Farmer & Flier Assoc., Lp v. Guilford Transportation Industries, Inc.

Decision Date07 September 2007
Docket NumberMICV20004510C
Citation2007 MBAR 395
PartiesFarmer & Flier Associates, a limited partnership et al. v. Guilford Transportation Industries, Inc.
CourtMassachusetts Superior Court
Opinion No.: 99599

As-is Docket Number: MICV2000-4510C

Venue Middlesex

Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Smith, Herman J., J.


This action arises out of a July 27, 1998 contract,[1] pursuant to which plaintiffs, Farmer & Flier Associates, Neil Farmer ("Farmer") and Richard Flier ("Flier" and collectively referred to as "F&F"), agreed to manage the development of real estate owned by defendant Guilford Transportation Industries, Inc. ("Guilford"). Guilford terminated the contract, and refused Farmer and Flier's demand for payment of various fees and commissions under the contract.

On April 2, 2001 F&F filed in this court its First Amended Complaint, which advances the following claims: breach of contract (Count I); breach of implied covenant of good faith and fair dealing (Count II); and, violation of G.L.c. 93A, §11 (Count III).

On April 11, 2001, Guilford filed its Answer to F&F's First Amended Complaint in which it raised several counterclaims against the plaintiffs, which include: 1) rescission (Counterclaim Count One); 2) breach of contract (Counterclaim Count Two); 3) negligence (Counterclaim Count Three); 4) violation of G.L.c. 93A (Counterclaim Count Four); 5) breach of an implied covenant of good faith and fair dealing (Counterclaim Count Five); and, 6) breach of fiduciary duty (Counterclaim Count Six). At the opening of this trial, Guilford voluntarily dismissed Counterclaim Counts Two and Six.

In 2004, Guilford moved for summary judgment in its favor on all three of F&F's Counts. On September 8, 2004, this Court (Gershengorn, J.) allowed Guilford's motion in part and denied it in part. Judge Gershengorn allowed Guilford's motion for summary judgment to the extent that the first amended complaint relies on F&F's claim of entitlement to value enhancement fees. In her ruling, Judge Gershengorn found that: F&F is not entitled to the Value Enhancement Fee ("VEF") because it could not show that it had completed Phase I of the subject contract; and, because the subject contract was ambiguous as to Guilford's obligation to pay to F&F a two percent brokerage commission for the sale of two parcels during Phase I. With respect to the critical issue of whether F&F had completed Phase I before Guilford terminated the contract, Judge Gershengorn unequivocally found that it had not. The unambiguous language that defined the completion of Phase I included the provision that "the land swap and cooperation agreements [be] finalized with the T to the satisfaction of Guilford." As Judge Gershengorn found, based upon the summary judgment record, and as this Court also finds after a full trial, the land swap and cooperation agreements were not finalized between Guilford and the MBTA until November 1, 2000 when Guilford and the MBTA memorialized their land swap agreement in a lengthy and detailed 50-page document. Accordingly, this Court finds that the July 29, 1999 vote of the MBTA Board of Directors to authorize the MBTA's General Manager to enter into a land swap agreement was essentially a vote to authorize the General Manager to negotiate and enter into such an agreement once certain express and implicit terms and conditions were finalized. Thus, Phase I of the North Point development was not completed until November 1, 2000, over a year after Guilford had terminated its agreement with F&F.

Further, Judge Gershengorn ruled that F&F's claims in Counts II and III fail to the extent that rely upon the mere termination of the contract, since under the unambiguous contract terms Guilford had an unqualified right to terminate F&F.[2]

Accordingly, Judge Gershengorn's September 8, 2004 Summary Judgment Decision sets the law of the case that F&F does not have any entitlement to the VEF, that Guilford terminated the contract before the completion of Phase I of the contract, and that Guilford's mere termination of the contract did not constitute a breach of the contract. This Court will not revisit these issues.

The claims remaining for this Court to decide are as follows:

1. F&F's Count I (Breach of Contract), in which F&F alleges that Guilford breached the Agreement by: (a) refusing to discharge F&F from the Ogden mortgage; (b) failing to pay for fees and expenses for four third-party vendors ($7,842.80 for public relations services by Colette Phillips Communications; $12,750 for financial services by the Aspen Company (Brian Kelleher); $11,417.48 for architectural services by Hans D. Strauch; and $19,633.30 for legal services rendered lay Holland & Knight); and (c) refusing to pay a two percent commission for the initial acquisitions of the Ogden and ADM Out Parcels.

