Northern Associates, Inc. v. Kiley

• Decision Date: 30 April 2003
• Docket Number: No. 00-P-921.,00-P-921.
• Citation: 57 Mass. App. Ct. 874,787 N.E.2d 1078
• Parties: NORTHERN ASSOCIATES, INC., & another<SMALL><SUP>1</SUP></SMALL> v. Thomas M. KILEY<SMALL><SUP>2</SUP></SMALL> & others.<SMALL><SUP>3</SUP></SMALL>
• Court: Appeals Court of Massachusetts

787 N.E.2d 1078

57 Mass. App. Ct. 874

NORTHERN ASSOCIATES, INC., & another¹ v. Thomas M. KILEY² & others.³

No. 00-P-921.

Appeals Court of Massachusetts, Essex.

Argued May 17, 2002.

Decided April 30, 2003.

COPYRIGHT MATERIAL OMITTED

Howard M. Brown, Boston, for the plaintiffs.

Thomas B. Drohan, Boston, for the defendants.

Present: GELINAS, DUFFLY, & KAFKER, JJ.

DUFFLY, J.

In August, 1994, Northern Associates, Inc., and Richard Benson (the plaintiffs or, collectively, Northern) entered into an agreement to lease a portion of the third floor of a commercial building located at 342 North Main Street, Andover. In February of 1995, the original owner-lessor conveyed the property to the defendant Frye Village Realty Trust. The defendant trustees, in turn, approached Northern about vacating the premises. Northern declined the offer. The trustees, thereafter, began renovations on the second floor of the property, which caused temporary disruption of some of the services to Northern's leased premises, as well as dust and debris. In the summer of 1995, the trustees did not provide air conditioning to Northern's premises, taking the position that it was not required under the lease.

Northern brought suit as a consequence of events arising from these renovations, claiming the trustees' actions resulted in breaches of the lease agreement (Count I), intentional infliction of emotional distress (Count II), interference with advantageous contractual relations (Count III), violation of G.L. c. 93A, § 11 (Count IV), and constructive eviction (Count V). Northern also sought, in Count VI, preliminary and permanent injunctive relief. The trustees, by way of counterclaim, sought declaratory judgments as to the amount of space that Northern was entitled to occupy under the terms of the lease, and whether Northern was entitled to air conditioning, maintenance and cleaning of its premises, and elevator services.

Prior to trial, a judge other than the trial judge entered partial summary judgment for the trustees on Count III. The trial judge dismissed Count II immediately prior to trial, and at the close of the evidence entered a directed verdict for the trustees on Counts IV and V. Following trial, judgment entered for Northern as to Count I; Northern's claim for injunctive relief (Count VI) was denied by the trial judge as to all claims except elevator service, and judgment entered substantially for the trustees on their counterclaim for declaratory judgments.⁴ Both sides sought an award of attorney's fees and costs.

Northern challenges as insufficient the $5,000 it was awarded on its claim for attorney's fees; challenges as erroneous the award of $100,000 in attorney's fees to the trustees⁵; appeals the dismissal of and entry of directed verdicts on several of its claims; and argues the trial judge erred in excluding parol evidence regarding its right to air conditioning.

1. Attorney's fees. Northern and the trustees sought to recover attorney's fees and costs under the lease agreement⁶ which provides, at § 10.05, as follows:

"If, on account of any breach or default by either Landlord or Tenant of their respective obligations under this Lease, it shall become necessary to employ an attorney to enforce or defend any of its rights or remedies hereunder, and should such party prevail, it shall be entitled to reasonable attorneys fees incurred."

We discuss below Northern's several challenges to the fee awards a. Fees were note "incurred." Northern first claims that the trustees were not contractually entitled to an award of attorney's fees because, although represented by legal counsel throughout the proceedings, the trustees had not, as of the date of the request for an award of fees and costs, been billed for or paid such fees and costs, and there was no agreement that such fees and costs would be paid. We reject Northern's claim and conclude that Lincoln St. Realty Co. v. Green, 374 Mass. 630, 373 N.E.2d 1172 (1978), on which Northern principally relies, is inapposite. In Lincoln, a landlord commenced an action to evict an indigent tenant who was represented by a legal services organization that did not charge indigent clients for its services. After prevailing in the action, the tenant moved for an award of attorney's fees pursuant to provisions in the lease agreement that allowed recovery for reasonable attorney's fees "incurred" by a prevailing tenant. The court determined that "`incurred' in this contractual context means `personally obligated to pay.'" Id. at 632, 373 N.E.2d 1172. The tenant's claim to an award for fees was rejected on the ground that the tenant was not personally liable for any attorney's fees. Id. at 633, 373 N.E.2d 1172. See Colonial Estates Assocs. v. Montagna, 18 Mass.App.Ct. 972, 972-973, 469 N.E.2d 1301 (1984).

