57 Mass. App. Ct. 874 | Mass. App. Ct. | 2003
In August, 1994, Northern Associates, Inc., and Richard Benson (the plaintiffs or, collectively, Northern) entered into an agreement to lease a portion of the third floor of a commercial building located at 342 North Main Street, Andover. In February of 1995, the original owner-lessor conveyed the property to the defendant Frye Village Realty Trust. The defendant trustees, in turn, approached Northern about vacating the premises. Northern declined the offer. The trustees, thereafter, began renovations on the second floor of the property, which caused temporary disruption of some of the services to Northern’s leased premises, as well as dust and debris. In the summer of 1995, the trustees did not provide air conditioning to Northern’s premises, taking the position that it was not required under the lease.
.Northern brought suit as a consequence of events arising from these renovations, claiming the trustees’ actions resulted in
Prior to trial, a judge other than the trial judge entered partial summary judgment for the trustees on Count HI. The trial judge dismissed Count II immediately prior to trial, and at the close of the evidence entered a directed verdict for the trustees on Counts IV and V. Following trial, judgment entered for Northern as to Count I; Northern’s claim for injunctive relief (Count VI) was denied by the trial judge as to all claims except elevator service, and judgment entered substantially for the trustees on their counterclaim for declaratory judgments.
Northern challenges as insufficient the $5,000 it was awarded on its claim for attorney’s fees; challenges as erroneous the award of $100,000 in attorney’s fees to the trustees
1. Attorney’s fees. Northern and the trustees sought to recover attorney’s fees and costs under the lease agreement,
“If, on account of any breach or default by either*877 Landlord or Tenant of their respective obligations under this Lease, it shall become necessary to employ an attorney to enforce or defend any of its rights or remedies hereunder, and should such party prevail, it shall be entitled to reasonable attorneys fees incurred.”
We discuss below Northern’s several challenges to the fee awards.
a. Fees were not “incurred.” Northern first claims that the trustees were not contractually entitled to an award of attorney’s fees because, although represented by legal counsel throughout the proceedings, the trustees had not, as of the date of the request for an award of fees and costs, been billed for or paid such fees and costs, and there was no agreement that such fees and costs would be paid. We reject Northern’s claim and conclude that Lincoln St. Realty Co. v. Green, 374 Mass. 630 (1978), on which Northern principally relies, is inapposite. In Lincoln, a landlord commenced an action to evict an indigent tenant who was represented by a legal services organization that did not charge indigent clients for its services. After prevailing in the action, the tenant moved for an award of attorney’s fees pursuant to provisions in the lease agreement that allowed recovery for reasonable attorney’s fees “incurred” by a prevailing tenant. The court determined that “ ‘incurred’ in this contractual context means ‘personally obligated to pay.’ ” Id. at 632. The tenant’s claim to an award for fees was rejected on the ground that the tenant was not personally liable for any attorney’s fees. Id. at 633. See Colonial Estates Assocs. v. Montagna, 18 Mass. App. Ct. 972, 972-973 (1984).
The lease agreement in the present case provides for recovery of “reasonable attomey[’]s fees incurred.” Attorney’s fees are “incurred” when a party renders himself liable to pay for such fees. See Oxford English Dictionary 1410 (Compact ed. 1971) (“incur” means “to render oneself liable to”); Webster’s Universal Unabridged Dictionary 927 (2d ed. 1979) (“incur” means “to bring upon oneself”). The affidavits of the trustees’ attorneys, specifying the nature of the services, the time expended and the hourly rate, establishes that services of private legal counsel had been engaged and provided, and supports the inference that the trustees were under an obligation to pay for their services.
