Opinion
No. 12–P–1297.
2013-07-18
Dorothy J. MACAULAY v. Maureen F. DiPALMA & another.
By the Court (COHEN, SIKORA & SULLIVAN, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This action alleging breach of contract, misrepresentation, and promissory estoppel arose out of the settlement of previous Land Court litigation brought by Dorothy J. Macaulay (Macaulay) to enjoin the construction of a condominium development by defendant L.J. DiPalma, Inc. (L.J.). Macaulay appeals from a judgment that dismisses her claims, with prejudice, and enters directed findings in favor of L.J. and defendant Maureen F. DiPalma (DiPalma) after Macaulay's opening statement at trial. Macaulay also appeals from the denial of her motion to amend her complaint, the award of attorneys' fees to the defendants, and a postjudgment order allowing costs and fees to a nonparty witness. For the reasons that follow, we (1) reverse the judgment dismissing the claims, (2) affirm the order denying Macaulay's motion to amend, (3) affirm the order awarding attorneys' fees to the defendants, and (4) vacate the order awarding costs and fees to a nonparty witness and remand that matter for further consideration. 1. Dismissal of all claims. The trial judge allowed a motion in limine barring all references to (1) the finances or financial condition of the defendants, and (2) the financial value of the proposed condominium project. The trial judge also barred some evidence concerning another DiPalma corporation, Stonewood, LLC (Stonewood), which had been dismissed as a defendant from the case.
Immediately before trial, the parties and the trial judge spent several days reviewing the proposed exhibits. In the course of those proceedings, the trial judge permitted introduction of a limited number of records pertaining to payments made by Stonewood and DiPalma's position within Stonewood. This exception to the order on the motion in limine was made in response to arguments that the failure to do so would create confusion as to the issues to be tried between the remaining parties; in particular, Stonewood had made payments that a jury could credit to L.J. The trial judge nonetheless emphasized that the parties should approach their opening statements conservatively.
At the outset of the Macaulay's opening statement, however, counsel referred to the fact that the condominium venture could be worth “millions of dollars” and that DiPalma wanted to build a “multimillion dollar” condominium project. The defendants immediately objected. The trial judge deferred ruling until the end of the opening argument. Macaulay's counsel then made several additional references to the multimillion dollar value of the project. When the opening statement was complete, the defendants renewed their objection, moving for mistrial, nonsuit, and directed findings. The trial judge declared a mistrial. After requesting written motions and hearing oral argument, the judge dismissed the case for an “egregious violation” of the order on the motion in limine, a violation which he found materially prejudiced the defendants.
The trial judge's ruling that the opening statement violated an existing order of the court finds ample support in the record. The order allowing the motion in limine was in full force and effect. The notion that the admission of a finite number of documents related to Stonewood constituted a wholesale abandonment of the court's prior orders regarding Stonewood and the finances of L.J., or that a party could reasonably conclude as much, is wholly unpersuasive.
At the hearing on the motion pursuant to Mass.R.Civ.P. 41(b)(2), 365 Mass. 804 (1974), before the trial judge, Macaulay argued that the order was impliedly revoked or modified. On appeal, Macaulay argues that the trial judge “reversed [his] prior rulings.” The ruling was not reversed. There was no motion to reconsider, and the order itself was not modified or vacated. If Macaulay had questions about the scope or vitality of the previous ruling on a motion in limine in light of the evidentiary rulings, it was her obligation to bring those questions to the judge before violating an extant order of the court. See Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 569, 677 N.E.2d 159 (1997). Our analysis does not end here, however. “Involuntary dismissal is a drastic sanction which should [only] be [used] ... in extreme situations.” Monahan v. Washburn, 400 Mass. 126, 128, 507 N.E.2d 1045 (1987). See Sommer v. Maharaj, 451 Mass. 615, 621, 888 N.E.2d 891 (2008). While there was “unreasonable conduct,” the trial judge also was required to consider “whether there [were] more suitable, alternative penalties.” Monahan v. Washburn, supra at 128–129, 507 N.E.2d 1045.
For these reasons, Macaulay's challenge to the evidentiary rulings on appeal is misplaced. It is no defense to the violation of a court order to question the validity of the order. “[O]nly where the court lacks jurisdiction to make an order or where an order is transparently invalid on its face may a party ignore a court order and attempt to evade sanctions by litigating the validity of the underlying order.” Oakham Sand & Gravel Corp. v. Oakham, 54 Mass.App.Ct. 80, 87, 763 N.E.2d 529 (2002).
