Opinion
No. 15–P–1020.
10-25-2016
Kathryn K. CULLEY & another v. AUTHENTIC TRADITIONS, LLC & others.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This appeal is currently before us after a tortuous procedural course. The prior proceedings in the case span ten years and include a twenty-three day jury trial, a seven-day bench trial, petitions to the single justice of the Appeals Court, and a petition pursuant to G.L. c. 211, § 3, which was denied first by a single justice of the Supreme Judicial Court and then by the full court. See Culley v. Cato, 460 Mass. 1009 (2011).
We are constrained to observe at the outset that our review has been greatly hampered by the state of the appellate record. As noted in the margin, the record and the briefing are noncompliant with our procedural rules in numerous respects, the most problematic being the underinclusive transcript and appendix. So serious are the deficiencies, that they would justify summary affirmance on procedural grounds. See Shawmut Community Bank, N.A. v. Zagami, 30 Mass.App.Ct. 371, 372–373 (1991), S.C., 411 Mass. 807 (1992) (“It is the obligation of the appellants to include in the appendix those parts of the jury trial and c. 93A trial transcripts, as well as copies of the motions, which are essential for review of the issues raised on appeal [both to determine whether the evidence supports the theory on appeal and whether the issue was properly presented and preserved]”). Nevertheless, because of the interests at stake, where feasible, we have addressed the merits on the limited record provided.
For example, the plaintiffs, whose principal claim of error is that the jury verdict was supported by the evidence, did not provide us with a complete trial record. The excerpts of trial testimony that they did provide are not set forth in chronological order. The transcriber found many of the sidebar conferences to be indiscernible, yet no effort at record reconstruction was made. The plaintiffs also refer to alleged rulings from the bench without providing page references to the transcripts where those rulings were made. Copies of important pleadings and documents, such as the defendants' motions for directed verdicts and for judgment notwithstanding the verdict (judgment nov), and the second State Board of Building Regulations and Standards (BBRS) decision, are missing or incomplete. In addition, the briefs contain a number of factual assertions that mischaracterize or have no basis in the record. Both the plaintiffs and defendants Mallegni and Ferreira have not consistently provided record references as required. We have disregarded factual assertions that are unsupported by accurate record references. See Harrington v. Costello, 467 Mass. 720, 724 n. 6 (2014).
Background. In September, 2005, the plaintiffs, Kathryn K. and Christian P. Culley, purchased a new home built for them by Gary Cato, doing business as Authentic Traditions, LLC. The 3,893 square foot house was built on an acre lot in Southborough, based on plans selected by the Culleys from Frank Busa's Custom Home Collections.
The Culleys discovered that the house contained a number of latent defects, including failed porticos, an unstable deck, inadequate reinforcement in a foundation wall, and inadequate column support and damp-proofing in the basement. After obtaining troubling reports and opinions from structural engineers and testing firms in early 2006, the Culleys demanded their money back. When a refund was not forthcoming, the Culleys brought this action against various individuals and entities involved in the construction, permitting, and sale of the property.
The Culleys also filed licensing complaints against a number of those involved in the project. As a result, numerous violations of the State building code were found, and several individuals had their licenses suspended or revoked.
The case was tried to a jury in the summer of 2010. As he had signaled throughout the trial the judge instructed the jury on the traditional rules of damages applicable in breach of contract, breach of warranty, and fraud cases. See Quinn Bros., Inc. v. Wecker, 414 Mass. 815, 817 (1993) ; Twin Fires Inv., LLC v. Morgan Stanley Dean Witter & Co., 445 Mass. 411, 424–426 (2005) and cases cited. The judge also instructed that on the evidence presented, the question of damages for each theory of liability essentially reduced itself to the costs of repair. At some point in the proceedings, the Culleys waived their request for the remedy of rescission, which the judge had reserved for himself.
In answer to special questions, the jury found the defendants liable on all theories submitted, and awarded the Culleys $1,093,487 in damages. On July 20, 2010, the special verdict was entered on the docket, but no judgment was entered. In a decision issued on December 2, 2010, the trial judge denied the defendants' motions for judgment nov. However, concluding that the damages were excessive and the verdict “likely due to misapprehension, confusion or passion,” the judge ordered a new trial on damages unless the Culleys accepted a remittitur to $140,518. The judge arrived at this figure based upon the testimony of Carl Goldknopf, one of the Culleys' two expert witnesses, as to the cost of replacing a rear retaining wall on their land, and the testimony of Kathryn K. Culley (Kathryn) about the cost of minor repairs that the Culleys had done to the house. The judge determined that the Culleys had not introduced any other competent evidence of compensable damages. The Culleys rejected the remittitur and opted for a new trial.