The lease agreement in the present case provides for recovery of "reasonable attorney's fees incurred." Attorney's fees are "incurred" when a party renders himself liable to pay for such fees. See Oxford English Dictionary 1410 (Compact ed.1971) ("incur" means "to render oneself liable to"); Webster's Universal Unabridged Dictionary 927 (2d ed.1979) ("incur" means "to bring upon oneself'). The affidavits of the trustees' attorneys, specifying the nature of the services, the time expended and the hourly rate, establishes that services of private legal counsel had been engaged and provided, and supports the inference that the trustees were under an obligation to pay for their services.

We reject Northern's argument that evidence that the trustees had not yet been billed for or paid their attorneys, and had no agreement to do so,⁷ requires the conclusion that the trustees also were under no obligation to pay their attorneys. Northern points to nothing in the record that suggests the existence of an agreement between the trustees and their attorneys that the services would be rendered free of charge regardless of outcome.⁸

In these circumstances, the question of whether legal fees were "incurred" is informed by United States Trust Co. v. Herriott, 10 Mass.App.Ct. 313, 407 N.E.2d 381 (1980), where we rejected as frivolous the defendants' argument that the plaintiff had not incurred any expenses because its attorneys had not billed or received any payment for their services. Id. at 321, 407 N.E.2d 381. Incurring a fee is to be distinguished from paying a fee. Cf. Penney v. First Natl. Bank, 385 Mass. 715, 723, 433 N.E.2d 901 (1982) (promissory note provided that plaintiff would "would pay all costs of collection and attorney's fees paid or incurred by the bank" [emphasis supplied] ). Whether a party ultimately pays the fees for which he has obligated himself, or whether the attorney seeks to collect on the outstanding indebtedness, is not determinative. The judge's findings and conclusions to the effect that the trustees incurred attorney's fees are not plainly wrong.

b. Prevailing party. Northern claims that, even if attorney's fees were incurred by the trustees, they are not entitled to an award because they did not "prevail." We first note that any reliance on cases discussing the meaning of the phrase "prevailing party" in the context of a statutory framework such as workers' compensation or civil rights is misplaced. "There is no basis for relating [§ 10.05 of the lease agreement] to these specialized statutes." Bardon Trimount, Inc. v. Guyott, 49 Mass.App.Ct. 764, 779, 732 N.E.2d 916 (2000). See Bird v. Bird, 24 Mass. App.Ct. 362, 365, 509 N.E.2d 289 (1987) ("In certain kinds of cases, [the achievement] of less than ultimate goals ... may earn one status as a prevailing party for purposes of recovery of legal fees under [civil rights statutes]. Those cases, however, have a `private attorney general' ingredient which is absent from actions based on private contracts" [Citations omitted] ).

Whether the trustees are entitled to an award of fees is governed by the terms of the parties' contract. The lease agreement provides that a party may recover attorney's fees "[i]f, on account of any breach or default by either Landlord or Tenant of their respective obligations under this Lease, it shall become necessary to employ an attorney to enforce or defend any of its rights or remedies hereunder, and ... such party prevail[s]." Where the language of a contract is unambiguous, the words will be given their plain or wellestablished meaning. See Haverhill v. George Brox, Inc., 47 Mass.App.Ct. 717, 720, 716 N.E.2d 138 (1999).

Section 10.05 of the lease speaks broadly in terms of a party employing an attorney who prevails in enforcing or defending "any of its rights or remedies" under the lease. This provision plainly contemplates that one or both parties may prevail in the enforcement of rights or remedies under the lease as well as in the defense of a claimed breach or default of the lease. The parties here sought to enforce several different rights under the lease, including rights to common areas, heat, air conditioning, maintenance of common areas, and square footage of the leased premises — Northern asserting its claims in multiple counts and the trustees asserting two counts for affirmative relief in its counterclaim.⁹ In addition, the trustees were compelled to defend against Northern's claims.

The trustees have not appealed the award to Northern and it appears that Northern, which was awarded at least a partial judgment in connection with its breach of contract claim¹⁰ and recovered $18,700 in damages, was correctly identified as the prevailing party in connection with Count I.

The judge's findings reflect that the award of fees to the trustees was in connection with their defense of Northern's claims that were "on account of a breach or default" under the lease, and in connection with the trustees' successful counterclaim seeking a declaratory judgment that limited the right of Northern to occupancy of 2100 square feet of the third floor. We will assume that the award was...