Opinion
18-P-1011
09-18-2019
MITNOR CORPORATION & another v. Felicio LANA & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiffs cleaned a building owned by Fifty Front Street, LLC (FFS) pursuant to a contract signed by Felicio Lana. After the defendants stopped making payments on the plaintiffs' invoice for services, the plaintiffs filed a complaint bringing claims for breach of contract against Lana and FFS, and an alternative claim of unjust enrichment against FFS. Concluding that the plaintiffs had not complied with a one-year limitations period in the contract, a judge allowed the defendants' motion to dismiss. On appeal, the plaintiffs argue that the one-year limitations period does not apply to their unjust enrichment claim against FFS, and that the one-year limitations period had not expired by May 26, 2017, when they filed their complaint. Because we agree with the plaintiffs as to their unjust enrichment claim, but disagree with the plaintiffs as to when the one-year limitations period expired, we vacate the dismissal of the unjust enrichment claim, and affirm the dismissal of the breach of contract claims.
Discussion. "We review the allowance of a motion to dismiss de novo, accepting as true all factual allegations in the complaint and favorable inferences drawn therefrom." Lipsitt v. Plaud, 466 Mass. 240, 241, 994 N.E.2d 777 (2013). We also consider the exhibits attached to the complaint. Id.
a. Unjust enrichment. The plaintiffs contend that their unjust enrichment claim against FFS is outside the contract's one-year limitations provision. The defendants make two arguments in response -- first, that the plaintiffs' unjust enrichment claim fails nevertheless because the plaintiffs alleged a contract with FFS, and second, that the contract's one-year limitations period applies even if FFS was not a party to the contract.
Regarding the plaintiffs' allegations of a contract with FFS, Mass. R. Civ. P. 8 (e), 365 Mass. 749 (1974), allows a party to state as many separate claims as are available, regardless of consistency. The plaintiffs did just that here, bringing claims against FFS for breach of contract and, in the alternative, unjust enrichment. In support of their breach of contract claim, the plaintiffs alleged in their complaint that "[t]he [d]efendants did hire and contract with the [p]laintiffs." In support of their unjust enrichment claim, the plaintiffs attached to their complaint a copy of the contract, which unambiguously lists Lana, not FFS, as the property owner and customer. Nothing about this was improper or precludes the plaintiffs from pursuing their unjust enrichment claim. See Zelby Holdings, Inc. v. VideogeniX, Inc., 92 Mass. App. Ct. 86, 92-93, 82 N.E.3d 1067 (2017).
We do not, however, reach the question whether there is, in fact, a contract between the plaintiffs and FFS that bars the plaintiffs' unjust enrichment claim. FFS has not made the argument here or below, and has instead limited its argument to whether the plaintiffs are bound by their allegations of a contract. Where the existence of a contract between the plaintiffs and FFS may require further factual development, it would be inappropriate for us to reach this question in reviewing the allowance of the motion to dismiss.
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We further reject the defendants' argument that the contract's one-year limitations period applies regardless of whether FFS was a party to the contract. The defendants point to the broad language of the one-year limitations period, which purports to apply to all actions "regardless of form, relating to the subject matter of this contract." Regardless of how broad this language may be, however, a nonparty to the contract (FFS) generally lacks standing to assert any rights under that contract. See Sullivan v. Kondaur Capital Corp., 85 Mass. App. Ct. 202, 205, 7 N.E.3d 1113 (2014). While there is an exception for third-party beneficiaries, the exception does not apply unless "the ‘language and circumstances of the contract’ show that the parties to the contract ‘clear[ly] and definite[ly]’ intended the beneficiary to benefit from the promised performance." Cumis Ins. Soc'y, Inc. v. BJ's Wholesale Club, Inc., 455 Mass. 458, 466, 918 N.E.2d 36 (2009), quoting Anderson v. Fox Hill Village Homeowners Corp., 424 Mass. 365, 366-367, 676 N.E.2d 821 (1997). Where FFS does not argue that it is a third-party beneficiary, and where further factual development would be required in any event, we cannot affirm the dismissal of the plaintiffs' unjust enrichment claim on this alternative basis.
b. Breach of contract. As for the breach of contract claims, the plaintiffs contend that the one-year limitations period did not begin to run until at least May 26, 2016. We disagree.
"[A] statutory limitations period can be shortened by contract so long as the shortened period is reasonable." Shahin v. I.E.S. Inc., 83 Mass. App. Ct. 908, 909, 988 N.E.2d 873 (2013). Here, the contract provides that "no action, regardless of form, relating to the subject matter of this contract may be brought more than one (1) year after the claiming party knew or should have known of the cause of action." The contract further provides, "If any amounts owing to Provider for Provider's services are not covered by insurance, Customer agrees to pay those amounts to Provider within fifteen (15) days of Customer's receipt of invoice."
The complaint and the exhibits attached thereto show that the plaintiffs sent their first invoice to Lana on March 6, 2015, and that they received partial payments in December 2015. Despite not receiving any further payments, the plaintiffs argue that their cause of action did not begin to run until much later because they were still awaiting an insurance coverage decision and because the defendants were not required to pay them until that coverage decision was made. This, however, the plaintiffs did not allege. Moreover, even if we consider the emails and affidavit attached to the plaintiffs' opposition to the defendants' motion to dismiss, those documents indicate that by April 2016, the plaintiffs knew that the defendants' insurer had issued checks to Lana for their services and that Lana had misappropriated those funds. This was thus not a situation where the plaintiffs were still awaiting an insurance coverage decision. The plaintiffs knew or should have known of their cause of action no later than April 2016, and the one-year limitations period thus expired before the plaintiffs filed their complaint on May 26, 2017.
Conclusion. So much of the judgment as dismisses the plaintiffs' unjust enrichment claim (count two) is vacated. The remainder of the judgment is affirmed.
So ordered.
vacated in part; affirmed in part