Commonwealth of Massachusetts
Appeals Court
Plymouth County 2001 Sitting
No. 2000-P-1897
_________________________________________
Charles G. Tufankjian, Jr.
Plaintiff/Appellee
v.
Rockland Trust Company
Defendant/Appellant
__________________________________________
On Appeal From A Judgment Of The
Superior Court Of Plymouth County
__________________________________________
Brief For The Plaintiff/Appellee
____________________________________________
Dana A. Curhan, Esq.
B.B.O. # 544250
101 Arch Street
Suite 305
Boston, MA 02110
(617) 261-3800
Harold Jacobi, III
B.B.O. # 248980
155 Federal Street
17th Floor
Boston, MA 02110
(617) 482-5151
July 2001
Table of Authorities
A. Cases
B. Other Authorities
Issues Presented
Statement of the Case
Statement of Facts
A. The Plaintiff's Evidence
B. The Defendant's Evidence
C. The Plaintiff's Rebuttal
Summary of the Argument
Argument
I. The Defendant Is Not Entitled To Relief On
Its Challenge To The Sufficiency Of The Evidence
On The Issue Of The Breach Of The Covenant Of
Good Faith
A. To The Extent That The Defendant Argues
That The Evidence Was Insufficient Based
On The Absence Of A Breach Of Contract, The
Defendant Failed To Preserve The Issue
For Appeal
B. The Evidence Supported The Jury's Finding
That The Defendant Violated The Implied
Covenant Of Good Faith And Fair Dealing,
Even In The Absence Of A Breach Of
Contract
II. The Evidence Amply Supported The Jury's
Finding That The Defendant's Conduct
Constituted Fraud And Misrepresentation
III. Where The Evidence Strongly Supported The
Jury's Finding That The Defendant Engaged In
Fraud And Misrepresentation Resulting In
Substantial Injury To The Plaintiff, The
Evidence Amply Supported The Judge's Finding
That The Defendant Violated Chapter 93A
IV. The Trial Judge Committed No Error Of Law,
Nor Did She Abuse Her Discretion, In Admitting
Statements Of A Deceased Person Pursuant
To G.L. c. 233, § 65
V. The Evidence At Trial Supported The Award
Of Damages In This Case
A. The Trial Judge Properly Upheld The
Jury's Damage Award Where That Award
Had A Solid Basis In The Evidence
B. The Allowance Of The Judgment N.O.V.
As To The Breach Of Contract Claim Has No
Bearing On The Damage Award Where That
Award Was Supported By The Verdicts On The
Remaining Claims
C. The Trial Court Properly Awarded
Multiple Damages Under G.L. c. 93A
VI. The Trial Judge Committed No Error Of Law,
Nor Did She Abuse Her Discretion, In Denying
The Defendant's Rule 60(b) Motion On The
Grounds That The Issues Raised Therein
Were Not Preserved And Were Therefore
Deemed Waived
VII. Should This Court Find A Breach Of The Contract
To Be A Prerequisite To A Finding On Any Of
The Above Issues, The Plaintiff Requests That
This Court Address His Cross Appeal, Since The
Record Did Indeed Support The Jury's Finding
That The Defendant Materially Breached The
Contract
VIII. Conclusion
Addendum
1. Whether the evidence supported the jury's finding that the defendant violated the implied covenant of good faith and fair dealing, even absent a breach of contract, where the defendant's employees engaged in fraudulent and extortionate conduct calculated to destroy the plaintiff's right to receive the fruits of the contract.
2. Whether the evidence supported the jury's finding that the defendant's conduct constituted fraud and misrepresentation where its employees engaged in a classic “bait and switch” scheme calculated to force the plaintiff to accept terms to which he had not agreed.
3. Whether the evidence supported the judge's finding that the defendant violated G.L. c. 93A where the evidence clearly established that the defendant engaged in fraud, misrepresentation, and extortionate conduct resulting in substantial injury to the plaintiff.
4. Whether the trial judge erred as a matter of law or abused her discretion in admitting statements of a deceased person pursuant to G.L. c. 233, § 65 where the record demonstrates that such statements were made in good faith and from personal knowledge.
5. Whether (a) trial supported the jury's finding on damages where the damage award was supportable on multiple theories; and (b) the judge was entitled to treble the damages based on the defendant's fraudulent and extortionate conduct.
6. Whether the trial judge erred or abused her discretion in denying the defendant's Rule 60(b) motion on the grounds that the issues raised therein were not preserved at trial.
7. Whether the judge erred in setting aside the jury's finding that the defendant materially breached the contract (a) where its refusal to close after all of the necessary conditions had been met supported the jury's conclusion; and (b) where, assuming the conditions were not met prior to the closing date, the wrongful conduct of its employees calculated to prevent those conditions from being met also constituted a material breach.
On September 19, 1994, the plaintiff Charles G. Tufankjian, Jr. (“Charles”), filed a complaint in the Plymouth Superior Court (Superior Court No. CA94-1539B) against Rockland Trust Company (“Rockland”). Count 1 alleged a breach of contract; Count 2 alleged a breach of the implied covenant of good faith and fair dealing; Count 3 alleged fraud and misrepresentation; Count 4 alleged negligence; and Count 5 alleged a violation of G.L. c. 93A. [RA 2, 7-19] . On September 16, 1996, Rockland filed an answer and counterclaim. Rockland filed an amended answer and counterclaim on October 16, 1996. The counterclaim sought recovery of a $3,500 appraisal fee. Charles filed an answer to the counterclaim on November 14, 1996. [RA 3, 21-28].
The defendant moved for summary judgment on October 21, 1996. That motion was denied by Brady, J., on December 20, 1996. [RA 3, 33-42]. The parties filed, and the court considered, various motions and pleadings not relevant to the instant appeal. [RA 3-5]. Trial commenced before Donovan, J., and a jury on April 10, 2000. [RA 5, 345].
On April 18, 2000, at the conclusion of the plaintiff's case, the defendant moved for a directed verdict. The plaintiff waived his claim as to Count 4. Judge Donovan allowed the motion on that claim and denied it as to the remaining counts. [RA 5, 65-87]. That same day, the defendant filed a motion to reserve the 93A claim, arguing that the question presented was entirely a matter of law for the court to decide. Judge Donovan denied the motion, except as to damages. [RA 5, 88-89].
On April 20, 2000, the jury returned a verdict on special questions, finding for the plaintiff on all of his claims and awarding damages of $232,116. The jury found for the defendant on its counterclaim, awarding it $3,500. [RA 5, 90-92].
On April 27, 2000, Judge Donovan issued a memorandum of decision and order on the plaintiff's 93A claim. She found the defendant's conduct to constitute a knowing and wilful violation of G.L. c. 93A and ordered that the $232,116 damage award be trebled to $696,348. She awarded $102,392.50 in attorneys' fees and $8,859.65 in costs. On her own motion, she set aside the jury's verdict on the breach of contract counts. The judgments were docketed on May 9, 2000. [RA 5, 107-112].