At the time of the ruling, the jury were empaneled, and a timely objection was made by the defendants. Instead of sustaining the objection and admonishing counsel, no action was taken. In light of the previous hearings, the trial judge may well have thought the transgression either so obvious or so idiosyncratic that repetition would not occur. The record is replete with efforts by the trial judge to limit the issues for trial, and reflects hours of hearings spent attempting to do so. We are mindful of and sympathetic to the frustration of a trial judge who finds that a court order has been violated. However, the failure to rule on the defendants' objection risked creating ambiguity where none otherwise would have existed. Had immediate action been taken, other sanctions, including the imposition of costs and fees, and/or instructing the jury to disregard the comment, were not only available, but more likely to be effective, thus lessening the necessity of a mistrial. More importantly, by deferring a ruling on the objection, the damage was compounded, not minimized. Even so, the trial judge could have impaneled a new jury. Because “[t]he law strongly favors a trial on the merits of a claim,” we conclude that, in the unique circumstances presented, the trial judge abused his discretion by imposing the ultimate sanction of dismissal with prejudice, and that the matter should be remanded for consideration of what other sanctions, if any, should be imposed. Id. at 129, 507 N.E.2d 1045.
Macaulay is cautioned, however, that repeated violation of the orders of a trial judge may properly result in sanctions, up to and including dismissal with prejudice. At various points in the pretrial and posttrial hearings the trial judge expressed the opinion that counsel either did not understand his rulings, or was willfully ignoring those rulings.
2. Directed verdict after opening statement. “A trial judge can in appropriate circumstances direct a verdict in a defendant's favor after the plaintiff's opening statement. ‘It is settled, however, that “the practice of ordering a verdict on an opening ... is a power which, for obvious reasons, should be exercised with great caution.’ “ Hubert v. Melrose–Wakefield Hosp. Assn., 40 Mass.App.Ct. 172, 176, 661 N.E.2d 1347 (1996), quoting from Upham v. Chateau De Ville Dinner Theatre, Inc., 380 Mass. 350, 351 n. 2, 403 N.E.2d 384 (1980).” Pitts v. Wingate at Brighton, Inc., 82 Mass.App.Ct. 285, 286, 972 N.E.2d 74 (2012). With these principles in mind, we turn to each of the claims.
a. Contract claim. The trial judge dismissed the breach of contract claims against both L.J. and DiPalma on the basis that the opening statement did not mention the written settlement agreement with L.J. or that Macaulay had fully performed the agreement. The judge also concluded that the opening was insufficient because full performance under the terms of the settlement agreement required submission of regular bills by Macaulay, and there was “no mention” whether the bills had been submitted.
We need not decide whether the submission of the bills was part and parcel of full performance or an affirmative defense to payment, since, for the reasons stated here, the opening statement was sufficient regardless.
In her opening, Macaulay stated that L.J. offered compensation worth $450,000 in exchange for Macaulay's agreement to “give up her rights and withdraw the Land Court suit.” Although the term “written settlement agreement” was not used, the opening statement outlined the gist of that agreement. Macaulay stated that she agreed to the terms, and dismissed the suit. On its face, the opening statement was sufficient to state a contract claim against both L.J. and DiPalma. “[T]he statements of counsel, treated as facts, together with all rational inferences of which those facts are susceptible,” stated a claim for breach of the settlement agreement as to L.J. Douglas v. Whittaker, 324 Mass. 398, 399, 86 N.E.2d 916 (1949). The terms of the settlement agreement were referenced, and the completeness of Macaulay's performance was an issue for trial. Macaulay also described other promises made by DiPalma, who was sued based on her oral representations that she would honor the agreement between Macaulay and L.J.
DiPalma is alleged to have made an oral promise to see to it that L.J. honored all of the terms of the settlement agreement. A motion judge found that the alleged promise was sufficient to create a dispute of fact on a breach of contract claim against DiPalma, and denied summary judgment. Thus, with respect to DiPalma, personally, the contract claim turned on the oral representations.
Moreover, the record before the trial judge, including the complaint and the summary judgment order, demonstrated that a cause of action existed. An opening statement is a roadmap, not an atlas. It is intended to outline, not render in full detail, the essential elements of the case. It is for this reason that, in evaluating the sufficiency of an opening statement, a trial judge looks not just to the words themselves, but considers “the opening in conjunction with the development of the case in the pleading and discovery phases.” Sereni v. Star Sportswear Mfg. Corp., 24 Mass.App.Ct. 428, 430, 509 N.E.2d 1203 (1987).
