Brown v. Hallisey

18 Mass. L. Rptr. 675
CourtMassachusetts Superior Court
DecidedNovember 4, 2004
DocketNo. 04180
StatusPublished

This text of 18 Mass. L. Rptr. 675 (Brown v. Hallisey) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. Hallisey, 18 Mass. L. Rptr. 675 (Mass. Ct. App. 2004).

Opinion

Nickerson, J.

This is an action for equitable relief arising from the irretrievable breakdown of the parties’ business relations. The case was tried to the Court sitting without juiy on July 9, 2004. Based on all the credible evidence the Court enters the following findings of fact.

FINDINGS OF FACT

The parties to this action are well established businessmen in the Orleans area. Walter Brown is an assessor for the Town of Chatham. James Trainor is a real estate broker and appraiser of considerable experience. John Hallisey is an attorney, a veteran of many years as a solo practitioner on the lower Cape.

In November 1990, Brown and Trainor became aware of a business opportunity, the sale of the leasehold interest in the premises at 29 Main Street in Orleans. For many years, the Mulholland family enjoyed a long-term lease on the land at 29 Main Street. The fee interest was owned by the Frank A. Besse Trust. The Mulhollands maintained a commercial building on the site containing retail shops and offices.

Brown and Trainor approached Hallisey, suggesting that they join forces to purchase the building and an assignment of the ground lease. The three entered into an agreement to do so. Hallisey drafted a five-page document entitled “Agreement,” which all three signed on November 13, 1990. By its terms, the Agreement called for Brown to contribute $52,250.00 towards the purchase price of $165,000.00, Trainor to pay $62,250.00 and Hallisey to pay $50,500.00. Despite the differences in their initial contributions, the Agreement declared that future profits and losses would be assessed one-third to each.1 The Agreement provided that the three men would take title to the premises as “co-tenants.” Nowhere in the Agreement did the terms partners, partnership or joint venture appear.

The transaction closed December 12, 1990. The assignment of the Mulholland/Besse lease was not marked as an exhibit. There is a bill of sale from Mulholland to the three men denoted as exhibit 10 wherein the building was transferred to the three “as co-tenants, each as to an equal 1/3 individual interest.” While the Agreement recites the above-referenced original contributions of the three towards the purchase price, on December 12,1990, the three men also signed a promissory note in favor of the Cape Cod Five Cents Savings Bank whereby the bank loaned $132,000.00 to the men, jointly and severally (ex. 23). The record is bereft of further evidence explaining how the acquisition of the leasehold interest was financed.

The three gentlemen amended the Agreement in 1993 by way of a document, drafted by Hallisey, entitled “Amendment To Agreement of November 13, 1990" (ex. 27). The 1993 Amendment is of little sub[676]*676stantive interest as it deals with Trainor’s ability to receive real estate broker’s fees on transactions affecting 29 Main Street and with Hallisey’s receipt of legal fees on 29 Main Street business. The 1993 document is significant as it refers to the original Agreement as ”our Partnership Agreement" and speaks of legal work done “for the partnership.” In similar fashion Hallisey used the term partnership in a March 1993 letter to Brown when referring to 29 Main Street (ex. 28). Indeed the letter is captioned “Re: 29 Main Street Partnership.” Hallisey drafted a separate “Agreement as to Legal Fees,” to implement the 1993 Amendment, wherein he referred to “the partnership known as 29 Main Street Partnership, being the partnership formed by Brown, Hallisey and Trainor to own and manage the building at 29 Main Street” (ex. 29).

From December 1990 until recently, 29 Main Street has been owned and managed pursuant to the Agreement. On October 1, 2001, the parties purchased the fee interest in the premises from the Besse Trust for $100,000.00. The deed runs to Trainor, Brown and Hallisey without further qualification (ex. 24). The transaction was apparently financed by a loan of $148,000.00 from the Cape Cod Five Cents Savings Bank (ex. 25).

From the outset, the building has been a profit making endeavor. During the first decade of ownership, the triumvirate was at peace. At about the time of the purchase from the Besse Trust in 2001, Hallisey unilaterally fired the group’s bookkeeper and took control of the accounts single handedly. Brown and Trainor chafed a bit but took no responsive action. Two of the building’s long-term tenants are Guertin Brother’s Jewelers (the trade name of GBJ, Inc., whose principal is Dean Smith) and Off The Top Beauty Salon owned by Karen Simpson. Issues regarding both tenancies fueled the rift between Hallisey and his two cohorts but the real causa bellum was an offer to purchase the premises made by Tom Kennedy (ex. 12).

