449 Mass. 119 | Mass. | 2007
The plaintiff, George Lambert, obtained a five-year, $500,000 commercial mortgage loan from a predecessor of the defendant, Fleet National Bank (now Bank of America).
Background. In reviewing a summary judgment decision, we view the material presented in the light most favorable to the nonmoving party, here the plaintiff. Kelley v. Rossi, 395 Mass. 659, 661 (1985). Viewed in this manner, the evidence in the record is as follows.
a. The 1985 mortgage loan. In 1985, the plaintiff purchased a thirty-two unit rental housing complex in Fall River for $1,000,000. Of the total purchase price, $500,000 was financed by a first mortgage provided by the defendant, with the balance furnished by a second mortgage from the sellers. At the closing, at the plaintiff’s request, a bank officer provided a signed letter agreement stating that the bank would renegotiate the mortgage in five years, and in five-year increments thereafter, provided that the loan was not then in default, there was no history of delinquent payments, and the mortgaged property continued to be acceptable collateral.
b. The 1990 mortgage loan. In the years that followed, the
c. The 1991 meeting. In 1991, the plaintiff discovered that his property manager, Robert Levrault, had improperly negotiated approximately $28,000 in checks made out to the plaintiff and taken the funds for his own use. The plaintiff met with a bank loan officer, Donald Isles, and informed him of this situation.
According to the plaintiff, Isles said “that was perfectly agreeable with the bank,” that “[h]e was very glad that I was going to go after the guilty party rather than deep pockets, and
From time to time after this meeting, the plaintiff would inquire of Isles whether the bank could roll over his note prior to its expiration, but “the bank never got into that position apparently.” Isles did waive late fees on the plaintiff’s mortgage payments on several occasions.
d. The 1995 negotiations. In the early 1990’s, the plaintiff was unable to pay real estate taxes or water and sewer bills on the mortgaged property, which constituted a default on the mortgage loan. In 1994, the plaintiff met with an officer of the bank to discuss refinancing his mortgage. At this meeting, the bank officer expressed optimism that the bank would renew the plaintiff’s mortgage loan, and urged him to cease contact with rival lenders. A similar meeting took place in April, 1995, with a different bank officer. The parties anticipated that any decision by the bank to renew the loan would be expressed in a formal commitment letter. Thereafter, however, the bank notified the plaintiff that it was declining to renew the loan.
Discussion. Summary judgment is appropriate where there is no genuine issue as to any material fact and the moving party is
a. Breach of contract claim. The plaintiffs breach of contract claim is based on his 1991 meeting with Isles. He claims that their conversation constituted a binding oral agreement under which the bank, in consideration for the plaintiffs forbearance of any legal claim against the bank for funds misappropriated by Levrault, committed itself to renew the mortgage loan regardless of the plaintiff’s default or late payment history. The plaintiff claims that this oral agreement constituted a new, independently binding obligation of the bank to renew the loan. Alternatively, the plaintiff argues that the agreement modified the bank’s 1985 letter agreement regarding future renegotiations, essentially waiving two of the bank’s conditions to renegotiation: that the loan not be in default, and that there be no history of delinquent payments.
At the outset, we note that to the extent the plaintiff attempts to enforce the 1985 letter agreement, there may be little, if anything, to enforce. The agreement did not obligate the bank to renew the loan, but only to “renegotiate” its terms, provided that certain conditions were met. In any event, we conclude that, however the 1991 meeting is viewed, it was too vague and informal in substance to create any binding legal obligations.