In Sereni, the plaintiff in an age discrimination claim omitted from his opening statement the filing of a complaint with the Massachusetts Commission Against Discrimination, a prerequisite to suit. Id. at 430–431, 509 N.E.2d 1203. The judge directed a verdict after opening statements, but only after satisfying himself that the full record of the case, including the complaint and discovery, established without dispute that no administrative filing had been made. Ibid. Here, by contrast, the written settlement agreement was appended to the amended complaint and had been premarked as an exhibit, and the history of billing and payment was properly the subject of testimony. These matters had been discussed and reviewed over several days of pretrial hearings. It was error to dismiss the breach of contract claim against L.J. in the face of evidence before the trial judge that showed that the elements of the claim were in the record of the case. See id. at 431, 509 N.E.2d 1203.
b. Misrepresentation. In her complaint Macaulay alleged that several terms of the agreement had been omitted from the settlement agreement, and that DiPalma, individually and in her corporate capacity, made false representations that these terms would be honored in order to induce Macaulay to sign the settlement agreement with L.J. immediately. In pretrial proceedings a motion judge denied summary judgment on Macaulay's claim of intentional misrepresentation on the grounds that Macaulay was permitted to introduce parol evidence of alleged misrepresentations for the limited purpose of avoiding the effect of the settlement agreement's integration clause. See Starr v. Fordham, 420 Mass. 178, 188–189, 648 N.E.2d 1261 (1995). The motion judge listed, by way of example, several alleged misrepresentations by DiPalma, including representations concerning sewer installation, the clearing of Macaulay's easement area, use of the easement by Macaulay's animals, and permission for Macaulay to erect buildings within the easement to house the animals and/or equipment.
The motion judge also found, arguendo, that the same analysis would apply to a claim of negligent misrepresentation.
The trial judge dismissed the misrepresentation claim after the opening statement on the grounds that (1) the settlement agreement and its integration clause were not mentioned, and (2) the misrepresentations described fell outside the limited scope of parol evidence that the summary judgment decision deemed admissible and were therefore insufficient to state a claim of misrepresentation as narrowed by the motion judge. As noted above, the basic terms of the settlement agreement with L.J. were adequately described. Moreover, in her opening statement, Macaulay did refer to broken promises regarding installation of the sewer lines and the easement. The alleged oral misrepresentations made by DiPalma, personally, were thus sufficiently described. Macaulay was not obligated to anticipate in an opening statement the defense theory regarding the settlement agreement's integration clause. See Pitts v. Wingate at Brighton, Inc., 82 Mass.App.Ct. at 290–291, 972 N.E.2d 74 (it is not plaintiff's burden in opening statement to foreclose defendant's alternative theories of the case).
Prior to trial, the defendants brought a motion in limine to bar the introduction of parol evidence to vary the terms of the settlement agreement, which the trial judge allowed. Neither party has supplied the transcript of the motion hearing in which the trial judge (presumably) outlined the scope of the order. See Mass.R.A.P. 18(b), as amended, 425 Mass. 1602 (1997) (outlining appellant's obligations and appellee's right to order transcripts and seek costs). Accordingly, we analyze the issue presented based on the rationale provided by the trial judge. On remand, the trial judge will be in a better position to reconcile the two orders.
“DiPalma did not pay for sewer installation or make the sewer connections.... DiPalma did not put up the promised fence. DiPalma did not create a pet bathroom/exercise area.... And in addition to those broken promises, DiPalma purposely interfered with Ms. Macaulay's exclusive right to continue to use a small portion of the developed land behind the family home, to continue to raise and house her animals and poultry.”
The trial judge dismissed the promissory estoppel count against DiPalma based on Macaulay's egregious violation of the court order. He did not address whether that count would survive the motion to dismiss, and we do not address it. We note, however, that the motion judge relied on the same promises as the trial judge in denying summary judgment on the promissory estoppel claim.
c. Damages. The defendants contend that Macaulay failed to make a claim for damages in her opening, and that the case was properly dismissed for this reason as well. Macaulay's counsel stated to the jury that “in the end, the evidence will show that Macaulay was given less than $170,000 of the $450,000 in cash and benefits that she was promised.” Macaulay also listed various actions with respect to the easement and the sewer lines that the defendants allegedly took or failed to take. This statement of damages was “sufficient to support the plaintiff's cause of action.” Douglas v. Whittaker, 324 Mass. at 399, 86 N.E.2d 916.
