Opinion
13-P-1646
06-12-2015
MICHAEL T. INTOCCIA, trustee, & another v. DEMETRIOS PANAGOPOULOS, trustee, & another.
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 trustees of the D&N Realty Trust and Nicholas Panagopoulos, individually (collectively, D&N), appeal from a judgment in favor of Michael T. Intoccia, trustee of the Washington Street 2 Realty Trust (Washington Street), and M.J. Holding Corp. (M.J.). The judgment followed a jury trial on consolidated actions. For the reasons that follow, we affirm.
Background. D&N brought an action against Washington Street for unpaid rent and possession of the premises at 2 Washington Street in Foxborough. Washington Street and M.J. filed a separate action alleging breach of a commercial lease and related claims. In the summary process action, the jury awarded possession of the premises to D&N and $178,169.68 in unpaid rent. On the damages claim, the jury found that D&N had breached the lease and an oral parking agreement, and awarded damages totaling $315,265.78 to Washington Street.
No appeal from the final judgment in this action is before us. The judgment represented the jury verdict in the amount of $258,962, less a credit of $80,792.32 in rent paid.
Of this amount, $56,585 was awarded on the claim for breach of the parking agreement, and $258,680.78 was awarded on the breach of contract claim.
Judgment. Although the lease was between D&N and Washington Street, and the special verdict slip listed Washington Street as the aggrieved party, judgment entered in favor of both Washington Street and M.J. D&N asks us to vacate the judgment as to M.J. This request was not made to the trial judge in D&N's motion for judgment notwithstanding the verdict (n.o.v.), and for that reason, is waived for purposes of this appeal. Michnik-Zilberman v. Gordon's Liquors, Inc., 14 Mass. App. Ct. 533, 541 (1982).
If, as D&N argues, the judgment in favor of M.J. was clerical error, the proper route to correct the judgment is to file a motion in the trial court pursuant to Mass.R.Civ.P. 60(a), 365 Mass. 828 (1974). We express no opinion on the merits of such a motion.
Breach of lease. D&N also urges us to vacate the judgment as to count I (breach of lease) regarding both Washington Street and M.J. because Washington Street was the only party to the lease and the damages awarded reflected amounts paid by M.J. to respond to septic overflow in the restaurant it operated on property rented from D&N. The argument that these were solely M.J.'s expenses was not raised at trial, in D&N's motion for directed verdict, or in its judgment n.o.v. Accordingly it is waived. Crown v. Kobrick Offshore Fund, Ltd., 85 Mass. App. Ct. 214, 217 n.5 (2014), citing Bonofiglio v. Commercial Union Ins. Co., 411 Mass. 31, 34-36 (1991).
Michael T. Intoccia was the principal of Washington Street and a fifty percent owner of M.J. In its motion for judgment n.o.v. D&N treated Washington Street and M.J. as one entity for purposes of the septic costs. D&N's motion refers to the invoices paid by M.J. as invoices of Washington Street. ("[Washington Street] introduced eighty-two invoices from Wind River Environmental, LLC.") On appeal, these invoices are characterized as invoices of M.J. At trial, the issue of the M.J. bills was brought to the judge's attention after he gave his instructions to the jury. He issued a clarifying instruction to the jury, stating, "With regard to some of the expenses that were claimed on the tenant in M.J. Holding Corp.'s case, they can be awarded to either M.J. Holding Corp. or to, if you find that there were damages towards one of those two parties were entitled to, then you may award damages to either of those two parties, but it has to be one, that is entitled to the damages, and it can't be awarded twice, and I'll leave it at that." There was no objection.
D&N further maintains that the costs of pumping the septic system were maintenance and repair expenses, not costs associated with the replacement of the septic system, and that under the terms of the lease, Washington Street was prohibited from recovering maintenance or repair costs. Thus, citing Nelson v. Hamlin, 258 Mass 331, 340 (1927), D&N contends that evidence of these damages was barred by the parol evidence rule. D&N further asserts that it replaced the septic system in a timely manner, and that in the absence of proof of its negligence, the damages award converted D&N from a landlord to an insurer.
D&N also argues that it made timely roof repairs and was not a guarantor of the roof. Washington Street's witness testified to $100,000 in clean-up costs associated with the D&N's obligation to repair the roof. Whether D&N timely repaired the roof was a question of fact for the jury. There was evidence from which the jury could find that the roof leak extended throughout the lease term.
At trial D&N did not contest that it had an obligation to replace the failed septic system. A commercial lease is a contract, and is subject to the standard rules of contract interpretation. See 275 Washington St. Corp. v. Hudson River Intl., LLC, 465 Mass. 16, 27 (2013). The judge ruled as a matter of law that the lease provision that set out the lessee's duty to repair the septic carried with it an implied term that a working septic system would be provided as part of the leasehold. There was no error in this ruling. See Vita v. Berman, 81 Mass. App. Ct. 748, 755 (2012), quoting from Lawrence v. Cambridge, 422 Mass. 406, 411 (1996) ("[I]n an ordinary contract, where matters are left open, the court may imply terms either that are reasonable or that may be gathered from the subsequent course of performance").