“It is axiomatic that to create an enforceable contract, there must be agreement between the parties on the material terms of that contract, and the parties must have a present intention to be bound by that agreement.” Situation Mgt. Sys., Inc. v. Malouf Inc., 430 Mass. 875, 878 (2000). While it is not necessary that every term of the agreement be specified with precision, “[t]he parties must . . . have progressed beyond the stage of ‘imperfect negotiation.’ ” Id., quoting Lafayette Place Assocs. v. Boston Redevelopment Auth., 427 Mass. 509, 517-518 & n.9
In the course of the 1991 discussion, the plaintiff indicated that he would not seek reimbursement for any misappropriated funds from the bank, but “would expect some cooperation from [the bank] as far as late charges or if [he] slipped behind in the mortgage” (emphasis added). The plaintiff stated that he “was expecting a new first mortgage in 1995” (emphasis added), and made at least two different proposals to the bank: that they roll any arrearages that might arise into a new first mortgage or, alternatively, lend the plaintiff more money to cover his shortfalls. Although Isles supposedly responded that “that was perfectly agreeable with the bank,” from the plaintiff’s account of the conversation, it is impossible to determine what aspect of the plaintiff’s vague and general set of proposals Isles found “perfectly agreeable.” Similarly, the plaintiff claims that Isles said “he was going to do everything [he] could to cooperate with me,”
The plaintiff argues that it would make no sense for him to give up his right to proceed against the bank for the wrongfully negotiated checks without exacting a substantial consideration in return. Setting aside whether Isles had the authority to settle a sizable legal claim on the bank’s behalf, it is inconceivable that such a major modification to a large commercial loan would be made informally and in general terms rather than in a finely
b. G. L. c. 93A claim. A four-year statute of limitations applies to G. L. c. 93A claims. See G. L. c. 260, § 5A. Under the “discovery rule,” this limitations period is subject to tolling until the plaintiff knew or should have known of the alleged injury. See Albrecht v. Clifford, 436 Mass. 706, 714-715 (2002). See also Schwartz v. Travelers Indem. Co., 50 Mass. App. Ct. 672, 678 (2001). The plaintiff bases his G. L. c. 93A claim on his 1995 conversations with bank officers regarding renewal of the loan, during which the plaintiff claims the bank was “stringing [him] along” and caused him to forgo other opportunities for refinancing before abruptly refusing to renew the loan and foreclosing on his property. The plaintiff knew or should have known of this claim when it became clear that the bank would not renew the loan. Because the undisputed facts disclose that the action was filed on April 18, 2000, considerably more than four years after the bank refused to renew the loan and foreclosed on the property, the plaintiff’s claim is untimely.
The plaintiff’s claim also fails on its merits. To prevail on a
Conclusion. The motion judge concluded correctly that the plaintiff had no “reasonable expectation” of proving any of his claims. Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). The order granting summary judgment in favor of the defendant is affirmed.
So ordered.
As nothing turns on the relationship between the defendant’s various predecessor banks, we refer to them collectively as “the defendant” or “the bank.”
The plaintiff also claimed breach of the implied covenant of good faith and fair dealing, a claim which he does not press before this court. See Mass. R. A. R 16 (a) (4), as amended, 367 Mass. 921 (1975).
The letter agreement stated: “The purpose of this letter is to advise you that the above referenced promissory note and mortgage executed by you on this date and which note expires on June 24, 1990, will be renegotiated by us with you at that time and every five years thereafter at the then prevailing
“a. The loan is not then in default; and
“b. The loan does not have a prior history of delinquency; and
“c. The mortgaged premises continues to meet the Bank’s minimum criteria for mortgage loans based on appraised value and income producing capabilities.”
The plaintiff was accompanied by one of his associates, Paul Rodrigues, whose deposition testimony substantially corroborates the plaintiff’s recollections of the meeting.
Although the plaintiff claims to have seen the memorandum briefly during a later conversation with a bank officer, throughout the litigation the plaintiff has referred to the 1991 conversation as creating an “oral agreement.”
In his deposition testimony, the plaintiff states that he was informed of the bank’s decision not to renew the loan in March, 1995. This conflicts with his testimony that the bank still contemplated renewing the loan as of April, 1995. Because correspondence regarding the bank’s refusal to renew the loan is dated as of late June, 1995, we assume that the plaintiff learned of the decision sometime between April and June of 1995. Nothing turns on this discrepancy in dates.
It is not clear from the plaintiff’s deposition testimony whether this offer to “do everything [he] could to cooperate” with the plaintiff referred only to “cooperation” in pursuing legal remedies against Levrault, or also extended to financial “cooperation.” We view the testimony in the light most favorable to the plaintiff, as we must, and assume that some financial “cooperation” with the plaintiff was contemplated.
Indeed, the cases on which the plaintiff relies all proceed on the assumption that an enforceable agreement existed. See Delorafano v. Delorafano, 333 Mass. 684, 686-687 (1956); Fenton v. Federal St. Bldg. Trust, 310 Mass. 609, 612-614 (1942); Coz Chem. Corp. v. Riley, 9 Mass. App. Ct. 564, 566-568 (1980).
It also seems unlikely that the bank, in exchange for the forbearance of a claim totaling at most $28,000, would obligate itself to loan the plaintiff many times that amount.
There is no merit to the plaintiff’s argument that the foreclosure sale in April, 1996, was a “new harm” or continuing violation that somehow restarted the statute of limitations. To the contrary, the foreclosure sale at most increased