Buker v. National Management Corp.

• Decision Date: 01 July 1983
• Citation: 16 Mass.App.Ct. 36,448 N.E.2d 1299
• Parties: Leonard BUKER et al. 1 v. NATIONAL MANAGEMENT CORPORATION.
• Court: Appeals Court of Massachusetts

Page 1299

448 N.E.2d 1299

16 Mass.App.Ct. 36

Leonard BUKER et al. ¹ v. NATIONAL MANAGEMENT CORPORATION.

Appeals Court of Massachusetts Hampden.

Argued Feb. 18, 1983.

Decided May 18, 1983.

Further Appellate Review Denied July 1, 1983.

Louis Kerlinsky, Springfield, for plaintiffs.

Samuel A. Marsella, Springfield, for defendant.

Before KASS, SMITH and WARNER, JJ.

SMITH, Justice.

The plaintiffs, lessees of a commercial building, brought this action in twenty counts, alleging deceit, misrepresentation, negligence, and breach of contract against the lessor, National Management Corporation (National). The matter was referred to a master, who found for National on all counts. Subsequently, a Superior Court judge granted summary judgment in favor of National on eighteen of the twenty counts contained in the plaintiffs' complaint. A jury trial on the remaining two counts, both alleging breach of contract, was halted by the trial judge when she allowed the defendant's motion for a directed verdict after the close of the plaintiffs' evidence. By this appeal, the plaintiffs contend that the granting of the summary judgment motion and the allowance of the motion for a directed verdict were error. ²

We summarize the relevant evidence in regard to the plaintiffs' contentions. ³ In September, 1965, Buker, who was interested in purchasing a restaurant, entered into negotiations with one Lemire, the major stockholder of a corporation then operating a restaurant on premises leased from National. Buker inspected the building, and Lemire assured him that at that time the premises were in good condition, causing Lemire no difficulties in the operation of his business. Subsequently, Lemire agreed to sell, and Buker to purchase, the assets of the restaurant business. In partial consideration for the purchase price, Lemire agreed to help Buker obtain a new long-term lease from National for the premises.

Buker had three meetings with Harry Young, then chief executive of National. Two of the meetings, at which Lemire was present, were prior to the closing, and the third was at the closing when the lease was signed. During one of those meetings, Lemire stated that he had repaired the roof so that it no longer leaked and that he had no trouble with the boilers. During the course of the meetings, Young adopted Lemire's statements about the heating system and roof and commented that the driveway was new. Young further stated that the building on the premises was old but had been repaired recently and was in operable condition so far as he knew. Young also remarked that although National's lessees were obliged to make "minor repairs" Buker "had nothing to worry about." A written lease, for an eight-year term, was executed in November, 1965, by Young, in behalf of National, and by Buker, in behalf of Bee and Jay, Inc. (B & J), a corporation established by Buker to operate the restaurant. Under the lease B & J, as lessee, acknowledged that the premises were then in good repair and also undertook responsibility for keeping the premises in that condition during the term of the lease.

Almost from the outset of his occupancy in December, 1965, Buker experienced difficulties with the premises. During the winter of 1965-1966, the boilers performed erratically, occasionally providing insufficient heat and hot water; certain areas of the roof leaked; and the sewage system frequently backed up and became inoperable. There were also several lesser problems, both structural and sanitary, that plagued the restaurant building.

In January, 1966, Buker spoke with Young and enumerated his complaints concerning the condition of the building. Young expressed surprise but acknowledged he had not been inside the restaurant for "some time." The conversation concluded with Young's promise to come to the restaurant to see the conditions for himself and his expression of the expectation that Buker and he would "work things out." Young died shortly thereafter, and no inspection was ever undertaken by National or its representatives.

Although Buker undertook some repairs of the building and its fixtures, the heating and sanitary systems continued to malfunction sporadically during the following year, and those conditions contributed to Buker's decision to close the restaurant in March, 1967. B & J had stopped paying rent on the building in February of that year, but apparently the event which precipitated Buker's decision to close the restaurant was the cancellation of insurance on the boiler system because of the inadequacy of its safety devices. Some months later, in July, 1967, Buker and B & J filed petitions in bankruptcy. Both were adjudicated bankrupt as of the respective filing dates. The schedules of assets in both petitions included claims against National similar to those advanced by both plaintiffs in this case. These claims were not pressed by the trustee in bankruptcy, the same individual having been appointed in both cases. He was discharged in Buker's case by order dated June 4, 1970, and in B & J's case on September 30, 1970.

