Opinion
No. 12–P–1542.
2013-07-2
Paul D'ATTANASIO & another v. John S. MARINI & others.
By the Court (COHEN, GRAHAM & FECTEAU, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
In this action for payment under a promissory note, a judge of the Superior Court ruled in favor of the plaintiffs on the parties' cross motions for summary judgment. The defendants appeal, claiming: (1) there was a genuine issue of material fact as to whether the plaintiffs had waived or modified provisions of the note relating to notice and repayment, and (2) the judge's award of damages was based upon a misinterpretation of the note's acceleration clause. We affirm.
Background. The undisputed material facts may be summarized as follows. Defendant Rockland Street–Canton, LLC (Rockland), purchased property from the plaintiffs with the intention of developing a sixteen-unit condominium. The purchase price was $1,120,000, of which $320,000 was paid to the plaintiffs at closing, the remainder to be repaid under the terms of a promissory note. Rockland together with defendant John S. Marini, individually, were designated the “Maker” of the note. Marini was the president and treasurer of Framing Company, Inc. (Framing), which was to serve as the general contractor for the project, and which guaranteed the note. Framing and the plaintiffs had established Rockland for the purpose of developing the project. Framing held a fifty-one percent ownership interest, and the plaintiffs held a forty-nine percent interest. Rockland agreed to pay Framing $4,675,000 to construct the project, and gave full power of attorney to Marini and Framing to manage Rockland and carry out its business.
Relevant here, the note provided that partial payment in the sum of $50,000 was to be made to the plaintiffs upon the closing of each of the residential units to be built on the property; however, in the event that the construction lender did not permit the money to be paid from the net sales proceeds, the maker (or if the maker did not have sufficient capital, Framing) was to pay that amount. No payments were due other than those due at the closing of each unit. However, the note also provided: “If all or any part of the Property or any interest in the Property (except for mortgage financing) is sold or transferred without [the plaintiffs'] prior written consent, [the plaintiffs] may require immediate payment in full of all sums required under this Note.... If [the plaintiffs] exercise[ ] this option, [the plaintiffs] shall give Maker notice of acceleration.” (Emphasis supplied.)
On November 20, 2008, Marini (on behalf of Rockland) sold unit 21–H, without obtaining the plaintiffs' prior written consent. The plaintiffs received only $40,000 from the proceeds of that sale. On May 15, 2009, Marini sold unit 21–G, without obtaining the plaintiffs' prior written consent. The plaintiffs received no money from the proceeds of that sale. On May 11, 2010, the plaintiffs gave written notice to the defendants that they were in breach of the terms of the note. On July 21, 2010, Marini sold unit 21–Q, without obtaining the plaintiffs' prior written consent. The plaintiffs received $16,799.58 as partial payment and reserved their rights under the terms of the note. On August 26, 2010, Marini transferred, for consideration, three units to Canton Viaduct, LLC (a company Marini owned, managed, and operated), without obtaining the plaintiffs' prior written consent. The plaintiffs received no money from these transfers.
Discussion. The defendants contend that a genuine issue of material fact was created as to whether the plaintiffs orally modified or waived the provisions of the note pertaining to prior written consent and postclosing payment. The only support for this contention is Marini's affidavit, which alleges in conclusory terms that all of the units were transferred with the plaintiffs' knowledge and consent, and with the understanding that postclosing payments would not be forthcoming because the construction lender was owed a substantial amount of money, and it was difficult to sell the units. However, there is no evidence that the parties' conduct conformed with the alleged waiver or modification. Nor is there any evidence that the plaintiffs received consideration to modify the terms of the note. See Cambridgeport Sav. Bank, v. Boersner, 413 Mass. 432, 439 (1992). In short, the defendants have failed to make the specific, factual showing required to demonstrate a genuine issue for trial. See Haverty v. Commissioner of Correction, 437 Mass. 737, 754 (2002), and cases cited.
We review the judge's ruling de novo, applying the familiar standards applicable to summary judgment. See Bank of N.Y. v. Bailey, 460 Mass. 327, 331 (2011).
Under the plain terms of the note, it was the defendants (and not the plaintiffs) who bore the risk that it would be difficult to sell the units at a price adequate to repay the construction lender and also pay the plaintiffs $50,000 per unit at the time of closing.
To the contrary, it is undisputed that the plaintiffs provided the defendants with written notice that they were reserving their rights.
To the extent the defendants argue that summary judgment was premature without further discovery on this issue, the argument is undermined by their failure to seek a continuance pursuant to Mass.R . Civ.P. 56(f), 365 Mass. 824 (1974).
The defendants' argument concerning the interpretation of the acceleration clause also is unavailing. By its express and unambiguous terms, this provision was intended to effectuate “acceleration.” If, as the defendants contend, “payment in full of all sums required under this Note” was intended to refer only to the amounts that should have been paid and not to the total outstanding principal, the clause would merely reiterate the plaintiffs' entitlement to amounts already owed; the provision would be superfluous and not an acceleration clause at all.
Even if we were to conclude that the language was ambiguous, we would construe it against the defendants, who drafted it. See DeWolfe v. Hingham Centre, Ltd., 464 Mass 795, 804 (2013).
Judgment affirmed.