Park Drive Towing, Inc. v. City of Revere, SJC-09224 (MA 6/11/2004), SJC-09224

• Court: United States State Supreme Judicial Court of Massachusetts
• Citation: 442 Mass. 80
• Docket Number: SJC-09224
• Parties: PARK DRIVE TOWING, INC. vs . CITY OF REVERE & others. 1
• Decision Date: 11 June 2004

Page 1

PARK DRIVE TOWING, INC.
vs.
CITY OF REVERE & others.¹ SJC-09224 Supreme Court of Massachusetts. May 4, 2004. June 11, 2004.

Present: Marshall, C.J., Greaney, Ireland, Spina, Cowin, Sosman, & Cordy, JJ.

Municipal Corporations, Contracts. Contract, Municipality, Validity. Statute, Construction. Consumer Protection Act, Unfair act or practice, Trade or commerce.

Civil action commenced in the Superior Court Department on November 27, 1998.

A motion for partial summary judgment was heard by Vieri Volterra, J., and the case was heard by Robert H. Bohn, Jr., J., on a motion for summary judgment.

After review by the Appeals Court, the Supreme Judicial Court granted leave to obtain further appellate review.

Bruce T. Macdonald for the plaintiff.

Ira H. Zaleznik for city of Revere & another.

Austin M. Joyce, for Roy Colannino, submitted a brief.

William T. Hogan, III, & Elizabeth D. Killeen, for Statewide Towing Association, Inc., amicus curiae, submitted a brief.

COWIN, J.

Park Drive Towing, Inc. (Park Drive), a Massachusetts corporation that provided vehicle towing services for law enforcement agencies and the general public, sued the city of Revere (city), and the former chief of police and his successor for breach of contract and unfair or deceptive acts or practices in violation of G. L. c. 93A, § 11. The defendants' motions for summary judgment were granted by the Superior Court,² and the Appeals Court affirmed. See Park Drive Towing, Inc. v. Revere, 60 Mass. App. Ct. 173, 178 (2003). We granted the plaintiff's application for further appellate review and now affirm the judgments of the Superior Court.

The essential facts are not in dispute. At all times relevant to this appeal, the city maintained a "tow list." This list consisted of three towing companies authorized to perform police-ordered tows of vehicles, for example, towing vehicles that were obstructing snow removal. In return for collecting fees from the towed vehicles' owners, the towing companies were required to collect from the owner and remit to the city a $15 "administrative fee" for each car towed, provide certain services to city vehicles free of charge (such as jump starts and changing flat tires) and comply with other conditions.³ The record does not include evidence of any procedure by which a towing company is placed on the list, nor does it include any written rules governing the "tow list," or any written agreement between the city and any towing company on the list.

At some point before September, 1996, Park Drive's owner, Arthur Norris, arranged with Chief Russo to have Park Drive placed on the "tow list." On September 26, 1996, Norris sold Park Drive to two brothers, John and Michael Lentz, and Dante Spadoni. Prior to the sale, Norris represented to the buyers that Park Drive would remain on the tow list after the transfer of ownership. The contract for the sale of Park Drive refers to "a contract with the City of Revere to tow for the City" and provides that city approval would be secured for the new owners either to receive an assignment of that contract or enter into a new contract with the city. However, there is no evidence in the record that a written contract memorializing the arrangement between Park Drive and the city ever existed, nor is there evidence in writing that any city official approved or acknowledged the terms of the contract for the sale of Park Drive. Prior to the sale, the Lentz brothers and Spadoni twice met with Chief Russo to "review all documentation of the sale" and the city rules pertaining to towing.

Between September 26, 1996, and October 20, 1998, Park Drive derived approximately $150,000 per year from tows ordered by the city's police department. To retrieve their towed vehicles, owners paid directly to Park Drive a $75 tow charge, a $20 a day storage fee, and the $15 city administrative fee. Park Drive retained these monies except for the administrative fee, which it remitted to the city.

On October 20, 1998, Park Drive was orally notified of Chief Russo's decision to suspend Park Drive from the tow list because criminal complaints had been issued against the Lentz brothers.⁴ In early February, 1999, the charges against Michael Lentz were dismissed, and John Lentz was found not guilty after a jury trial. Meanwhile, without the revenues from police-ordered tows, Park Drive defaulted on its purchase money note to Norris, who repossessed Park Drive's tow trucks, and Park Drive filed for bankruptcy. Chief Russo refused to reinstate Park Drive to the tow list.⁵ Chief Russo retired on March 1, 1999, and his successor likewise refused to reinstate Park Drive.

Park Drive argues that the defendants' breach of contract occurred when the city summarily suspended Park Drive from its tow list with no notice and without "any procedure in place where a towing company would be entitled to a hearing to present [its] side of the story," and then refused reinstatement after the criminal charges against the Lentz brothers had been resolved in their favor. These actions, Park Drive asserts, breached the implied covenants of good faith and fair dealing. The defendants rely primarily on G. L. c. 43, § 29, which sets forth requirements for municipal contracts.⁶ That statute provides in pertinent part that "[a]ll contracts made by any department, board or commission where the amount involved is five thousand dollars or more shall be in writing, and no such contract shall be deemed to have been made or executed until the approval of the mayor . . . and also of the officer or the head of the department or of the chairman of the board . . . making the contract is affixed thereto." G. L. c. 43, § 29. The defendants contend, and we agree, that, because these requirements were not met, no enforceable contract existed.

It is a well-established principle that a party "dealing with a city or town cannot recover if statutory requirements [such as those contained in G. L. c. 43, § 29] have not been observed." Richard D. Kimball Co. v. Medford, 340 Mass. 727, 729 (1960). See United States Leasing Corp. v. Chicopee, 402 Mass. 228, 231 (1988); Quincy v. Brooks-Skinner, Inc., 325 Mass. 406, 412-413 (1950); McGovern v. Boston, 229 Mass. 394, 397 (1918); Lumarose Equip. Corp. v. Springfield, 15 Mass. App. Ct. 517, 519-520 (1983).⁷ In Central Tow Co. v. Boston, 371 Mass. 341, 344 (1976),...