The defendant filed a notice of appeal on May 18, 2000. [RA 5, 112-113]. On June 2, 2000, the plaintiff filed a notice of appeal as to the entry of judgment n.o.v. on the breach of contract claim. [RA 5, 114]. The case was entered on the docket of this court on December 18, 2000.
On December 18, 2000, the defendant filed a motion for relief from judgment pursuant to Mass. R. Civ. P. 60. [RA 5, 116-148]. On April 30, 2001, after a hearing, Judge Donovan denied the motion, finding that “[i]ssues not preserved at trial are deemed waived.” [RA 6, 164]. The defendant filed a notice of appeal on May 18, 2001, and this court consolidated the two appeals. [RA 6, 165].
A. The Plaintiff's Evidence
Beginning at age ten or twelve, Charles Tufankjian worked with his father and grandfather at the family's Oldsmobile dealership, Bridgewater Motor Sales in Bridgewater. After high school, he attended the General Motors Institute, completing a program in dealership management. He then worked at the dealership, which he eventually co-owned with his brothers Allan and Ronnie. [RA 389-392].
Charles dreamed of having his own dealership. In the fall of 1993, he learned that Bob Barboza, the owner of Advantage Toyota in Weymouth, needed to sell his dealership. They met, and Charles offered to purchase the dealership for $1,400,000. He gave Barboza a $100,000 deposit. He then approached Toyota Motor Sales and received the required approval. He applied for loans with Citizens Bank and New England Merchants Bank in December of 1993. Both institutions expressed interest in financing the acquisition. [RA 392-398, 650-658].
In January of 1994, as Charles awaited final approval from the banks, a representative of Rockland named Malinowski came into Bridgewater Motors and introduced himself. He told Charles that they were actively seeking business from auto dealerships and could provide floor plan financing-i.e., financing of his inventory. Charles turned him down, preferring to stay with GMAC. Malinowski then said, “I understand you're buying a dealership in Weymouth.” Charles was taken aback, since Barboza had agreed to keep the deal quiet. Malinowski said that Rockland would be interested in financing the new dealership. Charles said he had already applied to two banks, but Malinowski suggested that he meet with Tony DiRobbio from Rockland's automotive group. DiRobbio later set up a meeting for January 19. [RA 398-400].
At the meeting Charles gave DiRobbio all of the relevant numbers. DiRobbio suggested that they visit the dealership together. He wanted to pose as a friend rather than a person from the bank so he could get information from some of the employees. He obtained a substantial amount of information, which impressed Charles. A short time later, DiRobbio called to say that Rockland had approved the loan. They met and went over the terms of the loan. Rockland planned to lend him $700,000 at 8 percent interest. There would be a second component to the package, which would be a Small Business Administration loan for $560,000. Charles was not familiar with SBA financing, so DiRobbio introduced him to Kristen Teixeira, the Vice President in charge of the SBA program. [RA 401-407, 967-979].
Teixeira explained how Charles could save a lot of money by going through the SBA. Charles was impressed but told DiRobbio that he expected 7.5 percent rate from Citizens. A short time later, DiRobbio told him that Rockland would loan him its portion at 7.5 percent, and that the SBA portion would be 6.5 percent. The loan was renewable after five years at 1 percent over prime. Charles spoke with Teixeira, who guaranteed that the rate on the SBA loan would not exceed 6.5 percent and might be as low as 6.4 percent. When Charles ran the numbers at these rates, they worked really well. He agreed to these terms and asked that the bank to proceed. [RA 407-411, 876-882].
Charles immediately provided Teixeira with various paperwork, including an appraisal and a 21E environmental report prepared in 1993. Teixeira asked for a new appraisal and faxed him a list of appraisers. She said that the appraisal was his responsibility, although he later learned that it was not. She asked for a new 21E report and sent him a list of approved companies. [RA 411-420].
Charles' brother Allan, an attorney, prepared for the acquisition. He set up a corporation and a real estate trust, obtained the required licenses and permits, reviewed paperwork, negotiated terms with the seller's lawyers, and made sure everything was in place so that Toyota would approve the acquisition. By April 1, everything was ready to go except for a few odds and ends. [RA 658-663, 696]. Allan became concerned in late May when he discovered that the law firm designated by the bank had not received any paperwork. The bank's attorney completed the title search after Allan promised to pay for it himself. Allan ordered a municipal lien certificate and sent it to the attorney. He directed Charles to have a 21E report prepared and sent to the bank, and he had Charles press the bank to have the place appraised. He obtained an insurance binder. [RA 663-681].
With Teixeira's approval, Charles hired REM Associates to prepare the 21E. The property passed, and he sent her the results in March. Shortly thereafter, Rockland sent him a letter of commitment dated April 1, 1994. Teixeira had signed it as Vice President and Manager, SBA Lending Department. Teixeira explained the terms of the loan-that there would be a $1,260,000 interim commercial mortgage. Once the SBA approved its portion of the loan in two to four months, the permanent financing would replace it. Charles asked why the commitment letter did not quote a rate for the SBA component. She explained that that portion of the loan was separate from the bank's portion and that the SBA would fill in the rate. However, she specifically guaranteed that the rate would not exceed 6.5 percent. Charles signed the letter and returned it to the bank. The letter expired on June 30, 1994. [RA 421-431].
Shortly thereafter, DiRobbio offered Charles a proposal for floor plan financing totaling $2,300,000, which was one of a number of such proposals the bank offered. Charles declined the offer. Around that time, he found two appraisers who would do the appraisal for $2,500 and gave their names to Teixeira. She later told him that they had to use a particular company in New Hampshire. She also told him that as part of the approval process, he would have to go before the South Shore Economic Development Council (SSEDC) to have the SBA portion of the loan reviewed. [RA 432-439, 690-695].
In January of 1994, Teixeira told Gene Healey , the Executive Director of the SSEDC, to expect this loan. Prior to the issuance of the commitment letter, Healey asked Teixeira about this loan several times but received no response. After April 1, he asked about the paperwork for the loan but received no response. He had words with managers from Rockland regarding the loan and felt that there was a problem on their end. He scheduled a meeting with Teixeira, but she never showed up. He later argued with Ferdinand Kelley about Teixeira's failure to attend this meeting. There were delays in providing him with the necessary paperwork. [RA 630-639, 687-690].
When Charles later asked Healey about the 6.5 percent rate he had been promised, Healey told him it was impossible to guarantee the rate on an SBA loan. Teixeira later admitted that she had promised Charles that rate and asked him to honor it. When Healey refused, they argued. Teixeira told Charles she was trying to straighten things out, but a short time later she told him the rate would be higher than 6.5 percent. Charles became nervous. He and his son Greg met with Ferdinand Kelley, the second in command at the bank, in May of 1994. Kelley refused to honor the 6.5 percent rate, explaining, “you're a 50 year old man. You mean to tell me that you're going to take the word of a 30 year old girl?” He said that the rate would float until it closed. [RA 443-448, 639-641, 883-890].