3. Motion to amend. Macaulay contends that the motion judge abused her discretion by denying a motion to amend the complaint, Mass.R.Civ.P. 15(b), 365 Mass. 761 (1974), to assert new claims against Stonewood to the effect that Stonewood was a joint venturer with DiPalma and acted as an agent of DiPalma. The motion was filed more than four years after the filing of the original complaint, and two months after the allowance of the motion for summary judgment dismissing Stonewood as a defendant. We discern no error in the denial of the motion on the basis of the delay and the prejudice that would accrue to the defendants as a result. See Weber v. Community Teamwork, Inc., 434 Mass. 761, 785–786, 752 N.E.2d 700 (2001); Herbert A. Sullivan, Inc., v. Utica Mut. Ins. Co., 439 Mass. 387, 398–399, 788 N.E.2d 522 (2003).
4. Award of attorneys' fees to the defendants. The trial judge awarded the defendants the costs and fees associated with their motion to dismiss. While we reverse the judgment of dismissal, we nonetheless affirm the award of fees, as the mistrial and the motions were the direct result of proceedings arising out of Macaulay's violation of the rulings on the motions in limine, and the sanction was therefore appropriate.
5. Award of fees and costs to nonparty witness. Macaulay argues that the court erred in granting the postjudgment motion of Richard Cuoco, a nonparty subpoenaed witness, for fees for his time and legal fees in preparation for trial. The motion was granted on the basis that the subpoena was burdensome and overbroad, and that the matter was dismissed due to Macaulay's misconduct. This award was also based, in part, on the fact that Cuoco never testified due to the dismissal of the case. The case has now been reinstated. Because the order was based at least in part on the latter ground and as a sanction, we remand to the trial judge for review of this award of fees and costs.
The trial judge considered the entire subpoena to be unwarranted in light of the narrowing of issues on summary judgment. Among the subpoenaed documents were documents pertaining to sewer lines allegedly promised by L.J. These documents, which would show the presence or absence of plans to build a sewer line, were arguably relevant to the claim of intentional misrepresentation. On remand, a judge may determine whether there are, in fact, relevant documents within the request, and if so, whether Macaulay should be required to advance the costs associated with the production of those documents under the law applicable to any such request. See Mass.R.Civ.P. 45(b), 365 Mass. 809 (1974).
Reasonable costs of producing documents may, in a judge's discretion, be awarded to a nonparty witness under Mass.R.Civ.P. 45(b), 365 Mass. 809 (1974). See Application of a Grand Jury of N.Y., 8 Mass.App.Ct. 760, 768–769, 397 N.E.2d 686 (1979). Here the request included attorneys' fees and expert witness fees, which normally are not compensable except in those cases where the right to reimbursement is granted by statute or contractual provision. See generally Waldman v. American Honda Motors Co., 413 Mass. 320, 321–324, 597 N.E.2d 404 (1992) (discussing costs versus fees under the American rule); Johnson v. Modern Continental Constr. Co., 49 Mass.App.Ct. 545, 550–551, 731 N.E.2d 96 (2000). See also Preferred Mut. Ins. Co. v. Gamache, 426 Mass. 93, 95, 686 N.E.2d 989 (1997) (attorney's fees); Demoulas v. Demoulas, 432 Mass. 43, 63–64, 732 N.E.2d 875 (2000) (costs for transcripts); Connolly v. Sullivan, 76 Mass.App.Ct. 316, 318, 921 N.E.2d 1017 (2010) (attorney's fees). No such statute or contract has been brought to our attention. Therefore, the award of attorney's fees or expert witness fees to Cuoco may only be justified on the basis that sanctions are warranted on account of the violation by Macaulay of the court's order. With respect to the routine costs of production, it is unclear from the time records submitted whether any portion of the current fee application includes expert witness fees of Cuoco, fees which are not compensable in the ordinary course under the American rule, as opposed to staff time for preparation of documents, fees for staff are compensable (in the court's discretion) under rule 45(b). See Application of a Grand Jury of N.Y., supra. We therefore consider it the wiser course to vacate the order awarding Cuoco fees and costs and remand the matter for further consideration in light of the reinstatement of the action and the principles outlined above.
6. Conclusion. Accordingly, the judgment on directed findings dismissing the case, with prejudice, is reversed, and the matter is remanded to the Superior Court for trial before a different judge. The order entered March 18, 2011, denying the motion to amend the complaint and the order entered December 22, 2011, allowing the defendants' motion for sanctions in the form of attorneys' fees are affirmed. The order entered June 11, 2012, allowing the motion for expenses and fees of a nonparty witness is vacated, and that matter is remanded for further proceedings consistent with this memorandum and order.
So ordered.