68 Mass. App. Ct. 738 | Mass. App. Ct. | 2007
We consider cross-appeals from judgments in two consolidated cases arising from a claim by SMS Financial V, LLC (SMS), under a forbearance agreement entered into between
In their appeal, the Conti parties assert that (1) it was error to enter summary judgment on liability in favor of SMS under the forbearance agreement because there were, at a minimum, genuinely disputed questions of material fact regarding alleged prior material breaches by SMS’s predecessor
1. Material facts. The material facts are not disputed. Various loans made to the Conti parties by USTrast, a Boston bank, went into default, and USTrust commenced, and obtained judgments
The forbearance agreement provided further that the Conti parties would secure the debt by giving USTrust real estate mortgages on four properties. The mortgages would be discharged by USTrust sequentially as payments were made. Of particular importance to the present dispute is a provision that USTrust would discharge a mortgage on property at 19 Lynn Street, Chelsea, after the Conti parties had made the initial payment of $92,946.34 plus an additional $80,000.
By December, 1998, the Conti parties had made the required initial payment and regular monthly payments, at which time the payments were sufficient to bring about a discharge of the 19 Lynn Street mortgage. However, the mortgage was not discharged at this time. The Conti parties continued to make regular payments through December, 1999, by which time a total of
At this point, USTrust was acquired by Citizens Bank. Although they had received no instructions to do so, the Conti parties forwarded their payment due in March, 2000, to Citizens Bank. The payment was returned to them on March 23, 2000, with no forwarding instructions. Robert Conti’s effort to obtain forwarding instructions from USTrust was unsuccessful. The Conti parties thereupon determined that they would make no further payments until forwarding instructions were received. None were forthcoming, and the Conti parties made no further payments and no additional efforts to straighten out the confusion. In 2002, Citizens Bank assigned its rights under the forbearance agreement to SMS, and the present litigation commenced.
2. Summary judgment on liability under the forbearance agreement. Determining that the record compelled a finding that there was an unexcused failure on the part of the Conti parties to make required payments, a judge of the Superior Court allowed SMS’s motion for summary judgment as to liability, deferring assessment of damages to a subsequent evidentiary hearing. The Conti parties argue that three prior material breaches on the part of USTrust excused them from performance, see Ward v. American Mut. Liab. Ins. Co., 15 Mass. App. Ct. 98, 100 (1983); Lease-It, Inc. v. Massachusetts Port Authy., 33 Mass. App. Ct. 391, 397 (1992), and that the judge erred in attempting to resolve on summary judgment factual disputes regarding the materiality of those prior breaches.
We conclude that the evidence of prior material breaches was insufficient to support a finding in favor of the Conti parties on the subject, see Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991), and that the judge determined correctly
Likewise, the fact that neither USTrust nor Citizens Bank notified the Conti parties of an address change for purposes of forwarding payments was not a breach, material or otherwise. The forbearance agreement contained no requirement that there be a notice of the lender’s change of address.
In the same way, USTrust’s erroneous statement of the balance due in January, 2000, was neither a breach nor material. The forbearance agreement did not require that USTrust provide accountings. That USTrust provided a figure on request — a figure that turned out to be mistaken — is not a breach of any covenant that USTrust contractually undertook to fulfil. Furthermore, the Conti parties were aware that the number provided by the lender was erroneous; they made no attempt to reconcile the figures; and they knew that, regardless of which figure was correct, a substantial amount remained to be paid. The judge concluded correctly that none of the proffered actions or inactions on the part of USTrust amounted legally to material breaches sufficient to excuse the Conti parties from further payments.
3. Interest on the SMS judgment. Following a hearing on the assessment of damages, another judge awarded SMS a total of $526,550.14 against various Conti parties. The amount is disputed (see part 7, infra). He concluded also that the amounts awarded should bear interest at a rate of twelve percent from the dates of the executions forward. The Conti parties challenge the ruling, arguing that the underlying promissory notes each provided for an interest rate less than twelve percent per annum.
We agree with the ruling of the judge. General Laws c. 231, § 6C, as appearing in St. 1982, c. 183, § 3, provides, in pertinent part, that interest shall be added to a “judgment for
4. Motion to compel discovery. Alleging in their own action that SMS’s attempts to secure and collect the amounts owed under the forbearance agreement constituted abuse of process and a violation of G. L. c. 93A, the Conti parties sought to compel SMS to provide discovery responses on the subject. At the evidentiary hearing on damages (see part 7, infra), the judge denied the motion, stating that “the matters alleged in the complaint [of the Conti parties] have been addressed and resolved [by the grant of summary judgment in the action brought by SMS on the forbearance agreement] and that collateral estoppel will bar them.” The essence of the Conti parties’ complaint is that SMS sought amounts substantially in excess of what was actually owed and availed itself of legal process to attempt to obtain the inflated amounts knowing that the Conti parties had legitimate defenses to SMS’s claims. We agree with the judge that the summary judgment on liability under the forbearance agreement (affirmed in part 2, supra) adjudicated these allegations unfavorably to the Conti parties and rendered further discovery on the Conti parties’ complaint purposeless.