Goldknopf opined that the entire rear retaining wall, a portion of which lies on the Culleys' property, was defective and would need to be replaced. He estimated that the cost to remove and rebuild the entire wall would be $333,000. In calculating the remittitur, the judge determined that the Culleys were entitled to an award of damages only for the percentage of the wall on their land, which he calculated to be $133,200. The judge then increased this amount by $7,318 for the minor house repairs to which Kathryn had testified.
No qualified expert testified about the costs to repair any other defect or to a quantifiable diminution in value of the property caused by the defects.
Having reserved the G.L. c. 93A claims to himself, the trial judge found that while the breaches of warranty by Cato and his cobuilder/vendor, Dante A. Mallegni, violated c. 93A, the Culleys had failed to prove actual damages. The judge reached the same conclusion with respect to defendant Carlos Ferreira. He therefore awarded only nominal damages of twenty-five dollars against Cato, Mallegni, and Ferreira for their c. 93A violations. The judge found that both Cato and broker Paula A. Spinazola were not liable under c. 93A for misrepresentations to the Culleys about the professional status of house designer, Frank Busa.
The judge found that Cato never referred to Busa as an architect. Although the judge found that Spinazola did refer to Busa as an architect, he concluded that any misrepresentation was at most negligent and did not rise to the level of a c. 93A violation.
After soliciting input from the attorneys regarding the scope of the new trial, the judge issued an order dated September 27, 2012, precluding the Culleys from introducing expert testimony on damages that they could have, but did not present at the first trial. See Total Containment, Inc. v. Dayco Prods., 177 F.Supp.2d 332, 338–340 (E.D.Pa.2001). In effect, his order limited the retrial to questions concerning the rear retaining wall.
The Culleys proposed to introduce new evidence concerning the costs to repair or to replace each of the numerous defects in the house structure, the soil, and the walls surrounding it; they also sought to provide evidence that the property had no market value as well as evidence that the total cost to demolish the building and to rebuild it would exceed the value of the property.
Thereafter, the judge who presided over the first trial retired. The new judge, after further consideration of the scope of the retrial, reaffirmed the limitations. Dissatisfied with the sufficiency of Goldknopf's multiple pretrial disclosures as well as the adequacy of the foundation of his proposed testimony, the judge precluded Goldknopf from expanding upon the damages to which he had testified at the first trial, i.e. $333,000. The Culleys took the position that the damages relating to the rear wall were inseparable from the damages to the rest of the property, and that Goldknopf could not give an opinion regarding the wall alone. Ultimately, although Goldknopf was available, the Culleys elected not to call him, insisting, despite his testimony at the first trial, that Goldknopf could not ethically testify that the rear retaining wall could be fixed for $333,000. After the judge rejected proposed expert testimony from the Culleys and a real estate broker, the Culleys chose not to offer evidence of damages with respect to the claims on which they had prevailed at the first trial. Thus, the case proceeded solely as a bench trial and only on the c. 93A issues.
Goldknopf testified at a voir dire hearing that he viewed the rear retaining wall, the fill behind the wall, and the house as one structural element; and that the cost to repair everything on the property would be around $2,000,000.
It appears that key rulings in this regard were made during proceedings on May 29, 2013. We have not been provided with the transcript of those proceedings.
In his c. 93A decision, the first judge had found that the rear retaining wall was built properly. The first judge subsequently vacated this finding, leaving his successor to decide both c. 93A liability and damages as to the rear retaining wall. After a weeklong trial, the second judge found that the rear retaining wall was stable and not defective. Accordingly, he concluded that the Culleys had failed to establish liability under c. 93A related to the rear retaining wall against Spinazola, the two principals of RE/MAX (William Wright and George Joseph), and Ferreira. Although the judge found that Cato and Mallegni were bound by findings of the State Board of Building Regulations and Standards (BBRS) that they had violated State regulations in failing to have an architect or engineer design the wall, he ruled that the Culleys did not prove that they sustained any loss as a result. Further, because the Culleys sustained no separate and identifiable harm arising from the code violations related to the wall, the judge concluded that they were not entitled to nominal damages or to attorney's fees. See Tyler v. Michaels Stores, Inc., 464 Mass. 492, 502–503 (2013).
