Summary
emphasizing unequivocality requirement
Summary of this case from G.L.M. Sec. & Sound, Inc. v. LoJack Corp.Opinion
14-P-769
03-12-2015
BAYNORTH REALTY FUND VI, L.P. v. DAVID L. WICKLINE.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The defendant, David L. Wickline, appeals from a Superior Court judgment, claiming the judge erred in allowing BayNorth Realty Fund VI, L.P.'s (BayNorth) motion for partial summary judgment. Wickline claims that BayNorth orally agreed to release him from personal liability under a guaranty signed by him, and that he was denied an opportunity to conduct discovery on this point. Finally, he challenges the default provisions of the promissory note as usurious under G. L. c. 271, § 49. We affirm.
William Shoaf was a defendant below, but has not filed an appeal in this court.
1. Personal guaranty. Wickline claims that his alleged conversation with Flint (an agent of BayNorth) amounted to an offer by BayNorth for an oral modification to the personal guaranty by Wickline in favor of BayNorth, which Wickline argues he accepted by performance. As a result of his purported modification agreement, Wickline asserts he is no longer personally liable to answer on the promissory note made to Easy Street Mezzanine, LLC. We disagree.
According to Wickline's affidavit, which the judge took as true in ruling on summary judgment, Flint told Wickline that in light of Wickline providing information regarding the project, BayNorth "valued [his] cooperation," that BayNorth "'was not Merrill Lynch,' it did not have to pursue all guarantors, and had the internal flexibility to differentiate between the 'bad actors' and those who acted properly in [BayNorth's] eyes, like [Wickline]," and "[BayNorth] would treat [Wickline] differently than Shoaf, who in Mr. Flint's opinion, was the 'bad actor.'"
The guaranty executed by the parties provides by its express terms that any subsequent modifications must be in writing and signed by the person to be charged. It is true that even where such clauses are present, we may nevertheless recognize a subsequent oral modification, but we will do so only when the evidence of the parties' intent is "of sufficient force to overcome the presumption that the integrated and complete agreement, which requires written consent to modification, expresses the intent of the parties." Cambridgeport Sav. Bank v. Boersner, 413 Mass. 432, 439 n.10 (1992). None of the statements attributed to Flint by Wickline, nor all of them taken together, would constitute a valid offer for an oral modification to the guaranty. There is no evidence that Flint proposed, or the parties negotiated, new terms or the details of a modified agreement, nor is there evidence that BayNorth agreed to release Wickline from liability. Compare id. at 439-442, with First Pa. Mort. Trust v. Dorchester Sav. Bank, 395 Mass. 614, 624-625 (1985) (oral modification of integrated written agreement found where, after detailed negotiations, the party with the power of acceptance had "unequivocally" indicated his acceptance). Flint's alleged statements to Wickline are not enough to reasonably infer that BayNorth had waived its legal right to go after Wickline. Wickline has not attempted to show that he was misled or coerced into signing the guaranty, nor has he suggested that he failed to understand the terms of the guaranty at the time of contracting. Thus, we see no reason to excuse him from performance according to a validly formed contract. See Cambridgeport Sav. Bank, supra at 440-442.
Because the statements attributed to Flint ultimately do not create a valid offer for an oral modification to the guaranty, the judge did not abuse her discretion in rejecting Wickline's request for discovery of facts that would ultimately not be material to resolving the dispute. See Commonwealth v. Fall River Motor Sales, Inc., 409 Mass. 302, 307-309 (1991).
Because we conclude that no modification of the contract occurred, we need not, and do not, reach the questions whether Wickline provided valid consideration by informing BayNorth of developments at the project, or whether he had a preexisting duty to provide that information.
2. Liquidated damages clause. Wickline claims the liquidated damages clause contained in the contract signed by the parties was unreasonable at the time it was made, and should therefore be declared void as a penalty. We disagree. The judge noted that Wickline, with the assistance of counsel, agreed when he signed the note that the amount of liquidated damages was "a reasonable estimate of [BayNorth's] anticipated actual damages." Nevertheless, he now claims it was not. Wickline has not supplied any evidence from which a reasonable fact finder could have found that the clause was unreasonable when made. Particularly where, as here, both parties were sophisticated and represented by counsel, we will enforce the liquidated damages clause as written, for to do so is consistent with the intent of the parties when they originally entered into the transaction. See Cummings Properties, LLC v. National Communications Corp., 449 Mass. 490, 496 (2007).
For example, the record is devoid of any evidence as to what amount BayNorth would have received absent default. Wickline has only averred that the amount of liquidated damages is "clearly excessive on its face." This is but a conclusory allegation which does not raise a genuine dispute of a material fact. See Ng Bros. Constr. v. Cranney, 436 Mass. 638, 648 (2002) ("adverse party may not manufacture disputes by conclusory factual assertions; such attempts to establish issues of fact are not sufficient to defeat summary judgment").
3. Usurious interest. Wickline claims that BayNorth has failed to comply with G. L. c. 271, § 49, which prohibits charges of usurious interest (over twenty percent) without prior written notice given to the Attorney General. We disagree. The contract at issue provides for a "Yield Maintenance Amount," triggered by prepayment of all or a part of the loan, which is designed to ensure BayNorth receives all interest to which it would otherwise be entitled absent the prepayment. The yield maintenance amount is computed at thirty percent interest, thus implicating G. L. c. 271. Prior to making the loan with Wickline, BayNorth was required to duly file a notice under § 49(d), which it did. Nevertheless, Wickline contends that § 49(d) required BayNorth to renew its notice every two years, and because it did not, the yield maintenance amount is therefore unlawfully usurious.
Wickline's suggested interpretation of § 49(d) is contrary to our case law, which has "consistently construed the requirement to mean that the notice should be on file with the Attorney General by the time the loan proceeds are disbursed." Clean Harbors, Inc. v. John Hancock Life Ins. Co., 64 Mass. App. Ct. 347, 365 (2005) (emphasis supplied). See Levites v. Chipman, 30 Mass. App. Ct. 356, 362 (1991) (interest rates in promissory note not illegal when § 49[d] notice was on file "at the time the loan proceeds were distributed"). Put another way, § 49(d) only requires an entity provide prospective notice of potentially usurious transactions. Consequently, because it disbursed the loan within two years of filing its § 49(d) notice with the Attorney General, BayNorth did not violate G. L. c. 271.
Judgment affirmed.
By the Court (Kafker, Meade & Maldonado, JJ.),
The panelists are listed in order of seniority.
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Clerk Entered: March 12, 2015.