The judge instructed the jury that routine maintenance and repair costs were the responsibility of the lessee, but left it to the jury to determine whether the bills for septic pumping were ordinary maintenance or damages for increased maintenance expenses associated with the failed septic system. This ruling did not violate the parol evidence rule, because the jury were instructed to award damages only if the bills fell outside the maintenance and repair provisions of the lease. See Albiani v. Loudd, 4 Mass. App. Ct. 165, 170 n.7 (1976). The charges for the pumping the septic system between 2002 and January of 2008 totaled $283,613.78. By D&N's estimate, the invoices included approximately $15,339 for the period of time before the system failed; the jury's verdict was approximately $25,000 less than the total invoices. Viewing the evidence in the light most favorable to Washington Street, see Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 378 (2004), the jury verdict was consistent with an award of damages, not an award for routine maintenance and repair.
"[I]f you find that the septic system failed and had to be replaced, the replacement, I tell you as a matter of law, is the responsibility to the landlord, not the plaintiff. With respect to the septic system, if you find that the septic system failed, and that as a result of that failure tenant's cost of maintaining the system increased, . . . the landlord is responsible and only for the increased cost."
There was evidence that routine maintenance or repair required pumping twice per year, but that the system was pumped far more frequently, sometimes twice per month, week, or day.
The evidence at trial was that the main drainage line from D&N's septic system was illegally connected to the State drainage line (per the Massachusetts Highway Department), and cross-connected to a failed leaching field. Cross-contamination occurred in 1981 and 1987. The town of Foxborough declared the septic in failure in 2004 and it was sealed. It took several years to obtain the required permits, and the system was not replaced until 2008, when the premises were connected to the town of Walpole sewer system. From this evidence the jury were permitted to find that D&N failed to provide a working septic system, that it was responsible for expenses associated with replacing that system, that it had maintained an inadequate system from the outset, and that the failure to provide a working septic system was the product of its wrongdoing. There was no error.
D&N argues on appeal that it should have had a reasonable amount of time to replace the system, that the burden of additional maintenance fell on the tenant in the interim, and that expert testimony on the question of reasonable efforts was required. The argument regarding the need for expert testimony was not raised at trial or on motion for judgment n.o.v. For these reasons, the argument is waived. T.W. Nickerson, Inc. v. Fleet Natl. Bank, 456 Mass. 562, 570 (2010). Moreover, in view of the evidence that there was not a working, compliant septic system, it is unclear what testimony an expert would have been able to give. Finally, the judge's ruling that the lease contained an implied covenant that a working septic system was part of the leasehold renders expert testimony largely irrelevant, as that ruling placed the burden of remediating the failure on the landlord.
D&N also contends that it made timely roof repairs and was not a guarantor of the roof. Washington Street's witness testified to $100,000 in clean-up costs associated with the leaking roof. See note 9, supra. D&N's obligation to repair was undisputed. Whether D&N timely repaired the roof was a question of fact for the jury. There was evidence from which a breach could be found, namely that the roof leaked repeatedly throughout the lease term.
Finally, D&N argues that after D&N linked its septic system to the town of Walpole sewer system, Washington Street became responsible for $42,212.33 in sewer hook-up fees. From this, D&N theorizes that if the septic system had been fixed promptly, Washington Street would have paid an average of $3,837.48 in sewer hook-up fees per month for 41 months, or $157,336.68 in fees. D&N asserts that these hypothetical charges, together with pump-out charges incurred before the system officially was declared a failure in 2004, should have been offset against the jury award. Washington Street counters that there would have been no sewer hook-up charges had there been a working septic system.
The judge told the parties to argue the issue to the jury; no special verdict question was requested or given. We have not been given a transcript of the closing arguments. Either D&N's argument was made to, and rejected by, the jury, or no argument regarding offset was made to the jury. In either event, it was for the jury to arrive at an award, and in light of Washington Street's claimed damages in excess of $380,000, it is apparent that the jury engaged in some offset or reduction. A rational jury could have awarded the damages set forth in the special verdict questions. See Labonte v. Hutchins & Wheeler, 424 Mass. 813, 824 (1997) ("[A]n award of damages must stand unless to make it or to permit it to stand was an abuse of discretion on the part of the court below, amounting to an error of law"), quoting from Mirageas v. Massachusetts Bay Transp. Authy., 391 Mass. 815, 822 (1984); Twin Fires Inv., LLC v. Morgan Stanley Dean Witter & Co., 445 Mass. 411, 424 (2005) ("[T]he amount of damages awarded is a factual issue reviewed on appeal under an abuse of discretion standard").
Oral parking agreement. Having considered D&N's argument that the oral parking agreement was barred by the parol evidence rule, we find no error in the judge's conclusion that under the express terms of the lease, "the landlord specifically reserved the parking for himself outside the lease." The lease provision barring oral modifications therefore had no application. Ryder v. Williams, 29 Mass. App. Ct. 146, 149 (1990).
The lease reserved the right for the landlord to "operate a commercial parking lot thereon upon any day upon which an event is being held at Foxborough Stadium."
We have considered D&N's remaining arguments and find them to be without merit.
Judgment affirmed.
Order denying motion for judgment n.o.v., new trial, or remittitur affirmed.
By the Court (Rubin, Brown & Sullivan, JJ.),
The panelists are listed in order of seniority.
--------
Clerk Entered: June 12, 2015.