Opinion
15-P-1423
05-18-2017
Robert DANDREO v. DIGIORGIO & MESSINA CONSTRUCTION CO., INC., & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
On August 21, 2013, the plaintiff, Robert Dandreo, filed a complaint in the Land Court appealing from a decision of the board of appeals of Swampscott (board) granting an assisted living facility special permit, a site plan special permit, and a dimensional variance to the defendant, DiGiorgio & Messina Construction Co., Inc. (D&M). On October 21, 2013, the judge ordered Dandreo to submit a written settlement proposal, and the parties to conduct settlement discussions and enter into mediation. The parties agreed to mediate the dispute through the Real Estate Bar Association Dispute Resolution (REBA) program. On May 8, 2014, after several mediation sessions, REBA reported to the court that the case was settled, and the parties executed a memorandum of agreement (agreement) on April 29, 2014.
Although the agreement is dated May 29, 2014, the parties agree that the agreement was executed on April 29, 2014, the day of the last mediation session, and that May 29, 2014, is a "typographical error."
On October 3, 2014, D&M filed a verified complaint for contempt pursuant to Mass.R.Civ.P. 65.3, as appearing in 386 Mass. 1244 (1982), seeking a declaratory judgment to enforce the agreement. In the contempt complaint, D&M argued that the agreement was a valid contract and that Dandreo had breached certain of its terms.
On August 12, 2015, after an evidentiary hearing, the judge entered a judgment ordering that the contempt complaint be construed as a motion to enforce the agreement. The judge also found that the agreement was valid and enforceable; D&M had satisfied each of its obligations under the agreement; Dandreo had breached his obligations under paragraph 2(b) of the agreement; the settlement offer submitted by D&M to Dandreo was a reasonable and proper amount; in refusing to submit a counter proposal, Dandreo, as a party to the agreement, had violated his duty of good faith and fair dealing; and, finally, Dandreo's complaint appealing the board's decision would be dismissed, with prejudice. Dandreo now appeals, arguing only that the agreement was nothing more than "an agreement to agree" and, therefore, the judge erred in finding it to be a legally enforceable contract. We affirm, essentially for the reasons well explained in the judge's thorough decision.
Validity of the agreement. We review de novo the judge's interpretation of the contested written agreement. See Commerce Ins. Co. v. Blackburn, 81 Mass. App. Ct. 519, 520-521 (2012). "An enforceable agreement requires (1) terms sufficiently complete and definite, and (2) a present intent of the parties at the time of formation to be bound by those terms." Targus Group Intl., Inc. v. Sherman, 76 Mass. App. Ct. 421, 428 (2010). "It is not required that all terms of the agreement be precisely specified, and the presence of undefined or unspecified terms will not necessarily preclude the formation of a binding contract." Situation Mgmt. Sys., Inc. v. Malouf, Inc., 430 Mass. 875, 878 (2000). "Provisions are not ambiguous simply because the parties have developed different interpretations of them." Basis Technology Corp. v. Amazon.com, Inc., 71 Mass. App. Ct. 29, 36 (2008). Here, Dandreo contends that the agreement lacks the completeness, the definiteness, and the binding intentions of the parties necessary for enforcement. We disagree.
First, as evidence of incompleteness, Dandreo asserts that there were too many essential issues, terms, and conditions remaining outstanding and unresolved; specifically, the provisions in paragraphs 1 through 4 of the agreement contemplated additional efforts by one or both parties, the success of which was uncertain. However, "[s]ufficient completeness depends upon the substance of the terms approved by the parties." Targus Group Intl., Inc., supra at 429.
Here, the agreement requires three primary obligations that, once satisfied, would result in the preparation of the final settlement agreement, signing of mutual releases, and dismissal of the litigation. As the judge found, D&M successfully completed each of its required tasks under paragraphs 1 through 4; according to the terms of paragraph 4, the fact that D&M's modification request to the board was, after reasonable efforts, denied, did not invalidate the agreement.
Paragraph 1 obligated D&M to arrange for a hydrant flow test by the Swampscott department of public works (DPW). During mediation, the parties suspected that the existing water pressure would be insufficient for the project. As a result, Dandreo's argument that the failed water flow test affected the validity of the agreement is meritless. Paragraph 2 required that the parties meet and negotiate (a) shared construction access between Archer Street and Vaughan Place, (b) reasonable compensation to be paid to Dandreo, and (c) utility line construction. Paragraph 4 obligated D&M to file with the board by a certain date a modification to the existing approved plan requesting "shared access between Archer Street and Vaughan Place during construction of all Roadway Infrastructure."
