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Fargo Management, LLC v. City of Worcester

Superior Court of Massachusetts, Worcester

September 4, 2016

Fargo Management, LLC
v.
City of Worcester, Massachusetts No. 134982

          Filed September 9, 2016

          MEMORANDUM OF DECISION AND ORDER

          Dennis J. Curran, Associate Justice.

         Procedural Background

         Fargo Management, LLC has sued the City of Worcester, Massachusetts because it alleged that the City had breached their contract, the details of which will be discussed below. The case was heard on cross motions for summary judgment before a different session judge who found that Worcester had indeed breached the contract. He allowed Fargo's motion for summary judgment for liability, but denied it as to the City's [33 Mass.L.Rptr. 65]. (See paper no. 10, Memorandum of Decision and Order on Cross Motions for Summary Judgment as to Liability.)

         On July 30, 2015, Fargo moved for summary judgment on the issue of damages, seeking specific performance as a remedy for the breach as had been specifically spelled out in the contract. The City of Worcester opposed that motion and asked for additional time to conduct discovery. That motion was allowed by another session judge on September 21, 2015. The City was granted an additional 90 days to gather evidence as to the various elements of damages and the feasibility of specific performance. However, that 90-day period yielded little to nothing to rebut Fargo's motion.

          The present procedural posture of the case is that both parties agree the case is properly before the Court on Fargo's renewed motion for partial summary judgment on the issue of damages. In short, Fargo seeks specific performance; the City opposes that effort and instead, requests that the court enter a judgment of money damages against it. A hearing has been held on the motion at which each party was represented by highly-respected and accomplished counsel.[1]

         This case raises significant concern because any decision would have a major impact on the City's finances (a result which gives this Court pause); it is also troubling because it would appear--at first blush--that the Court would be wading into the political arena, an area into which it is loath to intervene. Upon reading the facts of this case, however, it is clear that this is anything but a political case, but rather, a case appropriate for judicial resolution: i.e., it calls for the interpretation of a legal contract--an agreement into which the City (and its then-officials) freely entered some 13 years ago. As the City's attorney candidly[2] admitted during oral argument, essentially, no matter what decision the Court enters, the City faces a " lose-lose" quandary. The only remaining question is by how much.

         Factual Background

         Fargo and the City entered into a contract on June 3, 2003. The City was valiantly trying to revitalize the present DCU Center site, its surrounding area and encourage hotel development.

         The contract was formally entitled a " Land Disposition and Development Agreement, " to which was eventually added an Amendment I. The Agreement called for Fargo to buy certain land at the corner of Major Taylor[3] Boulevard and Martin Luther King Junior Boulevard and build a hotel there. Fargo bought the land and built the Hilton Garden Inn Hotel, a 200-room facility, which it continues to own. In exchange, the City agreed to construct an elevated pedestrian walkway ( i.e., a " skywalk") connecting the hotel to both the Major Taylor Boulevard Municipal Parking Garage and the Worcester Convention Center Facility (now the DCU Center). Moreover, Fargo agreed, as part of the deal, to build the footing required for the skywalk. The express terms of the contract required the city to construct the skywalk when the hotel was complete and received its certificate of use and occupancy.

         Fargo upheld its end of the bargain by completing the hotel in October 2006 (almost a decade ago), and fulfilled its additional contractual obligation by building the required footing for the skywalk at a cost of $400, 000.[4] The City issued the hotel its certificate for use and occupancy on October 13, 2006, but reneged on its deal to provide the elevated pedestrian walkway. The hotel opened for business four days later.

         The work for the construction of the elevated pedestrian walkway was put out to bid in 2005, after a professional estimate totaled $4, 065, 202. The City rejected the bid. The next year, two companies competed for the work, and submitted bids of $6, 507, 000 and $7, 488, 277, respectively. The City rejected these bids as well. The price increase from the previous year was attributed to the rise in the price of steel.

         The next year, bids were invited anew, and this time, came in at $7, 975, 000 and $8, 251, 000, respectively. The City rejected these two bids as well. By this time, the City had not accepted any one of the five submitted bids.

         It is now ten years (and several City administrations) later, and the money the City set aside for the construction of the walkway is largely gone.[5] The Worcester City Manager has testified that he informed the City Council to forget about the construction of the skywalk due to its high cost, and recommended that the City divert what is left of the funds for other uses.

         DISCUSSION

         Fargo is entitled to either specific performance as set forth in the contract, or money damages representing ...


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