22-P-0006
Mass. App. Ct.May 24, 2023Background
- Bickford's Family Restaurants assigned a purchase option in its Waltham commercial lease to Waltham Ventures, which agreed to pay a Deferred Payment ("kicker") of $200,000, less certain credits, subject to paragraph 22.
- Paragraph 22 required the Deferred Payment upon the earlier of the third anniversary of closing or a "Capital Transaction," defined to include a financing that records a mortgage and nets the buyer $1,000,000 or more over the payoff balance (with proportional reduction if less).
- Three years after closing, Bickford's inquired about the Deferred Payment; Waltham Ventures claimed its refinancing was an amendment of the existing mortgage that produced no net proceeds and thus did not trigger or reduce the Deferred Payment under paragraph 22.
- Bickford's sued for breach of contract and brought a G. L. c. 93A claim; the Superior Court granted summary judgment for Bickford's on the breach claim, and a later bench trial found for Waltham Ventures on the c. 93A claim and awarded fees to Waltham Ventures.
- Both parties cross-appealed; the Appeals Court affirmed: summary judgment for Bickford's on breach; no c. 93A liability for Bickford's; defendant entitled to contractual attorney's fees as prevailing party on c. 93A.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment on breach was proper given paragraph 22 and the refinancing | Paragraph 22 unambiguously required payment after three years absent a qualifying capital transaction; defendant produced no genuine issue of fact about a new recorded mortgage | The refinancing/amendment avoided payment because no new mortgage was recorded and no net proceeds above payoff were received | Affirmed: paragraph 22 unambiguous; amendment to existing mortgage was not a capital transaction, so summary judgment for plaintiff was proper |
| Whether paragraph 22 is internally conflicting so as to create a factual dispute defeating summary judgment | Any alleged conflict only affects reduction formula if a capital transaction occurred, which was not shown here | Conflicting provisions create a genuine issue about evidence needed to harmonize paragraph 22 | Rejected: any ambiguity is immaterial because no capital transaction occurred; summary judgment stands |
| Whether defendant's refusal to pay violated G. L. c. 93A | The facts found by the trial judge show conduct was unreasonable and coercive, warranting c. 93A liability | Defendant's conduct was an honest, though unreasonable, misunderstanding of the contract, not unfair or deceptive conduct under c. 93A | Affirmed for defendant: judge's factual findings support that conduct was a genuine misunderstanding, not a c. 93A violation |
| Whether prevailing-party attorney's fees are recoverable under the contract | Plaintiff argued it was the prevailing party because it won on the breach claim | Defendant argued it prevailed on the separate c. 93A claim and thus is the prevailing party entitled to fees under paragraph 26(d) | Affirmed: defendant prevailed on the c. 93A claim and is entitled to contractually provided fees; appellate fees denied to both parties |
Key Cases Cited
- G4S Tech. LLC v. Massachusetts Tech. Park Corp., 479 Mass. 721 (2018) (summary judgment reviewed de novo; standard described)
- Balles v. Babcock Power Inc., 476 Mass. 565 (2017) (unambiguous contract language construed by plain meaning)
- Sea Breeze Estates, LLC v. Jarema, 94 Mass. App. Ct. 210 (2018) (summary judgment appropriate where party fails to show genuine issue of material fact about contract terms)
- Diamond Crystal Brands, Inc. v. Backleaf, LLC, 60 Mass. App. Ct. 502 (2004) (not every contract breach is a c. 93A violation; requires knowing or extortionate conduct)
- Northern Assocs. v. Kiley, 57 Mass. App. Ct. 874 (2003) (definition of "prevailing party" for attorney's fees in contract litigation)