Keating v. Stadium Management Corp.

• Citation: 508 N.E.2d 121,24 Mass.App.Ct. 246
• Parties: Robert E. KEATING v. STADIUM MANAGEMENT CORPORATION.
• Decision Date: 29 July 1987
• Court: Appeals Court of Massachusetts

Page 121

508 N.E.2d 121

24 Mass.App.Ct. 246

Robert E. KEATING v. STADIUM MANAGEMENT CORPORATION.

Appeals Court of Massachusetts,

Norfolk.

Argued Feb. 18, 1987.

Decided June 2, 1987.

Further Appellate Review Denied July 29, 1987.

Richard K. Donahue, Lowell, for defendant.

John J.C. Herlihy (Karen M. Thursby, Boston, with him), for plaintiff.

Before PERRETTA, DREBEN and WARNER, JJ.

WARNER, Justice.

The essential facts are not in dispute; the admissibility of evidence establishing them and their relevance are contested. From 1971 to 1973 the plaintiff had been employed as director of operations at Schaefer (now Sullivan) Stadium in Foxborough, a facility leased and operated by Stadium Realty Trust (Trust), the predecessor of the defendant. From 1975 to 1978, the plaintiff was likewise employed at the Meadowlands, a New Jersey complex then consisting of a stadium and a horse racing track. His responsibilities there included the procurement of commercial advertising within the stadium and the track. The plaintiff sold advertising space for Marlboro cigarettes (Marlboro) at the Meadowlands to Philip Morris U.S.A. (Philip Morris), after negotiating the transaction with one Vin Winer, the representative of Philip Morris charged with advertising for Marlboro in stadia throughout the United States. While working at the Meadowlands, the plaintiff sold about $800,000 of advertising space.

After a communication from the Trust in early 1976, the plaintiff began negotiating with Winer for Marlboro advertisements at Schaefer Stadium. The plaintiff also had prepared a leasing representation agreement (Agreement) and submitted it to the Trust. The Trust returned the proposed Agreement to the plaintiff with the addition of a paragraph numbered 4 (which will be discussed below); the plaintiff executed the Agreement. Thereafter, on April 9, 1976, the plaintiff met with the trustees of the Trust and presented a proposal, including blueprints and schematics, for Marlboro advertising within Schaefer Stadium. The trustees accepted the proposal and subsequently entered into a contract with Philip Morris having essentially the terms and conditions proposed by the plaintiff; the advertising was put in place. After the plaintiff made his proposal at the April 9th meeting, the managing trustee signed the Agreement on behalf of the Trust.

The Agreement contained the following relevant provisions: (1) The plaintiff was retained as a nonexclusive representative to solicit leases for space for commercial advertising "in or about" Schaefer Stadium. (2) For the initial term of each such lease obtained by the plaintiff, he would be paid a commission of fifteen percent of rental payments received and for extensions or subsequent leases, the commission would be ten percent. (3) Either party could terminate the Agreement (otherwise self-extending) on thirty days written notice prior to the expiration of a one-year term. The core of the dispute in this case lies in paragraph 4, which, as we have said, was added by the Trust to the proposed Agreement submitted by the plaintiff. That paragraph provides:

"Notwithstanding any provision herein to the contrary, Keating shall not be entitled to commissions on account of rentals received by the Trust from any business which now leases, or has in the past leased, space at the Stadium for commercial advertising use or which has in the past purchased advertising space or time from any lessee of the Trust " (emphasis supplied).

The plaintiff was paid the proper commissions under the Agreement from 1976 through 1981. In late 1981, the defendant succeeded the Trust and assumed all the latter's rights and obligations under the Agreement. On March 6, 1982, the defendant gave the plaintiff timely notice of termination of the Agreement. The plaintiff's attorney responded on March 17, 1982, by acknowledging the propriety of the termination but insisting that the plaintiff would be entitled to future commissions under the terms of the Agreement so long as Philip Morris continued to display advertisements in and around Schaefer Stadium. On August 7, 1982, Charles W. Sullivan, president of the defendant, replied that the plaintiff would not be entitled to such commissions, by virtue of the terms of paragraph 4 of the Agreement, as Philip Morris, before the Agreement, had purchased advertising space in the team program from the New England Patriots Football Club, Inc., a sublessee of the Trust. Prior to April 9, 1976 (the date of the Agreement), the Patriots had engaged National Football League Properties, Inc., as its agent to sell advertising in PRO!, a football game program. There had been a full page advertisement for Marlboro in the August 15, 1971, program, the date of the first game played by the Patriots at Schaefer Stadium, and similar advertising in subsequent issues.

In November of 1982, the defendant entered into a new lease arrangement (ongoing at the time of trial) with Philip Morris for in-stadium advertising of Marlboro at the rate of $150,000 per year. The plaintiff has received no commissions under the Agreement since 1981. ¹

The plaintiff's amended complaint sought damages for breach of contract and under G.L. c. 93A, § 11, and a declaration (G.L. c. 231A, § 1) that the defendant had a duty to pay the plaintiff a ten percent commission on rental payments under the 1982 lease for Marlboro advertising. The defendant counterclaimed for the commissions paid from 1976 through 1981. After a jury-waived hearing in the Superior Court, a judge made findings of fact and rulings of law, and a judgment was entered (1) dismissing the defendant's counterclaim, (2) awarding contract damages ($60,000) for commissions under the terms of the Agreement on the rental payments under the 1982 lease, ² and (3) declaring that the plaintiff is entitled under the Agreement to ten percent commissions on the 1982 lease payments and on payments pursuant to any extended or subsequent lease with Philip Morris. The defendant appealed.

On appeal the defendant argues, as it did at trial, that it was error for the judge to receive and consider extrinsic evidence as to the meaning of the Agreement, particularly the provisions of paragraph 4. This is so, the defendant contends, because the relevant language of the Agreement is clear and unambiguous; indeed, the parties stipulated (and the judge by remark at trial seemed to agree) to that conclusion. There was no error.

The judge's findings and rulings make clear that he construed the disputed language of paragraph 4 of the Agreement considering the context in which the Agreement was executed, the established business usage of terms employed and the performance of the parties. The judge did not stray from the application of correct legal principles.

Contrary to the defendant's argument, the language of a contract need not be ambiguous on its face in order that extrinsic evidence may be admitted. "When the written agreement, as applied to the subject matter, is in any respect uncertain or equivocal in meaning, all the circumstances of the parties leading to its execution may be shown for the purpose of elucidating, but not of contradicting or changing its terms.... Expressions in our cases to the effect that evidence of circumstances can be admitted only after an ambiguity has been found on the face of the written instrument have reference to evidence offered to contradict the written terms" (citations omitted). Robert Indus., Inc. v. Spence, 362 Mass. 751, 753-754, 291 N.E.2d 407 (1973). See Computer Syss. of America, Inc. v. Western Reserve Life Assur. Co., 19 Mass.App.Ct. 430, 434 n. 5, 475 N.E.2d 745 (1985); 3 Corbin, Contracts § 572B (1960 & Supp.1971); Restatement (Second) of Contracts § 212(1) and comment b, and § 214 (1981). "[T]he facts and circumstances of the transaction, including the situation and relations of the parties, [may be admitted] for the purpose of applying the terms of the written contract...