Opinion
14-P-1829
10-30-2015
WEBSTER BANK, N.A. v. STEVEN E. GOODMAN & another.
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
On appeal from a judgment of the Superior Court, the defendants raise various claims of error. We discern in the defendants' arguments no cause to disturb the judgment; we affirm, addressing the defendant's claims in turn.
1. Promissory estoppel. Contrary to the contention the defendant Village on The Common Realty, LLC (Village), presses on appeal, the plaintiff Webster Bank, N.A. (Webster), made no unconditional commitment to fund project construction costs in the so-called "construction deficiency letter" from Robert Jose to Steven Goodman, dated August 6, 2008. In that letter, Jose observed that Village was in default, and cited several significant items requiring "immediate attention in order to get this project back on track." By reason of the cited concerns and the default status of the loan, Jose continued, "Webster will only fund those items as is [sic] necessary to obtain certificates of occupancy for those units under contract and the affordable units contained in the buildings already under construction. Also, Webster will no longer be funding any interest payments due on the loan and Borrower shall be responsible for making the monthly interest payments. The construction of speculative units will now be limited to four units at any one time." Far from constituting an unconditional promise to fund construction, the quoted language imposed limitations on any subsequent funding Webster would approve for the project, and signaled it would withhold funding if the identified concerns were not remedied promptly. Indeed, the letter concluded with the following warning: "In view of the above-referenced defaults, Webster expressly reserves its right to terminate funding at any time in its sole discretion and exercise all rights and remedies under the loan documents." The motion judge did not err in allowing Webster's motion for summary judgment on Village's claim of promissory estoppel.
2. Fraud and misrepresentation. There is likewise no merit to Village's reliance on the above-described construction deficiency letter to claim error in the allowance of Webster's motion for summary judgment on Village's claim of fraud and misrepresentation. As observed in the previous section, the premise on which Village's argument is based -- that the letter included an unconditional promise to fund certain construction costs -- is simply incorrect. In any event, as Webster observes in its brief, the record reveals that Jose retained hope at the time of the letter that Village would be able to address the cited concerns satisfactorily, so that funding could continue; accordingly Village's contention that the "promise" was false when made would be without merit even if the letter could be construed to express such a promise. Finally, the reservation by Webster of the right to terminate funding by reason of the defaults belies any claim that Village reasonably relied to its detriment on funding representations made in the letter.
3. Jury waivers. The motion judge correctly allowed Webster's motions to strike the defendants' jury claims. The jury waiver contained in the loan agreements Village signed was quite broad. It is settled that the right to a jury trial may be waived by contract, see Chase Commercial Corp. v. Owen, 32 Mass. App. Ct. 248, 251-252 (1992), and neither Village nor the defendant Steven E. Goodman contends that anything in the circumstances of the present case makes the contractual jury waiver unenforceable as a general matter. Village's contention that its claim based on "intentional misconduct" removes it from the scope of matters "arising in connection with or in any way related" to the transaction between the parties is unsupported by appellate authority, and we consider it unpersuasive. At its essence, the claim inherently arises from the transaction between the parties, and Village's attempt to label it under a different theory does not derogate from that reality.
The provision is as follows:
"THE BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY SUIT ACTION OR PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT OR THE LOAN DOCUMENTS ARE A PART AND/OR THE ENFORCEMENT OF ANY OF LENDER'S RIGHTS AND REMEDIES. THE BORROWER ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER DUE AND ADEQUATE CONSIDERATION."Each promissory note contained an essentially similar provision.
The application of the jury waiver to Goodman, as guarantor, is controlled by our holding in Chase Commercial Corp. v. Owen, supra. Though Goodman attempts to distinguish Chase on its facts, the essential rationale supporting the holding in Chase applies with equal force in the present case. As in Chase, the guaranty in the present case did not include a jury waiver, and did not incorporate the entire loan agreement by reference. See id. at 250. Nevertheless, the documents were signed at the same time, and were interrelated in purpose. See id. at 251. Goodman negotiated the loan on behalf of Village, and could easily monitor its performance. See ibid. There was no error in the conclusion by the motion judge that the jury waivers contained in the loan agreement and promissory note applied to Goodman as guarantor.
4. Breach of contract and implied covenant, G. L. c. 93A. Finally, we discern no error of law in the dismissal by the trial judge of Village's claims under G. L. c. 93A and for breach of contract and of the implied covenant of good faith and fair dealing. As the trial judge correctly ruled, at the time Webster initiated steps to foreclose its mortgage, "Village was in default, and [Webster] had legitimate grounds to so declare, as well as to cease funding. Although it was free to consider [the] offer [of The Procaccianti Group, a potential investor brought in by Goodman,] to purchase the loans at a discounted price, [Webster] had no obligation to accept an offer that it considered inadequate. [Webster] was entitled to exercise all its remedies under the loan documents so as to recover the full amount owed." Contrast Renovator's Supply, Inc. v. Sovereign Bank, 72 Mass. App. Ct. 419, 430 (2008) (lender "lulled Renovator to a point beyond its credit deadline and [then] exploited that timing in an attempt to force the unwanted additional credit terms upon the company"). We likewise consider correct the trial judge's conclusion that compliance with the "balance" provisions of the loan documents stood as a precondition to Webster's obligation to fund requisitions, so that Webster was not obliged to continue advances until after notice and an opportunity to cure any defaults.
Village does not challenge, as clearly erroneous, the findings of fact entered by the trial judge.
Judgment entered April 17, 2014, affirmed.
By the Court (Berry, Green & Blake, JJ.),
The panelists are listed in order of seniority. --------
Clerk Entered: October 30, 2015.