Opinion
15-P-537
05-05-2016
ANDREW MAUS v. CAROLINE FRITZ & 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 plaintiff and defendant-in-counterclaim, Andrew Maus, and the defendants and plaintiffs-in-counterclaim, Caroline Fritz and 3 Brothers Fritzarvis, LLC (collectively, Fritz), executed an agreement for sale of assets (contract), in July of 2012 for the purchase and sale of a fitness center business known as "Get in Shape for Women." The material terms of the contract provided for Maus to sell to Fritz, for the sum of $75,000, assets specified in schedule 1 of the contract.
Pursuant to the contract, Fritz made a $20,000 down payment and signed a promissory note (note) for the remaining $55,000. The note provided, inter alia, that monthly payments of principal and interest be made by Fritz in the amount of $3,202.75 and that Fritz was responsible for all costs of collection, including attorney's fees. On September 22, 2012, Fritz made one partial payment on the note in the amount of $2,351.69, and thereafter did not make any further payments. On October 25, 2012, Maus sent a notice of default to Fritz declaring the full amount of the note due and payable.
Fritz paid $5,000 with the offer to purchase and $15,000 at the closing.
On December 7, 2012, Maus commenced an action in the Superior Court alleging breach of a promissory note and a violation of G. L. c. 93A, § 11. Fritz filed an answer and counterclaims alleging breach of contract, breach of the implied covenant of good faith and fair dealing, negligent misrepresentation, fraud, and violation of G. L. c. 93A, § 11. Maus moved for summary judgment on his affirmative claim of breach of a promissory note and on Fritz's counterclaims. A Superior Court judge (first judge) allowed Maus's motion as to his affirmative claim, and ordered entry of judgment. The first judge subsequently allowed Maus's motion as to Fritz's counterclaims, and they were dismissed. A different judge of the Superior Court (second judge) held an assessment of damages hearing and ordered Fritz to pay $95,129.40 ($74,092.37 in damages and $21,037.03 in attorney's fees), plus interest.
The Superior Court docket reflects that on September 15, 2014, the parties filed a stipulation of partial dismissal, with each party waiving any right of appeal, as to the alleged violation of G. L. c. 93A, § 11. Accordingly, that claim is not before us.
On appeal, Fritz contends that the first judge erred in allowing summary judgment because the record established genuine issues of material fact as to her breach of contract and misrepresentation counterclaims. Fritz does not dispute that the note was enforceable, or that she failed to make timely payments. However, she contends that Maus's material breach of the contract excused her from further performance thereof, thus relieving her of the obligation to make payments in satisfaction of the note.
"We review a grant of summary judgment de novo to determine whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as a matter of law." Galenski v. Erving, 471 Mass. 305, 307 (2015). Where, as here, "the party opposing the motion bears the burden of proof at trial, the moving party will prevail only if it demonstrates that the nonmoving party has no reasonable expectation of proving an essential element of the case." Cabot Corp. v. AVX Corp., 448 Mass. 629, 637 (2007), citing Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991).
Here, Fritz alleges that Maus violated the contract provision that states, "Seller warrants and represents that the currently [sic] monthly receivables are between $9,000.00 to $10,000.00 as evidenced by the attached Exhibit 'A' setting forth the names, addresses, phone numbers, contract termination dates and outstanding balances of all Seller's clients." Fritz claims that Maus failed to provide exhibit A to her, which "caused [her] to believe that [she was] purchasing memberships which had significant value and would therefore provide a steady income stream." The claim is unavailing because the plain language of the contract references existing revenues (i.e., "currently [sic] monthly receivables") and makes no representation regarding future performance or anticipated revenues. See Superior Mechanical Plumbing & Heating, Inc. v. Insurance Co. of the W., 81 Mass. App. Ct. 584, 593 (2012) (plain language of contract controls). Fritz neither contended, nor produced any evidence to show, that the receivables in the months immediately prior to the execution of the contract were below the "$9,000 to $10,000" amounts represented in the contract. Furthermore, Fritz admits that Maus provided her with profit and loss statements, and she does not argue that the information therein was inaccurate.
In her statement of material facts, Fritz avers that "[she] does not recall receiving an Exhibit A, or being informed about the contents of an Exhibit A, that was purportedly made a part of the Sale Agreement" (emphasis supplied). Such speculative averments are insufficient to withstand a well-pleaded motion for summary judgment. See Benson v. Massachusetts Gen. Hosp., 49 Mass. App. Ct. 530, 532 n.3 (2000) ("To the extent [the nonmoving party] cannot remember what happened and has no other admissible evidence relating thereto, [her] allegation . . . cannot be based on personal knowledge and amounts to speculative averment based upon information and belief insufficient to defeat a well-pleaded summary judgment motion").
