Heard: November 14, 2016.
action commenced in the Superior Court Department on March
case was tried before Robert A. Cornetta, J., and a motion to
alter or amend the judgment, or for a new trial, was heard by
J. Sullivan for the defendants.
Y. Goldberg, Assistant City Solicitor (Stephanie M. Williams,
City Solicitor, also present) for the plaintiff.
Present: Sullivan, Maldonado, & Neyman, JJ.
Contract, Municipality, Performance and breach.
case, we consider the propriety of actions taken by the city
of Beverly (city), which owns the Beverly Golf and Tennis
Club (Golf Club), and by Bass River Golf Management, Inc.
(Bass River), which operated the facility for almost two
years pursuant to a management contract with the city. On
March 11, 2011, the city commenced an action in the Superior
Court against Bass River and 31 Tozer Road, L.L.C. (Tozer),
the guarantor of Bass River's payment obligations to the
city, asserting claims for breach of contract against each
party and seeking damages. Bass River filed counterclaims
against the city (subsequently amended) which alleged
violations of G. L. c. 93A, breach of contract, breach of an
implied covenant of good faith and fair dealing, breach of
warranty, and conversion.
a trial, the jury, in response to special questions, found
that Bass River had breached its management contract with the
city, that Tozer had guaranteed Bass River's payment
obligations, and that the city was entitled to damages of
$631, 969.63. The jury also found that the city had violated
the covenant of good faith and fair dealing in its
contractual relationship with Bass River, and that the city
had converted Bass River's property. The jury awarded
Bass River damages of $48, 967.33. Thereafter, the judge
determined that Bass River had not proved that the city
violated G. L. c. 93A.
River and Tozer filed a motion to amend the findings of facts
and rulings of law, to amend the judgment, or, in the
alternative, for a new trial. The judge amended the judgment
against Tozer to $600, 000, in conformity with the language
of the guaranty. In all other respects, the motion was
denied. An amended final judgment entered on October 3, 2014,
adding interest accrued on the damages awarded by the jury,
limiting the judgment against Tozer as guarantor, and
dismissing the parties' remaining claims and
counterclaims. Bass River and Tozer appealed, contending that
the judge erred in (1) denying their motion for a directed
verdict; (2) denying their motion to amend the judgment or
for a new trial; (3) refusing to give, or improperly giving,
particular jury instructions; and (4) dismissing the
counterclaim alleging violations of G. L. c. 93A.
jury could have found the following facts. As of January 1,
2005, the city entered into a five-year management contract
with Johnson Golf Management, Inc. (Johnson Golf), whereby
Johnson Golf agreed to manage, control, and operate the Golf
Club, and to collect related fees from permit holders, in
exchange for paying the city $600, 000 annually, plus certain
other fees. At the sole option of the city, the contract
could be extended for an additional five-year term.
management contract provided that the city would keep the
Golf Club compliant with all Federal, State, and local laws,
rules, and regulations. Johnson Golf was solely responsible
for maintaining and repairing the buildings and the grounds,
including the golf course and the interior of the clubhouse,
keeping with their existing condition. The city was solely
responsible for maintaining, repairing, and rebuilding the
structural components of the buildings, including the walls,
floors, roofs, and exterior facades. All work necessary to
protect lives, safety, and the structural integrity of the
buildings was to be performed first, after a review of two
reports prepared by Gale Associates, Inc. (Gale reports), an
engineering and design firm retained by the city to help it
develop a facility maintenance plan and budget. Thereafter,
the city would determine the order of its maintenance,
repair, and rebuilding projects.
time, the relationship between Johnson Golf and the city
deteriorated. On April 3, 2008, Johnson Golf agreed to assign
its rights, interests, and obligations under the management
contract to Bass River for $620, 750, plus $50, 500 for
certain equipment, tools, and fixtures. Manuel Barros was the
sole owner of Bass River. Prior to entering into the
assignment, he toured the Golf Club and was familiar with the
condition of its clubhouse, including the fact that the
second floor, where a large function room was located, was
not accessible to persons with disabilities.
induce the city to execute the assignment with Bass River,
Tozer provided a written guaranty to the city. It
unconditionally guaranteed full and punctual payment "of
all sums which may be presently due and owing and of all sums
which shall in the future become due and owing to the City
from Bass River." Among other matters, Tozer also agreed
that its liability was "the lesser of $600, 000.00 or
such sums as may, from time to time, be due to the City by
Bass River under the Management Contract." The guaranty
was signed by Barros, as manager of Tozer.
Bass River started operating the Golf Club, it made numerous
improvements to the facility in an effort to increase the
number of permit holders. In September, 2008, the city's
mayor sought, and the city council approved, a $1.5 million
bond to pay for capital improvements to the golf course, the
clubhouse, and a maintenance building that needed
environmental remediation. Architectural and engineering work
was initiated, and repairs were undertaken. During the time
that Bass River was managing the Golf Club, the city spent
approximately $130, 000 on various repairs and improvements.
2009, Bass River had fallen significantly behind in its
payments to the city under the management contract, by then
owing the city over $600, 000. The mayor decided not to
extend the contract with Bass River for an additional
five-year term, choosing instead to hire a new manager for
the Golf Club. When Bass River failed to pay its
arrearage, the present action ensued.