystal Brands, Inc., 60 Mass. App. Ct. at
507.
3. Fees. Declining to reverse the trial judge's ruling
with respect to the c. 93A claim, we further decline to vacate
the attorney's fees awarded to the defendant for costs incurred
in its defense of the plaintiff's c. 93A claim. Under paragraph
26 (d) of the contract, the "prevailing party" in any litigation
arising under the agreement "shall be awarded its costs
including reasonable attorney's fees." The defendant is the
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"prevailing party" as to the c. 93A claim.4,5 See Northern
Assocs. v. Kiley, 57 Mass. App. Ct. 874, 880-881 (2003), quoting
Bardon Trimount, Inc. v. Guyott, 49 Mass. App Ct. 764, 778-780
(2000) ("litigant in whose favor judgment enters is 'prevailing
party'"). We decline to award attorney's fees to either party
for costs associated with this appeal.
Judgment affirmed.
By the Court (Neyman,
Desmond & Grant, JJ.6),
Clerk
Entered: May 24, 2023.
4 We are unpersuaded by the plaintiff's argument that it is the
prevailing party because it succeeded on the "ultimate issue" of
the breach of contract claim. The underlying suit consisted of
two separate claims, breach of contract and violation of c. 93A,
and the defendant prevailed on the latter claim. See Northern
Assocs., 57 Mass. App. Ct. at 880-881.
5 We likewise reject the plaintiff's argument that the judge
erred in finding that the c. 93A claim "arose from the terms of
the agreement." Where the plaintiff's complaint alleged that
the defendant violated c. 93A by, inter alia, "refusing to
tender the deferred payment," "ignoring the plain meaning of
Paragraph 22 of the Assignment," and ultimately "engag[ing] in
conduct in disregard of known contractual arrangements," we
conclude that the c. 93A claim constitutes "any litigation
arising under the terms of this Agreement" pursuant to paragraph
26 (d). Contrast Hannon v. Original Gunite Aquatech Pools,
Inc., 385 Mass. 813, 828 (1982) (contract provision entitled
prevailing party to attorney's fees "in an action brought to
determine or enforce rights under the contract").
6 The panelists are listed in order of seniority.
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