Earlier, the first judge had clarified that the question of Spinazola's c. 93A liability in connection with the Busa misrepresentation would not be revisited at the second trial.
The judge also ruled that the Culleys were entitled to nominal damages of twenty-five dollars against the three defendants (Cato, Mallegni, and Ferreira) found liable under c. 93A by the first judge on the basis of violations related to the house. Judgment subsequently entered assessing attorney's fees of $237,606 and expenses of $21,341, jointly and severally, against them.
Discussion. 1. Timeliness of the defendants' posttrial motions. On July 14, 2010, the same day that the jury returned their verdict, an assistant clerk entered a document entitled “Summary of action on various counts” on the docket. Even a cursory review of the document establishes that it was not signed by the trial judge, as the Culleys maintain; nor can the document reasonably be interpreted, in form or in content, as a decision of the judge in favor of the Culleys or as a final judgment. Because final judgment did not enter until September 17, 2014, all of the defendants' posttrial motions were timely. There also was no error in the denial of the Culleys' motion, based on the July 14, 2010, summary, to rescind the decision of the second trial judge dated May 7, 2014.
As the first trial judge correctly noted, he had the authority to entertain posttrial motions before the entry of a final judgment. See 1973 Reporter's Notes to Mass.R.Civ.P. 59(b), Mass. Ann. Law Court Rules, Rules of Civil Procedure at 314–315 (Thomson Reuters 2016).
2. Sufficiency of the evidence underpinning the jury's damage award. We discern no abuse of discretion in the allowance of the defendants' motions for a new trial and in the direction for remittitur. See Evans v. Lorillard Tobacco Co., 465 Mass. 411, 464 (2013). See also Reckis v. Johnson & Johnson, 471 Mass. 272, 299 (2015) (noting that only in “exceedingly rare” cases may an appellate court set aside the discretionary action of the trial judge in this context).
The record before us confirms that the amount of damages awarded by the jury ($1,093,487) is not supportable. As noted above, no real estate appraiser provided an opinion on the diminution of value caused by the defects on the property or an opinion that the defects rendered the property worthless. No expert testified that the costs of repair exceeded the value of the property. No engineer or contractor testified that as a result of the defects, the house would have to be torn down. The BBRS did not make this finding. Except for minor incidentals, the Culleys failed to introduce any competent proof of quantifiable damages except in relation to the rear retaining wall.
With a binder and calculator in front of her, Kathryn testified about the discrete elements of damages the Culleys were seeking, including the purchase price, various upgrades, and out-of-pocket expenses. To the extent that the Culleys allege improper “tallying” of damages by the judge, the record shows only that the judge corrected one obvious addition error by Kathryn. During the deliberations, the jury asked the judge what would happen to the house if the Culleys wanted their money back. In response, the judge told them the issue was not relevant and to follow his instructions on damages. The amount awarded (the exact amount to which Kathryn testified) indicates that the jury attempted to restore the status quo ante, a measure of damages not within their province. Compare Zimmerman v. Kent, 31 Mass.App.Ct. 72, 77, 82 & n. 11 (1991). If those damages had been allowed to stand, the Culleys would have ended up with significant monetary damages and also would have retained the house and the land. Such an award would have far exceeded any permissible measure of damages.
In fact, Goldknopf, who had “heard a price” paid by the Culleys for the house, testified at the subsequent voir dire hearing that his firm did not undertake any cost analysis to determine whether repairing the defects on the property would be financially prudent.
On appeal, as below, the Culleys argue that in light of the defects and the documented code violations that would have to be disclosed to prospective buyers, the jury could have inferred that the property had no value. See 940 Code Mass. Regs. § 3.16(2) (1993). They also argue that the testimony of their expert, Rene Mugnier, was sufficient to support a finding that the property was worthless. We disagree with both of these assertions. As the trial judge found, the Culleys continued to reside in the house at all times. They also still owned the acre lot on which the house sat. No expert testified that the land lacked value.
