Fairfield 274-278 Clarendon Trust v. Dwek

• Decision Date: 06 April 1992
• Docket Number: No. 91-1729,91-1729
• Parties: , 36 Fed. R. Evid. Serv. 183 FAIRFIELD 274-278 CLARENDON TRUST, et al., Plaintiffs, Appellees, v. Robert M. DWEK, Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 990

970 F.2d 990

23 Fed.R.Serv.3d 740, 36 Fed. R. Evid. Serv. 183

FAIRFIELD 274-278 CLARENDON TRUST, et al., Plaintiffs, Appellees, v. Robert M. DWEK, Defendant, Appellant.

No. 91-1729.

United States Court of Appeals First Circuit.

Heard April 6, 1992.

Decided July 30, 1992.

Garry V. Inge with whom Nissen and Lumsden, Boston, Mass., was on brief, for defendant, appellant.

Neal M. Brown with whom Law Offices of Neal M. Brown, Boston, Mass., was on brief, for plaintiffs, appellees.

Before CYR, Circuit Judge, and COFFIN and CAMPBELL, Senior Circuit Judges.

CYR, Circuit Judge.

Following a two-day jury trial, the United States District Court for the District of Massachusetts entered judgment against appellant Robert Dwek awarding plaintiff-appellee Fairfield 274-278 Clarendon Trust ("Trust") $48,000 in damages for breach of contract. ¹ We affirm.

I BACKGROUND

On October 8, 1987, the Trust entered into a written agreement to sell Dwek an uncompleted condominium unit in Boston for $240,000. The agreement contemplated a $48,000 purchase money deposit the same day, to be retained by the Trust as liquidated damages in the event of a default by Dwek. Dwek did not make the deposit. There was evidence that the parties later agreed orally to a reduced deposit of $10,000 by Dwek, but there was no evidence of any agreement to alter the liquidated damage provision in the October 8 agreement. Dwek did not make the $10,000 deposit. Thereafter, the parties executed an undated handwritten agreement which called for the completion of the condominium unit and its resale to a third party. Dwek was to furnish the labor and materials, and profits or losses were to be shared. The handwritten agreement made reference to a formal document to be drawn and executed at a later date; it was never drafted. Dwek failed to comply with the handwritten agreement as well. Eventually, the condominium unit was sold to a third party for approximately $261,000.

II DISCUSSION

Dwek raises four claims on appeal. First, he asserts that the court erred in instructing the jury that it must find that there had been a breach of the contract by Dwek, and award the Trust $48,000 in liquidated damages, if it were to find the October 8 agreement to have been the operative contract between the parties. ² Second, Dwek asserts that the trial court erred in excluding his pretrial deposition. Third, he claims that the court made prejudicial comments to the jury regarding Dwek's unavailability at trial. Finally, Dwek contends that the court committed reversible error by limiting cross-examination of the drafter of the October 8 agreement.

1. Instruction on Liquidated Damages

The trial court instructed the jury that it was free to find that the parties intended to be bound by the October 8 agreement, either in its original form or as modified by the later handwritten agreement. In the alternative, the jury was free to find that the handwritten agreement replaced the October 8 agreement. The court further instructed the jury that Dwek "broke either or both of those contracts insofar as that question is before you. There is no issue as to whether there was a breach or not. There was a breach." Finally, the jury was instructed that damages could be determined in various ways. If the jury were to find that Dwek breached the October 8 agreement, however, it was to award $48,000 in liquidated damages. Dwek contends that the district court misinstructed the jury on the meaning of the liquidated damage clause. ³

The Standard Form Condominium Purchase and Sales Agreement executed on October 8, 1987, states that "[t]he agreed purchase price for said premises is Two Hundred Forty Thousand ($240,000)--dollars, of which $48,000.00 have been paid as a deposit this day...." Paragraph 22 then states that "[i]f the BUYER shall fail to fulfill the BUYER'S agreements herein, all deposits made hereunder by the BUYER shall be retained by the SELLER as liquidated damages and such retention shall be Seller's sole remedy at law or in equity."

The district court ruled that interpretation of the October 8 agreement was a matter for the court and that it prescribed liquidated damages in the amount of $48,000. Dwek contends that his failure to deposit the $48,000, as contemplated by the October 8 agreement, rendered the liquidated damage provision ambiguous because there was no deposit to be "retained by the SELLER as liquidated damages." Alternatively, he argues that the jury should have been permitted to determine that the parties intended, by virtue of their later oral agreement, that Dwek deposit $10,000, not $48,000.

