I. The Trial Court Erred In Granting Summary Judgment Where, Viewed In The Light Most Favorable To Collias, The Evidence Raised Genuine Disputes Of Material Fact As To Both Of The Issues Raised In Lavallee's Motion
In this case, the trial court granted Lavallee's motion for summary judgment on two grounds. First, the judge ruled that the delays between the parties' signing the two agreements and their filing of an application for the transfer of the liquor license were unreasonable as a matter of law and should be attributed solely to Collias. Second, he ruled that the doctrine of laches bars Collias' request for specific performance, again based on his conclusion that Collias was solely responsible for the delays. In resolving both of those issues, the judge, in effect, accepted Lavallee's version of the facts and disregarded facts in the record favorable to Collias. In fact, the evidence raised genuine disputes of material fact as to both of the issues raised on summary judgment. The judge erred in prematurely disposing of Collias' claims, and the order granting summary judgment must be reversed.
A. Summary Judgment Standards
“Summary judgment is a 'device to make possible the prompt disposition of controversies on their merits without a trial, if in essence there is no real dispute as to the salient facts or if only a question of law is involved.'” Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983), quoting Community National Bank v. Dawes, 369 Mass. 550, 553 (1976) and 3 W.W. Barron and A. Holtzoff, Federal Practice and Procedure (Rules ed.) § 1231, at 96 (Wright rev. ed. 1958). See Ng Brothers Const., Inc. v. Cranney, 436 Mass. 638, 643-644 (2002); Mejia v. American Cas. Co., 55 Mass. App. Ct. 461, 464 (2002). A motion for summary judgment should be allowed if, viewed in the light most favorable to the nonmoving party, “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Mass. R. Civ. P. 56(c). See Route One Liquors, Inc. v. Sec'y of Admin. & Fin., 439 Mass. 111, 115 (2003); Id. “The moving party bears the burden of affirmatively demonstrating that there is no triable issue of fact.” Ng Brothers Const., Inc. v. Cranney, 436 Mass. at 644; Pederson v. Time, Inc., 404 Mass. 14, 17 (1989). “An order granting or denying summary judgment will be upheld if the trial judge ruled on undisputed material facts and his ruling was correct as a matter of law.” Route One Liquors, Inc., 439 Mass. at 115, citing Commonwealth v. One 1987 Mercury Cougar Auto., 413 Mass. 534, 536 (1992).
In considering a motion for summary judgment, the court may not “pass upon the credibility of witnesses or the weight of the evidence, [nor should the court] make [its] own decision of facts.” Hub Assocs. v. Goode, 357 Mass. 449, 451 (1970), quoting Gordon v. American Tankers Corp., 286 Mass. 349, 353 (1934). In addition,
“all doubt as to the existence of a genuine issue of material fact must be resolved against the party moving for summary judgment.” Gross v. Southern Ry., 414 F.2d 292, 297 (5th Cir. 1969). “[T]he moving party must affirmatively show that there is no issue of fact.” Hub Assocs. v. Goode, supra. Indeed, “[a] party moving for summary judgment assumes the burden of affirmatively demonstrating that there is no genuine issue of fact on every relevant issue raised by the pleadings. This is so even though . . . he would have no burden if the case were to go to trial.” Mack v. Cape Elizabeth School Bd., 553 F.2d 720, 722 (1st Cir. 1977). See Felix v. Young, 536 F.2d 1126, 1134-1135 (6th Cir. 1976).
Attorney General v. Bailey, 386 Mass. 367, 371 (1982). See Pederson v. Time, Inc., 404 Mass. at 16-17.
Finally, in considering the materials accompanying a motion for summary judgment, “the inferences to be drawn from the underlying facts contained in such materials must be viewed in the light most favorable to the party opposing the motion.” Hub Assocs. v. Goode, 357 Mass. at 451, quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).
B. There Is Evidence Supporting Collias' Contention That He Acted In Good Faith In His Attempts To Have The License Transferred And That The Delay Was Attributable To Lavallee, And In Any Event, Lavallee Waived Any Claim That Collias Breached The Two Contracts
As noted above, the parties signed two contracts-one in April of 1997 for the transfer of the liquor license, and one in February of 1998 for the sale of the real estate. The contract for the purchase and sale of the liquor license contained a provision requiring Collias to “use good faith in obtaining said transfers as quickly as is reasonably possible.” [R. App. 14]. Without citation to any authority, Judge Connor concluded that such terms “were unambiguous in requiring the buyer to seek immediate approval for a transfer of Lavallee's liquor license.” (Emphasis added). [R. App. 345]. Judge Connor similarly focused on the inclusion of a time is of the essence clause in the purchase and sale agreement for the real estate, again concluding that immediate action was required. Because Collias did not file the application for the transfer of the liquor license until April of 1998, the judge concluded as a matter of law that Collias materially breached both contracts.