Charles met with bank President Douglas Philipson notwithstanding Kelley's assurance that Philipson took orders from him. Philipson refused to change Kelley's decision. He did, however, propose that Rockland handle all of the financing for the dealership, including floor plan financing, for a rate of 7.5 percent. Charles declined this offer. He felt he had no choice but to go forward with the SBA financing at whatever rate was available. [RA 448-452, 759-772, 889-894, 900].
Charles pressed Douglas Moquin, the head of Rockland's Appraisal Department, to complete the appraisal on time. He questioned Kelley why he had to pay $3,500 to a New Hampshire firm when a local firm was willing to do the work for $2,500, but he ultimately agreed to the bank's appraiser. Charles asked Kelley to bill him for the cost. [RA 452-455].
Charles and Allan pressed Kelley to schedule the meeting with the SSEDC, and the meeting was finally held on June 23, 1994. At the meeting, Charles and Greg answered a few easy questions. Kelley then noted that he had come from a small dealership and asked in a very negative tone how he expected to run a dealership of that size. Charles answered the question, but was quite upset. After the meeting, he asked Kelley what would happen if everything was not done by June 30, since interest rates were rising. Kelley assured him that they could extend the commitment without any problem. Later, Kelley told him that the SSEDC had approved the application, and he received a letter the following day. Healey assured him that they were all set, that SBA approval was just a formality once the SSEDC approved the loan. According to Healey, the SBA approved the loan on certain conditions, which is normal. All approved loans are sent back with a list of things that must be done to get them into shape. [RA 455-464, 635-636, 697].
On June 28, Charles met at the law office of Wynn and Wynn with Barboza, Manny Silva from Chrysler Credit, and some of the other parties. During the meeting, Charles tried to reach Kelley. When Kelley called back, Charles put him on speakerphone and asked whether they were all set to close. Kelley said that they were not, that the appraisal had not been done, and that even if it had been done, the interest rate would be two percent higher because interest rates had gone up. Kelley refused to close. Charles and Kelley went back and forth for some time. After the call, the Chrysler representative indicated that he intended to foreclose on the property and put his own representative into the dealership if the deal did not close. Barboza threatened to keep the $100,000 deposit. Charles called Allan. [RA 464-469, 471, 697-698, 895-900, 1239-1259].
Allan faxed several letters to Kelley, and Charles spoke with him several times in an effort to salvage the deal. At one point, Kelley suggested that they forget about the SBA and let Rockland finance the entire purchase with a single 7.5 percent loan. Charles was prepared to accept, but Kelley would only honor that rate if Rockland handled the floor plan financing. Without the floor plan component, the rate would be two percent higher. Kelley stalled and ultimately refused to go through with the deal. Charles tried without success to contact Philipson. He did everything he could to close the loan by June 30. [RA 470-481, 484-488].
Allan also spoke with Kelley several times. Kelley refused to close without the appraisal or extend the commitment. Kelley also gave him the “history” of the situation. Referring to Teixeira, he explained that “this loan went to a girl” who “was getting married or something and she was flustered and had no experience.” Charles should not have relied on her to put together this loan. He further explained that “interest rates are screaming higher and we can't let this money go out at 7.5 percent.” When Allan asked about the commitment, Kelley stated that they were going to interpret the contract as strictly as possible. Kelley later said he was upset that Charles had called Philipson at home. He vowed to bury Bridgewater Motors by refusing to loan money to their customers. He said “this is all that f-ing girl's fault.” Allan begged him to honor the commitment. He wrote to the Board of Directors, and he offered to sign on the loan personally. Kelley refused to close and then added that he would not even let it go through at 9.5 percent, since at that rate he was not sure that Charles could afford to run the dealership. [RA 698-706].
Healey later told Allan that Kelley was under orders to kill the loan, since the interest rate was too low. Unless they could get the floor plan business, the rate would be at least 9.5 percent. [RA 713-714].
Chrysler Credit ultimately foreclosed on the dealership and on June 30, 1994, loaned Charles some of the purchase money at 8.5 percent for a year. Charles borrowed other funds from Allan. The assets of the dealership were transferred to Charles on July 8. Over the next year, Charles had to spend substantial time looking for replacement financing. He later secured an 8.75 percent loan for five years through Citizens Bank. James Dildine, an accountant testified that the additional interest charges totaled $232,116. Charles attributed a number of physical ailments to this episode. [RA 470-474, 481-483, 723-729, 823-826, 1259-1261].
On July 11, 1994, Kelley wrote to Charles claiming that he had offered a loan of $1,100,000 at 7.5 percent with no reference to floor plan financing. Allan wrote back asking if he would honor those terms. Kelley never responded. [RA 278-282, 722-723].
An appraisal report was completed by Keystone Consultant Group, Inc. on July 21, 1994. A cover letter attached to that report was dated June 29, 1994. Prior to June 30, Charles gave the bank all required paperwork, including the 21E report. [RA 486-488, 707-711].
B. The Defendant's Evidence
Vincent Visconti, an appraiser for Keystone Consulting Group, advised Charles by letter that Rockland had urged him to expedite his appraisal. He denied that Rockland told him it would extend the commitment if the loan did not close by June 30. [RA 920-927].
Ferdinand Kelley, Executive Vice-President and Senior Loan Officer at Rockland, testified that two commitment letters were issued to Charles. One included floor plan financing and one did not. The latter included an interim loan, which would be replaced by a commercial mortgage and an SBA loan. Kelley is on the Board of Trustees of the SSEDC, which acts as a conduit for SBA financing. Under the SBA 504 program, a bank may not close on any loan, including an interim loan, that the SBA has not approved. Approval by the SSEDC is not sufficient. In this case, the commitment letter superseded all prior oral and written commitments. It expired on June 30, 1994. [RA 1050-1062, 1069-1113, 1138-1139].
Charles' loan was not presented to the SSEDC until June 23. Kelley attributed the delay to mishandling of the bank's documents by the SSEDC and the failure of Charles to provide necessary documentation. He argued with Gene Healey about who was at fault. He also blamed Charles for the delay in securing the appraisal. Federal law prohibited the bank from closing without an appraisal. [RA 1113-1120, 1121-1132].
Kelley met with Charles regarding the claimed oral commitment to a 6.5 percent interest rate. No one at the bank could have made such a commitment, as the interest rate on an SBA loan was beyond the bank's control. Kelley offered to go forward either on the terms described in the commitment letter or to have the bank loan $1,260,000 at 7.5 percent without the SBA component. He presented this latter proposal to the bank's board on June 9. However, he did not want to saddle the bank with a below market rate without getting something in return, so he put in a proviso that the rate was only good if Charles gave the bank his floor plan business. If the floor plan business went elsewhere, the rate would be 9.5 percent. The bank approved the proposal, but Charles balked, insisting on the 6.5 percent rate. [RA 1133-1193].