In these circumstances, the question of whether legal fees were “incurred” is informed by United States Trust Co. v. Herriott, 10 Mass. App. Ct. 313 (1980), where we rejected as frivolous the defendants’ argument that the plaintiff had not incurred any expenses because its attorneys had not billed or received any payment for their services. Id. at 321. Incurring a fee is to be distinguished from paying a fee. Cf. Penney v. First Natl. Bank, 385 Mass. 715, 723 (1982) (promissory note provided that plaintiff would “would pay all costs of collection and attorney’s fees paid or incurred by the bank” [emphasis supplied]). Whether a party ultimately pays the fees for which he has obligated himself, or whether the attorney seeks to collect on the outstanding indebtedness, is not determinative. The judge’s findings and conclusions to the effect that the trustees incurred attorney’s fees are not plainly wrong.
b. Prevailing party. Northern claims that, even if attorney’s fees were incurred by the trustees, they are not entitled to an award because they did not “prevail.” We first note that any reliance on cases discussing the meaning of the phrase “prevailing party” in the context of a statutory framework such as workers’ compensation or civil rights is misplaced. “There is no basis for relating [§ 10.05 of the lease agreement] to these specialized statutes.” Bardon Trimount, Inc. v. Guyott, 49 Mass. App. Ct. 764, 779 (2000). See Bird v. Bird, 24 Mass. App. Ct.
Whether the trustees are entitled to an award of fees is governed by the terms of the parties’ contract. The lease agreement provides that a party may recover attorney’s fees “[i]f, on account of any breach or default by either Landlord or Tenant of their respective obligations under this Lease, it shall become necessary to employ an attorney to enforce or defend any of its rights or remedies hereunder, and. . . such party prevails].” Where the language of a contract is unambiguous, the words will be given their plain or well-established meaning. See Haverhill v. George Brox, Inc., 47 Mass. App. Ct. 717, 720 (1999).
Section 10.05 of the lease speaks broadly in terms of a party employing an attorney who prevails in enforcing or defending “any of its rights or remedies” under the lease. This provision plainly contemplates that one or both parties may prevail in the enforcement of rights or remedies under the lease as well as in the defense of a claimed breach or default of the lease. The parties here sought to enforce several different rights under the lease, including rights to common areas, heat, air conditioning, maintenance of common areas, and square footage of the leased premises — Northern asserting its claims in multiple counts and the trustees asserting two counts for affirmative relief in its counterclaim.
The trustees have not appealed the award to Northern and it appears that Northern, which was awarded at least a partial judgment in connection with its breach of contract claim
The judge’s findings reflect that the award of fees to the trustees was in connection with their defense of Northern’s claims that were “on account of a breach or default” under the lease, and in connection with the trustees’ successful counterclaim seeking a declaratory judgment that limited the right of Northern to occupancy of 2100 square feet of the third floor. We will assume that the award was not intended to include fees incurred in connection with the emotional distress claim (Count II).
The grant of summary judgment in favor of the trustees as to Count HI,
With respect to Counts 111, IV and V, the award appropriately reflects that “the plaintiff has dragged the defendant through a costly and ultimately fruitless exercise.” Bardon Trimount, Inc. v. Guyott, supra at 780, quoting from Anderson v. Melwani, 179 F.3d 763, 766 (9th Cir. 1999).
c. Allocation of fees. Northern further challenges as insufficient the amount of fees it was awarded, and as excessive the
The judge appropriately relied on factors set out in Cummings v. National Shawmut Bank, 284 Mass. 563, 569 (1933), to determine what would constitute a reasonable award to each prevailing party.
In contrast, the trial judge concluded that the trustees were required to expend countless hours defending groundless claims and were subjected to needless costs and fees in connection with the trustees’ defense of Northern’s lease-related claims. Fees also were incurred in connection with the trustees’ substantially successful efforts to obtain a declaratory judgment that enforced their rights under the lease. Northern’s reliance on Ingram v. Sonitrol Sec. Sys. of Worcester, Inc., 11 Mass. App. Ct. 754, 758 (1981), for the proposition that fees incurred in connection with a declaratory judgment action may not be recovered is misplaced.
d. Prolonging litigation. Northern claims that the trial judge’s finding that Northern had improperly prolonged the litigation was erroneous because both parties were responsible for the delay. The trial judge’s findings in this respect are amply supported by the record and are not erroneous.