Paragraph 4 provides that the denial of the modification, "shall not invalidate or render this Agreement null and void or unenforceable, in whole or in part."
Dandreo further argues that the reference in paragraph 3 to a future settlement agreement showed that there were still disputed terms to be negotiated, rendering the agreement merely "an agreement to agree." However, "[t]he parties' arrangement for a later, final writing may signify not incompleteness but rather the subsequent memorialization of an already accomplished agreement." Id. at 430. Here, in fact, paragraph 6 of the agreement specifically states, "This Memorandum of Agreement is intended to be enforceable notwithstanding that a more complete written agreement is contemplated." That statement is a clear indication that the terms of the agreement had been resolved and that the parties were intending to " ‘memoralize’ or record the settlement terms, not to create them." Basis Technology Corp., supra at 37. Also, in paragraph 3, language referring to the termination of the litigation and execution of mutual releases upon the successful completion of the listed items in paragraph 2 further indicates a resolution of disputed issues. Thus, in reviewing the document as a whole, we are satisfied that the essential terms of the agreement were complete.
Second, Dandreo argues that there was a lack of definiteness in the agreement because good faith disputes remained at the time it was executed. Specifically, he contends that the parties had an entirely different understanding as to certain terms included in the agreement; in his view, the "approved plan" cited in paragraph 2(c) held a different meaning to him than to D&M: Dandreo considered the approved utility plan to be one signed off by the board and all of the local authorities, and ready to be acted upon; D&M considered the approved plan to be the existing plan already signed off by only the board. The judge explained, based primarily on the testimony of Gino Cresta, director of the Swampscott department of public works (DPW), that the approved plan is the existing "2014 Utilities Plan" approved by the board, which needed only minor modifications from the DPW and fire department. The judge found reasonable Cresta's testimony that he understood that D&M was willing to make whatever changes were recommended by the DPW, and that it was industry practice for that version of the plan not to be submitted until "[j]ust prior to development."
As to paragraph 4, Dandreo also asserts that, in making "reasonable efforts" to get the board to approve D&M's modification request to share access between Archer Street and Vaughan Place during construction, more was required than to send the board a letter requesting the modification to the existing plan; D&M, Dandreo argues, was required to submit to the board a formal application. Again, the judge found, and we agree, that there was nothing in the agreement that required D&M to make a formal application to the board requesting the modification, and that D&M had timely filed its request as required by paragraph 4. In addition, this paragraph contains a definitive provision in case of a denial of the modification request, maintaining the validity and enforceability of the agreement under such circumstances. See note 4, supra.
Finally, as to the intention of the parties to be bound, Dandreo's interpretation of the agreement as "an agreement to agree" is a fundamental misconception. "To ascertain intent, a court considers the words used by the parties, the agreement taken as a whole, and surrounding facts and circumstances." Basis Technology Corp., 71 Mass. App. Ct. at 41. "[T]he requisite intent is the ‘present intent’ at the moment of the formation of a contested agreement." Targus Group Intl., Inc., 76 Mass. App. Ct. at 432.
Here, it is telling that the agreement contained language in paragraphs 4 and 6 ensuring the validity and enforceability of the agreement regardless of the occurrence of certain events. Specifically, in paragraph 6, the agreement acknowledges that although a "more complete written agreement is contemplated" at the time of signing, the parties intend the agreement to be enforceable. In addition, paragraph 3 embodies the parties' intention to terminate the existing litigation and exchange mutual releases. Further, "the underlying mediation process would promote a considered result." Id. at 433. This is especially true in light of the fact that on May 8, 2014, REBA reported to the court that the matter was settled.
Reporting that a matter is settled indicates to the court the serious commitment of the parties in having reached an enforceable agreement. See Basis Technology Corp., supra at 42. In fact, in Basis Technology Corp., the court held that "the deliberateness and the gravity attributable to a report of a settlement, especially during the progress of a trial, weigh heavily as circumstantial evidence of the intention of a party ... to be bound by its communication to the opposing party and to the court." Id. at 44.
For these reasons, we conclude that there is ample evidence contained in this record to establish that the parties intended to be bound at the time they executed the agreement.
Dandreo's breach of the agreement. We review the judge's factual findings as to Dandreo's breach under the "clearly erroneous" standard of Mass.R.Civ.P. 52(a), as amended, 423 Mass. 1402 (1996). "A finding is clearly erroneous when there is no evidence to support it or ‘the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’ " Brandao v. DoCanto, 80 Mass. App. Ct. 151, 154 (2011), quoting from Kendall v. Selvaggio, 413 Mass. 619, 620-621 (1996). We discern no error.