Fritz also does not set forth specific facts that delineate how any purported violation of the contract constituted a material breach or caused her to suffer damages. The conclusory allegation in her affidavit in support of her opposition to summary judgment, that Maus "caused [her] to believe that the memberships that [she] was purchasing were more valuable than those [she] actually purchased," is insufficient to avoid summary judgment. See Benson v. Massachusetts Gen. Hosp., 49 Mass. App. Ct. 530, 532 (2000). Accordingly, Fritz's counterclaims for breach of contract and breach of the implied covenant of good faith and fair dealing were properly dismissed on summary judgment. See Ayash v. Dana-Farber Cancer Inst., 443 Mass. 367, 385, cert. denied sub nom. Globe Newspaper Co. v. Ayash, 546 U.S. 927 (2005) ("The scope of the covenant [of good faith and fair dealing] is only as broad as the contract that governs the particular relationship").
Fritz does not cite to evidence in the record that demonstrates that Maus's actions had the effect of destroying or injuring her right to receive the fruits of the contract. Thus, her counterclaim for breach of the implied covenant of good faith and fair dealing cannot survive summary judgment. See Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 471-472 (1991). Rather, Fritz contends that Maus induced her to enter into the contract by withholding information about the memberships. For the reasons stated infra, this claim of misrepresentation is also unavailing.
Fritz also contends that Maus made material misrepresentations in connection with the contract, which induced her to enter into the deal. Asked in interrogatories to "[d]escribe each and every misrepresentation of material fact made by [Maus] to [Fritz]," Fritz responded, in relevant part, as follows:
"I began communicating with the plaintiff in June 2012. Following a series of communications, I then entered into the agreement for the sale of assets dated July 17, 2012. The closing occurred on August 6, 2012. Commencing in September I began to notice discrepancies between representations the plaintiff made to me prior to the closing and the actual operation of the business. On October 12, 2012 I had my prior counsel correspond with the plaintiff regarding my complaints."Absent from the response is the identification of any specific or actionable misrepresentation. That notwithstanding, Fritz claims that Maus also failed to provide support for a period of two weeks following the closing, misrepresented the true nature of the alleged memberships, and failed to identify how the value of the sale price was apportioned among payments for leasehold improvements, office furniture and nonleased equipment, and good will.
Apart from conclusory assertions in Fritz's affidavit, the record is devoid of specific facts regarding the nature of the alleged misrepresentations. See Mass.R.Civ.P. 56(e), 365 Mass. 824 (1974). Moreover, Fritz's argument ignores the integration clause in the contract, which specifies:
The portions of Maus's deposition testimony included in the record appendix are unavailing. At most, they show that Maus spent one and one-half days in person with Fritz after the closing, but they do not demonstrate that Maus failed to cooperate with Fritz for the two-week period purportedly contemplated by the parties.
"All understandings, representations, warranties, agreements, and offers made between the parties are merged in this agreement and the closing documents, which alone fully and completely express the entire agreement of the parties. Neither [Maus] nor [Fritz] are relying on any oral statements made by the other party. No modification of this agreement shall be binding unless in writing and signed by both parties."As none of the above-mentioned representations is addressed or referenced in the contract, the integration clause bars Fritz's negligent misrepresentation claim. Sound Techniques, Inc. v. Hoffman, 50 Mass. App. Ct. 425, 433-434 (2000). See Cumis Ins. Soc., Inc. v. BJ's Wholesale Club, Inc., 455 Mass. 458, 474 (2009) ("Plaintiffs who are unable to prevail on their contract claims may not repackage the same claims under tort law"). On the record before us, Fritz has not identified any actionable misrepresentations, or reasonable reliance thereon, and Maus is therefore entitled to judgment as a matter of law on Fritz's claims of negligent misrepresentation, fraud, and violation of G. L. c. 93A, § 11.
Finally, there is no merit to Fritz's claim that the second judge abused his discretion in awarding Maus attorney's fees of $21,037.03. Fritz does not dispute that § 6 of the note requires the "[b]orrowers" to pay "reasonable attorney's fees" for "the enforcement of this [note]." However, Fritz contends that the amount was disproportionate to the amount of the underlying claim and not reasonable as required under § 6. We discern no abuse of discretion. The second judge held a hearing, made appropriate written findings, and, contrary to Fritz's assertion, awarded attorney's fees that were not disproportionately greater than the damages. See Berman v. Linnane, 434 Mass. 301, 302-303 (2001). Cf. WHTR Real Estate Ltd. Partnership v. Venture Distrib., 63 Mass. App. Ct. 229, 230 (2005) (attorney's fees of fifty percent of damages award held to be within judge's discretion).
Judgments affirmed.
By the Court (Cypher, Wolohojian & Neyman, JJ.),
The panelists are listed in order of seniority. --------
/s/
Clerk Entered: May 5, 2016.