2. Dismissal of claim for intentional infliction of emotional distress. Richard Benson, the individual plaintiff, complains that the judge wrongly dismissed his emotional distress claim in response to the trustees’ motion in limine to exclude evidence supporting the claim. Benson challenges both the procedure — arguing that a motion in limine was an improper vehicle for dismissing a claim — and the merits of the judge’s action.
Benson’s contention that the judge essentially treated the motion in limine as one for summary judgment without providing
3. Directed verdict on constructive eviction claim. At the close of Northern’s evidence, the trustees argued that as a matter of law, the disruptions to which the witnesses testified were not sufficiently substantial to constitute constructive eviction.
As with the emotional distress claim, Northern’s evidence of misconduct did not rise to the level required to make out a claim for constructive eviction. The landlord’s acts must be of a character which “deprive the tenant permanently or for a substantial time of the enjoyment of the property.” Westland Hous. Corp. v. Scott, 312 Mass. 375, 382 (1942) quoting from 3 Williston, Contracts § 891 (rev. ed. 1936). Northern points to the same conduct on the part of the trustees that supported the jury verdict for Northern on its breach of lease claim: periodic heat problems, poor maintenance of common areas, debris from a broken skylight, construction dust and disruption.
The law requires more substantial or ongoing interference than was established by this evidence. See, e.g., Shindler v. Milden, 282 Mass. 32, 33-34 (1933) (landlord’s deliberate failure to install a heating system, as promised, rendered the premises unfit for the commercial tenant’s restaurant business and constituted a constructive eviction); Westland Hous. Corp. v. Scott, 312 Mass. at 382 (smoke, soót, and fumes from a defective oil burner entering an apartment over a three-month period, causing illness to the tenant and damage to clothing and furniture, constituted a constructive eviction); Charles E. Burt, Inc. v. Seven Grand Corp., 340 Mass. 124, 127 (1959) (landlord’s failure to provide any power, electricity, lights, heat, or elevator service to commercial premises constituted a constructive eviction). Compare Sims v. Mason, 361 Mass. 881 (1972) (failure to provide proper cleaning services, suitable heat and air conditioning, and promised improvements, while breaches of the lease, were not sufficient to make out a constructive eviction).
The judge did not err in allowing the trustees’ motion for a directed verdict.
4. Directed verdict on Northern’s claim for lost profits. Northern sought to recover lost profits allegedly caused by the disruption of its business. To prove its lost profits, Northern offered the testimony of its “controller,” Jack Crawley, and introduced Northern’s tax returns for the years 1991 through 1997. Crawley testified that Northern had lost clients because of the trustees’ breach, but went on to say that he could not “quantify that figure.” On cross-examination, Crawly also testi
At the end of Crawley’s testimony, the trustees moved to strike. The judge, after hearing argument, allowed the motion, stating from the bench that Crawley was not qualified as an expert witness and that he had offered no facts to support his opinion that any lost profits were tied to the trustees’ wrongful acts. Subsequently, the judge also allowed the trustees’ motion for a directed verdict on the breach of contract claim for lost profits, relying on Augat, Inc. v. Aegis, Inc., 417 Mass. 484 (1994).
On appeal, Northern cites Dyecraftsmen, Inc. v. Feinberg, 359 Mass. 485, 486-487 (1971), for the proposition that “it was for the jury to decide whether a causal connection was to be inferred.” In the Dyecraftsmen case, the landlord deliberately cut off steam to the premises, causing the tenant’s commercial dyeing business to shut down for nine days at the end of 1963, and affecting its production for several weeks after. See ibid. The tenant’s sales manager “testified to the total amount of a decline in sales to named firms from 1963 to 1964.” Id. at 488. Here, by contrast, Northern’s controller testified to only a vague knowledge of lost clients, specifically adding that he could not “quantify” the loss. Hence, no lost clients were identified, nor were any losses shown to be connected to even the relatively brief periods in 1995 that the disruptions to the leased premises occurred.
The judge was correct in ruling that any finding of causation based on Northern’s evidence would be purely speculative.
