Opinion
11-P-322
04-02-2012
GOLDMAN ENVIRONMENTAL CONSULTANTS, INC. v. KIDS REPLICA BALLPARK, INC.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 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.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Goldman Environmental Consultants, Inc. (GEC) contracted with Kids Replica Ballpark, Inc. (Kids Replica) to provide various environmental consulting services in connection with Kids Replica's planned construction of a mini-Fenway Park in Quincy, Massachusetts (project). After Kids Replica failed to make payments due under the contract, GEC sued under several counts, including breach of contract. At trial, Kids Replica argued that it could not pay GEC due to its lack of funds. It also argued that the discovery of vernal pools on the project site led the Department of Conservation and Recreation (DCR) and other government agencies to impose more conditions on Kids Replica before it could obtain necessary permits, making it impossible for Kids Replica to obtain such permits. Kids Replica attempted to present evidence that a force majeure clause in its contract with GEC excused its performance thereunder. The trial judge precluded such evidence, and allowed GEC's motion in limine preventing Kids Replica from referring to the force majeure clause in closing argument. The jury returned a verdict in favor of GEC on the breach of contract count, awarding $91,322.87 in damages. Kids Replica appeals, arguing that the judge's evidentiary rulings were in error.
GEC also sued Kids Replica's chief executive officer (CEO) individually. The jury returned verdicts in his favor; a separate judgment entered dismissing the claims against him. No cross appeal was taken from that judgment. Kids Replica also did not appeal from the separate judgment dismissing its counterclaims.
Kids Replica argued that, as a nonprofit corporation, its ability to transfer funds to pay GEC was limited.
The clause provides, in pertinent part, that:
'[n]either party shall be responsible for failure of performance due to causes beyond its reasonable control, including, without limitation, accidents, acts of God, labor disputes, actions of any government agency, or shortage of materials.'
Discussion. 1. Applicability of the force majeure clause. The interpretation of a contract is for the judge, Sherman v. Employers' Liab. Assur. Corp., 343 Mass. 354, 356, (1961), and a force majeure clause must be interpreted with reference to the previous clauses of the contract. Baetjer v. New England Alcohol Co., 319 Mass. 592, 596-597 (1946). Clause A of the contract between Kids Replica and GEC expressly provides that Kids Replica will pay GEC for services rendered from January 2006, through April 30, 2007, 'upon the availability of funding.' Thereafter, Kids Replica agreed that it would receive monthly invoices from GEC payable upon receipt or within thirty days; payment was not made contingent upon the availability of funding. While Kids Replica argues that the parties always understood that payment would depend upon Kids Replica obtaining the necessary permits, nothing in the contract reflects that understanding and the parties expressly provided that '[t]here are no other understandings, statements, promises or inducements, oral or otherwise, contrary to this Agreement.' The contract unambiguously requires Kids Replica to pay GEC regardless of the status of any permits; an unambiguous contract must be enforced according to its terms. Sherman, supra.
Kids Replica, however, argues that DCR's disapproval of its design, which stymied Kids Replica's ability to obtain permits, was an 'action of any government agency' which excuses its performance under the contract. Even if we agreed that DCR's failure to approve the project constitutes an action to which the force majeure clause applies, the contract requires the party claiming an exclusion under that clause to 'promptly notify the other of the particulars giving rise to the excuse.' There is nothing in the record to suggest that Kids Replica ever informed GEC of its inability to perform under the contract due to events covered by the force majeure clause. Moreover, nothing in the contract requires Kids Replica to obtain permits before paying GEC for services performed pursuant to the contract.
We do not so conclude.
Moreover, DCR partially approved the project. The CEO of Kids Replica testified that DCR would issue a complete approval of the project once Kids Replica satisfied certain environmental concerns, but that his charitable organization deemed the partial approval 'not good enough.' He testified that Kids Replica could have addressed DCR's concerns, but that doing so would change the project as Kids Replica and its sponsors had envisioned it. Such testimony demonstrates that it was Kids Replica's decision not to satisfy DCR's conditions, and not DCR's conditions themselves, that resulted in the lack of permits.
Both parties were represented by counsel in negotiating this contract. The parties expressly provided that payment for services rendered between January, 2006, and April 31, 2007, would be contingent upon the availability of funds, but made no such provision for services rendered after April 31, 2007. Instead, they agreed that Kids Replica would pay GEC upon receipt of monthly invoices and, '[i]n these circumstances, where sophisticated parties choose to embody their agreement in a carefully crafted document, they are entitled to and should be held to the language they chose.' Anderson St. Assocs. v. Boston, 442 Mass. 812, 819 (2004).
2. Attorney's Fees. GEC seeks appellate attorney's fees and costs incurred in defending this appeal. '[P]arties may provide in an agreement that, in certain circumstances, one of them may be obligated to pay the other's attorney's fees, incurred in asserting rights under the agreement.' Carter v. Warren Five Cents Sav. Bank, 409 Mass. 73, 80 (1991). Here, Kids Replica agreed 'to pay all reasonable GEC attorney and related legal fees in the event GEC is required to commence legal proceedings because of [Kids Replica]'s failure to pay for services rendered in accordance with this Agreement, if GEC prevails.' Because GEC prevails in this appeal, it is entitled under the contract to its attorney's fees and costs.
GEC also seeks sanctions pursuant to Mass.R.A.P. 25, as appearing in 376 Mass. 949 (1979), which allows this court 'to award double costs to an appellee in a civil case when the appeal is frivolous, immaterial, or intended for delay.' Avery v. Steele, 414 Mass. 450, 455 (1993). 'An appeal is frivolous '[w]hen the law is well settled, when there can be no reasonable expectation of reversal . . . ." Ibid., quoting from Allen v. Batchelder, 17 Mass. App. Ct. 453, 458 (1984). Although Kids Replica's appeal is clearly unmeritorious, we do not consider it to be frivolous within the meaning of rule 25, such that sanctions are warranted. See Symmons v. O'Keefe, 419 Mass. 288, 303 (1995) ('We are hesitant to deem an appeal frivolous and grant sanctions except in egregious cases').
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GEC is invited to file a verified and itemized application for fees and costs within fourteen days of the date of the rescript. Kids Replica will have fourteen days thereafter in which to file any opposition to the amounts requested. See Fabre v. Walton, 441 Mass. 9, 10 (2004).
Judgment Re: Kids Replica Ballpark, Inc. affirmed.
By the Court (Sikora, Carhart & Sullivan, JJ.),