Kelley attended the SSEDC meeting on June 23. He thought his question to Charles was fair. The SSEDC approved the loan, but the SBA did not. Some documents were still missing, which was not the bank's fault. The bank would not have prepared the legal paperwork for the loan until all of the required approvals had been obtained. On July 11, he sent Charles a letter indicating that the bank's commitment had expired. He responded to Charles' allegations and tried to provide him with some alternatives. [RA 1194-1238].
Elizabeth Tufankjian, Allan's wife, was trustee of the Massachusetts Bay Investment Trust, which was created to loan money to Charles. In July of 1994, it loaned him $513,000. The note required monthly payments. She did not believe he had paid monthly, but by the time of trial, he had repaid $490,000 of the principal. She did not send him a letter saying he was in default for not paying monthly. He may not have paid any interest as of the date of trial. [RA 1441-1446].
Anthony DiRobbio, Vice President and Director of Consumer Lending for Rockland, met with Charles in January of 1994 to discuss financing the acquisition of a Toyota dealership. He believed Charles was looking for floor plan financing and offered him a number of proposals which included a floor plan component. Charles appeared to use these proposals to secure a better deal from Toyota. DiRobbio also introduced him to Teixeira to have her explain the SBA 504 program. She said that she could not guarantee the rate on an SBA loan. [RA 207-211, 272-277, 1521-1569, 1575].
Attorney William Rosa represented Jack Barboza in the sale of a Toyota dealership to Charles. They scheduled the closing on June 28, 1994 but did not close until July 8. There were two lawsuits pending against Barboza. One was by Color Tile, which owned a portion of the property being conveyed, and the other was by the Patriot Ledger newspaper for unpaid advertising. The Patriot Ledger obtained a TRO prohibiting the sale without reserving sufficient funds to pay the $14,000 debt. Either Charles or his brother Allan indicated that they wanted the suits resolved before the closing. Both were settled sometime between June 30 and July 7. [RA 1622-1633].
C. The Plaintiff's Rebuttal
In 1994, Margo Akins worked at REM Associates and prepared a 21E report for Charles in the spring of 1994. She spoke with Kristen Teixeira three times. Teixeira wanted to know when her report would be done. Akins delivered it to her the first week of June. At no time did Teixeira tell her that REM Associates was not an approved company for site appraisals. [RA 1641-1645].
I. The defendant cannot prevail on its claim that the trial court entered inconsistent verdicts where it failed to preserve that issue. Moreover, the evidence supported the jury's finding that the defendant violated the covenant of good faith and fair dealing implicit in the contract, even absent a breach of the contract. The plaintiff presented overwhelming evidence that the defendant engaged in fraudulent and extortionate conduct calculated to destroy his right to receive the fruits of the contract. [Pages 21-28].
II. Assuming the issue has been preserved, the evidence supported the jury's finding that the defendant's conduct constituted fraud and misrepresentation. Its employees engaged in a classic “bait and switch” scheme calculated to force the plaintiff to accept terms to which he had not agreed. [Pages 28-30].
III. The evidence supported the judge's finding that the defendant violated Chapter 93A where the evidence clearly established that the defendant engaged in fraud, misrepresentation, and extortionate conduct resulting in substantial injury to the plaintiff. [Pages 30-34].
IV. The trial judge committed no error or abuse of discretion in admitting statements of a deceased person under G.L. c. 233, § 65. Assuming the issue was preserved, the record demonstrates that such statements were made in good faith and from personal knowledge. [Pages 34-38].
V. The evidence presented at trial supported the jury's finding on damages. The damage award was sustainable on multiple theories, and the jurors were instructed not to return duplicative damage awards. Further, the judge was entitled to treble the damages based on the defendant's fraudulent and extortionate conduct. [Pages 38-46].
VI. The trial judge committed no error of law or abuse of discretion in denying the defendant's Rule 60(b) motion. The judge correctly found that the defendant waived the issues raised therein. [Pages 46-47].
VII. Assuming this court deems it necessary to reach the plaintiff's cross-appeal, he contends that the judge erred in setting aside the jury's finding that the defendant breached the contract. The jury was entitled to find that all of the necessary conditions were met prior to the closing date and that the bank's refusal to close constituted a material breach. Assuming some of the conditions were not met prior to the closing date, the wrongful conduct of the defendant's employees calculated to prevent those conditions from being met also constituted a breach of the contract. [Pages 47-49].
I. The Defendant Is Not Entitled To Relief On Its Challenge To The Sufficiency Of The Evidence On The Issue Of The Breach Of The Covenant Of Good Faith
The defendant argues that by allowing the jury's verdict to stand on the count alleging a breach of the covenant of good faith and fair dealing, while directing a verdict on the breach of contract claim, the trial court entered an inconsistent judgment unsupported by the evidence. However, the defendant waived the issue for purposes of appellate review. Should this court reach the merits, the evidence clearly supports the jury's verdict even in the absence of a breach of the contract.
A. To The Extent That The Defendant Argues That The Evidence Was Insufficient Based On The Absence Of A Breach Of Contract, The Defendant Failed To Preserve The Issue For Appeal
At the close of the plaintiff's evidence, the defendant filed a general motion for a directed verdict on all counts pursuant to Mass. R. Civ. P. 50(a). In support of its claim that a verdict should be entered as to the claimed breach of the covenant of good faith and fair dealing, the defendant argued that it fulfilled the terms of the contract and that the delay in closing was entirely the plaintiff's fault. [RA 80-81]. At no time did the defendant argue, as it does on appeal, that it was entitled to judgment as a matter of law on Count 2 if there was no breach of contract. See Blake v. Hendrickson, 40 Mass. App. Ct. 579, 582 (1996). The trial judge instructed the jurors at length on the elements of the plaintiff's theory and then repeated those instructions on the second day of deliberations. At no time did the defendant object to such instructions or request an instruction that Count 2 must fail absent a breach of contract.
After the verdict, the defendant did not move for judgment n.o.v., nor did it challenge the claimed inconsistencies after the court set aside the breach of contract claim. In fact, the defendant first raised the present issue seven months after entry of the judgment in its Rule 60(b) motion. The trial court properly found that the defendant waived the issue. Handrahan v. Red Roof Inns, Inc., 43 Mass. App. Ct. 13, 16 n.7 (1997). See Shafir v. Steele, 431 Mass. 365, 371 (2000). Nothing in the record warrants treating the issue any differently on appeal. See Id.; Anthony's Pier Four, Inc. v. HBC Associates, 411 Mass. 451, 471 n.25 (1991).