Contrary to the judge's conclusion, the language of the two agreements did not require instantaneous unilateral action on the part of Collias. The April 1997 agreement focused primarily on Lavallee's obligation to cooperate in effecting the transfer. Although it required good faith and diligence on the part of Collias, it implicitly recognized that the transfer process would take some time. [R. App. 14]. The inclusion of a “time is of the essence” clause in the February 1998 agreement also required diligence but did not require immediate action. That provision did not set forth a particular date or time frame for performance. Contrast Owen v. Kessler, 56 Mass. App. Ct. 466, 469 (2002) (clause specified date and time of performance). In fact, it was contingent on the completion of the transfer of the liquor license, which the parties understood would take some time. Where the agreements anticipated that the transfer of the license would not be immediate and that both parties would have obligations in effecting the transfer, the mere lapse of time could not as a matter of law be deemed a breach of the contract by Collias.
Moreover, even if these provisions were “essential and inducing features” of both contracts [R. App. 346], “[c]onditions and clauses of a contract may be waived, either expressly or by words and conduct.” Id. at 470. See McCarthy v. Tobin, 429 Mass. 84, 88-89 (1999).
In this case, Lavallee failed to complain of the delay in effecting the transfer. See McCarthy v. Tobin, 429 Mass. at 88-89 (seller did not object to the passage of the deadline). Indeed, after signing the initial agreement, she indicated that she intended to carry out the transfer of the liquor license, and in February of 1998, she signed a purchase and sale agreement for the real estate that was contingent on a successful transfer of that license. Once the process of transferring the license commenced, she participated in that process, providing Collias and his counsel (albeit with some delay) with information necessary to complete the transfer, appearing before the Seekonk Board of Selectmen and the ABCC where she spoke in favor of the transfer. See Id. (waiver was established by continued dealings between the parties after the deadline). In these circumstances, “the evidence of conduct constituting waiver was unassailable[,]” Owen v. Kessler, 56 Mass. App. Ct. at 470, and the judge erred in finding a breach of contract.
In addition, viewed in the light most favorable to Collias, Lavalle was responsible for the delays in this case by failing to provide necessary information and documentation. See Id.; Owen v. Kessler, 56 Mass. App. Ct. at 470. Both Collias and Nelson would testify that she delayed in going forward with the transfers because she did not know what she would do with the proceeds from the sale. Once the process finally went forward, the ABCC denied the application because Lavallee owed back taxes. [R. App. 59-60, 162-163, 221-223, 226-227]. Thereafter, Lavallee resisted Collias' efforts to resolve the outstanding tax liability. Although she had netted a substantial sum of money from the sale of other properties, she failed to pay the taxes owed. She refused to tell Collias the amount owed so that he could pay it himself, and she refused to execute a power of attorney so that he could determine and pay the amount owed. [R. App. 312-313]. She did, however, continue to tell Collias that she would take care of the tax matter, which she ultimately failed to do. [R. App. 61-76, 84, 90, 98-99, 153-154, 158, 251-252, 256].
Throughout this time period, she also accepted money totaling more than $13,000 from Collias and Nelson, which she failed to return. [R. App. 311-313]. Most of that money was paid after March of 1998. See Church of God in Christ, Inc. v. Congregation Kehillath Jacob, 370 Mass. 828, 832-835 (1976) (acceptance of payments after deadline constituted waiver).
In faulting Collias for the delay, the judge focused on “Lavallee's financial and personal problems” in rendering a timely sale of the business essential. [R. App. 346]. The court credited her claim that Collias and Nelson took advantage of her weak financial situation by delaying their performance. In doing so, the judge overlooked evidence offered by Collias that (1) she had received substantial funds from the sale of other properties during this time period; (2) Collias and Nelson advanced her substantial funds and paid various bills in order to prevent her financial situation from deteriorating; and (3) Lavallee commented to Collias' father that her business had improved and was running profitably. [R. App. 317]. Again, the judge overlooked evidence-much of which Lavallee admitted-that she herself was responsible for much of the delay. As noted above, the judge was required to view the evidence in the light most favorable to Collias. See Route One Liquors, Inc. v. Sec'y of Admin. & Fin., 439 Mass. at 115. He did not do so here, instead resolving disputed facts in Lavallee's favor and ultimately viewing the evidence in the light most favorable to her.
The record before the court clearly established that there was a genuine dispute of material fact as to Collias' claim. The judge erred in finding as a matter of law that Collias failed to act with reasonable diligence and in good faith, and that he breached the contract. He should not have granted summary judgment, and the judgment should be reversed. See G.S. Enterprises, Inc. v. Falmouth Marine, Inc., 410 Mass. 262, 272-276 (1991) (judge incorrectly ordered summary judgment where genuine disputes remained for resolution by a jury with respect to the performance of a contract where material facts remained for resolution with respect to the elements of good faith). See also Route One Liquors, Inc., 439 Mass. at 115.
