Opinion
No. 12–P–1194.
2013-04-8
T.W. NICKERSON, INC. v. FLEET NATIONAL BANK, trustee, & others.
By the Court (GRASSO, TRAINOR & CARHART, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
In this cross appeal, the plaintiff and the beneficiary defendants appeal the Superior Court judge's determination of damages arising out of a breach of the implied covenant of good faith and fairing dealing in a real estate contract. We affirm.
Background. The facts leading up to the breach of the implied covenant have been described in detail in previous decisions. See T.W. Nickerson, Inc. v. Fleet Natl. Bank, 73 Mass.App.Ct. 434 (2009), S.C., 454 Mass. 562 (2010). We recite only the facts relevant to the issue of damages. Upon remand from this court, the trial judge held an evidentiary hearing on December 22, 2010, to assess damages. The judge considered expert testimony that was offered at trial by William J. Pastuszek, Jr., a real estate appraiser; and Gregory Carl Wirsen, an environmental consultant. The judge also heard expert testimony from James Toner, another real estate appraiser.
On February 25, 2011, the judge issued findings of fact and rulings of law, concluding that the plaintiff is entitled to $500,000 in damages. The judge reached this figure by finding that the property's fair market value is $900,000 and reducing from that amount $400,000, which is the price paid by Anthony J. and Barbara Bridgewater to acquire the property. On appeal, both parties argue that the evidence does not support the judge's findings of fact, and that the judge used incorrect principles of law to measure contract damages. Additionally, the plaintiff seeks attorney's fees and costs for the appeal by the defendant beneficiaries.
Discussion. “Valuation is a question of fact, and we will not disturb a judge's determination unless it is clearly erroneous.” Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 483 (1991), quoting from Sarrouf v. New England Patriots Football Club, Inc., 397 Mass. 542, 550 (1986). Pastuszek testified that if the thirty-acre property was developed residentially and comprised of thirty units, its market value as of July 10, 2002, would be $1,800,000. His calculation was based on comparable land sales; however the judge noted that none of the properties compared had a stump dump or were in commercial use, as is the case here. Additionally, Pastuszek did not factor in the extensive permitting process and the construction work required to transform the property.
Wirsen testified that as of 2005, his company, Green Seal Environmental, was contracted by the plaintiff to complete a permit application (ongoing since 1999) with the Department of Environmental Protection, which would enable the plaintiff to convert its stump dump operation into a wood reclamation facility. According to Wirsen, this permit process alone would span over four years and cost approximately $50,000 to $75,000, but equipment failures, labor costs, market conditions, fuel and insurance costs, and market oversupply could delay the project and diminish anticipated surplus. Toner offered testimony similar to Pastuszek, and it was based on comparable land sales that neither involved a stump dump nor faced the arduous permitting process associated with obtaining approval from the local, State, and Federal governments. Toner testified that residential development could not occur on the property until at least 2011 because it was subject to two leases for the interim period.
After considering this evidence, the judge found that “given the circumstances of the case, particularly the relationship of the parties, the projected delay of eleven years before any residential development could proceed, the risks inherent in obtaining approval for such a development from state and municipal agencies, including the Cape Cod Commission, and the existence of a stump dump/wood waste reclamation facility of uncertain size and depth which would require reclamation, the value estimated by Pastuszek requires a downward adjustment. A further issue considered by the court in deviating from the usual rule of awarding the full fair market value is that the plaintiff settled its claim for specific performance with Bridgewater for consideration.”
Thus, the judge reduced the property's fair market value to $900,000 and determined that the plaintiff was entitled to $500,000 in damages, with interest accruing from the dismissal date of the claim for specific performance. We find no error. See id. at 483–484. Nor is there error in the judge's deviation from the general measure of contract damages. Far to the contrary, the judge's findings were a reasonable contemplation of the probable result that naturally would have occurred from the breach. See John Hetherinaton & Sons v. William Firth Co., 210 Mass. 8, 21 (1911). “[T]he injured party should be as well off as if the transaction had gone through—but not better off.” Foster v. Bartolomeo, 31 Mass.App.Ct. 592, 596 (1991).
We note that the judge implicitly determined that awarding interest from July 9, 2002, would have placed the plaintiff in a better position than if the contract was performed.
Furthermore, the beneficiary defendants' argument that the plaintiff failed to mitigate its damages is without merit as this issue previously has been decided.
Because we determine that the beneficiary defendants' cross appeal is not frivolous, we decline to award costs or fees. See Mass.R.A.P. 25, as appearing in 376 Mass. 949 (1979).
Judgment affirmed.
Order denying motion to amend findings and alter and amend judgment affirmed.