Opinion
16-P-812
03-06-2017
Jenna HOANG v. ETERNAL SALON, INC. & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Following a jury-waived trial, the defendants, Eternal Salon, Inc., and Tuan Quac Pham, were ordered to pay the plaintiff, Jenna Hoang, $125,000 in damages for breach of contract and negligent misrepresentations stemming from the purchase and sale of a nail salon, Garden Nails & Spa, in Saugus. On appeal, the defendants claim that the judge erred in holding that Hoang did not waive the condition precedent, that she incurred monetary damages, and that the defendants' conduct caused Hoang's inability to obtain an assignment of the property lease. We affirm.
The defendants fail to raise a claim concerning the judge's finding of negligent misrepresentation. In his findings and order, the judge did not distribute the award of $125,000 in damages between the breach of contract finding and the negligent misrepresentation finding. Because the judge did not delineate how the damages were allocated between the two findings, we interpret the award as supported by both counts, jointly and severally. Due to the defendants' lack of argument concerning the negligent misrepresentation claim, this issue is therefore deemed waived, and renders this appeal moot as the damages can be attributed to the negligent misrepresentation finding alone. See Mass.R.A.P. 16(a)(4), as amended, 367 Mass. 921 (1975); Commonwealth v. Coutu , 90 Mass. App. Ct. 227, 230 n.4 (2016). However, if we consider the appeal, the defendants' arguments still have no merit.
1. Breach of contract . To succeed in a breach of contract claim, the plaintiff must show "(1) an agreement was made between the plaintiffs and the defendant supported by valid consideration; (2) the plaintiffs have been ready, willing, and able to perform; (3) the defendant's breach has prevented them from performing; and (4) the plaintiffs have suffered damage." Singarella v. Boston , 342 Mass. 385, 387 (1961) (citations omitted). Here, as the judge found, the breach was due to the failure of the lessor/landlord to accept the plaintiff as lessee/assignee for the present or new lease with terms that were acceptable to the plaintiff. Such acceptance was a condition precedent to the plaintiff's purchasing obligations under an addendum to the parties' signed purchase and sale agreement:
"This agreement is contingent upon the Lessor/Landlord of the business premises accepting Buyer as the replacement Lessee or Assignee upon or under the same terms as the present lease or a new lease with terms acceptable to the Buyer in his/their sole discretion. Seller is responsible for assigning the lease to Buyer under paragraph 17.1 of Seller/Landlord lease dated October 9, 2008. Seller warrants that the option to extend per Article 31 of the Seller/Landlord's lease will be duly exercised and without restriction, said warranty to survive closing of this purchase and sale agreement."
The judge determined that the condition precedent had not been met, and that the obligations of the plaintiff in purchasing the business were entirely contingent upon satisfaction of the lease assignment condition.
"A condition precedent defines an event which must occur before a contract becomes effective or before an obligation to perform arises under the contract. If the condition is not fulfilled, the contract, or the obligations attached to the condition, may not be enforced." Massachusetts Mun. Wholesale Elec. Co . v. Danvers , 411 Mass. 39, 45 (1991) (citations omitted). Due to the defendants' nonperformance of the condition precedent, the plaintiff was within her rights under the contract to abandon the purchase and sale agreement and relinquish the business back to the defendants.
2. Waiver of condition precedent . The defendants' claim that the plaintiff waived the condition precedent due to her moving into the premises and operating the business, as well as paying the entire purchase price before the condition precedent had been satisfied, is without merit. If anything, Pham's negligent misrepresentations are what induced the conduct of the plaintiff that he considers waiver.
The plaintiff represents that the defendants did not raise this second rationale at trial.
As the judge properly held, in order for the defendants to demonstrate waiver, there must be more presented than just that the plaintiff operated the business. To define waiver, the defendants rely on KACT, Inc . v. Rubin , 62 Mass. App. Ct. 689, 695 (2004), where we held that:
"Waiver may occur by an express and affirmative act, or may be inferred by a party's conduct, where the conduct is consistent with and indicative of an intent to relinquish voluntarily a particular right such that no other reasonable explanation of the conduct is possible. Here, where waiver is not explicit, it must be premised on clear, decisive and unequivocal conduct"
(quotations and citations omitted). The key point in KACT is the plaintiff's intent to relinquish the rights preserved in the condition precedent. However, the defendants failed to establish such an intent here.
The evidence shows that the plaintiff made multiple attempts to negotiate the assignment of the lease with the landlord, exhibiting the plaintiff's intention that the condition precedent had not been waived and that she was making the effort to suffice it. Although there was evidence that the defendants made efforts to secure the assignment, there was evidence that the defendants withheld information as to a modification of the original lease that did not allow for assignment by the defendants at all. The defendants also refused to sign the lease assignment once the plaintiff's attorney was able to secure it. Because the assignment was never completed, and could never be completed, the plaintiff was within her rights to terminate the agreement and recoup her purchase price; her running the business and placing the remainder of the purchase money into escrow was not an explicit, or even implied, waiver of the condition precedent.
3. Damages . The defendant contends that the judge erred in awarding the plaintiff $125,000 in damages, the amount of the purchase price. We disagree. This award was based on both the defendants' breach of contract and negligent misrepresentations; it was appropriate to return the plaintiff to the position she was in before the defendants' breach. See John Hetherington & Sons, Ltd . v. William Firth Co ., 210 Mass. 8, 21 (1911) ("The fundamental principle of law upon which damages for breach of contract are assessed is that the injured party shall be placed in the same position he would have been in, if the contract had been performed ..."). Because there was evidence that the plaintiff attempted to secure the lease assignment, and because it was on the basis of the defendants' fault that the assignment was not obtained, the defendants are liable to return the purchase price to the plaintiff to reimburse for the failed condition precedent, which voided the purchase agreement. It does not matter if the entirety of the monies came from the plaintiff's personal bank accounts; the monies were paid on her behalf. Therefore she is owed the entire purchase price paid under the failed agreement.
The plaintiff's motion for sanctions is denied.
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Judgment affirmed .