In his findings, the judge determined that as to paragraphs 1 and 4 of the agreement, which required D&M to perform certain tasks, each had been satisfied. We agree. By contrast, the judge saw as "somewhat thornier" the issue whether the obligations of the parties under paragraph 2 had been satisfied. Nonetheless, as evidenced by the exhibits admitted at trial (and included in the record before us), it is clear that D&M satisfied its obligations under paragraphs 2(a) and (c) of the agreement and the judge so found.
Paragraph 1 of the agreement obligated D&M to arrange for a "[h]ydrant flow test ... by ... DPW by 5/7/14, subject to availability of DPW with results to be shared with [Dandreo]." Paragraph 4 of the agreement required D&M to "file with the [board] a request for modification of the existing decision to provide for shared access between Archer Street [and] Vaughan Place during construction of all Roadway Infrastructure and ... [to] pursue reasonable efforts to have the [board] approve such a modification. Such request shall be filed by May 28, 2014."
In order to satisfy paragraph 2(a), on May 28, 2014, D&M's attorney sent a timely letter to the board requesting a modification to the existing approved plan, so that Dandreo's request to split construction access between Archer Street and Vaughan Place could be accomplished. As noted, the agreement contemplated the possibility that the request would be denied.
In accordance with paragraph 2(c) of the agreement regarding neighboring utilities to be utilized by the project, D&M arranged for the preparation of a revised grading and drainage plan (referred to as the 2014 utility plan) depicting a proposed "looped" system of water and sewer lines between Archer Street and Vaughan Place, which the flow test (referenced in paragraph 1 of the agreement) indicated was the only way to maintain adequate water pressure; the 2014 utility plan showed that existing private water and sewer lines (including the lines servicing Dandreo's property) would remain in place postconstruction. At trial, Dandreo testified that he had no objection to the installation of new water and sewer lines, as required by the board and the DPW, and Cresta testified that he understood that D&M was willing to abide by those requirements. Cresta also testified that only minor modifications were required to secure his approval for the 2014 utility plan and that the modified plan would not be expected to be submitted to the board until just prior to development of the property. As a result, D&M satisfied its obligations under paragraph 2(c).
The judge also found that D&M had successfully satisfied its obligation under paragraph 2(b) to negotiate compensation to be paid to Dandreo to reimburse him for his cost of installing, in 1995, private water and sewer lines to his property. In October, 2014, D&M obtained a professional estimate prepared by a third-party general contractor showing that the current cost of installing sewer and water lines to service Dandreo's property was $45,150; D&M offered this amount to Dandreo as reimbursement in accordance with paragraph 2(b). The judge found that Dandreo did not submit "a counter-estimate of his costs incurred in installing his water and sewer lines, nor has he provided actual proof of the cost thereof" (Dandreo stated during the hearing that he did not have those records).
Dandreo also argued that it would cost more to repave the extension of Vaughan Place, which he had done in 1995; however, the estimate provided by D&M clearly includes the cost of repaving.
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The judge found unreasonable Dandreo's demand of compensation equal to what it would cost D&M "to implement Cresta's recommended loop utilities plan [see note 6, supra ]. In sum, it is plainly unreasonable for [Dandreo] to take the position that [D&M]'s offer is unreasonable, but offer no apparent counterproposal based upon his own professional estimate. It is likewise unreasonable for him to attempt to demand payment equal to [D&M]'s present costs—which will likely be significantly higher than [Dandreo's] own costs, due to, among other reasons, ... the inflated costs of labor and materials that has resulted from approximately twenty years of inflation." The judge also found Dandreo's claim that he was expecting further discussion on several other aspects of the project before determining what was reasonable compensation to be "subterfuge for [Dandreo's] transparent attempt to delay the consummation of the parties' Agreement." For these reasons, the judge found that Dandreo breached his contractual obligations under paragraph 2(b) of the agreement. We agree.
Conclusion. The judge was warranted in deciding not to find Dandreo in contempt, as there was no evidence of his disobedience of a clear and unequivocal court order. See Wooters v. Wooters, 74 Mass. App. Ct. 839, 843 (2009). We are satisfied that the agreement is a valid and enforceable contract, and also uphold the determination that Dandreo breached his obligations under paragraph 2(b) of the agreement.
Judgment affirmed.