Coupounas v. Madden

• Decision Date: 12 November 1987
• Citation: 514 N.E.2d 1316,401 Mass. 125
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1316

514 N.E.2d 1316

401 Mass. 125

George D. COUPOUNAS v. Edward C. MADDEN et al. ¹ Supreme Judicial Court of Massachusetts Suffolk.

Argued Sept. 11, 1987.

Decided Nov. 12, 1987.

Daniel Briansky (Paul William Garber, Boston, with him), for defendants.

John A. Gledhill, Jr., Malden, for plaintiff.

Before HENNESSEY, C.J., and WILKINS, LIACOS, ABRAMS and LYNCH, JJ.

HENNESSEY, Chief Justice.

The defendant Madden appeals from a judgment in favor of the plaintiff Coupounas on promissory notes executed by Madden in payment of professional fees owed Coupounas by Madden and by two corporations controlled by Madden.

Prior to 1970, Coupounas, an attorney and certified public accountant, rendered certain professional services to Madden and to his corporations. In November, 1970, and subsequent months, Coupounas sent invoices for his fees to Madden and to each corporation. These bills were not paid. Coupounas testified that, at some point in 1972, he had discussed with Madden the matter of the unpaid invoices, and that Madden had agreed to pay interest on the balances at the rate of 1 1/2% per month. Madden denied having made such an agreement. It is undisputed that Coupounas's invoices for the month of October, 1972, included, in addition to the principal balance of the unpaid fees an amount representing accrued interest, at the rate of 1 1/2% per month, from the time each fee originally was invoiced through October 1, 1972. Subsequently, Coupounas continued to send monthly invoices to Madden and to his corporations, each month adding an additional interest charge of 1 1/2% of the previous month's outstanding balance. In this fashion, by calculating each month's interest accruals using as a base the previous month's outstanding balances, Coupounas compounded interest by charging not only interest on principal but also interest on interest previously accrued.

This continued until March, 1973, when Madden again sought Coupounas's professional services. Coupounas refused to perform any further services until Madden made some arrangement to pay for the previous ones. Eventually, Madden agreed to execute the promissory notes on which Coupounas sued below. Coupounas prepared three promissory notes, one each for the balances due respectively from Madden personally, and from each of his corporations. Each note was dated March 31, 1973, payable thirty days thereafter, and executed in a face amount representing the balance due from the particular debtor, including simple and compound interest through that date. Madden executed each note in his individual capacity.

When introduced in evidence at trial, each note bore the words, "with interest at 1 1/2% per month." Madden denied that this language appeared on the notes at the time he signed them.

Madden did not pay the notes when they became due, and Coupounas brought an action on them in the Superior Court. The jury returned a verdict for Coupounas in the face value of the notes, and the judge added interest at 1 1/2% per month from the date the notes were executed to the date of the judgment. Madden appealed, and we took the case on our own motion.

On appeal, Madden contends that the judge erred in denying his requests for certain jury instructions, and in denying his motion for a new trial. At trial, Madden's counsel did not object to the trial judge's denial of certain of his requests for instructions, and so the propriety of the judge's action as regards these is not before us. Mass.R.Civ.P. 46, 365 Mass. 811 (1974). Those requests as to which Madden's rights were saved were properly denied for the reasons that follow.

Madden requested an instruction that Coupounas had compounded interest on the invoices and had incorporated such compound interest in the face amount of the notes. We see no error in denying this request. Coupounas's own testimony established that such compounding had occurred and that the face amount of the notes included compound interest. As there was no factual dispute, there was no function for the jury to perform on this issue and the judge was correct not to submit it to them.

Madden requested that the jury be instructed that, "[i]f you find a fiduciary relationship existed between the plaintiff and defendant as a result of their attorney-client relationship at the time of the defendant executing said three (3) promissory notes, the plaintiff had a duty to inform the defendant that (a) he should obtain independent legal advice before signing the notes; (b) he was to alter the notes by inserting an interest rate of 1 1/2% per month; and (c) he would be assuming individual liability for corporate obligations, some of which were incurred for services never fully rendered by the plaintiff."

The judge's refusal to give this instruction was not error, as the requested instruction was infirm in a number of particulars. First, there was no dispute as to the underlying facts. Coupounas did not claim to have made any of the indicated disclosures. There was therefore no function for the jury to perform. Secondly, as to the first part of this instruction, Coupounas had no duty to advise Madden to seek independent legal counsel before signing the notes, or that by signing he would be assuming individual liability for corporate obligations. There was no unfairness or overreaching by Coupounas. Madden, an experienced businessman, willingly signed the notes in order to obtain further services from Coupounas. Coupounas was not obligated to advise Madden of the consequences of his signing the notes in his individual capacity or to advise him to seek independent legal counsel before so signing. See Widett & Widett v. Snyder, 392 Mass. 778, 782-783, 467 N.E.2d 1312 (1984). As to the requests that the jury be instructed that Coupounas had altered the notes to include a provision for interest, and that some of the underlying debts "were incurred for services never fully rendered" by Coupounas, these were requests that the jury be directed that these facts had been established. On the contrary, Coupounas disputed these issues. He testified that the notes bore interest when Madden executed them, and that he had performed all the services for which he had charged Madden.

Madden also requested that the jury be instructed that, "[i]n the circumstances of this case where the integrity of the three (3) notes is called in question because plaintiff billed the defendant for some services he did not render to the defendant, but for which he gave him a bill, the plaintiff should not recover anything." Again, to have given this instruction would have been to direct a finding that "plaintiff billed the defendant for some services he did not render," a disputed issue. Moreover, even if such overcharging had been established, it does not follow that "the plaintiff should not recover anything," since he still might be entitled to recover the reasonable value of the services actually rendered. See, e.g., Young v. Southgate Dev. Corp., 379 Mass. 523, 399 N.E.2d 27 (1980) (attorney's misconduct does not bar recovery of reasonable value of services rendered prior to such misconduct). Finally, the phrasing of the instruction in terms of the "integrity" of the notes being "called into question" misstates the applicable burden of proof. Coupounas established his prima facie case by undisputed evidence that Madden had signed the notes. It then was incumbent on Madden to prove any defense by a preponderance of the evidence. Uniform Commercial Code (UCC), G.L. c. 106, § 3-307(2) (1986 ed.), and UCC § 3-307 comment 2 (Law Co-op.1984). To establish a defense, Madden had to do more than "call into question" the "integrity" of the notes, whatever that ambiguous, if not meaningless, language connotes. For any of these reasons, the judge below was correct to deny the request for this instruction.

Much the same reasoning applies to Madden's request that the jury be instructed that, "[i]f you find that there exist circumstances and conditions brought about by the plaintiff in the course of conduct by him to the defendant which would cause the integrity of the promissory notes to be questionable, then the promissory notes are void and the plaintiff should recover nothing." Again, this phrasing is misleading at...