Opinion
14-P-1978
03-16-2016
OCEAN ECOSYSTEMS, INC. v. HANNAH BODEN CORPORATION & others.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such 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. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
In this complex civil case involving red crab fishing, defendant Hannah Boden Corporation (Hannah Boden) appeals from a Superior Court judgment and from the denial of its posttrial motions for a new trial and to alter or amend the judgment. The plaintiff, Ocean Ecosystems, Inc. (Ocean Eco), cross-appeals from the judgment and from the denial of its posttrial motion to amend the judgment to include the remaining defendants. We affirm.
The defendants collectively filed a notice of appeal. However, only Hannah Boden filed a brief.
We decline to address Ocean Eco's appeal from the order denying its motion to amend the judgment as it makes no argument in its brief regarding this order. See Mass.R.A.P. 16(a)(4), as amended, 367 Mass. 921 (1975); Travenol Labs., Inc. v. Zotal, Ltd., 394 Mass. 95, 97 (1985); Budish v. Daniel, 417 Mass. 574, 577 n.5 (1994). Instead, the brief focuses on the midtrial denial of Ocean Eco's motion to amend the complaint, which was allowed after trial.
Background. We briefly summarize the facts the jury could have found following the approximately one week long trial. In 2008, Neal Goff, Jonathan Williams, and Frank Wetmore were in the red crab fishing business. Williams owned three fishing vessels and was the principal of the defendant corporations. Goff and Wetmore were owners of Ocean Eco, and from 1994 until 2008, Goff owned the fishing vessel "Frank Wetmore" (the Wetmore). All of the vessels operated out of the Fall River State Pier. Around 2001, the National Marine Fisheries Service began to regulate the fishery in which Williams, Goff, and Wetmore participated, which is the only red crab fishery in the United States. The Service issued five permits allowing the holders to catch a maximum amount of red crab per trip. Ocean Eco's permit allowed it to catch up to 125,000 pounds per trip, while the remaining permit holders could catch up to 75,000 pounds. By June, 2008, Williams or the corporations that he controlled owned four of the five permits.
Goff owned ninety-one percent and Wetmore owned nine percent.
The vessel previously was owned by Wetmore.
On June 25, 2008, Williams on behalf of Hannah Boden, and Goff on behalf of Ocean Eco executed three agreements. One was a purchase and sale agreement for the Wetmore and the permit, another was the "Bareboat Charter Agreement" (charter agreement), and the third was the "Red Crab Co-op Agreement" (co-op agreement). Through these agreements, Hannah Boden purchased the Wetmore and the permit and leased the vessel back to Ocean Eco in exchange for a portion of Ocean Eco's share of profits from the co-op agreement. Hannah Boden paid Ocean Eco $550,000 for the Wetmore, with the price of the permit to be "established according to the profits of the lease agreements." Pursuant to the lease provision, Hannah Boden's "rate of compensation" was fifty-one percent of the profits Ocean Eco received from the co-op. The co-op consisted of the defendant corporations (excluding Hannah Boden) and Ocean Eco. Benthic Fishing was the co-op manager; Ocean Eco or its designee would manage the Wetmore in exchange for $40,000 per year; Goff was guaranteed $40,000 per year from the co-op's profits; and "Ocean Ecosystems w[ould] always manage one vessel in the co-op."
After the sale, Goff added Williams as a signatory on Ocean Eco's accounts and Hannah Boden took over managing Ocean Eco's books. Inevitably, problems soon arose. Goff would make cash withdrawals without accounting for them to the bookkeeper, prompting Williams to withdraw $175,000 from Ocean Eco's account without Goff's knowledge. Goff neglected to tell Williams about payments on two personal loans that were automatically deducted from Ocean Eco's account, and Goff did not know that Williams had a policy of withholding money from the crew. By January, 2009, the relationship between Williams and Goff had deteriorated to the point where they communicated only through Wetmore. Williams offered to pay Ocean Eco $490,000 to end the relationship, and, through electronic mail messages, Wetmore, Williams, and Goff negotiated and came to an agreement regarding a buy-out of Ocean Eco by Hannah Boden. They agreed on a price and met on February 1, 2009, to confirm. Wetmore drafted a document entitled "Red Crab Permit Sale," which set forth the terms of the parties' agreement, and which Wetmore and Goff signed (the permit sale agreement). The agreement did not provide for dissolution of the co-op or termination of Goff's employment. Hannah Boden wrote Ocean Eco a check for $12,000 as a down payment for the permit; however, Williams did not sign the permit sale agreement.