5. Special motion to dismiss. SMS filed a special motion to dismiss the complaint of the Conti parties for abuse of process
“The legislative history in Massachusetts demonstrates that in response to the problem of SLAPP suits the Legislature intended to enact very broad protection for petitioning activities.” MacDonald v. Paton, 57 Mass. App. Ct. 290, 291 (2003), quoting from Duracraft Corp. v. Holmes Prods. Corp., 427 Mass. 156, 162 (1998). The special movant must show that the claims against it are based on its petitioning activities alone, “and have no substantial basis other than or in addition to the petitioning activities.” Duracraft Corp. v. Holmes Prods. Corp., 427 Mass. at 167-168. Petitioning activities include statements submitted to a judicial body. See G. L. c. 231, § 59H; McLarnon v. Jokisch, 431 Mass. 343, 347 (2000). See also Kobrin v. Gastfriend, 443 Mass. 327, 331-340 (2005), for a discussion of the scope of petitioning activities under the anti-SLAPP statute. Once the moving party establishes that the claims arise out of its petitioning activities, the burden shifts to the adverse party to show that the activity complained of was “devoid of any reasonable factual support or any arguable basis in law.” Fabre v. Walton, 436 Mass. 517, 524 (2002).
Here, SMS’s employment of legal mechanisms to obtain trustee process attachments and approval of foreclosure of the real estate mortgages plainly constituted petitioning activity under the anti-SLAPP statute. There was no other basis for the claims. Consequently, the Conti parties had the burden of demonstrating that the petitioning activity (i.e., the trustee process and foreclosure proceedings) was devoid of reasonable factual support or arguable basis in law. Such a showing was
Pursuant to that statute, the judge properly awarded counsel fees to SMS. The Conti parties argue that the amount awarded ($4,621.25) included a component that had already been awarded to SMS in connection with its own complaint. SMS does not contest the proposition, contending instead that the award, even with its duplicative component, was reasonable and not an abuse of discretion. See Galipault v. Wash Rock Invs., LLC, 65 Mass. App. Ct. 73, 86 (2005). We fail to see how a fee award that exceeds the value of the services that the applicant itself determined can be anything other than unreasonable. The award appears to result from a mistake regarding the legal services for which there is to be compensation. We therefore vacate this portion of the judgment on the complaint of the Conti parties, and remand so that the fee award under G. L. c. 231, § 59H, may be reconsidered and, if appropriate, revised.
6. Summary judgment on the G. L. c. 93A claim. Having denied SMS’s special motion to dismiss with respect to the claim of the Conti parties under G. L. c. 93A, the judge subsequently granted summary judgment thereon in favor of SMS. The judge concluded correctly that the evidence was insufficient to establish that SMS’s conduct was unfair or deceptive. See Kourouvacilis v. General Motors Corp., 410 Mass. at 716.
Nor are we persuaded by the contention of the Conti parties that there was a breach of the forbearance agreement on the part of SMS that amounted to an unfair act or practice. See Anthony’s Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 474 (1991). We have disposed in part 2, supra, of the proposition that USTrust materially breached the agreement prior to the cessation of payments by the Conti parties, and have concluded in the present section that SMS’s claims thereunder, while excessive, did not violate G. L. c. 93A. Finally, there is no merit to the Conti parties’ claim that the obtaining of a preliminary injunction against foreclosure of the mortgages by SMS entitled them at least to attorney’s fees as prevailing parties. Such a recovery requires a demonstration that there existed a specific unfair or deceptive trade practice for which the injunctive relief in question was granted. See Jet Line Servs., Inc. v. American Employers Ins. Co., 404 Mass. 706, 718 (1989). There must be a showing as well that the unlawful act or practice “had some adverse effect upon [them], even if it is not quantifiable in dollars.” Ibid. Neither of these conditions is present in this case, where the preliminary injunction issued because of the possibility of irreparable harm to the mortgagors from the foreclosures and for the purpose of maintaining the status quo pending a resolution that was ultimately in SMS’s favor.
