Bui v. Ma, 03-P-567 (MA 11/29/2004)
| Decision Date | 29 November 2004 |
| Docket Number | 03-P-567 |
| Citation | 62 Mass. App. Ct. 553 |
| Parties | DIEP BUI vs . HA T. MA. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Res Judicata. Judgment, Preclusive effect. Summary Process. Contract, Lease of real estate, Ratification. Landlord and Tenant, Eviction.
Summary process. Complaint filed in the Dorchester Division of the District Court Department on April 6, 1999.
On appeal to the Superior Court Department, the case was heard by Diane M. Kottmyer, J.
Paul A. Palermino for the defendant.
James P. Long for the plaintiff.
Present: Laurence, Kantrowitz, & Cohen, JJ.
At issue in this appeal is whether the plaintiff, Diep Bui, or the defendant, Ha T. Ma, has the right to possession of a 1,500 square foot commercial condominium unit (premises) located in a building on Dorchester Avenue in Boston. Both women, immigrants from Vietnam, wish to use the premises for a restaurant. Since March, 1994, Ma has occupied the premises as proprietor of the Hau Giang Restaurant, an establishment that serves Vietnamese food and sells sandwiches. Over the past seven years, the validity of Ma's continued use and occupancy of the premises has been challenged both by the prior owner of the property, Atlantic Realty Trust (Atlantic), and by Bui, who purchased the premises and an adjacent commercial condominium unit from Atlantic in March, 1998, with the intention of operating her own Vietnamese restaurant in the combined commercial space.
The present case began when Bui initiated summary process proceedings in the District Court in April, 1999. Ma prevailed in the District Court, but after a jury-waived trial de novo, a judge of the Superior Court ordered judgment for possession in favor of Bui. Ma brings this appeal, contending that she is entitled to remain in the premises pursuant to the terms of a March, 1994, lease she entered with the then-owner of the building, Royce Realty Trust (Royce). We agree with Ma and reverse, concluding that principles of claim preclusion and ratification prevent Bui from contesting the lease.
Background. The background of this case is lengthy and involved. Our recitation is chronological, derived from the judge's findings, from uncontradicted evidence that is consistent with those findings, and from findings made by a different judge in an earlier summary process case litigated between Ma and Bui's predecessor, Atlantic. As we later explain, the findings in the Atlantic case are binding upon Bui.
The premises occupied by Ma is part of a larger commercial parcel at 1153-1611 Dorchester Avenue (property). On November 1, 1989, Royce purchased the property, simultaneously granting USTrust a mortgage to secure a loan for a portion of the purchase price. At that time, the trustee of Royce was Joseph J. Grassello, and the beneficiaries were his sister and brother-in-law, Maria and Richard Miara. On June 8, 1993, Maria Miara succeeded her brother as trustee and undertook to manage the property for Royce.
As things stood in 1993, three businesses coexisted on the property in adjacent storefronts: a grocery store known as the Far East Market, a Thai restaurant known as Mr. Le, and a shop operated by Ma's foster brother, Chuong Pham, who held a five-year lease with options to extend for two additional five-year periods. Chuong Pham's lease contained a use restriction providing that "[t]he lessee shall use the leased premises only for the purpose of [a] coffee shop, bakery and deli . . . not to compete with Mr. Le Restaurant or Far East Market." Be that as it may, in addition to selling sandwiches, Chuong Pham operated a full-service restaurant with seating for forty-eight persons, serving Vietnamese and Chinese cuisine. Maria Miara, who patronized the restaurant, had actual knowledge of Chuong Pham's use and apparently did not object.
In 1994, Chuong Pham informed Maria Miara that Ma was taking over his business and that she would like her own lease. A lease was prepared that provided for a three and one-half year term, commencing April 1, 1994, with options for two five-year extensions. The lease also contained the identical use restriction that was present in Chuong Pham's lease, as well as a provision that "[a]fter the first year the rent will increase up to 3% per year."
The lease between Ma and Royce was executed by both parties,1 but never recorded. Thereafter, Ma operated her business in the same way as Chuong Pham, selling sandwiches but also running a full service restaurant. Maria Miara continued to be personally aware of the operation of the restaurant and even patronized it.