B. The Evidence Supported The Jury's Finding That The Defendant Violated The Implied Covenant Of Good Faith And Fair Dealing, Even In The Absence Of A Breach Of Contract
"Every contract implies good faith and fair dealing between the parties to it." Anthony's Pier Four, Inc. v. HBC Associates, 411 Mass. at 471; Warner Ins. Co. v. Commissioner of Insurance, 406 Mass. 354, 362 n. 9 (1990); Kerrigan v. Boston, 361 Mass. 24, 33 (1972). That implied covenant of good faith and fair dealing provides “'that neither party shall do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.'” Id. at 471-472, quoting Drucker v. Roland Wm. Justras Associates, Inc., 370 Mass. 383, 385 (1976). See Nile v. Nile, 432 Mass. 390, 398 (2000); Williams v. B & K Medical Systems, Inc., 49 Mass. App. Ct. 563, 569 (2000). In order to implicate the covenant, there must be a contract between the parties; bad faith in the execution of a contract, as opposed to its performance, does not implicate the covenant. Sheehy v. Lipton Indus., Inc., 24 Mass. App. Ct. 188, 194 n. 6 (1987). See Id. at 471. Moreover, contrary to the defendant's suggestion, a plaintiff need not show a breach of the contract in order to establish a breach of the covenant. Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. at 471-473 (exercise of discretionary right for the purpose of forcing financial concessions did not directly breach terms of the contract but indicated bad faith and unfair dealing).
Here, the trial court clearly “could have found that while defendant[] did not violate the express terms of the [contract], [it] nonetheless violated the covenant of good faith and fair dealing” which Massachusetts law implies into contracts. Cantellops v. Alvaro-Chapel, 234 F.3d 741, 744 (1st Cir. 2000) (applying Puerto Rico law). See Anthony's Pier Four, Inc. v. HBC Associates, 411 Mass. at 472-473. In this case, the parties agreed, and the trial court properly instructed the jury, that the April 1994 commitment letter constituted a contract between the parties. The defendant argues that in setting aside the breach of contract count, the trial court necessarily found that the contract became void due to a simple failure of a condition precedent (i.e., approval by the SBA) . However, the defendant reads too much into the trial court's ruling. Viewed in the light most favorable to the plaintiff, the evidence strongly supports his contention that the defendant's employees unreasonably delayed taking steps necessary to carry out the contract. For example, they delayed in ordering the appraisal, they failed to consider that appraisal though it became available prior to June 30; they waited until late June to present the loan package to the SSEDC; and they failed to provide paperwork and otherwise cooperate with the SSEDC. Finally, in the July 7, 1994 letter from Barbara Wheatley of the SBA, she writes that the SBA had withdrawn the plaintiff's application from consideration primarily because “[i]t appears at this time that the applicant may not agree to the financing terms set by the [defendant].” [R. App. 344].
The jury could (and apparently did) find that the plaintiff balked at the floor plan financing plans that the defendant was trying to push; that the defendant then provided the SBA with unfavorable information intended to undermine the plaintiff's application; and that, notwithstanding the approval of the SSEDC, the SBA then withdrew the application from consideration.
“[I]t is fundamental that a promisor may not avoid his promised performance based on the 'non-occurrence of a condition' where the promisor has himself hindered or prevented its occurrence." Lobosco v. Donovan, 30 Mass. App. Ct. 53, 56 (1991). See Anthony's Pier Four, Inc. v. HBC Associates, 411 Mass. at 471 (implied covenant of good faith and fair dealing breached where party to contract withheld approval of redevelopment authority's master plan in bad faith in order to force financial concessions from other party); Community Builders, Inc. v. Indian Motocycle Associates, Inc., 44 Mass. App. Ct. 537, 558-559 (1998) (the pattern of the defendants' conduct-characterized as “foot dragging” intended to pressure plaintiff to compromise its claim-violated the implied covenant of good faith and fair dealing even if it did not constitute a breach of contract in and of itself).
In this case, if the contract expired because of the failure of the SBA to approve its portion of the loan package, the expiration was directly attributable to actions by the defendant and its agents while that contract was pending. The ultimate failure of the contract does not preclude a finding that the defendant breached the implied covenant of good faith and fair dealing. Compare PH Group Ltd. v. Birch, 985 F.2d 649, 651 (1st Cir. 1993) (jury found breach of implied covenant of good faith and fair dealing under Massachusetts law but no breach of contract), with Cool Light Co., Inc. v. GTE Products Corp., 973 F.2d 31, 23, 33-35 (1st Cir. 1992) (inconsistency between general verdict and jury's answers to special interrogatories, and general verdicts' inconsistencies with one another, could not be reconciled and required new trial).
Finally, the defendant criticizes Charles for failing to present expert testimony as to whether the bank's conduct fell below the reasonable commercial standards for fair dealing. Charles alleged fraud, misrepresentation, and a course of extortionate conduct. An expert was not necessary to establish that such outrageous conduct was not commercially reasonable, nor has the defendant cited any case establishing such a requirement.
II. The Evidence Amply Supported The Jury's Finding That The Defendant's Conduct Constituted Fraud And Misrepresentation
The defendant fares no better in its claim that the absence of a breach of contract precludes a finding of fraud and misrepresentation. As with the issue discussed in Section I, supra, the defendant waived the issue by failing to alert the trial court to the claimed inconsistencies in the verdicts until its Rule 60(b) motion seven months after entry of judgment. Handrahan v. Red Roof Inns, Inc., 43 Mass. App. Ct. at 16 n.7. See Shafir v. Steele, 431 Mass. at 371. Should this court choose to address the merits of the defendant's claim, the evidence amply supported the jury's finding that the defendant engaged in fraud and misrepresentation.
To recover on a claim for fraud and misrepresentation, the plaintiff was required to show that he reasonably relied to his detriment on a false statement of material fact made by the defendant to induce him to act. Danca v. Taunton Sav. Bank, 385 Mass. 1, 8 (1982); Rood v. Newberg, 48 Mass. App. Ct. 185, 192 (1999). Viewed in the light most favorable to the plaintiff, the evidence supports a finding that (1) the plaintiff had secured financing for the purchase of the dealership, (2) the defendant's employees approached him and offered him financing on more favorable terms, (3) the key to the defendant's proposal was an SBA loan which a bank vice president falsely guaranteed would not exceed an interest rate of 6.5 percent; (4) as a result of this proposal, the plaintiff agreed to forego other available financing; (5) after the plaintiff took the “bait”, the defendant tried to “switch” him to different loan packages which included floor plan financing that was substantially more profitable for the bank; (6) when the plaintiff balked at the new proposals, the defendant took various actions causing the original agreement to fail; and (7) as a result of the defendant's actions, the plaintiff was forced to secure financing on less favorable terms. This classic “bait and switch”, found by both the jury and the trial court, was well supported by the evidence. The defendant has cited no authority suggesting that the failure of the contract ultimately entered into by the parties excuses its fraud or misrepresentations.