C. The Judge Erred In Granting Summary Judgment On The Ground Of Laches Where The Evidence Would Support A Finding That Lavallee Herself Caused Collias To Delay In Filing Suit, And Where In Any Event, The Record Does Not Establish That The Delay Prejudiced Her
The defense of laches may be raised (a) where the plaintiff has unjustifiably and unreasonably delayed in instituting a legal action, and (b) where such delay has resulted in actual harm or prejudice to the defendant. Srebnick v. Lo-Law Transit Mgmt., Inc., 29 Mass. App. Ct. 45, 49 (1990). See Town of Brewster v. Sherwood Forest Realty, Inc., 56 Mass. App. Ct. 905, 906 (2002). “Laches is available, if affirmatively pleaded, as a defense to a claim that is equitable in nature.” Id. “It is not generally available as a defense to a legal claim.” Id. It also does not apply where the party asserting that doctrine has caused the delay. See School Committee of Brockton v. Massachusetts Comm'n Against Discrimination, 423 Mass. 7, 12-13 (1996). Finally, except in extreme cases, whether a delay is sufficient to implicate the defense of laches ordinarily “is a question of fact” and is not appropriate for resolution on summary judgment. Town of Brewster v. Sherwood Forest Realty, Inc., 56 Mass. App. Ct. at 906.
In this case, the judge concluded that Collias was not entitled to specific performance of the contracts. He explained that Collias knew of his potential claim in November of 1998 but waited three and a half years before filing his complaint. The judge further concluded Lavallee suffered prejudice, since she “continued to endure the expense of maintaining her property and running the business” and since she lost the opportunity to sell the license and property at a higher price. [R. App. 347].
In reaching these conclusions, the judge again resolved disputed factual issues in favor of Lavallee and disregarded credible evidence that would have supported Collias' complaint. See Route One Liquors, Inc., 439 Mass. at 115; G.S. Enterprises, Inc. v. Falmouth Marine, Inc., 410 Mass. at 272-276. Specifically, as the judge acknowledged, Collias contends that he, Lavallee, his counsel, and Lavallee's attorney continued to discuss going through with the deal through 2001. [R. App. 317, 319, 344]. During this period, Lavallee promised to resolve the tax issues, and Collias reasonably relied on these representations. Lavallee also did not return Collias' money even though she had the means to do so, and she never told him that the deal was off. [R. App. 317]. Where the evidence would support a finding that Lavallee dissuaded Collias from filing suit by representing throughout the period of delay that she intended to go through with the transactions, the judge erred in entering summary judgment for Lavallee on the issue of laches. See School Committee of Brockton v. Massachusetts Comm'n Against Discrimination, 423 Mass. at 12-13.
Further, it is a question of fact whether the period of delay was unreasonable in the present circumstances. As noted above, in some situations, a delay may be found to be unreasonable as a matter of law-for example, where the time period exceeds the statute of limitations. See Town of Brewster v. Sherwood Forest Realty, Inc., 56 Mass. App. Ct. at 906 (“twenty-three year delay here--a time longer than the statute of limitations for recovery of land--was unreasonable delay as matter of law”). In this case, the delay was well within the statute of limitations. Especially where the evidence would support a finding that Collias had legitimate reasons for holding off on filing suit, the issue should have been left to the jury. Contrast O'Meara v. Doherty, 53 Mass. App. Ct. 599, 605-606 (2002) (without legitimate reason, mother delayed for more than seventeen years in putting defendant on notice of paternity claim).
The record also fails to support the judge's finding that Lavallee suffered prejudice as a result of the delay. In her deposition, Lavallee was unable to identify any prejudice she suffered as a result of the delay. [R. App. 305-308]. As noted above, the judge focused on the expense incurred by Lavallee of having to run her business during this time period and apparently concluding that operated the business at a loss. Yet, she indicated to at least one person that business had improved, and a finder of fact could conclude that it was running profitably.
The loss of a potential opportunity to sell at a higher price does not as a matter of law constitute prejudice. Had Lavallee gone through with her obligations under the contracts with Collias, she would not be entitled to the windfall from the sale at a higher price. There is also evidence that Lavallee turned down an offer from Collias that is $20,000 higher than the one she recently accepted. Moreover, a finder of fact could reject these claimed damages, since Lavallee has also failed to resolve the underlying tax issues in this latter transaction.
Where a fact finder could conclude the delay is attributable to Lavallee and that she has suffered no prejudice, the judge erred as a matter of law in granting her summary judgment on this point.
II. Conclusion
Based on the authorities cited and the reasons aforesaid, the plaintiff requests that this court reverse the Superior Court's order granting the defendants summary judgment and that the case be remanded to the court for trial.
Respectfully submitted,
George A. Collias
By his attorneys,
David A. Sullivan
B.B.O. # 555566
Torphy and Sullivan, LLP
10 North Main Street
P.O. Box 608
Fall River, MA 02720
(508) 675-1576
Dana Alan Curhan
B.B.O. # 544250
101 Arch Street
Suite 305
Boston, MA 02110
(617) 261-3800
Assisting on the brief:
Brad Bennion, Legal Intern