Williams then left the country for ten days. Goff agreed to watch the vessel while he was gone. On February 17, 2009, following a "cold spell," frost damage was discovered on the vessel. Water pipes had split, an exhaust manifold had cracked, and there were several cracks on one of the main engine blocks. News of the damage left Williams "reeling," and ultimately he decided not to repair the vessel. Williams "fired" Goff and requested that the Fall River State Pier deny Goff access unless he was accompanied by one of Williams's employees or a guard, and by March, 2009, the co-op "was done." In August, 2010, Williams sold the Wetmore for $65,000.
On March 30, 2011, Ocean Eco filed a complaint against Hannah Boden and the other co-op members alleging breach and wrongful termination of the charter and co-op agreements. It also sought an accounting and damages. The defendants answered and asserted counterclaims for breach of the charter and co-op agreements, breach of the covenant of good faith and fair dealing, deceit, negligent misrepresentation, unjust enrichment, and embezzlement. Trial took place before a jury and, as the evidence was drawing to a close, the judge expressed his inclination "to submit a series of questions that will not separate agreements but will tell the jurors to begin with that these agreements are two in number but one in terms of breaches of contract." Neither party objected. The judge dismissed, without objection, Hannah Boden's claims for deceit and negligent misrepresentation, and he reserved for himself disposition of the permit. The jury returned special verdicts in favor of Ocean Eco on its claims for breach and wrongful termination of the agreements, and it awarded damages in the amount of $391,000. The jury found in favor of Hannah Boden on the accounting claims, and it found that Ocean Eco wrongfully withdrew monies from its own bank account in the amount of $22,133.42. Judgment entered in favor of Ocean Eco in the amount of $391,000 with interest in the amount of $100,011.18, and in favor of Hannah Boden in the amount of $22,133.42 with interest of $5,661.35.
A declaration also entered "that all rights, title and interest in the permit belong to the Defendant, Hanna [sic] Boden Corp."
After trial, Ocean Eco moved to amend the judgment to include the remaining defendants, and Hannah Boden moved for a new trial. The "court decline[d] to order a new trial," but it did "amend[] the pleadings to conform to the evidence pursuant to Mass.R.Civ.P. 15(b)." Nearly four months later, the defendants moved pursuant to Mass.R.Civ.P. 59, to alter or amend the judgment to remove the award of prejudgment interest. The trial judge denied both Ocean Eco and Hannah Boden's motions to amend in a written decision.
Discussion. 1. Motion for a new trial. Hannah Boden seeks a new trial on the basis that the verdict was against the weight of the evidence. Although Hannah Boden did not move at trial for a directed verdict, "[a] proper motion for a directed verdict is not a prerequisite for a motion for new trial." Bonofiglio v. Commercial Union Ins. Co., 411 Mass. 31, 36 n.2 (1991). See Service Publications, Inc. v. Goverman, 396 Mass. 567, 571 n.5 (1986) ("The filing of a motion for directed verdict is a prerequisite to filing a motion for judgment notwithstanding the verdict"). Hannah Boden does not argue that the judge's denial of its motion constitutes an abuse of discretion, and the verdict was supported by evidence that Williams "fired" Goff, that the captain of the Wetmore was an employee of Williams and not Ocean Eco, and that the permit was not disposed of until after trial. See J. Edmund & Co. v. Rosen, 412 Mass. 572, 576 (1992) (citations omitted) ("A trial judge may set aside a jury verdict and order a new trial if the verdict is against the clear weight of the evidence. That determination rests in the sound discretion of the trial judge").
The charter agreement states that it "shall remain binding until federal fisheries permit #410535 is either sold or transferred to a different owner[,]" and that "Ocean ecosystems will always manage one vessel in the co-op." The co-op agreement provides that "Ocean Ecosystems or it's [sic] designee will manage it's [sic] vessel for $40,000 per year."
Hannah Boden next seeks a new trial on the basis that the judge erroneously instructed the jury that it could find for Ocean Eco if it determined that Hannah Boden breached the permit sale agreement. As Hannah Boden recognized in its Superior Court filing, the judge's instruction regarding the permit sale agreement related to damages. He instructed the jury that Ocean Eco bore the burden of proving that Hannah Boden "actually terminated the contract consisting of the Charter and Co-Op Agreements," and we see no error.