5. Air conditioning. Northern concedes that the lease was silent on the subject of air conditioning. At trial, Northern’s
No such proof emerged, however. In her memorandum on the defendants’ motion for a new trial, the judge detailed the shortcomings with Northern’s evidence in this regard. She correctly determined that nothing in Northern’s evidence demonstrated that an ambiguity existed as to whether the landlord’s obligation to supply electricity under the lease necessarily included air conditioning. The judge also did not err when she ruled that because the lease contained an integration clause and was not ambiguous, the jury could not consider evidence that air conditioning was intended to be included in the lease.
On appeal, Northern relies on Cooley v. Bettigole, 1 Mass. App. Ct. 515 (1973). We ruled in that case that paroi evidence was admissible to show what the parties intended with respect to whether the landlord of an office building could charge tenants’ customers for parking, refundable upon validation. See id. at 520-521. In Cooley, the lease required the landlord to provide, in “the manner customary in office buildings,” parking for the tenants and their invitees, without additional charge, while also giving the landlord the exclusive right to regulate and control the parking area. Id. at 517. Here, the lease specifically identified electricity and heat as the services to be paid for by the landlord, but made no mention of air conditioning. There was no error.
Conclusion. Based on the foregoing, we see no reason to disturb the orders and judgments of the trial court. We decline to award appellate attorney’s fees or costs to either party.
Judgments affirmed.
Orders affirmed.
The order “declares that the elevator is part of the common area,” entitling Northern to its access and use.
Northem sought $139,987.50 in attorney’s fees and $16,123.66 in costs, and was awarded attorney’s fees in the amount of $5,000 and $578 in costs. The trustees sought $301,816.05 in attorney’s fees and $11,668 in costs, and were awarded $100,000 in fees and $2,467 in costs.
The trustees additionally sought attorney’s fees and costs pursuant to G. L. c. 231, § 6F. With respect to this ground for its request for attorney’s fees, the judge stated, “the Court does not find that a hearing is warranted and will take no further action on this matter.”
In support of its argument that the trustees did not “incur” any fees in the defense of this action, Northern relies on the deposition of Thomas M. Kiley. Responding to the question, “What attorneys have you paid to represent your interests in this case?,” Kiley answered, “I haven’t paid anyone so far.” The questioning continued, with Kiley answering in the negative to questions whether he had a fee agreement with any of his attorneys or had agreed to pay them.
There is also nothing in the record to suggest that the obligation was limited by a contingency fee agreement to a percentage of recovery. See Winthrop Corp. v. Lowenthal, 29 Mass. App. Ct. 180, 186 (1990).
This is consistent with the requirement in our rules that all claims for relief arising out of the same occurrence be raised in a single action. See Mass.R. Civ.R 13(a), as amended, 423 Mass. 1405 (1996).
With respect to the questions put to the jury on the issue of breach, the jury concluded that the trustees had failed to provide heat to the premises, interfered with Northern’s business operations, interfered with Northern’s quiet use and enjoyment of the third-floor premises, and failed to clean and maintain the third-floor common areas.
Northern, in a passing reference, observes that “[t]he trial court acknowledged the limited nature of the legal claims as to which fees could be awarded . . . correctly concluding] that Section 10.05 did not permit Northern to recover [attorney’s] fees expended in connection with Mr. Benson’s claim for intentional infliction of emotional distress.” The trustees do not counter this assertion.
Count HI asserted a claim for wrongful interference with advantageous contractual relationships, based on the alleged conduct on the part of the defendants in denying heat and air conditioning to the premises, engaging in renovations and taking action designed to constructively evict Northern.
Count IV asserted that the defendants engaged in unfair and deceptive acts or practices is in violation of G. L. c. 93A when they wrongfully threatened to evict Northern; denied heat, air conditioning and elevator services to the premises; and interfered with Northern’s quiet enjoyment of the premises and with Northern’s ongoing business operations.
Count V alleged that the defendants’ conduct was designed to constructively evict Northern from the premises.
