City of Beverly v. Bass River Golf Management, Inc.

CourtMassachusetts Appeals Court
DecidedJanuary 5, 2018
DocketAC 15-P-171
StatusPublished

This text of City of Beverly v. Bass River Golf Management, Inc. (City of Beverly v. Bass River Golf Management, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Beverly v. Bass River Golf Management, Inc., (Mass. Ct. App. 2018).

Opinion

NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557- 1030; SJCReporter@sjc.state.ma.us

15-P-171 Appeals Court

CITY OF BEVERLY vs. BASS RIVER GOLF MANAGEMENT, INC., & another.1

No. 15-P-171.

Essex. November 14, 2016. - January 5, 2018.

Present: Sullivan, Maldonado, & Neyman, JJ.

Contract, Municipality, Performance and breach. Municipal Corporations, Contracts. Consumer Protection Act, Trade or commerce, Unfair or deceptive act. Bankruptcy, Stay of other proceedings. Practice, Civil, Directed verdict, Amendment, New trial, Instructions to jury. Judgment, Amendment.

Civil action commenced in the Superior Court Department on March 11, 2011.

The 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 him.

Denis J. Sullivan for the defendants. Eitan Y. Goldberg, Assistant City Solicitor (Stephanie M. Williams, City Solicitor, also present) for the plaintiff.

1 31 Tozer Road, L.L.C. 2

MALDONADO, J. In this 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.

Following 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. 3

Bass 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.

1. Background. The 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.

The management contract provided that the city would keep

the Golf Club compliant with all Federal, State, and local laws, 4

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,2 in

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.

Over 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

2 Because the clubhouse was on the State register of historic places, all interior maintenance had to be done in accordance with the rules and regulations of the Massachusetts Historical Commission. 5

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.

To 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.

Once 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. 6

By late 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.3 When

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