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Ford v. Waterhouse Properties, LLC

Appeals Court of Massachusetts

June 30, 2015

Thomas Ford , trustee, [1]
Waterhouse Properties, LLC , & another. [2]

Editorial Note:

This decision has been referenced in an "Appeals Court of Massachusetts Summary Dispositions" table in the North Eastern Reporter. And pursuant to its rule 1:28, As Amended by 73 Mass.App.Ct. 1001 (2009) are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 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, 881 N.E.2d 792 (2008).


The plaintiff, Thomas Ford, as trustee of Plymouth Conifer Realty Trust (Ford), filed a complaint in the Superior Court against the defendants, Waterhouse Properties, LLC and LG Automotive, LLC (Waterhouse), alleging breach of contract and seeking specific performance of an agreement to cooperate in building a road to access commercial property in Plymouth. Waterhouse, in turn, filed a number of counterclaims against Ford. Following a jury-waived trial, the trial judge entered judgment in favor of Waterhouse on the claims raised by Ford in his complaint and judgment in favor of Ford on Waterhouse's counterclaims. The parties cross-appeal from the respective judgments and Waterhouse appeals from an order denying its application for attorneys' fees.


Following a jury-waived trial, we review the trial judge's findings of fact for clear error and review de novo his rulings on questions of law. Trace Constr., Inc. v. Dana Barros Sports Complex, LLC, 459 Mass. 346, 351, 945 N.E.2d 833 (2011). Additionally, we review the trial judge's ruling with respect to equitable remedies under an abuse of discretion standard. See Forman v. Gadouas, 247 Mass. 207, 211, 142 N.E. 87 (1924) (specific performance); Astra USA, Inc. v. Bildman, 455 Mass. 116, 128, 914 N.E.2d 36 (2009) (rescission). We turn to the contentions of the parties on appeal, including breach of contract (Ford), easements (Ford), abuse of process (Waterhouse), covenant of good faith and fair dealing (Waterhouse), G. L. c. 93A (Waterhouse), and attorney's fees (Waterhouse).

1. Breach of contract.

Ford contends that Waterhouse breached its contractual obligations by failing to complete construction of the subdivision road. The trial judge found that, read as a whole, the " Joint Development Agreement" (agreement) between the parties and the 2007 amendment to the agreement did not impose an absolute obligation on Waterhouse to construct the road. Rather, he found that the agreement, as amended, required only that Waterhouse " diligently pursue completion of the contemplated roadway and to share in the costs of construction" and did not impose an absolute obligation on Waterhouse to complete the construction of the road. Our review of the agreement, as amended, discloses no error on the part of the trial judge in his interpretation of the contractual obligations imposed on Waterhouse. World Species List-Natural Features Registry Inst. v. Reading, 75 Mass.App.Ct. 302, 309, 913 N.E.2d 925 (2009) (interpretation of contractual language a question of law for the judge).

The judge also found that the credible evidence before him demonstrated that Waterhouse had stopped construction of the subdivision road because its application for a road opening permit had been indefinitely tabled by the board of selectmen of Kingston (board) and ultimately was denied. Thereafter, Waterhouse unsuccessfully sought judicial review of that decision.[3]

In order to prevail, Ford must show that Waterhouse committed a material breach of the agreement. See Singarella v. City of Boston, 342 Mass. 385, 387, 173 N.E.2d 290 (1961). Accordingly, Ford testified that one of the Waterhouse partners stated to him that construction had in fact stopped due to the weather. He also testified that at another point in time the other Waterhouse partner stated he needed to sell something in order to fund the remaining road construction. The judge, however, as factfinder in this jury-waived trial did not find that road construction had stopped for either of those reasons. Rather, the trial judge credited the testimony on behalf of Waterhouse that the project was stopped due to its inability to obtain the necessary permits from the board.[4]

After a careful review of the record we discern no error on the part of the trial judge in concluding that Ford failed to prove by a preponderance of the evidence that Waterhouse had breached its obligation under the agreement to diligently pursue completion of the roadway.

2. Easements.

Ford argues that the trial judge erred in declining to order the rescission of the easements the parties had granted each other and thereby to return the situation to the status quo ante. See Schwartz v. Rose, 418 Mass. 41, 47, 634 N.E.2d 105 (1994). Rescission, however, is equitable in nature and such a remedy lies within the sound discretion of the judge, whose decision should be informed by the totality of the circumstances. Browning-Ferris Indus., Inc., v. Casella Waste Mgmt. of Mass., Inc., 79 Mass.App.Ct. 300, 313, 945 N.E.2d 964, (2011). Considering the circumstances here, we conclude that the trial judge did not abuse his discretion in denying Ford's request for rescission.

In declining to order rescission, the judge concluded that there was no mutual mistake of fact warranting such relief. " Neither side can rescind the contract merely because the known and assumed risk turned out to be greater than either or both expected it to be." Cook v. Kelley, 352 Mass. 628, 632, 227 N.E.2d 330 (1967), quoting from Aldrich v. Travelers Ins. Co., 317 Mass. 86, 88, 56 N.E.2d 888 (1944). He specifically found that " the parties understood that construction of the roadway was contingent on obtaining the necessary local permits and they jointly assumed the risk that such permits might not be granted within the five year performance period." The judge thus determined that the failure to obtain the Kingston permit was not a mutual mistake of fact, but rather an assumed risk of which both parties were aware. To the extent that the request for rescission was premised on a claim that there was a mutual mistake of fact between the parties, the judge properly declined to order rescission.

He similarly declined to rescind on the ground of frustration of purpose. As he pointed out, equitable relief is appropriate only where the frustration of purpose is so severe that it cannot fairly be regarded as an assumed risk. Massachusetts Mun. Wholesale Elec. Co. v.Danvers, 411 Mass. 39, 52, n.8, 577 N.E.2d 283 (1991). The parties here are experienced in business and there is no evidence that when they exchanged easements they failed to understand that permits would be required to construct the road. In this regard we note, as did the trial judge, that Ford did not argue that the conveyance of cross-easements was subject to a condition subsequent that the construction of the road actually occur. On appeal, ...

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