Opinion
No. 96-1211C
March 11, 1998
MEMORANDUM AND ORDER ON MOTION OF LAWRENCE SAVINGS BANK FOR SUMMARY JUDGMENT
In this action, Northern Associates, which in 1994 leased a building in Andover from Lawrence Savings Bank, brings suit against Thomas M. Kiley, et al., who purchased the building from the bank in 1995, for alleged violations of the lease by the new owner, Kiley. Kiley, in turn, third-party complained against Lawrence Savings Bank, alleging that if he was in breach of the lease it was because of misunderstandings concerning the terms and conditions thereof, which had resulted from representations made by Lawrence Savings Bank at the time of the sale of the building to Kiley. Lawrence Savings Bank now moves for summary judgment.
After hearing, the motion of Lawrence Savings Bank for summary judgment is allowed in part.
BACKGROUND
There is no material dispute about the relevant facts. After Kiley took over ownership, he refused to allow the third-floor tenant, Northern Associates, unrestricted access to the elevator, and refused to allow the air conditioning to be turned on to the third-floor. Beginning in the summer months, the third-floor became unbearably hot. Northern sued and obtained a preliminary injunction against Kiley, requiring the provision of air conditioning. Eventually, Kiley refused to maintain the third-floor common areas to allow Northern Associates to use the entire floor. Additionally, during the course of the litigation, he has refused to provide Northern Associates with heat during the winter months. As a result of the lack of maintenance to the third-floor common areas, it is alleged and not denied that the urinal in the third-floor bathroom was blocked for several months and that birds were permitted to nest in the third-floor skylight, causing excrement to "rain down" on the occupants.
The lease agreement states that the leased premises is the "third-floor, 342 North Main Street" and estimates the leased premises to comprise approximately "2100 square feet net usable area." Although the lease agreement provided that "[t]he premises are outlined on Exhibit A attached," it is agreed that Exhibit A has been lost and cannot be located by any party. Although the lease agreement does not specifically allude to Northern Associates need to use the elevator or turn on the air conditioning, the lease provides that the "[l]andlord shall pay the costs of all electrical current supplied to or used in the section of the Building that Tenant occupies. Landlords shall pay the costs of heat . . . used in the building." The lease further provides that the "[l]andlord is responsible for the maintenance of all common areas, maintenance of all sidewalks, maintenance of the parking lots including snow removal and cleaning," and that the "[t]enant acknowledges and agrees that it has not relied upon any statement, representation, agreement or warranty except such as may be expressly set forth in this Lease and it is agreed by Landlord and Tenant that no amendment or modification of this Lease shall be valid or binding unless in writing executed by Landlord and Tenant. No provision of this lease shall be altered, waived, amended or extended except in writing executed by Landlord and Tenant."
It is further undisputed that the bank advised Kiley it could not locate Exhibit A prior to Kiley's purchase of the building, and that Kiley never requested the bank to create a new Exhibit A prior to the purchase. Further, it is undisputed that a month before the purchase of the building, the bank gave Kiley a list of annual operating expenses for the building, which included the cost of supplying air conditioning to the third-floor and the operation of the elevator. Prior to the purchase, Kiley never questioned whether Northern used the elevator or air conditioning during the course of its occupancy of the third-floor. Kiley was told by a representative of the bank that there were rooms on the south side of the third floor of building that were excluded from Northern Associate's leasehold. The Purchase and Sale Agreement executed on or about January 30, 1995, provided that "[A]cceptance of the deed by the BUYER, or his nominee, . . . shall be deemed to be a full performance and discharge of every agreement and obligation herein contained or expressed . . . ." It further provides that "[t]he BUYER acknowledges that the BUYER has not been influenced to enter into this transaction nor has he relied upon warranties or representations not net forth or incorporated in this Agreement or previously made in writing . . . [T]his Purchase and Sale Agreement supersedes in all respects the Offer to Purchase previously executed by the parties and all previous oral agreements, negotiations, arrangements, letters, representations, promises and understandings between the parties."
DISCUSSION
Summary judgment shall be granted where there are no material facts in dispute and the moving party is entitled to judgement as a matter of law. Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983); Community National Bank v. Dawes, 369 Mass. 550, 553 (1976). The moving party bares the burden of affirmatively demonstrating that there is no genuine issue of material fact on every relevant issue. Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). Where the moving party does not have the burden of proof at trial, this burden may be met by either submitting affirmative evidence that negates an essential element of the opponent's case or "by demonstrating that proof of that element is unlikely to be forthcoming at trial." Flesner v. Technical Communications Corp., 410 Mass. 805, 809 (1991); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). Once the moving party establishes the absence of a triable issue, the party opposing the motion must respond and allege specific facts establishing the existence of a material fact in order to defeat the motion. Pederson, supra at 17.
Defendants concede that all of their claims against the bank, including the breach of contract, are premised on two "representations," allegedly made by the bank: 1) the act of providing a copy of the integrated Lease Agreement to defendants with an implied representation that it was the entire agreement; and 2) a statement that there were rooms in the south side of the building that were specifically excluded from the lease. Based on these "representations," the defendants felt that they were justified in denying Northern Associates air conditioning in the summer months; that they were not obligated to provide Northern Associates with elevator service; that they could attempt to prevent Northern Associates from occupying the entire third-floor; and that they could refuse to clean and maintain the common areas of the third-floor.
