Greenstein v. Flatley

• Decision Date: 14 February 1985
• Citation: 474 N.E.2d 1130,19 Mass.App.Ct. 351
• Parties: Max GREENSTEIN et al. 1 v. Thomas J. FLATLEY et al. 2
• Court: Appeals Court of Massachusetts

Page 1130

474 N.E.2d 1130

19 Mass.App.Ct. 351

Max GREENSTEIN et al. ¹ v. Thomas J. FLATLEY et al. ²

Appeals Court of Massachusetts Middlesex.

Argued Nov. 8, 1984.

Decided Feb. 14, 1985.

Kenneth A. Sweder, Boston, for defendants.

Geoffrey D. Wyler, Boston, for plaintiffs.

Before GRANT, KAPLAN and KASS, JJ.

KASS, Justice.

Thomas J. Flatley, at all times material, owned an office building at 18 Tremont Street, Boston. He appeals from a judgment ³ against him on a c. 93A complaint which alleged that Flatley acted unfairly and deceptively by leading the plaintiffs to think they had a lease for an office suite and disavowing the existence of such a lease one month before its scheduled commencement.

We rehearse (with slight supplement from the record) the salient facts found by the trial judge, which we leave undisturbed in the absence of clear error. Mass.R.Civ.P. 52(a), 365 Mass. 816 (1974). See New England Canteen Serv., Inc. v. Ashley, 372 Mass. 671, 675, 363 N.E.2d 526 (1977). The plaintiffs are partners in a firm of certified public accountants, Cohen, Greenstein and Co. During the summer of 1979, Harvey Greenstein (Greenstein), on behalf of the firm, began looking for office space larger than the premises they then occupied as tenants at will. Greenstein inquired at 18 Tremont Street of Thomas J. Gibbs, who was the Boston property manager for Flatley. ⁴ Gibbs showed Greenstein suite 1033, which contained approximately 1,500 square feet. By September, 1979, negotiations had progressed sufficiently so that Greenstein submitted to Gibbs, for forwarding to Flatley, a written letter of intent.

That letter brought forth from the Flatley home office in Braintree a lease on a printed form published by the Greater Boston Real Estate Board, with typed material filled in, typed addenda, and a floor plan as an annexed exhibit. The document provided for a lease term of seven years at an annual rent of $13,500 to be adjusted, after measurement of the premises, on the basis of nine dollars per square foot. The commencement date was left blank on the lease form submitted. Gibbs invited Greenstein to sign the lease. More particularly, some time before October 30, 1979, Gibbs told Greenstein that when he, Greenstein, signed the lease, there would be a deal. On October 30, 1979, Greenstein delivered to Gibbs four counterparts of the lease signed by him, together with a notice of lease similarly signed by him. Gibbs indicated that the papers would be forwarded to Flatley for countersignature and, indeed, they were.

Timing was of some consequence to the plaintiffs. January 1st to April 15th was "tax season" and not an opportune time for accountants to move. In an effort to accommodate to that exigency, Gibbs, on November 8, 1979, wrote to Greenstein that Flatley would use its ⁵ best efforts to make the space ready for occupancy by January 10, 1980. Roughly a month later, on December 3, 1979, Gibbs wrote to Greenstein with the bad news that Flatley could not get the space ready until March, 1980. He offered Greenstein choices: he could "negate the lease" or he could accept April 15th as an occupancy date. Greenstein chose April 15th occupancy. While all this was going on, a decorator employed by Flatley worked with the plaintiffs on details of space design and decor (paint, wallpaper, rugs, etc.). By letter dated December 10, 1979, Gibbs wrote to Greenstein on the letterhead of the Flatley office in Braintree:

"As you requested, the lease agreement by and between Thomas J. Flatley ... and Cohen, Greenstein and Company, as Lessee dated October 30, 1979, for the premises described as Suite # 1033, located at 18 Tremont Street, Boston ... is hereby amended as follows:

The term of said lease shall be for Seven (7) years commencing on April 15, 1980 and ending on March 14, 1986.

All other terms, conditions and covenants of the original lease agreement shall remain in full force and effect and are hereby reaffirmed.