"Under Massachusetts law, interpretation of a contract is ordinarily a question of law for the court." Edmonds v. United States, 642 F.2d 877, 881 (1st Cir.1981) (citing Freedlander v. G. & K. Realty Corp., 357 Mass. 512, 516, 258 N.E.2d 786, 788 (1970)). Only if the contract is ambiguous is there an issue of fact for the jury. Id. (citing cases). Moreover, where the contract is unambiguous, it is to be enforced according to its terms. Id. (citing cases). Absent fraud or mistake, an agreement is presumed to express the intent of the parties, Hess Oil & Chemical Corp. v. Ristuccia, 3 Mass.App.Ct. 772, 772, 331 N.E.2d 823, 823 (1975) (agreement unambiguous as concerned obligation of defendants to pay one third of cost).

Evidence of prior or contemporaneous oral agreements cannot be admitted to vary or modify the terms of an unambiguous written contract. New England Financial Resources, Inc. v. Coulouras, 30 Mass.App.Ct. 140, 145, 566 N.E.2d 1136, 1139 (1991) (parol evidence rule precludes use of oral evidence to modify integrated agreement); Aerostatic Engineering Corp. v. Szczawinski, 1 Mass.App.Ct. 141, 143, 294 N.E.2d 521, 522 (1973) (oral agreement cannot modify payment terms unambiguously expressed in written contract). Instead, "parties are bound by the plain terms of their contract," Hiller v. Submarine Signal Co., 325 Mass. 546, 550, 91 N.E.2d 667, 669 (1950) (limiting party to sales commission prescribed by plain terms of contract), and contemplation of the parties is not material where the agreement is unambiguous, Blakeley v. Pilgrim Packing Co., 4 Mass.App.Ct. 19, 24, 340 N.E.2d 511, 514 (1976) (restrictive agreement between industrial park developer and park tenant interpreted according to meaning of unambiguous written agreement).

These interpretive principles lend support to our view of the October 8 agreement as an integrated contract whose unambiguous deposit and liquidated damage provisions were not subject to modification through resort to parol evidence. New England Financial Resources, 30 Mass.App.Ct. at 145, 566 N.E.2d at 1139 ("parol evidence rule precludes evidence of earlier or contemporaneous decisions that would modify the provisions of a later integrated agreement which the proponent of the agreement seeks to enforce"). The contract unambiguously established a $240,000 purchase price, "of which $48,000.00 have been paid as a deposit this day ...," and provided that "all deposits made hereunder by [Dwek] shall be retained by the [Trust] as liquidated damages...."

As a practical matter, Dwek was inviting the district court to conform the terms of the liquidated damage provision to accommodate his breach of the deposit provision. Of course, as a logical matter the suggested disregard of Dwek's breach of the deposit agreement would result in a commensurate reduction in the purchase price and expunge the liquidated damage clause in its entirety. We think that the contract reasonably could not be considered ambiguous based on an interpretation which would reward the buyer for its breach. See Jefferson Ins. Co. v. Holyoke, 23 Mass.App.Ct. 472, 475 n. 4, 503 N.E.2d 474, 476 n. 4 (1987) (reviewing court "must itself determine, as a matter of law, the question of ambiguity").

Thus, the unarticulated assumption that the liquidated damage provision was expunged by Dwek's failure to deposit the $48,000 is unsupported by evidence or logic. Absent a subsequent modification or novation of the October 8 agreement (and the jury found neither), ⁴ the failure to make the $48,000 deposit in no way altered either the agreement to do so or the amount of liquidated damages prescribed for the failure to do so. As neither fraud nor mistake was alleged, the deposit and liquidated damage provisions are presumed to express the intent of the parties, Hess Oil & Chemical Co., 3 Mass.App.Ct. at 772, 331 N.E.2d at 823, and Dwek was bound by their plain language, see Hiller, 325 Mass. at 550, 91 N.E.2d at 669. The liquidated damage instruction did not constitute error.

2. Exclusion of Dwek's Deposition

The district court refused to allow Dwek's deposition to be read to the jury at trial. According to the deposition, taken July 9, 1990, Dwek had been living and working in California for approximately one year. On the eve of trial, through counsel, Dwek requested a continuance due to alleged financial hardship. The request was denied. In his opening statement, Dwek's counsel informed the jury that Dwek would arrive within a day or two, but that the defense did "have his testimony recorded" in the event Dwek did not appear. When Dwek had not arrived by day two, counsel tried to introduce the pretrial deposition pursuant to Civil Rule 32(a)(3)(B), which provides that

(3) The deposition of a witness, whether or not a party, may be used by any party for any purpose if the court finds ... (B) that the witness is at a greater distance than 100 miles from the place of trial or hearing, or is out of the United States, unless it appears that the absence of the witness was procured by the party offering the deposition.

Fed.R.Civ.P. 32(a)(3)(B) (emphasis added). Following "lengthy discussions" in chambers, which apparently were not recorded the district court excluded the deposition on the ground that the "defendant ha[d] shown no reason why he shouldn't be [there]...