Opinion
11-P-672
03-06-2012
KGM CUSTOM HOMES, INC. v. STEPHEN J. PROSKY & others.
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
The defendants appeal from a judgment entered in the Superior Court after a jury-waived trial. The case arises from a failed real estate deal whereby the defendants sought to sell their land to the plaintiff for a G. L. c. 40B development in Norton.
The defendants argue that the judge erred in concluding that they breached (by anticipatory repudiation) the parties' purchase and sale agreement (agreement), that the plaintiff's remedy for any breach of the agreement is limited to specific performance of the agreement, and that the judge erred in awarding the plaintiff attorney's fees incurred in connection with the litigation.
We affirm in part and reverse in part.
Discussion. A. Retraction of anticipatory repudiation. The defendants argue that they appeared at the closing ready, willing, and able to perform, and therefore any earlier repudiation of the agreement was retracted. However, the defendants waived that argument by failing to raise it at trial. See Carey v. New England Organ Bank, 446 Mass. 270, 285 (2006) ('An issue not raised or argued below may not be argued for the first time on appeal'), quoting from Century Fire & Marine Ins. Corp. v. Bank of New England - Bristol County, N.A., 405 Mass. 420, 421 n.2 (1989).
Furthermore, the defendants have failed to show that the judge's findings on the issue of anticipatory repudiation were clearly erroneous. See Psy-Ed Corp. v. Klein, 459 Mass. 697, 710 (2011) ('[W]e accept the judge's findings of fact as true unless they are clearly erroneous'), quoting from Kendall v. Selvaggio, 413 Mass. 619, 620 (1992). The judge found that the defendants sent a letter to the plaintiff indicating, falsely, that they had another buyer and instructing the plaintiff to calculate its damages. These findings suffice to show that the defendants notified the plaintiff they were repudiating the contract. See Tucker v. Connors, 342 Mass. 376, 383 (1961); Cavanagh v. Cavanagh, 33 Mass. App. Ct. 240, 243-244 (1992). Nothing in the judge's findings supports the defendants' argument that they retracted their repudiation of the agreement.
Given our conclusion on this point, we need not address the defendants' argument that the plaintiff was the party that breached the agreement. Because the defendants repudiated the agreement, the plaintiff was excused from performance. See Tucker v. Connors, 342 Mass. 376, 383 (1961); Cavanagh v. Cavanagh, 33 Mass. App. Ct. 240, 243-244 (1992).
B. Limitation of remedies. We agree with the defendants' argument that, because the plaintiff brought an action predicated on anticipatory repudiation, its remedy is limited to specific performance and it cannot recover money damages. The theory of anticipatory repudiation is generally not recognized in Massachusetts outside the commercial law context. See Cavanagh, supra, citing Daniels v. Newton, 114 Mass. 530 (1874). Under an exception to the general rule, however, the plaintiff was allowed to bring an equitable action for specific performance. See Collins v. Snow, 218 Mass. 542, 545 (1914). In such an equitable action, an award for money damages was not available to the plaintiff, even under the damages provision of the agreement. See Tucker, supra.
C. Attorney's fees. We also agree with the defendants' argument that the judge erred in awarding the plaintiff its attorney's fees incurred in connection with this litigation under the damages provision of the agreement. The damages provision of the agreement states that, in the event of a breach by the defendants, the defendants shall pay the plaintiff, as liquidated damages, a sum of money equal to all charges and fees paid by the plaintiff in connection with the transaction, including but not limited to attorney's fees. At best, this provision is ambiguous as to whether the plaintiff should recover attorney's fees and costs incurred in connection with the lawsuit.
The American rule is 'that in the absence of a fee-shifting statute or court rule, a successful party is not allowed to recover its attorney's fees or expenses.' Hermanson v. Szafarowicz, 457 Mass. 39, 51 (2010). Here, given the ambiguity of the damages provision and the absence of an applicable fee-shifting statute or court rule, the award of attorney's fees was erroneous.
Conclusion. So much of the judgment as awards to the plaintiff money damages and attorney's fees incurred in connection with this litigation is reversed. The remainder of the judgment, awarding specific performance to the plaintiff, is affirmed. In addition, we affirm the orders denying the defendants' posttrial motions to amend the judgment. Finally, the plaintiff's request for its appellate attorney's fees is denied.
In the event the plaintiff disavows its entitlement to specific performance and the property remains in the hands of the defendants, we leave it to the trial judge to determine, in the first instance, any issue related to the deposit.
So ordered.
By the Court (Graham, Rubin & Milkey, JJ.),