Mugnier testified that the inadequate foundation wall could be fixed by reinforcing it with a grid of steel plate. Discussing the grid, Mugnier testified that the grid would be “very expensive” and would “warn any potential buyer that something may be wrong and that would lengthen the—the process of selling or stop anybody to buy that house that—that—that house.” In his posttrial order regarding the issues for the new trial, the judge decided that Mugnier, a structural engineer, lacked qualification as a real estate expert to render this opinion. As the Culleys' attorney correctly pointed out, the defendants failed to timely object or move to strike Mugnier's testimony, and thus, the evidence should have been considered by the judge in the Culleys' favor. Even so, however, this testimony did not suffice to establish that the Culleys were entitled to recover everything they ever spent for the property, the land, and upgraded improvements they made. In addition, although Mugnier described the steel plate reinforcements as “very expensive,” he did not otherwise furnish a basis, beyond speculation, for the jury to estimate the cost.
The Culleys' property was part of a parcel of land purchased by Cato for $450,000 in October, 2003. Mallegni testified that the builders borrowed, through White B. Realty Trust, $650,000–$675,000, inclusive of land acquisition costs, for the Culley project.
The Culleys also contend that the defendants' “own witnesses' testimony made clear that any attempt to conduct cost of repair analysis would be futile and would require destruction of the property.” However, that assertion is not supported by the record. Like Mugnier, the defendants' forensic engineer, George Byl, testified that everything, including the framing, could be fixed. Although Byl candidly agreed that there were some construction defects, he proposed repairs that were not nearly as extensive as those proposed by Mugnier. In Byl's opinion, what he observed of the physical condition of the house did not warrant destructive testing to evaluate the structural integrity of the framing; and, furthermore, even if such testing revealed deficiencies, they would be susceptible to repair. Byl also testified that as-built plans were not required to implement his proposed remedial actions. Neither Byl, who had prepared thousands of estimates for proposed repairs and remediation work, nor Mugnier was asked how much any of the repairs would cost.
In several aspects, the Culleys' brief has mischaracterized Byl's testimony. For example, Byl did not testify that if he was wrong in his analysis of the property, the house would have to be bulldozed. According to Byl, if the results of the Culleys' rebar testing firm were correct (showing inadequate reinforcement of the foundation wall), the house would already be on the ground and in need of removal by a bulldozer. Byl also did not testify that that “the building likely contained latent defects which would require demolition to identify.”
3. Limitation on the scope of the new trial. The Culleys have failed to establish any abuse of discretion in the orders limiting the scope of the new trial. A partial new trial may be ordered if “the issues as to which the new trial is ordered are so distinct and independent from the remainder of the case that they may be separately tried without injustice.” 1973 Reporter's Notes to Mass.R.Civ.P. 59(a), Mass. Ann. Laws Court Rules, Rules of Civil Procedure at 313 (Thomson Reuters 2016). See Gasoline Prods. Co. v. Champlin Ref. Co., 283 U.S. 494, 500 (1931) ; Simmons v. Fish, 210 Mass. 563, 565 (1912).
Here, the two judges could conclude, in the exercise of their discretion, that limiting the retrial to distinct issues concerning the rear retaining wall would not be unjust. Before the first trial, the Culleys knew the condition of the soils, and the costs to remove the soils and to shore the house were ascertainable. Their two expert witnesses, Mugnier and Goldknopf, had been involved in analyzing the structural problems with the house dating back to early 2006. Despite admonitions from the judge and ample advance notice as to the legal principles upon which the jury would be instructed, the Culleys failed to introduce evidence from which the jury properly could have found damages as to anything but the rear retaining wall.
Because there was no such evidence, the defendants appropriately objected to the submission of other damage claims to the jury. Despite his misgivings about the sufficiency of the Culleys' proof, in keeping with preferred practice, the judge submitted the entire case to the jury. By limiting the second trial, the judge, in effect, correctly ruled that the defendants had been entitled to removal of claims of damages from the jury's consideration that had not been proved. Finally, as the second judge noted in reaffirming the limitation on the scope of the new trial, to the extent that the Culleys later argued that no expert could separate out the cost of the repair or replacement of the rear retaining wall, the Culleys' own expert already had done so at the first trial.