With respect to the act of providing a copy of the Lease Agreement, Kiley does not contend that any affirmative misrepresentations were made about any of the above issues, but merely that, by Lawrence Saving Bank providing them with the Lease Agreement, there was an implication it was the "entire" agreement between the parties, which was a misrepresentation of material fact upon which Kiley reasonably relied, because the lease was silent about the tenants right to use the elevator and air conditioning, and did not precisely delineate the area on the third floor which was leased. However, absent a fiduciary duty, mere non-disclosure is not ordinarily actionable as deceit or negligent misrepresentation in the absence of "some affirmative act of concealment." Swinton v. Whitinsville Savings Bank, 311 Mass. 677, 679 (1942); Salinsky v. Perma-Home Corp., 15 Mass. App. Ct. 193, 197, review denied, 388 Mass. 1105 (1983).
In rebuttal, Kiley asserts that partial disclosures and half-truths satisfy the affirmative statement element of the torts of deceit and misrepresentation, citing Kannavos v. Annino, 356 Mass. 42, 47-48 (1969) and Nei v. Boston Survey Consultants, Inc., 388 Mass. 320, 322-323 (1983). The Court in Kannavos stated that if a person "does speak with reference to a given point in information, voluntarily or at the other's request, he is bound to speak honestly and to divulge all the material facts bearing upon the point that lie within his knowledge. Fragmentary information may be as misleading . . . as active misrepresentation, and half-truths may be as actionable as whole lies." 356 Mass. at 48. Kiley contends that being provided with the integrated Lease Agreement amounted to "half-truths" upon which Kiley reasonably relied because alleged side-deals between the plaintiffs and the bank were not part of the lease agreement.
The cases on which Kiley relies, however, are those in which a party was provided with partial information in circumstances in which the recipient could reasonably be expected to be mislead by the withholding of pertinent additional information. Indeed, in Nei, supra, the Supreme Judicial Court found that there was no basis for fraud, where the statements made were true, but a misunderstanding had reasonably resulted therefrom, and where no requests for additional information (which defendant had in its possession) were made. Conversely, in Kannavos, supra, on which the third-party plaintiff places its principle reliance, half-truths were stated in circumstances where the purchaser could be expected to understand a situation to exist which in fact did not exist. Thus, in Kannavos, the Court held that the purchase of properties could be rescinded because the properties were advertised as income-producing properties with furnished apartments being rented to the public, which could continue to be operated for such purposes, whereas in fact they were being so operated, but were being operated illegally, having been converted to multi-family apartments in violation of the zoning ordinances of Springfield. 356 Mass. at 48-50. The other cases cited in Kannavos similarly involved situations where half-truths, while literally true, were calculated to mislead and did mislead the recipient in a material respect. Id. at 48.
Here, to the contrary, no reasonable implication could be drawn, by reason of being provided with the integrated lease and the purchase and sale agreement, that Kiley would not be obligated to continue elevator service and air conditioning to the third-floor tenant. While the lease did not specifically allude to the provision of elevator service or air conditioning, any reasonable purchaser of commercial real estate, and certainly a sophisticated businessman such as Kiley, could be expected to know that in the absence of some indication to the contrary, the third-floor tenant would need to have air conditioning in the summer months, heat in the winter months, and access to the common elevator. This is especially true given that the lease specified that the landlord was responsible for the cost of electricity and heat costs, and the fact that Kiley was provided with, and relied upon, in agreeing to a purchase price, expense sheets for operation of the building which included the cost of the provision of these amenities to the third-floor tenant. Under the circumstances, there is no basis upon which a jury could reasonably find that any misrepresentation was made; much less that Kiley reasonably relied upon the lease and purchase and sale agreement which he received, to believe he was entitled to cut off elevator service, air conditioning, and heat to Northern Associates.
Kiley was described as an investor in real estate and a practicing lawyer.
The same may be said, a fortiori, with respect to Kiley's refusal to maintain the common areas on the third-floor, in view of the lease's specific provision that the landlord must maintain such areas. Nor is there anything in the record to indicate that the bank otherwise misled Kiley in any way regarding such obligation.
This leaves the dispute with regard to the boundaries for the area on the third-floor which was leased to Northern Associates. In this respect, it is not disputed that the bank did tell Kiley there were some rooms not included within the third-floor lease. To the extent that it may be determined at trial that Northern Associates had been indeed leased the entire third-floor, it is possible that Kiley was mislead in that regard, particularly in view of the bank's inability to provide Exhibit A (which specified the leased area boundaries) at the time of sale of the building to Kiley. The reasonableness of any such reliance also remains to be determined. Accordingly, that portion of Kiley's action that alleges he was mislead as to parameters of the leased premises is not dismissed, but remains for trial.
ORDER
Accordingly, for the reasons stated above, summary judgment is allowed with respect to all of Kiley's claims against Lawrence Saving Bank, except insofar as they pertain to the geographical parameters of the leased premises on the third-floor. Kiley's complaint, in so far as it alleges fraud, misrepresentation, or breach of contract with respect the provision of elevator service, the provision of heat and air conditioning, and the maintenance of the common areas on the third floor, is dismissed
_______________________________ Thayer Fremont-Smith Justice of the Superior Court
Dated: March 11, 1998