Moreover, as the trial court correctly instructed the jurors, where the evidence supports a finding that the defendant's conduct caused the contract to fail, the defendant cannot benefit from its own malfeasance. See Lobosco v. Donovan, 30 Mass. App. Ct. at 56.
Under no view of the facts or law is the judgment on Count 3 inconsistent with the trial court's ruling on the breach of contract claim, and indeed, the jurors' findings were well supported by the evidence.
III. Where The Evidence Strongly Supported The Jury's Finding That The Defendant Engaged In Fraud And Misrepresentation Resulting In Substantial Injury To The Plaintiff, The Evidence Amply Supported The Judge's Finding That The Defendant Violated Chapter 93A
The defendant contends that the evidence failed to establish a violation of G.L. c. 93A and that the trial court therefore erred in awarding multiple damages. However, the record strongly supports the jury's and judge's findings that the defendant wilfully or knowingly committed unfair or deceptive acts or practices resulting in substantial injury to the plaintiff. The judge was entitled to find on the facts before her that the defendant violated Chapter 93A and that an award of multiple damages was appropriate.
G.L. c. 93A, § 2(a) “makes unlawful any '[u]nfair ... acts or practices in the conduct of any trade or commerce.'” Anthony's Pier Four, Inc. v. HBC Associates, 411 Mass. at 474. “This prohibition is 'extended to those engaged in trade or commerce in business transactions with others similarly engaged[.]'” Id., quoting G.L. c. 93A, § 11.
Some courts have held that to be actionable under Chapter 93A, such conduct “'must attain a level of rascality that would raise an eyebrow of someone inured to the rough and tumble world of commerce.'” Tagliente v. Himmer, 949 F.2d 1, 7 (1st Cir. 1991), quoting Quaker State Oil Refining Corp. v. Garrity Oil Co., Inc., 884 F.2d 1510, 1513 (1st Cir. 1989). See Meyer v. Wagner, 429 Mass. 410, 424 (1999); Johnson v. Koplosky Foods Inc., 5 F.Supp.2d 48, 55 (D.Mass. 1998). However, this court recently found “[p]hrases such as 'level of rascality'” to be “uninstructive in deciding questions of unfairness under G.L. c. 93A; courts should rather focus on the nature of the challenged conduct and on the purpose and effect of that conduct.” Stagecoach Transp., Inc. v. Shuttle, Inc., 50 Mass. App. Ct. 812, 817 (2001). Other formulations have focused on whether the conduct fell within at least the penumbra of some common-law, statutory or other established concept of fairness, or were immoral, unethical, oppressive or unscrupulous, and resulted in substantial injury. Johnson v. Koplosky Foods Inc., 5 F.Supp.2d at 55. See Meyer v. Wagner, 429 Mass. at 424.
In this case, the defendant argues that, assuming that bank officials misrepresented the availability of 6.5 percent financing, the commitment letter placed Charles on notice that he could not rely on any oral representations, especially as to the future intentions of the SBA. Further, the defendant contends that because the SBA turned down his loan application for reasons unrelated to the alleged fraud, he failed to show any harm from the defendant's acts.
The defendant takes a rather narrow and benign view of its conduct during the course of the events. As noted above, the evidence amply supported the findings of both the judge and the jury that its agents engaged in a classic “bait and switch.” Compare Hannon v. Original Gunite Aquatech Pools, Inc., 385 Mass. 813, 825 (1982) (if proven, submission of low bid followed by demand for more money after award of contract would constitute violations of c. 93A). Notwithstanding the defendant's contentions, the evidence “permitted an inference that the misrepresentations were intentional, ... which is tantamount to fraud[,]” and which “warrants the award of [multiple] damages under G.L. c. 93A.” St. Paul Surplus Lines Ins. Co. v. Feingold & Feingold Ins. Agency, Inc., 427 Mass. 372, 376 (1998).
Moreover, the claimed conduct was not limited to misrepresentations calculated to induce Charles into signing the contract. Once Charles had entered into the contract, the defendant's agents engaged in an even more insidious pattern of conduct-one amounting to commercial extortion in order to force him to accept against his will a financing package that was far more profitable to the bank. Anthony's Pier Four, Inc. v. HBC Associates, 411 Mass. at 474-475 (“Anthony's attempt to force HBC to increase Anthony's compensation was a knowing and wilful violation of G.L. c. 93A, § 2, as a matter of law”); Community Builders, Inc. v. Indian Motocycle Associates, Inc., 44 Mass. App. Ct. at 558-559 (G.L. c. 93A violation found where the pattern of the defendant's conduct was properly found to have exhibited “an extortionate quality”); Atkinson v. Rosenthal, 33 Mass. App. Ct. 219, 226 (1992) (application of G.L. c. 93A appropriate where defendant's conduct “has an extortionate quality that gives it the rancid flavor of unfairness.”); Pepsi-Cola Metropolitan Bottling Co. v. Checkers, Inc., 754 F.2d 10, 17-19 (1st Cir. 1985) (commercial extortion giving rise to c. 93A liability, and treble damages, where defendant withheld payment due under contract not because of dispute over liability or inability to pay but, rather, as a "'wedge' against [plaintiff] 'to enhance [defendant's] bargaining power for more product'").
Finally, as discussed more fully in Section V, infra, the judge and jury properly found that the defendant's conduct resulted in substantial damages to Charles. The judge committed no error, nor did she abuse her discretion, in awarding multiple damages under G.L. c. 93A.
IV. The Trial Judge Committed No Error Of Law, Nor Did She Abuse Her Discretion, In Admitting Statements Of A Deceased Person Pursuant To G.L. c. 233, § 65
The defendant contends that the trial court erred by allowing Charles and Allan to describe conversations they had with Gene Healey. Such conversations, the defendant claims, constituted prejudicial hearsay. Charles submits, however, that the judge properly admitted statements of Healey pursuant to G.L. c. 233, § 65. Further, it is questionable whether the defendant adequately preserved the issue for appeal. Most of the challenged testimony came in either without objection or over an objection that would not have alerted the judge to this issue. See Blake v. Hendrickson, 40 Mass. App. Ct. at 582. Moreover, the prejudice, if any, was minimal. The defendant is not entitled to a new trial.
G.L. c. 233, § 65 provides that in a civil case, "a declaration of a deceased person shall not be inadmissible in evidence as hearsay ... if the court finds that it was made in good faith and upon the personal knowledge of the declarant." Shine v. Vega, 429 Mass. 456, 468 (1999). Even where the court does not make explicit findings on the record, a finding that such statements were made in good faith and from personal knowledge is implicit in the decision to admit the statements. Mitchell v. Hastings & Koch Enters., Inc., 38 Mass. App. Ct. 271, 275 (1995). See Demoulas v. Demoulas, 428 Mass. 555, 564 n.9 (1998).