In 1999, Guertin’s lease expired. The triumvirate voted to increase the rent from $1,500.00 to $ 1,800.00 per month. No new lease was executed. Guertin paid at the old rate, creating an arrearage each month. During 2002 and early 2003, the septic system at the property was failing, requiring frequent pump outs. The Beauty Salon needed a closed system to accommodate hair dyes and such waste products. Brown and Trainor favored the installation of a new septic system while Hallisey wanted to either limp along with the old system or impose the cost of a new system on Simpson. The Town’s health agent was growing impatient.

In August 2003, Kennedy offered to buy the premises for $460,000.00. He required that there be new leases for Guertin and the Beauty Salon and that the septic system be brought up to code (ex. 12). Brown and Trainor negotiated a higher sale price of $485,000.00. They sought Hallisey’s approval but he nixed the deal. Brown and Trainor took it upon themselves to have an engineer draft plans for a new septic system. They had it installed by a contractor, paying for it from their own pockets. Hallisey refused to reimburse them.

From the summer of 2003 through the spring of 2004, correspondence was traded between the tenants, Hallisey and the Brown/Trainor team. Hallisey put Simpson on notice in a letter dated June 25, 2003 (ex. 19) that 29 Main Street “was a joint venture, not a partnership,” and thus any lease would require all three men’s signatures. On February 23, 2004, Hallisey wrote to Smith, the principal of Guertin, that the three owned 29 Main Street “as tenants in common, each equally as to a one-third interest. We are not a partnership, but hold 29 Main Street, Orleans pursuant to a joint venture.” Hallisey went on to inform Smith that any lease would require all three signatures.

Brown and Trainor were not cowed by Hallisey. They took the view that paragraph 5 of the agreement permitted a majority of the three to bind the group “in regard to all matters affecting the premises” (ex. 1). So armed, they entered into a lease with Simpson dated February 4, 2004, a lease with Guertin taking affect March 1, 2004 (ex. 13) and a purchase and sale agreement with Kennedy dated March 10, 2004.

Hallisey was protesting these actions by Brown and Trainor to all involved. Hallisey, believing that the new leases somehow constituted a transfer of Browm and Trainor’s interest in the venture, sought to purchase their respective interests pursuant to paragraph 9 of the Agreement. His proposed purchase price was so low as to make his offer disingenuous, leading this jurist to conclude that Hallisey was merely attempting to recast the business relationship as something other than a partnership. Brown and Trainor refused his offer and filed suit March 31, 2004.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Shain Investment Co., Inc. v. Cohen
443 N.E.2d 126 (Massachusetts Appeals Court, 1982)
Fisher v. Fisher
212 N.E.2d 222 (Massachusetts Supreme Judicial Court, 1965)
Shinberg v. Garfinkle
278 N.E.2d 738 (Massachusetts Supreme Judicial Court, 1972)
Beatty v. NP CORP.
581 N.E.2d 1311 (Massachusetts Appeals Court, 1991)
Taber-Prang Art Co. v. Durant
75 N.E. 221 (Massachusetts Supreme Judicial Court, 1905)
Lavoine v. Casey
146 N.E. 241 (Massachusetts Supreme Judicial Court, 1925)
Boyer v. Bowles
37 N.E.2d 489 (Massachusetts Supreme Judicial Court, 1941)
Webber v. Rosenberg
64 N.E.2d 98 (Massachusetts Supreme Judicial Court, 1945)
Starr v. Fordham
648 N.E.2d 1261 (Massachusetts Supreme Judicial Court, 1995)
Garnick & Scudder, P.C. v. Dolinsky
701 N.E.2d 357 (Massachusetts Appeals Court, 1998)
Wagley v. Danforth
46 Mass. App. Ct. 15 (Massachusetts Appeals Court, 1998)
Diranian v. Diranian
773 N.E.2d 462 (Massachusetts Appeals Court, 2002)

Cite This Page — Counsel Stack

Bluebook (online)
18 Mass. L. Rptr. 675, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-hallisey-masssuperct-2004.