Bickford's Family Rests. v. Waltham Ventures, LLC

• Docket Number: 22-P-6
• Decision Date: 24 May 2023
• Parties: BICKFORD'S FAMILY RESTAURANTS, INC. v. WALTHAM VENTURES, LLC.
• Court: Appeals Court of Massachusetts

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BICKFORD'S FAMILY RESTAURANTS, INC. v. WALTHAM VENTURES, LLC.

No. 22-P-6

Appeals Court of Massachusetts

May 24, 2023

Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass.App.Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass.App.Ct. 1001 [2009]), are primarily directed to the parties and therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore represent only the views of the panel that decided the case.

A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass.App.Ct. 258, 260 n.4 (2008).

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

This case arises from a real estate contract dispute. The plaintiff, Bickford's Family Restaurants, Inc., which operated a restaurant in Waltham, assigned the purchase option in its commercial lease^[1] to the defendant, Waltham Ventures, LLC. In addition to other consideration, the defendant agreed to a deferred payment^[2] in the amount of $200,000, less credits, subject to conditions discussed infra. Three years later, after an inquiry by the plaintiff regarding status of the deferred payment, the defendant stated its belief that, per the terms of the parties' written agreement (contract), it did not owe the deferred payment because it had refinanced a loan secured by the property without netting any funds in excess of the payoff balance. The plaintiff sued, seeking enforcement of the deferred payment clause and damages under G. L. c. 93A. A Superior Court judge granted summary judgment in favor of the plaintiff on the breach of contract claim and permitted the c. 93A claim to proceed to trial. After a bench trial, a different Superior Court judge found for the defendant on the c. 93A claim and ordered the plaintiff to pay fees and costs. Both parties cross-appealed. Discerning no error, we affirm.

Discussion.

1. Summary judgment.

On appeal, the defendant argues that the motion judge should not have granted summary judgment to the plaintiff as to the breach of contract claim because (1) the language of the contract unambiguously supported the defendant's position and (2) summary judgment was inappropriate insofar as the judge had concluded that certain provisions of the contract conflict. We are not persuaded.

"Our review of a motion judge's decision on summary judgment is de novo, because we examine the same record and decide the same questions of law." G4S Tech. LLC v Massachusetts Tech. Park Corp., 479 Mass. 721, 730 (2018), quoting Kiribati Seafood Co. v. Dechert LLP, 478 Mass. 111, 116 (2017). "The standard of review of a grant of summary judgment is whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as a matter of law." G4S Tech. LLC, supra, quoting Casseus v. Eastern Bus Co., 478 Mass. 786, 792 (2018).

"A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty." Sea Breeze Estates, LLC v. Jarema, 94 Mass.App.Ct. 210, 215 (2018), quoting I &R Mechanical, Inc. v. Hazelton Mfg. Co., 62 Mass.App.Ct. 452, 454 (2004). "When contract language is unambiguous, it must be construed according to its plain meaning." Balles v. Babcock Power Inc., 476 Mass. 565, 571 (2017). "To determine whether the language at issue is ambiguous, we look both to the contested language and to the text of the contract as a whole." Id. at 572.

Here, we agree with the motion judge that the language of paragraph 22 of the contract unambiguously supports summary judgment in the plaintiff's favor. Paragraph 22 of the contract states in full:

"Upon the earlier of (a) the third anniversary of the Closing, or (b) the occurrence of a Capital Transaction, Buyer shall pay Seller the Deferred Payment in the amount of Two Hundred Thousand Dollars ($200,000.00), less credits due to Buyer for (x) one-half (1/2) of the first six Non-refundable Option Payments made hereunder, and (y) any payments made by Buyer on account of Seller's failure to perform its obligations hereunder, including the Lease. As used herein, the term "Capital Transaction" shall mean the Buyer's sale of all, or substantially all of its interest in the Property, either directly or [through] a transfer of a membership interest in Buyer or a financing transaction resulting in the recording of a mortgage or other security instrument against the Property after completion of the initial construction of the Project[], where such financing transaction pays Buyer a net amount of $1,000,000.00 or more over the payoff balance of the existing mortgage. If the net amount received by Buyer is less th[a]n $1,000,000.00 then the Deferred Payment amount required to be paid at the time of the financing transaction shall be reduced proportionately by the ratio of net amount received by Buyer divided by $1,000,000. This obligation shall survive the closing."