Here, the defendant argues that because Healey had an interest in “evading responsibility for the SBA's denial of the loan” in order to avoid being sued, and because such statements took place after the commencement of the present litigation, such statements “cannot in any manner be deemed to have been made in good faith.” [Defendant's brief at 35 and n. 11]. “That a writing or statement is made in anticipation of litigation ... does not necessarily mean that it is not made in 'good faith.'” Shine v. Vega, 429 Mass. at 468. Further, Healey was not a party to the litigation, and nothing in the record indicates that he might have been concerned about being sued himself. The judge properly found that the statements were made in good faith and on personal knowledge. Id.
The defendant further contends that some of the statements describing conversations with bank employees should have been excluded as double hearsay. However, such statements were properly admitted as admissions by a party. Kirby v. Morales, 50 Mass. App. Ct. 786, 792 n.9 (2001); Blake v. Hendrickson, 40 Mass. App. Ct. at 581-582. Especially where the defendant's counsel never alerted the judge to this issue, she committed no error of law or abuse of discretion by admitting this testimony.
Finally, even if this testimony had been erroneously admitted, it could not have prejudiced the defendant. Without objection, counsel for the plaintiff read relevant portions of Healey's deposition testimony into the record. Healey testified that he believed the bank had some sort of problem with this loan, that bank employees failed to communicate with him and to provide him with necessary paperwork, and that he had words with bank managers regarding these problems. He also described conversations with Teixeira regarding the rate she had quoted for the SBA portion of the loan. [RA 633-640]. The challenged testimony simply corroborated other admissible evidence on the same subject and added little to the plaintiff's case.
Especially where the defendant failed to object to most if not all of the challenged testimony, there is simply no basis for finding that the judge erred or abused her discretion in admitting such testimony.
V. The Evidence At Trial Supported The Award Of Damages In This Case
The defendant raises three challenges to the damage award. First, it argues that there was no evidence that the plaintiff suffered any damages in this case. Second, it contends that where the damages were awarded based on the breach of contract, and where the breach of contract count was set aside, the damage award was fatally flawed. Third, it challenges the judge's trebling the damage award under G.L. c. 93A. The plaintiff submits that the evidence presented at trial supports the jury's finding on damages, that the damage award was equally supportable on theories other than breach of contract, and that the judge was entitled to treble the damages and award attorneys' fees based on the defendant's fraudulent and extortionate conduct.
A. The Trial Judge Properly Upheld The Jury's Damage Award Where That Award Had A Solid Basis In The Evidence
This court will “uphold the jury's damage award where, as here, it has a 'solid basis in the evidence.'” Stagecoach Transp., Inc. v. Shuttle, Inc., 50 Mass. App. Ct. at 822, quoting Rizika v. Donovan, 45 Mass. App. Ct. 159, 166, (1998). At trial, the jury could have found that the defendant promised a five-year loan of $700,000 at an interest rate of 7.5 percent and a $560,000 SBA loan at an interest rate of 6.5 percent. To substitute for these loans, Charles obtained a loan of $513,000 from a family trust at an interest rate of 10.5 percent and two loans from Chrysler credit totaling $712,000 at an interest rate of 8.5 percent. On April 24, 1995, Charles replaced the Chrysler loans with a $700,000 loan at an interest rate of 8.75 percent. James Dildine, an expert called on behalf of Charles, testified that the difference in the amount of interest incurred during the period set forth in the contract totaled $232,116, a figure adopted by the jurors.
The defendant notes that Charles had repaid all but $23,000 of the loan principal from the family trust, that he had not repaid the interest, and that the trustee had not taken any steps to collect the balance due or the interest. According to the defendant, the early repayment of the loan resulted in a savings of $400,000 in interest charges. Further, the fact that Charles had not paid interest amounted to additional savings, as this was, in effect, an interest-free loan. According to the defendant, the savings entirely negated any damages.
The flaw in the defendant's reasoning is as follows. First, with regard to the interest on the loan from the family trust, the fact that Charles may not have paid any interest by the time of trial did not excuse him from paying the interest called for in the note. He was and is legally obligated to pay the interest. Second, the suggestion that Charles is somehow better off because he paid down some of the higher interest loans over a shorter period of time does not hold water. The higher interest rate changed the economics of the loans. The fact that Charles may have withdrawn capital from his business to pay down the loans sooner (or may have felt compelled to repay the family trust as quickly as possibly) does not indicate that he benefited from having to pay a higher interest rate.
The defendant further contends that the plaintiff's expert assumed an interest rate for a portion of one of the replacement notes at 8.875 percent rather than 8.75 percent to which Charles testified. [RA 827-828]. Even if the 8.875 percent figure was incorrect, it is not clear that the expert based his opinion on that figure. He testified that in preparation for his testimony, he reviewed the actual financing that Charles had to take after the Rockland loans fell through, which would have been the Citizens loan at 8.75 percent. Thus, while there may have been an error in the question, the answer appears to have been correct. Moreover, even if he had used a higher figure than was warranted, the error would not have made a significant difference in the answer and certainly does not invalidate the entire damage award.
The jurors were not required to accept the defendant's view of the evidence. They were entitled to accept Dildine's calculations, which were supported by substantial evidence at trial.
B. The Allowance Of The Judgment N.O.V. As To The Breach Of Contract Claim Has No Bearing On The Damage Award Where That Award Was Supported By The Verdicts On The Remaining Claims
The plaintiff presented his claim on several theories, and to avoid the possibility of duplicative damages, the court properly instructed the jurors not to award multiple damages for a single harm. [RA 1693, 1730-1732]. See Clark v. Taylor, 710 F.2d 4, 8 (1st Cir. 1983) ("[T]he amount of compensatory damages properly awardable does not depend on the number of theories under which plaintiff may recover, but on the extent of his injury."). Assuming the trial court was correct in setting aside the breach of contract count, where the evidence amply supported the counts alleging a breach of the implied covenant and fraud and misrepresentation, the court properly allowed the damage award to stand.
As discussed above, a finder of fact may properly find a breach of the implied covenant of good faith and fair dealing separate and apart from a breach of the underlying contract. See Anthony's Pier Four, Inc. v. HBC Associates, 411 Mass. at 472-473; Community Builders, Inc. v. Indian Motocycle Associates, Inc., 44 Mass. App. Ct. at 558-559. Even absent a breach of contract, if the breach of the covenant had “the effect of destroying or injuring the right of the other party to receive the fruits of the contract[,]” the plaintiff is entitled to recover what he would have received had the contract been performed. Id. at 471; Drucker v. Roland Win. Jutras Assocs., 370 Mass. at 385. See Nile v. Nile, 432 Mass. at 399.