4. G. L. c. 93A. Neither judge was required to find in favor of the Culleys on their c. 93A claims against Spinazola, Wright, Joseph, or RE/MAX. Although couching their argument as a legal one, the Culleys essentially reargue the facts, which were for the judges to decide. In resolving the reserved c. 93A claims, the judges were entitled to make contrary factual findings from those made by the jury. See Klairmont v. Gainsboro Restaurant, Inc., 465 Mass. 165, 186–187 (2013). Because of record inadequacies, we are unable to evaluate the Culleys' claim that the judge made “insupportable” findings of fact. Moreover, to the extent that the Culleys' claims of error are predicated on the July 14, 2010, summary, that document is of no consequence for the reasons stated above.
Even if the first trial judge erred by requiring the Culleys to establish reliance as an element of their claim against Spinazola, see Hershenow v. Enterprise Rent–A–Car Co. of Boston, Inc., 445 Mass. 790, 800 n. 20 (2006), any error was harmless. The judge found that Spinazola's conduct—at most, negligent misrepresentation—did not warrant the imposition of c. 93A liability. Negligence is not, as the Culleys contend, a per se violation of c. 93A. On the insufficient record presented, we are in no position to determine whether the judge's view of Spinazola's conduct was clearly erroneous.
5. Fair trial. Nothing in the record before us supports the Culleys' claims that they did not receive a fair trial or that their constitutional rights were violated. At their peril, they decided to forego the introduction of appropriate evidence of damages at the first trial. In ruling on the posttrial motions, the first judge acted within the permissible bounds of his discretion. The second judge gave the Culleys several opportunities to provide him with the evidentiary foundation that would have supported their expert's $2,000,000 damage estimate. Having failed in that endeavor, the Culleys chose not to have their expert testify to any lesser amount, even though he had done so during the first trial. If anything, the record reflects that both judges gave the case painstaking and patient consideration.
6. Cross appeals. Ferreira and Mallegni filed notices of appeal in the trial court, but neither paid the fees required to docket their cross appeals in this court. Accordingly, we need not address them. Sewall–Marshall Condominium Assn. v. 131 Sewall Ave. Condominium Assn., 89 Mass.App.Ct. 130, 136 n. 7 (2016). “While the defendants may defend the judgment against any attack by the plaintiff, their failure to docket the appeal[s] precludes them, in the absence of compelling circumstances, from obtaining a judgment more favorable to them than the judgment entered below.” Marshall v. Status Pharmaceuticals, Inc., 51 Mass.App.Ct. 667, 669 (2001). See Mancuso v. Massachusetts Interscholastic Athletic Assn., Inc., 453 Mass. 116, 133 (2009). No such “compelling circumstances” are presented here. To the contrary, in addition to failing to pay the docket fee, Ferreira and Mallegni have frustrated meaningful appellate review by failing to provide us with a record sufficient to decide the issues they seek to raise and by relying, instead, upon numerous unsupported factual assertions in their briefs. Furthermore, insofar as we have been able to consider their arguments on the inadequate record, we see no merit in them.
7. Other issues. To the extent we have not addressed other points raised by the parties, they have not been overlooked; we find nothing in them that requires discussion. See Department of Rev. v. Ryan R., 62 Mass.App.Ct. 380, 389 (2004).
The following arguments may be deemed waived: all issues raised for the first time on appeal, arguments unsupported by adequate reasoning and citation to relevant authority, arguments based on unsupported facts and documents that were not provided in the record, and all substantive claims not addressed in the briefs. See Mass.R.A.P. 16(a)(4), as amended, 367 Mass. 921 (1975); Sullivan v. Liberty Mut. Ins. Co., 444 Mass. 34, 35 n. 1 (2005) ; Carey v. New England Organ Bank, 446 Mass. 270, 285 (2006) ; Chokel v. Genzyme Corp., 449 Mass. 272, 279–280 (2007) ; Cameron v. Carelli, 39 Mass.App.Ct. 81, 85–86 (1995).
The request of the defendants who seek an award of attorney's fees and costs is denied.
The plaintiffs are entitled to an award of reasonable appellate attorney's fees and costs, but only insofar as they were incurred in defending the purported cross appeals. The plaintiffs may submit an application for such appellate attorney's fees and costs, with appropriate supporting materials, to this court within fourteen days of the date of the rescript, pursuant to Fabre v. Walton, 441 Mass. 9 (2004). Ferreira and Mallegni shall have ten days to respond.