The plain language of this paragraph indicates that, given the parties' agreement that no sale of the property has occurred and that three years have passed since the defendant closed on the property, the defendant must show, at a minimum, a genuine issue of material fact regarding whether a new mortgage or security had been recorded against the property in order to avoid summary judgment on the claim of breach of contract. See Sea Breeze Estates, LLC, 94 Mass.App.Ct. at 215. It has failed to do so. See id. at 216-218 (summary judgment appropriate where party fails to show genuine issue of material fact regarding contract terms).

Paragraph 22 defines a "capital transaction" as, inter alia, "a financing transaction resulting in the recording of a mortgage or other security instrument." The undisputed record reflects that the defendant's April 10, 2014 agreement with RBS Citizens, N.A., titled "Amendment to Construction Mortgage, Assignment of Leases and Security Agreement and Other Loan Documents," was an amendment of the existing mortgage between those parties, rather than a new mortgage. Indeed, the defendant concedes as much in its brief. Because the amendment did not result in the recording of a new mortgage or other security instrument, it was not a capital transaction as defined by paragraph 22. Therefore, the defendant's failure to generate any additional funds through the refinancing and amendment of its existing mortgage did not eliminate its obligation to make the deferred payment.

The defendant further argues that summary judgment was improper because the judge concluded that certain provisions of paragraph 22 in the contract conflict and there was a factual dispute as to the evidence necessary to harmonize that conflict. We are not convinced. See G4S Tech. LLC, 479 Mass. at 730.

Assuming without deciding that any conflict in the plain meaning of the contract language exists, such a conflict only deals with the extent to which the payment would be reduced in the event that a capital transaction occurred.^[3] The plain language of the contract, however, shows that a capital transaction did not occur, meaning that any reduction of payment in the event of such an occurrence is immaterial to the grant or denial of a motion for summary judgment. See Balles, 476 Mass. at 571. See also G4S Tech. LLC, 479 Mass. at 730.

2. Chapter 93A.

On cross appeal, the plaintiff argues that the trial judge's findings do not support his decision to award judgment to the defendant on the c. 93A claim. We disagree.

"General Laws c. 93A, § 11, prohibits unfair or deceptive acts or practices among those engaged in trade or commerce." Diamond Crystal Brands, Inc. v. Backleaf, LLC, 60 Mass.App.Ct. 502, 506-507 (2004), citing Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 474 (1991). "Not every breach of contract constitutes a violation of G. L. c. 93A, but a knowing violation of contractual obligations for the purpose of securing unwarranted benefits does" (citation omitted). Diamond Crystal Brands, Inc., supra at 507. "Courts must consider whether the nature, purpose, and effect of the challenged conduct is coercive or extortionate." Id., citing Massachusetts Employers Ins. Exch. v. Propac-Mass, Inc., 420 Mass. 39, 42-43 (1995).

"The standard of review is well established. The findings of fact of the judge are accepted unless they are clearly erroneous. We review the judge's legal conclusions de novo" (citation omitted). T.W. Nickerson, Inc. v. Fleet Nat'l Bank, 456 Mass. 562, 569 (2010). "In an action alleging violations of G. L. c. 93A, 'whether a particular set of acts, in their factual setting, is unfair or deceptive is a question of fact.'" H1 Lincoln, Inc. v. South Washington St., LLC, 489 Mass. 1, 1314 (2022), quoting Casavant v. Norwegian Cruise Line Ltd., 460 Mass. 500, 503 (2011). "But whether conduct found to be unfair or deceptive 'rises to the level of a chapter 93A violation is a question of law.'" H1 Lincoln, Inc., supra at 14, quoting Baker v. Goldman, Sachs &Co., 771 F.3d 37, 49 (1st Cir. 2014).

Here the plaintiff does not contest the trial judge's findings of fact. Instead, it argues that the facts found by the judge require a finding that the defendant's actions constituted a violation of c. 93A. We disagree. Admittedly, the trial judge was highly condemnatory of the...