With regard to the fraud and misrepresentation count, a victim of such conduct is entitled to the benefit of the bargain he made-that is, the difference between what he actually received and what he would have received had the defendant's representations been true. See Danca v. Taunton Sav. Bank, 385 Mass. at 8; Melvin v. H.J. Nassar Motor Co., 355 Mass. 692, 694 (1969). More specifically, in a classic “bait and switch” scheme, the victim is entitled to the “bait.” In this case, the bait was the contract set forth in the commitment letter, with SBA financing for a portion of the loan at a rate not to exceed 6.5 percent, as well as the ability to borrow up to ninety percent of the appraised value of the property.
The fact that the contract ultimately expired does not nullify the damage award under either theory. As discussed above, viewed in the light most favorable to the plaintiff, the evidence strongly supported a finding of intentional conduct by the defendant that caused the contract to fail. Indeed, the July 7, 1994 letter from Barbara Wheatley indicates that she withdrew the plaintiff's loan application primarily because of concerns related to her by agents of the defendant.
This is not a situation where the plaintiff would not or could not have qualified for SBA financing. Contrast Whisenant v. Fulton Federal Sav. & Loan Ass'n of Atlanta, 200 Ga.App. 31, 406 S.E.2d 793 (1991) (borrower failed to establish it was injured by alleged “bait and switch” tactic of soliciting mortgage loan applications from public by agreeing to interest rate commitment which it did not intend to honor where evidence conclusively demonstrated that borrower's loan was disapproved for bona fide reason unrelated to interest rate commitment). In fact, according to Gene Healey, the SSEDC approved the plaintiff's loan package “and sent it to the SBA, and it was approved on certain conditions.” [RA 635-636]. While Barbara Wheatley's letter expresses concerns about the financing package, and purports to withdraw the application, the jury did not and was not required to accept those reasons or to treat the letter as a denial by the SBA. Even if that letter is taken at face value, none of the concerns expressed in the letter were fatal; had the defendant begun the process in a more timely manner, Charles could have easily addressed those issues and secured SBA approval.
Because the evidence amply supports the covenant and fraud/misrepresentation theories, and because either theory would support the full amount of damages awarded, the trial court properly declined to reduce or vacate the damage award.
C. The Trial Court Properly Awarded Multiple Damages Under G.L. c. 93A
As described in Section III, supra, the evidence supported a finding that the defendant engaged in fraud and misrepresentation in inducing Charles to enter into the contract and then engaged in extortionate conduct in order to coerce him into agreeing to terms that were more profitable for the bank. Where damages were properly awarded under the above theories, the decision of the trial court to award multiple damages and attorneys' fees under G.L. c. 93A was a proper exercise of discretion. Anthony's Pier Four, Inc. v. HBC Associates, 411 Mass. at 474-475.
VI. The Trial Judge Committed No Error Of Law, Nor Did She Abuse Her Discretion, In Denying The Defendant's Rule 60(b) Motion On The Grounds That The Issues Raised Therein Were Not Preserved And Were Therefore Deemed Waived
Rule 60(b)(6) of the Massachusetts Rules of Civil Procedure permits the trial court to grant a party relief from judgment where that party has a meritorious claim and where extraordinary circumstances merit relief. Parrell v. Keenan, 389 Mass. 809, 814-815 (1983); Powers v. H.B. Smith Co., Inc., 42 Mass. App. Ct. 657, 660 (1997). As discussed above, the issues raised in the defendant's motion were far from meritorious. See Id. Furthermore, the fact that the defendant's trial counsel failed to alert the trial court to those issues, belies the current argument that such claims are sufficiently meritorious to warrant extraordinary relief.
As noted above, this is not a case where the judge misapprehended the facts or law, where the law changed after entry of the judgment, or where the parties discovered new evidence. Contrast Steele v. Kelley, 46 Mass. App. Ct. 712, 728 (1999). The judge committed no error of law or abuse of discretion in concluding that the issues were waived and in refusing to address the merits of the defendant's motion.
VII. Should This Court Find A Breach Of The Contract To Be A Prerequisite To A Finding On Any Of The Above Issues, The Plaintiff Requests That This Court Address His Cross Appeal, Since The Record Did Indeed Support The Jury's Finding That The Defendant Materially Breached The Contract
Should this court agree with the arguments set forth above, there would be no need to address the plaintiff's cross appeal. However, to the extent that the judge's ruling setting aside the breach of contract claim may be relevant to any of the above issues, the plaintiff contends that the judge erred in setting aside that claim. He asks that the jury verdict on that issue be reinstated.
Viewed in the light most favorable to Charles, the evidence establishes that he had met all of the conditions necessary to effectuate the contract. The required paperwork was complete, and the SBA portion of the loan had been approved. The jury properly found that the bank's refusal to close on or before June 30 “was a substantial breach going to the root of the contract....” Lease-It, Inc. v. Massachusetts Port Authority, 33 Mass. App. Ct. 391, 396 (1992); Aerostatic Engr. Corp. v. Szczawinski, 1 Mass. App. Ct. 141, 145 (1973).
Even assuming that some condition had not been met by June 30, 1994, the jury could still have found that the defendant caused such condition(s) not to be met. Specifically, the plaintiff presented evidence of the defendant's efforts to “kill” the loan-for example, by providing the SBA with unfavorable information. The plaintiff also presented evidence of the defendant's failure to take the steps necessary to process the loan-e.g., its failure to submit documentation to SBA affiliates in a timely fashion, its failure to timely order an appraisal, and its failure to request that the bank's attorneys proceed with the necessary legal work. On these facts, the jurors were entitled to find that such wrongful acts undertaken to prevent the timely completion of the contract constituted a breach of the contract. See Anthony's Pier Four, Inc. v. HBC Associates, 411 Mass. at 470 (defendant's improper withholding of approval of master plan made it impossible, as a practical matter, for the transaction to proceed as scheduled and therefore constituted a material breach of the contract); Lobosco v. Donovan, 30 Mass. App. Ct. at 56 (“a promisor may not avoid his promised performance based on the nonoccurrence of a condition, where the promisor has himself hindered or prevented its occurrence.”). The judge erred in setting aside the breach of contract claim.
VIII. Conclusion
Based on the authorities cited and the reasons set forth in Sections I-VI, the plaintiff requests that the judgment be affirmed. Should this court find it necessary to reach the plaintiff's cross appeal, he requests that this court reinstate the jury's verdict on the breach of contract count.
Respectfully submitted,
Charles G. Tufankjian, Jr.,
By his attorneys,
Dana A. Curhan, Esq.
B.B.O. # 544250
101 Arch Street
Suite 305
Boston, MA 02110
(617) 261-3800
Harold Jacobi, III
B.B.O. # 248980
155 Federal Street
17th Floor
Boston, MA 02110
(617) 482-5151
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