Please indicate your assent by signing below and returning three copies to my attention."

The letter was signed: "The Flatley Company/T.A. Gibbs/Boston Property Manager." Greenstein promptly indicated his assent to the document from The Flatley Company by returning three countersigned copies to Gibbs.

On or about January 24, 1980, at Gibbs' request, Greenstein executed superseding lease forms, in four counterparts, showing the premises to contain 1,484 square feet and providing for an annual rent of $13,356. In reliance on representations that he would have the space in 18 Tremont Street, Greenstein took no steps to find other office space. The plaintiffs were required to vacate the offices they then occupied on April 30, 1980. On February 15, 1980, Greenstein wrote Gibbs that phones would be installed on April 21, 1980, and that his firm would move in on April 24th. In the same letter, Greenstein asked, as he had on previous occasions, for a countersigned copy of the lease he had signed and sent to Flatley. Gibbs' response, made orally, to these requests was that the lease was in Braintree.

Not until mid-March did Greenstein get a precise response to his request for a signed lease. It was an unwelcome one. By letter dated March 13, 1980, on The Flatley Company letterhead and signed "Cordially, The Flatley Company" Gibbs sent the following ungenial message: "I have presented the proposed lease to my Lease Committee and they have determined at this time that they cannot accept the proposed lease. I thank you for your interest in 18 Tremont Street." By rejecting the plaintiffs, Flatley was able to make a more advantageous deal for the tenth floor space which the plaintiffs would have occupied by leasing the entire east wing of the tenth floor to Little, Brown & Co., an existing tenant. By renting space in bulk, Flatley was able to include corridors and interior walls as parts of the leased premises.

Gibbs, the judge found, was not authorized to sign leases. She did find, however, that he had "authority and apparent authority to negotiate and deal generally, orally and in writing, with tenants and prospective tenants and to carry out all the usual duties of a property manager."

Flatley pegs his defense on paragraph 22A of the lease, drafted and submitted by him to the plaintiffs, which provides: "The acceptance of a security deposit and or the submission of this lease for examination does not constitute a reservation of, or option for the Premises, and shall vest no right in any party." The construction which Flatley attributes to this language--that a tenant has no rights under a lease until Flatley himself countersigns the document his organization has proffered--is not an inevitable one. Certainly it is an oblique way of saying so. ⁶ Indeed, such a provision would be contrary to G.L. c. 186, § 15D, which requires a lessor who has agreed orally to execute a lease and who has obtained a signed lease from a lessee to deliver a countersigned copy to the lessee on pain of a $300 fine. By its terms § 15D declares void any waiver of the command of the statute. As the judge determined that Gibbs was not cloaked with authority or apparent authority to sign leases, there was no finding, nor did the evidence support one, that Flatley had agreed orally to execute the lease.

Acquisition of a leasehold estate greater than a tenancy at will requires an instrument in writing signed by the grantor or his attorney. G.L. c. 183, § 3. Chester A. Baker, Inc. v. Shea Dry Cleaners, Inc., 322 Mass. 311, 312-313, 77 N.E.2d 223 (1948). Schwartz, Lease Drafting in Massachusetts § 1.3 (1961). That Flatley never signed the Greenstein lease would, therefore, be a fact to conjure with were the plaintiffs asserting a right to possession under the lease. At that, the instrument of December 10, 1979, purporting to amend the lease of October 30, 1979, signed on behalf of The Flatley Company, written on a letterhead of The Flatley Company and bearing the home office address, would present some difficulty for the defendant. The test for apparent authority is how the person dealing with the agent reasonably interprets the agent's authority. See Kanavos v. Hancock Bank & Trust Co., 14 Mass.App. 326, 331-332, 439 N.E.2d 311 (1982); Restatement (Second) of Agency §§ 8, 27 & 49 (1957). On the view we take of the case, we need not decide whether Flatley was bound by the December 10 document. We proceed on the basis that the trial judge was correct in her mixed determination of fact and law that Gibbs was without apparent authority to bind Flatley on a lease.

Although the complaint asserted rights...