Opinion
No. 12–P–1489.
2013-04-22
TURFLINKS, INC. v. TWIN HILLS REALTY, INC., & others.
Based on this language, the new owners argue that Twin Hills agreed to defend it against claims from third parties such as TurfLinks, or to indemnify it for the costs of such a defense.
By the Court (MEADE, MILKEY & HANLON, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, TurfLinks, Inc. (TurfLinks), brought this action to collect money it was owed for fertilizer and other horticultural products that it sold to a golf course in Longmeadow. That TurfLinks was owed the money was never in contest. Rather, the dispute was over which of the defendants was liable for the debt, a dispute that arose out of a confluence of circumstances. It was TurfLinks's customary practice to deliver its products in the fall, with payment not due until the following spring. After the 2009 shipments at issue had been delivered, but before payment for them had become due, the golf course changed hands. Specifically, Twin Hills Realty, Inc. (Twin Hills), the owner of the golf course at the time that the products were delivered, sold the golf course to the Atillio Cardaropoli, as trustee of the Twin Hills Realty Trust (the trust); thereafter, a company related to the trust, Wolf Swamp Enterprises, LLC (Wolf Swamp), took over the operation of the golf course. When TurfLinks sought to be paid, both Twin Hills and the new owners disclaimed liability, with each maintaining the other was responsible. This action resulted. On summary judgment, a Superior Court judge ruled that Twin Hills was liable to TurfLinks for the debt, and that it could not pursue contribution or indemnification from the new owners. The net result was a judgment under which Twin Hills, and only Twin Hills, was liable to TurfLinks. The only issue remaining on appeal is whether the judge erred in denying the new owners' request that Twin Hills also be required to pay their attorney's fees. We affirm.
For convenience, we will refer to the trustee (or the trust) and Wolf Swamp collectively as the “new owners.”
Background. Twin Hills agreed to sell the golf course to the trustee through an asset purchase agreement dated November 21, 2009. In that document, the trustee agreed to pay $4 million for real and personal property that Twin Hills owned. The personal property included the member lists, goodwill, and name of the golf course, as well as “certain items of equipment and furniture.” The fertilizer and the other products that TurfLinks had brought to the site were not referenced. After the real estate closing, Twin Hills transferred personal property to the trustee pursuant to a bill of sale dated January 6, 2010. By its terms, the bill of sale covered the “equipment and other personal property owned by [Twin Hills] and located on the premises [with some exceptions not here relevant] .”
In response to TurfLinks's efforts to get paid, the new owners took the position that they had acquired the products from Twin Hills as part of their purchase of the golf course, and that Twin Hills—the party who had contracted with TurfLinks—was solely responsible for the unpaid bill. For its part, Twin Hills took the position that the products were inventory for which no payment was due until after the golf course had changed hands, that they were not assets covered by the bill of sale, and that the new owners were solely responsible for paying the bill (or, alternatively, for returning unused product to TurfLinks). Caught in the middle, Turflinks sued both Twin Hills (contract and unjust enrichment) and the new owners (unjust enrichment only). The new owners filed a cross claim alleging that Twin Hills was liable “in indemnification, contribution and breach of contract” for any liability they faced against TurfLinks. Twin Hills responded in kind.
Twin Hills sought to bolster its case through parol evidence that, early in the negotiations over the sale of the golf course, the trustee orally had agreed to take over responsibility for paying the bill from TurfLinks when it became due. Finding the final written documents unambiguous, the judge declined to consider such assertions.
For reasons not revealed by the record, Twin Hills filed its cross claim only against Wolf Swamp, not the trustee.
TurfLinks sought summary judgment only against Twin Hills. After TurfLinks prevailed on that motion, the focus of the case became the dispute among the defendants. The new owners filed a motion for summary judgment on the dueling cross claims, which the judge allowed. The judge did not address the request for attorney's fees that the new owners obliquely raised at the end of their memorandum. The new owners renewed that request in a separate motion that the judge summarily denied “for reasons set forth in [Twin Hills's] memorandum of opposition.”
Discussion. As an initial matter, we note that there is some doubt as to whether the new owners' request for attorney's fees is even within the scope of their cross claim. That is because their claim for indemnification was expressly phrased in terms of Twin Hills being liable “[t]o the extent that [the new owners are] adjudged liable to TurfLinks” (an event that indisputably never occurred). We need not resolve this issue, because we conclude that the new owners' argument for fee shifting fails on the merits.
Under the “American rule,” each party must bear its own litigation expenses unless narrowly construed exceptions apply. John T. Callahan & Sons, Inc. v. Worcester Ins. Co., 453 Mass. 447, 449–452 (2009). The new owners' argument for an exception relies on the following language from the bill of sale:
“[Twin Hills] hereby warrants to [the trustee] that [Twin Hills] is the lawful owner of the Purchased Assets, that the Purchased Assets are free from all liens and encumbrances, that [Twin Hills] has good right to sell the same, and that [Twin Hills] will warrant and defend the same against the lawful claims and demands of all persons.”
Based on this language, the new owners argue that Twin Hills agreed to defend it against claims from third parties such as TurfLinks, or to indemnify it for the costs of such a defense.
Although this case nominally touched on a third party's claim to the stockpiled products, it was, at root, about what the new owners and Twin Hills had agreed regarding which of them had to pay for those products. Whatever else it might mean, the “warrant and defend” language included in the bill of sale cannot reasonably be construed as a promise by Twin Hills to reimburse the new owners for the costs they incurred in a dispute of this nature. See Kelly v. Dimeo, Inc., 31 Mass.App.Ct. 626, 628 (1991) (contract-based indemnity claim exists only where expressly set forth in a binding contract between the parties, or where such a right fairly can be implied). ,
The new owners' claim for attorney's fees fares no better when recharacterized as one for damages for breach of warranty.
We deny the new owners' request for appellate attorney's fees.
Order entered June 5, 2012, denying attorney's fees affirmed.