As set forth in her memorandum, the trial judge’s award of fees was premised on the trustees’ “successfully defending those portions of this litigation which related to the lease,” and their affirmative claim that resulted in a declaratory judgment in favor of the trustees, “that the demised premises consist of the net 2100 square foot area at the north end of the third floor.” The judge’s findings refer specifically to “the wasteful nature of this litigation [as] seen in the plaintiff’s insistence that air conditioning was included in the lease,” and to Northern’s effort “to take a gentlemen’s agreement it had between its principal Richard Benson and the original lessor ... [to use all of the third floor], thus drastically expanding its leasehold on the third floor,” beyond the lease terms.
The holding in Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 571 (1997), that “[w]here but one judgment is rendered in the action the prevailing party is the one in whose favor that judgment is entered,” is not to the contrary. That case involved entry of one judgment against a defendant on a single count of civil contempt. Although the case also involved a related shareholder derivative action, the matter of fees arose solely in connection with a civil contempt judgment entered against the defendant. Id. at 563, 571. There originally were three counts in the contempt complaint, but two were dismissed because the order on which the claims were based had expired prior to the defendant’s act, leaving just one count for trial. Id. at 571 n.75. The appeal from the contempt judgment was consolidated on appeal with the appeal in the principal case. Id. at 565.
Cummings v. National Shawmut Bank, 284 Mass. 563, 569 (1933), sets out the following considerations: “the ability and reputation of the attorney, the demand for his services by others, the amount and importance of the matter involved, the time spent, the prices usually charged for similar services by other attorneys in the same neighborhood, the amount of money or the value of the property affected by the controversy, and the results secured.”
In Ingram v. Sonitrol Sec. Sys. of Worcester, Inc., 11 Mass. App. Ct. 754, 758 (1981), the defendant had been a lessee under the lease which had terminated. The plaintiff lessor sought declaratory judgment that Sonitrol had exercised its option to renew under the lease. We upheld the dismissal of the complaint on the ground that the lease did not provide an option to renew, but contained a right to extend the lease, and that the tenant, Sonitrol, had become a tenant at will. As such, we concluded that “[tjhis case is not one in which Sonitrol is enforcing any obligations owed by Ingram arising under the tenancy.” Id. at 758.
In support of their motion to exclude Benson’s evidence of intentional infliction of emotional distress, the trustees offered excerpts from Benson’s videotaped deposition, portions of his deposition transcript and his answers to interrogatories. This evidence amply supports the judge’s determination that the trustees’ conduct did not rise to the level necessary to make out Benson’s claim. See Foley v. Polaroid Corp., 400 Mass. 82, 99 (1987) (even if intentional or malicious, liability will only be imposed when conduct is “so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency,” quoting from Restatement [Second] of Torts § 46 comment d [1965]).
The trustees argued that the dust and noise from the construction on the floor below Northern’s leased premises was a temporary condition, that problems with the heat were due to repairs made to the boiler and were also temporary, and that the debris falling from the skylight was minor and did not impair the habitability of the premises.
Northem also cites problems with the elevator, but the jury rejected that claim.
For example, Rhonda Fitzpatrick, Northern’s office manager, testified that the construction lasted only three months. Fitzpatrick, though complaining that the problems with the furnace occurred two or three days a week, also testified that the heat would drop down “into the 60’s.”
Winchester v. O’Brien, 266 Mass. 33, 36 (1929), cited in Northern’s reply brief in support of its argument that the severity of the trustees’ actions should have been decided by the jury, held merely that the tenant may remain in possession and initiate suit; indeed, the court expressly declined to reach the merits of the constructive eviction claim.
“It was not sufficient simply to show Isotronics’s projection of its sales and the historic return on total sales. . . . Many factors bear on the financial performance of a company. The plaintiffs had to show the portion of Isotronics’s losses, at least in general terms, that was attributable to the defendants’ misconduct. . . . Damages for lost profits are recoverable only when proof is made ‘with sufficient certainty.’ ” Augat, Inc. v. Aegis, Inc., 417 Mass. 484, 488 (1994), quoting from Jet Spray Cooler, Inc. v. Crampton, 377 Mass. 159, 181 (1979).