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Nicoli v. Gooby Industries Corp.

Superior Court of Massachusetts, Essex

September 2, 2016

Joseph M. Nicoli et al.
v.
Gooby Industries Corp., a Massachusetts Corporation dba Century Box et al No. 134565

          MEMORANDUM OF DECISION

          Richard E. Welch, III, Justice

         Even the dullest first-year law student learns in the first-year contracts class that one cannot legally obtain something of value in exchange for an empty promise. That same student also understands that a party to a contract must act in good faith and cannot intentionally undermine the value of the agreed-upon bargain. One hopes that any ethical adult would understand these basic rules of fair dealing without attending a law school. Unfortunately, not all act in good faith. This is an example of bad faith dealing which constitutes a breach of contract.

         This case was tried in a jury-waived trial. After carefully considering all the credible evidence, it is rather easy to conclude that this case presents an example of a company utilizing bad faith when breaching a contract with one of its neighbors.[1]

         The plaintiffs, Joseph and Margaret Nicoli, live at 58 French Street in Methuen, Massachusetts. French Street is a residential street. To the rear of French Street lies property owned by the defendant Gooby Industries Corp. which does business as Century Box. Century Box is a manufacturing company run by David Kagan as the managing director. David's older brother, Mark Kagan, is the plant manager of this manufacturing facility. David Kagan is also the Trustee of 37 Chase Street Realty Trust, a realty trust that owns the property on which Century Box manufacturing plant is located. As defendants' counsel conceded during trial, Century Box can be considered the alter ego of the Chase Street Realty Trust in that David Kagan managed and directed the business of both. When David Kagan, as managing director of Century Box, negotiated real estate deals he did so in the name Century Box, not Chase Street Realty Trust. See e.g., Exhibits 4, 5 and 6. The end result is the parties agree that Century Box and Chase Street Realty Trust are one and the same.

         The residential parcel owned by the Nicolis (58 French Street) abuts the property of Century Box. The Nicoli parcel is not a rectangular shape but instead is an L-shaped parcel. The small portion of land that creates the " L" is owned by Century Box. This portion of land owned by Century Box is approximately 30 by 28 feet. Soon after the Nicolis purchased their home at 58 French Street, Margaret Nicoli (then named Margaret Barnes because she was Joseph Nicoli's fiancé e) wrote a letter to Alvin Kagan, then the owner of Century Box (Alvin Kagan is the father of David and Mark Kagan). She requested to purchase a " small piece of land [owned by Century Box] to square off our property." She attached a diagram to her October 29, 2002 letter which specified that land. See Exhibit 2. The parcel that she was proposing to purchase from Century Box was a mostly rectangular piece (technically it would be a trapezoid) which measured 30 by 28 feet. This parcel would indeed " square off" the Nicoli parcel and change it from an " L" shape to a rectangle.[2]

         The Nicolis remained interested in purchasing this 30 by 28 feet piece of property because they " just want[ed] to be able to square off our property and have a little bit of a yard." Thus, Ms. Nicoli mailed a second letter to Alvin Kagan approximately a year later. See Exhibit 3. Alvin Kagan and Century Box did not agree to sell any portion of land to the Nicolis at that time. This 30 x 28-foot parcel of land was located between the back yard of the Nicolis and the Century Box manufacturing plant. It was mostly wooded at the time. See Exhibit 1. The Nicolis used that small portion of property to store wood. See Exhibit 1.

         By 2012, Alvin's sons were in charge of the Century Box manufacturing plant. By 2012, Century Box was interested in expanding its production facility and the company submitted applications to expand the Century Box manufacturing plant.

         In approximately June 2012, Century Box published notice of its plans to expand the plant and began to hold a series of meetings with the neighborhood and city officials concerning expansion. At this time, Century Box had retained Attorney Vincent Manzi, an attorney specializing in development law and permitting, to assist Century Box in this expansion. At the first neighborhood meeting, Attorney Manzi and Mark Kagan were present. Joseph Nicoli attended the meeting, along with numerous other abutters and neighbors, and voiced his opposition to the expansion. In general, many of the neighbors were upset about the expansion. After the meeting, Joseph Nicoli approached Attorney Manzi and Mark Kagan and reiterated his longstanding desire to acquire the small parcel of land behind his back yard " in order to square off his lot."

         By late of August 2013, despite some neighborhood opposition, the City of Methuen had approved the Century Box plan to expand. The plan showed a retaining wall being built between the abutters' property and the expanded Century Box facility. This retaining wall would be a new wall behind the Nicoli property because a retaining wall never existed behind their property prior to this date. The retaining wall (shown in Exhibits 5, 6, 8 and 9) shows a retaining wall extending in a straight line across the back of the Nicoli lot and the neighboring lot owned by a Mr. Espinol. This straight line wall would result in blocking off the 30 by 28 feet parcel of land owned by Century Box (which the Nicolis wished to acquire) and placing that parcel on the Nicolis' side of the retaining wall. In other words, the 30 by 28 feet parcel of land owned by Century Box would be located behind the retaining wall (away from the Century Box facility) and on the Nicoli side of the retaining wall. The City of Methuen approved the project in late August 2013 (see Exhibit 9), with the proviso there be no loading dock in the back of the facility near the Nicoli property.

