DocketNumber: No. 10-P-2210
Citation Numbers: 82 Mass. App. Ct. 482
Judges: Brown
Filed Date: 9/26/2012
Status: Precedential
Modified Date: 6/25/2022
This case centers on a web of bargained-for covenants set forth in a written commercial lease. The lease was made in August, 2004, by Bright Horizons Children’s Centers, Inc. (Bright Horizons), as lessee, and 400 Longwater Realty,
The covenants had to do with the construction of a new building on the demised premises. The “lessor” agreed to construct the building’s exterior shell — “base building” in the lease language — and substantially complete its construction work by October 15, 2005. The “lessee” agreed to do the fit-out work to render the building suitable for its intended use as a childcare facility. The lease expressly provided: “The covenants, agreements and conditions contained [herein] to be performed and observed by either party shall be binding upon said party and its heirs, . . . successors and assigns and shall inure to the benefit of the other party and its heirs, . . . successors and assigns” (emphasis added).
From its inception, the building project was marred by delays. On September 23, 2005, when the base building was far from substantially complete, Longwater conveyed all its interest in the property, including its reversion in the leasehold estate, by quitclaim deed, to Sturtevant, Inc. (Sturtevant), a local manufacturing firm, for $1,883 million. Sturtevant thus succeeded Longwater as the lessor. Thereafter, further delays ensued; ultimately, Bright Horizons performed portions of the base building work in addition to fit-out work. An occupancy permit was issued by the town in January, 2006.
Bright Horizons made written demand on Sturtevant for reimbursement of costs incurred in performing base building construction work. Bright Horizons also requested from Sturte-vant payment of its “improvement allowance” as specified in the lease and rental credit for delays attributable to the late delivery of the base building.
At the close of the evidence, the trial judge denied the parties’ cross motions for a directed verdict. See Mass.R.Civ.P. 50(a), 365 Mass. 814 (1974). Returning a special verdict, the jury found for Sturtevant on the contract claim; independently, the judge found no c. 93A violation. Judgment entered for Stur-tevant on each count. The judge denied Bright Horizons’s motions for a new trial and for a judgment notwithstanding the verdict. Bright Horizons appealed.
On appeal, Bright Horizons principally contends that the judge erred by failing to interpret and apply the unambiguous lease language to the undisputed facts. This error, Bright Horizons argues, recurred throughout the trial and, specifically, in the judge’s jury charge and c. 93A decision. We agree. It is evident from the record that the case presented two major legal questions: (1) Applying its plain and unambiguous language, what rights were created and what obligations were imposed by the lease on the lessor and lessee? (2) What legal effect, if any, did the assignment and assumption agreement have on the lease? Those questions were for the judge, not the jury. The judge, by failing to answer those questions, caused the trial to proceed on an improper legal footing.
The simple answer, applying the lease language, is that the covenants that formed the basis of Bright Horizons’s contract claim were fully enforceable against Sturtevant, as successor to Longwater. Sturtevant was responsible for any breach due to its action or inaction after purchasing the property on September
Standard of review. We are guided by well-established review standards. “The interpretation of the terms of an unambiguous written lease is a matter of law for the court.” Great Atl. & Pac. Tea Co. v. Yanofsky, 380 Mass. 326, 334 (1980). The meaning of a contract, “what promises it makes, what duties or obligation it imposes, is a question of law for the court.” Tri-City Concrete Co. v. A.L.A. Constr. Co., 343 Mass. 425, 427 (1962), quoting from Smith v. Faulkner, 12 Gray 251, 255 (1858). These are matters open to our de nova review.
The lease explicitly confirms that its makers had intended and agreed that it was an integrated contract, that is, a complete and final embodiment of the terms of their contract.