The judge instructed the jury that, if they found that Hannah Boden wrongfully terminated the agreements, they could consider in assessing damages the "alleged plan" by Williams and Goff to end their relationship in exchange for $490,000. Counsel for Hannah Boden objected to the inclusion of a specific sum, and the judge gave a curative instruction ("it's for you to determine if that was the understanding that eventually would have been put into effect"). Hannah Boden did not object on the grounds now raised on appeal, it did not argue those grounds in support of its motion for a new trial, and we do not consider them. See Mass.R.Civ.P. 51(b), 365 Mass. 816 (1974) ("No party may assign as error the giving or the failure to give an instruction unless he objects thereto . . . , stating distinctly the matter to which he objects and the grounds of his objection"); Narkin v. Springfield, 5 Mass. App. Ct. 489, 491 (1977) ("A party who fails to comply with [Mass.R.Civ.P. 51(b)] forfeits his right to complain on appeal of the giving or omission of an instruction"); Laveck v. Pascoe Pizza, Inc., 29 Mass. App. Ct. 935, 935 (1990) ("None of the four points which the defendants now press was properly called to the attention of the trial judge and those issues are, therefore, lost on appeal").
Finally, Hannah Boden seeks a new trial so that a jury can determine whether Goff's wrongful withdrawal of $22,133.42 constituted a material breach of contract which would preclude Goff from recovering. Hannah Boden waived the right to have the jury decide this issue by failing to request a special question or demand its submission to the jury. Mass.R.Civ.P. 49(a), 365 Mass. 812 (1974). "As put to the jury, [Hannah Boden's] cancellation of the contract could be excused only by [Ocean Eco's] material breach." G.M. Abodeely Ins. Agency, Inc. v. Commerce Ins. Co., 41 Mass. App. Ct. 274, 281 (1996). The jury found that Ocean Eco did not breach the agreements by failing to perform in a workmanlike manner to prevent frost damage to the Wetmore. Hannah Boden did not "move to correct [any apparent] inconsistency prior to dismissal of the jury," Holder v. Gilbane Bldg. Co., 19 Mass. App. Ct. 214, 219 (1985); it did not ask the judge to "resubmit the questions to the jury with additional instructions" that they determine whether the wrongful withdrawal of monies constituted a material breach of the agreements, ibid.; and it "makes no complaint on appeal about the form of the special questions[.]" G.M. Abodeely Ins. Agency, Inc., supra at 279. The judge made no finding regarding material breach and he did not address the issue in denying Hannah Boden's motion for a new trial. We deem the judge "to have made a finding in accord with the judgment on the special verdict." Mass.R.Civ.P. 49(a). "The judgment against [Hannah Boden] is . . . consistent with the jury's determination that [Ocean Eco] did not materially breach the contract[,]" G.M. Abodeely Ins. Agency, Inc., supra at 281, and we see no abuse of discretion in denying Hannah Boden a new trial on these grounds. See Gath v. M/A-CON, Inc., 440 Mass. 482, 492 (2003) ("We grant considerable deference to a judge's disposition of a motion for a new trial, especially where he was the trial judge, and we will reverse the ruling only for an abuse of discretion").
2. Motion to alter or amend. Five months after judgment entered, Hannah Boden moved to amend the judgment to remove the award of prejudgment interest. It argued that the case was controlled by Federal maritime law, pursuant to which the question of interest must be submitted to the jury. The judge found that the charter and co-op agreements "meet[] the definition of a maritime contract[,]" but that Hannah Boden waived its right to have the jury decide the question of interest when it failed to ask that it be put to the jury. There was no error.
Hannah Boden neither brought claims under Federal maritime law, contrast Militello v. Ann & Grace, Inc., 411 Mass. 22 (1991), nor raised that law at any point before trial. See Mass.R.Civ.P. 44.1, 365 Mass. 809 (1974) ("A party who intends to raise an issue concerning the law of the United States . . . shall give notice in his pleadings or other reasonable written notice"). As Hannah Boden did not demand that the issue be submitted to the jury at any point, we agree with the judge that the issue is waived. See Mass.R.Civ.P. 49(a).
Judgment affirmed.
Order entered July 2, 2013, on Hannah Boden Corporation's motion for new trial affirmed.
Order entered November 29, 2013, denying parties' posttrial motions affirmed.
By the Court (Vuono, Carhart & Kinder, JJ.),
The panelists are listed in order of seniority. --------
/s/
Clerk Entered: March 16, 2016.