         Shortly before this plan's approval by the City of Methuen, Century Box, acting through the 37 Chase Street Realty Trust, purchased 64 French Street, a parcel next door to the Nicoli property. The plan approved on August 22, 2013 (Exhibit 9) did not incorporate any plans that Century Box had regarding the use of the 64 French Street parcel.

         In order to build the retaining wall set forth in the initial August 2013 plan, Century Box needed to obtain easements from the disgruntled abutters. These easements were necessary because the method of constructing the retaining wall along the back side of the abutters' property required Century Box to enter and disrupt the land of the abutters in order to lay fabric and related materials in connection with this retaining wall. The disruption caused by that easement was considerable. See e.g., Exhibits 7 and 10 (disruption of neighbors' lawn, sheds etc.). The easements were a necessity for Century Box. Certain of the abutters quickly provided easements to Century Box. Some of these abutters already had a crumbling retaining wall bordering their property which Century Box promised to replace. Other abutters, including Mr. Albert Espinol and the Nicolis, were not eager to grant this easement to Century Box. After all, the Nicolis opposed the expansion proposed by Century Box, did not want this disruption to their back yard, and there was no crumbling retaining wall bordering their property.

         Attorney Manzi met with Joseph Nicoli at the Nicoli home sometime during the summer of 2013 to discuss obtaining an easement from the Nicolis. At that time, Joseph Nicoli showed the parcel of land (the 30 by 28 feet parcel) that the Nicolis long wished to obtain in order to " square off their lot." At that time, Joseph Nicoli incorrectly referred to this property as a 30 by 40 feet parcel (when in fact it was only 30 by 28 feet). Again, Joseph Nicoli expressed his desire to obtain title to this parcel of land and Attorney Manzi indicated that such a result would be possible due to the fact that this parcel of land (which both Attorney Manzi and Joseph Nicoli referred to as a 30 by 40 feet parcel) would be " land locked" behind the straight retaining wall and, thus, be of little use to Century Box. Although no price was discussed, Attorney Manzi (and later other representatives of Century Box) indicated that the desired parcel was of little value of Century Box and implied that the parcel could be the consideration provided to the Nicolis if they granted an easement to build the retaining wall. During this meeting, Attorney Manzi knew that Century Box had acquired or was about to acquire the 64 French Street property and understood that acquisition might affect, in a small way, the location of the retaining wall. At the time of the acquisition of 64 French Street, this parcel was initially envisioned as providing an emergency access route to the rear of the Century Box facility for fire trucks and related emergency vehicles. This change of access was communicated to the City of Methuen Conservation Commission which indicated that the 64 French Street property would be the preferred emergency access route as compared to a gravel access through a wetland area as initially proposed and approved. See Exhibit 9. Attorney Manzi discussed with Mr. Nicoli that there was a possibility that the retaining wall might be shifted in a slight manner in the event that the 64 French Street property was used as an emergency access. At all times, however, both Attorney Manzi and the Nicolis knew that: 1) the retaining wall was not to be moved dramatically from the position set forth on the August 2013 plan; 2) that a substantial amount of land (which they jointly referred to as a 30-by-40-foot parcel) would remain behind the retaining wall; and 3) this parcel was to be transferred to the Nicolis.

         After this meeting, Attorney Manzi drafted an agreement relating to the Nicolis granting of the easement in exchange for the possibility of purchasing the " 30 by 40" patch of land. See Exhibit 4. This agreement was drafted sometime in late August or September of 2013 by Attorney Manzi. At that time, Century Box was already beginning the process of building the retaining wall and rather desperately needed easements from the " hold out" abutters. These " hold outs" included the Nicolis and Albert Espinol. Mr. Nicoli did not initially sign the agreement and Attorney Manzi called Mr. Nicoli and asked why he was not signing off on the agreement. Mr. Nicoli responded that he would sign off on the easement if Century Box would sell the 30 by 40 patch of land that he had been trying to acquire for the last several years. As a result, Attorney Manzi drafted Exhibit 4 and urged the Nicolis to sign the document.

         Exhibit 4 is, to put it charitably, not a well drafted legal document. It exhibits signs that it was drafted in haste. It reflects Attorney Manzi's eagerness to obtain the sought-after easement from the Nicolis and Albert Espinol. For example, Exhibit 4 refers to the Nicolis' desire to " purchase certain land consisting of a forty feet by thirty feet patch of land on their side of the retaining wall which is owned by Century Box." This description of the land is significantly inaccurate because the patch of land that existed on " their side of the retaining wall" (a retaining wall that had not yet been built) was only 30 by 28 feet (nor, technically, was it owned by Century Box). Likewise, the agreement identified David Kagan as the " President, " not the Managing Director, of Century Box. Attorney Manzi's testimony that he urged the Nicolis to retain an attorney is not credible. Century Box and their ...


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