The Sturtevant and Longwater assignment agreement also threw aside the black-letter law that one party to a contract cannot alter or modify the rights or duties of a counterparty by unilateral action. See New England Mut. Life Ins. Co. v. Harvey, 82 F. Supp. 702, 706 (D. Mass. 1949). Such a result demands the parties’ mutual consent. Ibid. If, as here, the parties have defined the method in their contract to bring about any such change, an attempt to do so that does not “conform to the method laid down” by them is invalid. Ibid. That is precisely
2. Jury instruction. The trial judge’s misapprehension of the governing principle led him ultimately to deliver the following jury instruction, which had been requested by Sturtevant: “That point of law is that if you find that 400 Longwater Realty did not assign to Sturtevant the obligations that Bright Horizons alleges were breached, then you cannot find Sturtevant liable for breach of those obligations.” Bright Horizons correctly argues that this instruction, delivered over its timely objections, was legally erroneous and substantially prejudicial.
“Putting the wrong questions is not likely to beget right answers even in law.” Vanston Bondholders Protective Comm. v. Green, 329 U.S. 156, 170 (1946) (Frankfurter, J., concurring). The challenged instruction effectively forced the jury’s hand to find that Sturtevant was not legally bound to honor its lease obligations insofar as they related to the base building project.
As to the contract count, the judgment is vacated, the verdict is set aside, a new judgment shall enter for Bright Horizons, and the matter is remanded to Superior Court for further proceedings for purposes of assessing Bright Horizons’s damages.
So ordered.
In connection with fit-out work performed by Bright Horizons, the lease required the lessor to pay a fixed sum ($12.50 per actual square foot) for tenant improvements completed on the leased premises, and $6,500 for fencing. The lessor was also required to grant the lessee a credit against rental payments (equivalent to one day’s rent) for each day the demised premises remained incomplete until “commencement” of the lease term. See Wesson v. Leone Enterprises, Inc., 437 Mass. 708, 721-722 (2002) (landlord’s promise was a significant inducement to the tenant entering into the lease).
As it did at trial, Sturtevant argues on appeal that the assignment and assumption agreement, to which Bright Horizons was not a party, had “carved out” from the lease the “construction and tenant improvement [payment] responsibilities from those obligations Sturtevant accepted as the new owner of the Property.”
The lease provides: “This Lease and the exhibits (including the material referred to thereon) attached hereto set forth all the covenants, promises, agreements, conditions and understandings between LESSOR and LESSEE concerning the Leased Premises and there are no covenants, promises, agreements, conditions, or understandings, either oral or written, between them other than are herein set forth. This Lease shall not be modified or amended in any manner except by an instrument in writing executed by the parties hereto.”
Sturtevant’s affirmative defense of an implied waiver by Bright Horizons of its rights under the lease cannot be sustained as a matter of law given the fact that the lease is an integrated contract. No such waiver, or any form of a novation, could be found unless Bright Horizons had agreed to alter its rights under the lease in a written instrument that it had executed with Sturtevant. See note 3, supra. No such writing has been shown to exist. It is no answer to
The same error infected the trial judge’s c. 93A decision, insofar as he had acted on the belief that Sturtevant could lawfully “cherry-pick” the lease obligations that it would agree to assume, as if this were a corporate asset purchase, along the lines of a de facto merger. See Cargill, Inc. v. Beaver Coal & Oil Co., 424 Mass. 356, 359-362 (1997).
Sturtevant argues that Bright Horizons failed to comply with a notice provision in the lease, requiring that the lessor be provided thirty days’ written notice before the lessee could take action to cure an alleged default (i.e., base building work). It is enough to say here that compliance with a notice provision is not required if it would be an empty gesture. Shawmut-Canton LLC v. Great Springwater of America, Inc., 62 Mass. App. Ct. 330, 340 (2004). We should add that subsequent to its purchase of the property, Sturtevant had solicited the assistance of Stephen Mack, principal of Longwater, to oversee or inspect, in some way or another, aspects of the building project during the time in question. It is difficult to conceive that Sturtevant was unaware of Bright Horizons’s work in December, 2005. We would expect the trial judge to sort this out on remand.