2. F&F's Count II (Breach of Covenant of Good Faith and Fair Dealing) and Count III (Violation of G.L.c. 93A, §11) in which F&F alleges bad faith based upon (a) Guilford's alleged refusal to discharge F&F from the Ogden mortgage; (b) Guilford's alleged failure to pay for the third-party vendor fees and expenses; and (c) Guilford's alleged refusal to pay a two percent commission for the initial acquisitions of the Ogden and ADM Out Parcels.

3. Guilford's Counterclaim I (Rescission - Fraud in the Inducement), in which Guilford seeks rescission of the July 27, 1998 Agreement because F&F allegedly represented falsely that it was TRA and that the resources of TRA would be available for the massive North Point project.

4. Guilford's Counterclaim IV (Unfair and Deceptive Trade Practice), in which Guilford claims that F&F's false representation that it was TRA and that the resources of TRA would be available for the massive North Point project constituted an unfair and deceptive trade practice under Chapter 93A, §11.

5. Guilford's Counterclaim III (Negligence), in which Guilford alleges that F&F negligently breached its duties by failing to properly handle the notification of appropriate state and local officials of the initial T Board vote in July 1999.

6. Guilford's Counterclaim V (Breach of the Duty of Good Faith and Fair Dealing), in which Guilford claims that F&F breached its duty of good faith and fair dealing when it allegedly made false representations in the Agreement that it possessed the necessary expertise to obtain the cooperation of state and local officials necessary for the development of the North Point project, that F&F professed the expertise to handle the notifications in timely fashion, and that Guilford reasonably relied on F&F's representations.

After trial without jury and consideration of the credible evidence and reasonable inferences therefrom, this Court Orders that judgment enter in favor of Guilford on all of F&F's remaining counts in its Complaint and that judgment enter in favor of F&F on all of Guilford's Counterclaims. The Court's findings and rulings are set out below.

A. Farmer & Flier Associates

Farmer & Flier Associates was formed in or about 1991 and is a real estate services firm of which Neil Farmer and Richard Flier are the principles. Farmer & Flier Associates perform brokerage consulting and brokerage services in real estate. Farmer and Flier have between them decades of experience in the development of commercial and residential real estate. Farmer has been in the real estate business for over 30 years, including positions of vice president and president for Ryan Elliott & Co. and Spalding & Slye, working in the area of appraisal consulting, brokerage and real estate development. Farmer had worked for the MBTA in various capacities for over 20 years. Over that period of time, he became acquainted with a number of the high-level Massachusetts Bay Transportation Authority ("MBTA") personnel. The work that Farmer did related to MBTA land takings for the expansion of the transit system as well as providing appraisal support and consulting services for the MBTA concerning the highest and best use studies and development opportunities of MBTA properties. In connection with his work with the MBTA, Farmer had a long-standing business relationship with the Secretary of Transportation, which oversees the MBTA, as well as with various General Managers of the MBTA. In addition, Farmer had long-standing relationships with the various operative managers of the several operative departments of the MBTA. Flier's development work included the development of the Boston Design Center.

Farmer & Flier Associates had originated and undertaken a number of development projects in or around greater Boston, including large commercial property projects in Natick and Hyde Park. Farmer & Flier Associates also ran another business known as American Asset Advisors.

In 1997, Farmer and Flier formed a company with several other partners called Transit Realty Associates ("TRA"). The TRA submitted a proposal to the MBTA to manage the MBTA's surplus properties as well as all of its leases and licenses that the MBTA had with outside parties. The MBTA accepted the proposal and awarded TRA the contract to manage the non-operating real estate of the MBTA and to find opportunities to sell surplus MBTA real estate. All six TRA partners had their own independent business which they continued to pursue and operate.

B. Guilford Transportation Industries, Inc.

Guilford Transportation Industries, Inc. is the parent Corporation of the Pan American Airway, Inc. and the Boston and Maine Corporation which, at all relevant times, was the owner of a parcel of property in the City of Cambridge ("Cambridge") known as "North...

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