On November 9, 1994, USTrust recorded a notice of foreclosure of the mortgage it held on the property. A foreclosure auction was attended by a number of bidders, including an attorney, Keith Kiper, who represented Athena and Italo Grassello, the parents of Maria Miara. Although another individual was the high bidder, shortly thereafter he assigned his rights under the bid to Kiper, as trustee of Atlantic. On April 10, 1996, USTrust gave a foreclosure deed to Kiper as Atlantic's trustee, who quickly was succeeded in that capacity by Athena Grassello. After the foreclosure sale, Athena Grassello notified the tenants, including Ma, about the change in ownership. She directed them to pay their rents to Atlantic and designated Maria Miara and her husband, Richard, as agents for the management of the property.
On April 23, 1996, Atlantic converted the property into condominium units, recording a master deed for the Far East Condominium and designating the premises occupied by Ma as unit three. By letter dated May 1, 1996, Atlantic informed Ma of this development and told her to contact Maria Miara, "the real estate broker marketing the property," should she wish to buy the premises. Ma also was informed that Atlantic
Discussions ensued about Ma purchasing the premises, but no agreement was reached. All the while, Ma continued to occupy the premises and pay rent to Atlantic. On March 11, 1997, Ma sent Athena Grassello a letter notifying Atlantic that she was exercising the first of her two options to extend her lease for five-years. The letter specifically referenced her lease, stating, "I hereby exercise the extension option under the lease dated March 28, 1994 for another five (5) years commencing on December 1, 1997 and expiring on November 30, 2002." Atlantic responded, stating that there was no lease in effect.
At this juncture, Bui entered the picture — having been told by her brother (who held an interest in the Far East Market) that the property was a very good location for Bui and her husband to operate a Vietnamese restaurant. The Buis decided to purchase and combine two condominium units for this purpose — unit two, which originally was occupied by the Thai restaurant, Mr. Le, but which had evolved into a Vietnamese restaurant, Pho Pascal; and unit three, the premises occupied by Ma's restaurant, Hau Giang. On April 29, 1997, Bui offered to purchase units two and three, subject to their being vacant at closing. Bui and her husband had seen the property several times before they made the offer, and they knew that Ma was operating a full service Vietnamese restaurant in unit three.
Athena Grassello, on behalf of Atlantic, accepted Bui's offer on May 1, 1997. Bui and Atlantic then entered into a purchase and sale agreement, dated July 21, 1997, which again provided that Bui's purchase of condominium units two and three was contingent upon the units being vacant at the time of the closing, which was scheduled for later that summer. The purchase and sale agreement stated that if the units were not vacant, the buyers would extend the closing date for a period not to exceed six months. If, at the end of that period, the premises still were not vacant, Atlantic would be obliged to refund Bui's deposit and pay a penalty of $10,000.
In furtherance of its obligation to deliver the premises tenant-free, Atlantic, by its attorney, John Collier, sent Ma a sixty-day notice to quit on August 1, 1997, explaining that the premises were "under agreement for sale and the owners are required to deliver the condominium vacant at the time of the closing." On October 27, 1997, Collier filed a summary process action in the District Court in which Atlantic contended that Ma was a tenant at will who had been given proper notice of termination. During the trial of that action, the lease between Ma and Royce was not brought to the judge's attention. Judgment for possession entered for Atlantic, and Ma appealed to the Superior Court.
In March, 1998, that case was retried to a judge of the Superior Court, sitting without a jury. During this trial, Ma, who was represented by new counsel, produced the 1994 lease bearing her signature and that of Maria Miara, as trustee of Royce, and the focus of the case became the validity of the lease and whether Atlantic was bound by it.
Up to this point, the closing on Bui's purchase of condominium units two and three had been postponed from its originally scheduled date of August 28, 1997. Then, after the Superior Court trial was completed, but before the judge issued a decision, Bui, fearing that she would lose her financing, decided to go ahead with the purchase even though the issue of Ma's occupancy remained unresolved.
The closing took place on March 31, 1998, with all parties to the sale represented by counsel. Collier, who had been appearing for Atlantic in the eviction proceedings, represented Atlantic, attorney Joel Fishman represented Bui, and attorney Peter Harrington represented Bui's mortgage lender, Equity One, Inc. Because Ma's continued occupancy of unit three remained a cause for concern, at or immediately before the closing the parties and Collier, as...
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