1. Summary judgment decision. We consider first the plaintiffs' contention that a Superior Court judge erred in granting summary judgment on eighteen of the twenty counts contained in the plaintiffs' complaint.

a. Statute of limitations. The master found that by January 22, 1966, Buker knew or should have known of the defective conditions that formed the basis of the plaintiffs' allegations that National had engaged in deceit and misrepresentation, or had been negligent, in negotiating the lease of the restaurant building. The writ commencing this action was dated January 5, 1971, almost five years later. On the basis of these findings, the judge ruled that eleven counts of the plaintiffs' complaint which sounded in tort were barred by the two-year statute of limitations then governing such actions ⁴ and granted summary judgment in favor of National on those counts. The plaintiffs contend that the ruling was in error, and the actions timely filed, because the statute of limitations was tolled during the three-year period when their assets were under the control of a trustee in bankruptcy. ⁵ The plaintiffs do not cite any case or statute which holds that the statute of limitations is tolled during the period that the assets of a bankrupt are under the control of a trustee in bankruptcy. ⁶

The purpose of the bankruptcy statutes is broadly defined as the "seizure of an insolvent debtor's assets in the interest of an impartial application of them to his creditor's [sic ] demands, ... [and] as a means of relieving his distress and rehabilitating him financially while rendering [to] his creditors all for which they may reasonably hope." Harris v. Zion's Sav. Bank & Trust Co., 317 U.S. 447, 451, 63 S.Ct. 354, 357, 87 L.Ed. 390 (1943). See Perez v. Campbell, 402 U.S. 637, 648, 91 S.Ct. 1704, 1710, 29 L.Ed.2d 233 (1971). To that end, preexisting claims of the sort here asserted become assets of the estate in bankruptcy and may be prosecuted by the trustee in bankruptcy for the benefit of the estate and the bankrupt's creditors. 11 U.S.C. § 110(a)(6) (1976). Tamm v. Ford Motor Co., 80 F.2d 723, 726-727 (8th Cir.1936). See note 6, supra. ⁷ Those provisions are intended to assure that a cause of action not yet time-barred will not be lost while a trustee in bankruptcy assesses the economic potential of the bankrupt estate. Tolling the statute of limitations during the entire period of bankruptcy would provide "bonus time" to the debtor of no apparent benefit to his creditors while permitting the debtor, after discharge from bankruptcy, to resurrect a stale claim. We do not read such an unlikely purpose into the Bankruptcy Act.

Thus, the judge was correct in holding that the statute of limitations barred the counts sounding in tort. We are not inclined to tamper with limitation periods enacted by the Legislature to "promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared." Burnett v. New York Cent. R.R., 380 U.S. 424, 428, 85 S.Ct. 1050, 1054, 13 L.Ed.2d 941 (1965), quoting Order of R.R. Telegraphers v. Railway Exp. Agency, Inc., 321 U.S. 342, 348-349, 64 S.Ct. 582, 586, 88 L.Ed. 788 (1944). See Olsen v. Bell Tel. Labs., Inc., 388 Mass. 171, 174-175, 445 N.E.2d 609 (1983).

b. Warranty of suitability. The Superior Court judge also granted summary judgment in favor of National on seven counts alleging breach of a warranty that the leased premises would be suitable for the plaintiffs' commercial purposes. The judge's ruling was based on the principle that no such warranty may be implied in the rental of commercial property. Gade v. National Creamery Co., 324 Mass. 515, 518-519, 87 N.E.2d 180 (1949). Compare Boston Housing Authy. v. Hemingway, 363 Mass. 184, 199, 293 N.E.2d 831 (1973). See Young v. Garwacki, 380 Mass. 162, 171 n. 12, 402 N.E.2d 1045 (1980). The plaintiffs argue that the ruling was in error because there were certain express warranties of suitability given them by National.

The plaintiffs' argument is flawed in several respects. Though we do not doubt that a lessor may, by contract, expressly warrant the suitability of a commercial property, the written lease in the instant case made no such warranty. In fact, the lease specifically provided that B & J, as lessee, acknowledged that the premises were in good order at the outset of its occupancy, and covenanted to prevent damage to the property and to return it in good order to National at the end of the term of the lease. By the provisions of the lease, the lessee accepted the leased premises as they were and undertook full responsibility for maintaining them in good repair. Even had the defendant given oral warranties prior to execution of the lease, those warranties would have been superseded by the unambiguous provisions...