7. Amount of judgment for the breach of the forbearance agreement. We turn to the appeal of SMS in which it contends that the judge erred in not awarding as principal damages for
The judge concluded otherwise. Admitting extrinsic evidence on the subject, he found that one of the collection proceedings (the Essex action) was actually an intervention on the part of USTrast in a proceeding between Robert Conti and American Bridge Products, Inc., and was undertaken by USTrast in an effort to preserve its position as a secured judgment creditor of American Bridge Products, Inc. The amount to be embraced by the execution in the Essex County case is the sum already due on one of the actions in Suffolk County, and thus represents a significant double counting when compared to the Conti parties’ liability with respect to the original USTrast loans. The judge determined that the parties to the forbearance agreement did not intend that there be this kind of double recovery, and reduced the damages award accordingly.
We agree with the judge’s interpretation. SMS argues that an unambiguous contract must be enforced in accordance with its terms, see Schwanbeck v. Federal-Mogul Corp., 412 Mass. 703, 706 (1992), and that evidence extrinsic to the contract should
SMS concedes that enforcement of the agreement’s literal provisions would give it, in effect, a double payment on one of the underlying promissory notes. It argues, however, that the extra liability was a reasonable, bargained-for recourse in the event of a breach of the forbearance agreement by the Conti parties, particularly given that the borrowers had, by means of that agreement, eliminated their exposure to a G. L. c. 93A claim and multiple damages. We are not persuaded that this was what the parties intended. The forbearance agreement constituted a compromise of liabilities incurred by the Conti parties pursuant to identified promissory notes, and it is those liabilities that the parties apparently intended to enforce in the event that the compromise failed. Absent the forbearance agreement, USTrust and its successors could not have collected twice on one promissory note, and we do not read the agreement as purposefully creating such an entitlement.
8. Appellate attorney’s fees. The forbearance agreement provides that, in the event of a default by the borrowers, the lender is entitled to “all attorney’s fees incurred by the Bank in connection with the Essex Action, Second Suffolk Action, Third Suffolk Action, and this Agreement and Related Documentation, and not yet reimbursed at the time of the default.” We construe this entitlement to apply to appellate proceedings to the extent that SMS is the prevailing party. Accordingly, within fifteen days of the date of this opinion, SMS may file an application for an award of appellate attorney’s fees and expenses limited to those portions of the appeal on which it has prevailed. The Conti parties may file an opposition within fifteen days of service of SMS’s application. See Fabre v. Walton, 441 Mass. at 10-11.
9. Disposition. That portion of the judgment entered in Suffolk Superior Court civil action no. 02-4144 that awarded attorney’s fees in connection with the special motion to dismiss filed by SMS under G. L. c. 231, § 59H, is vacated, and the case is remanded to the Superior Court for a redetermination of the amount of attorney’s fees in accordance with this opinion. The remainder of that judgment is affirmed. The judgment entered in Suffolk Superior Court civil action no. 02-2666 is affirmed.
So ordered.
Robert Conti; New England Bridge, Inc. (of which John Conti was president); Everett Aluminum, Inc. (of which Peter R. Conti was president); John Conti, as trustee of the 93-95 Brookline Street Realty Trust; Robert Conti, as trustee of the Lynn Street Realty Trust; and Peter R. Conti, as trustee of the Conti Family Realty Trust.
The Conti parties appeal as well from the denial of their motion for reconsideration of the order granting summary judgment on that portion of the case.
The reference is to the forbearance agreement.
Certain of the periodic payments had been for more than the required amount.
The agreement authorized the parties to send notices of changes of address, but did not obligate them to do so.
In fact, the lender’s change of address was irrelevant. The agreed-upon address for payment was what mattered.
We acknowledge the principle that impracticability of performance or frustration of purpose may suspend temporarily an obligor’s duty to perform, or even discharge such duty if the obligor’s performance has been made more burdensome. See Restatement (Second) of Contracts § 269 (1981); 9 Corbin, Contracts § 947 (1979) (contract contains implied promise by obligee not to prevent or hinder performance). The principle is inapplicable here, given that the Conti parties never attempted, following the sale of USTrust, to make payment as directed in the forbearance agreement.
What we have said answers as well the contention of the Conti parties that the judge abused her discretion by denying reconsideration of the order allowing summary judgment on liability.
One note provided for annual interest at two percent above USTrust’s “base lending rate”; another at nine percent per annum; and the third at the USTrust base lending rate plus one percent.
The judge subsequently acknowledged that, at the time of the ruling, he had been unaware that SMS had in fact properly initiated foreclosure proceedings in the Land Court.
Specifically, the amounts of the executions sought by SMS were $304,811.63, $333,973.17, and $192,682.07, for a total of $831,466.87. After subtracting the amounts paid by the Conti parties under the forbearance agreement and adding postexecution interest, SMS’s claim exceeds $1 million.