Greenery Rehabilitation Group, Inc. v. Antaramian

628 N.E.2d 1291, 36 Mass. App. Ct. 73
CourtMassachusetts Appeals Court
DecidedFebruary 18, 1994
Docket92-P-1048
StatusPublished
Cited by76 cases

This text of 628 N.E.2d 1291 (Greenery Rehabilitation Group, Inc. v. Antaramian) 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
Greenery Rehabilitation Group, Inc. v. Antaramian, 628 N.E.2d 1291, 36 Mass. App. Ct. 73 (Mass. Ct. App. 1994).

Opinions

Kaplan, J.

On August 16, 1989, the 400 Centre Street Limited Partnership, as seller, entered into an agreement with Greenery Rehabilitation Group, Inc. (Greenery), as buyer, for the sale of an office building at 400 Centre Street, Newton. The 99-111 Chestnut Hill Avenue Corp. (Chestnut Hill) took an assignment of the rights of Greenery (its parent company) under the purchase and sale agreement, and closed the purchase of the building on September 15, 1989.

Northern Construction Corp. was a principal tenant of the building under a lease expiring by its terms on July 31, 1993. The lease was assigned to Chestnut Hill as new owner. On January 31, 1990, some four and a half months after the closing of the sale of the building, Northern Construction, stating that because of economic conditions it could no longer afford the space, defaulted under its lease by failing to make a payment when due and vacated the premises.

On April 26, 1990, Greenery and Chestnut Hill commenced the present action against Northern Construction; Denco Enterprises, Inc. (Denco), and Jack J. Antaramian, the two general partners of the 400 Centre Street Limited Partnership; and David E. Nassif, president of Denco.3 The amended complaint, filed on July 12, 1990, in count I claimed against Northern Construction for the balance due under the lease, in count II against the other defendants for damages for fraud, and in count III against them for damages pursuant to G. L. c. 93A.

There was an agreement for judgment against Northern Construction.

[75]*75The other defendants moved (Denco and Nassif jointly, Antaramian separately) for summary judgment dismissing the action. Upon the record made by the parties, including deposition testimony, a judge of the Superior Court allowed the motions with explanatory memoranda, and final judgment for these defendants entered on April 10, 1992. The plaintiffs appeal from the judgment. They also seek review of the judge’s denial of their motion further to amend their complaint to add a count against Antaramian by which he, a fifty percent shareholder of Northern Construction, would be charged personally for the default of that company on a theory of “piercing the corporate veil.”

1. Regarding the “fraud” claim, a. Statements made by seller. Viewing the evidence with intendments favoring the parties opposing the summary judgment,4 we accept that, during extended negotiations leading to the sale of the property, Nassif, representing the seller, in the course of conversation with Gerard Martin or George Ferencik, representing the buyer, said that the tenants were “solid”; “good as gold,” except for the Freesia restaurant, which was in default; the other two tenants were “in good standing” with “rents paid right up to date”; Northern Construction “was there as a long term tenant.” The last three quoted phrases, which were relatively specific, were accurate. The other epithets were so general as to amount to puffery; it would be very hard, even with the intendments favoring the plaintiffs, to raise from them any implications of falsity upon which there could have been reasonable reliance.

However, regardless of how the statements are viewed, any claim based on them is eliminated by the terms of the purchase agreement itself: so the judge correctly held. It is [76]*76clear beyond doubt that the question of the possible survival, beyond the date of the formal agreement, of any antecedent representations or warranties was itself negotiated seriously and at length; Martin’s uncontroverted testimony on deposition is conclusive on the point. The buyer was urging that the agreement should provide explicitly for survival (or, perhaps, should not negate survival); the seller was resisting any provision for survival. The matter was compromised, as will be seen, by observing the particular places in the agreement where survival is agreed to. As to the subject of tenants’ leases, we consult par. 14, entitled “Representations and Warranties, Leases, Etc.” Subparagraph 14.2 states in part that the buyer has examined the listed leases and is familiar with their terms and accepts them; the seller represents that these leases are in full force. (There is a special provision regarding the restaurant tenant.) As to any other representations (prior or contemporaneous) that may have been made about matters not specifically excepted — leases are not excepted — subpar. 14.1, reinforced by par. 20 (“Acceptance of the Deed”), denies survival to them and makes them unavailable as any basis of liability. (The pertinent parts of the texts of pars. 14.1 and 20 are reproduced as an appendix hereto.)

The provisions of subpar. 14.1 and par. 20 were not “boilerplate” but, as noted, were negotiated and agreed to and are to be respected and enforced according to their terms. We think the distinction is recognized and acknowledged in the recent case of McEvoy Travel Bureau, Inc. v. Norton Co., 408 Mass. 704, 710-712 (1990). See also Turner v. Johnson & Johnson, 809 F.2d 90, 95-98 (1st Cir. 1986); Plumer v. Luce, 310 Mass. 789, 803-805 (1942), with which compare Bates v. Southgate, 308 Mass. 170, 173 (1941), all discussed by the court in McEvoy.

b. Alleged nondisclosure. The plaintiffs charged, to quote from count II, that Antaramian and Nassif “knew in September 1989 . . . that Northern Construction was financially incapable of meeting its obligations under the Lease,” that they were under a duty to disclose this to the buyer, and [77]*77that, failing the disclosure, there was liability to the buyer in common law fraud.

The plaintiffs attempt to build up an impression of such knowledge from an assortment of details, such as the fact that Northern Construction on occasions prior to the sale remitted rent to the then owner by means of a check of an affiliated company, that it attempted to sublet part of the premises shortly after the sale, etc. We think the details, taken together, do not make out a genuine issue for trial regarding the claimed knowledge (see note 4, supra).

But at all events the judge was right to say there was no duty to disclose. This was not a case of a partial disclosure that is deceptive unless the whole story is told. See Maxwell v. Ratcliffe, 356 Mass. 560, 562-563 (1969). For purposes of argument only, we may assume a case where a seller knows of a weakness in the subject of the sale and does not notify the buyer of it. Such nondisclosure does not amount to fraud and is not a conventional tort of any kind. The classic expression of this view is by Justice Qua in Swinton v. Whitinsville Sav. Bank, 311 Mass. 677 (1942); the nub of his opinion (at 678-679) is quoted in the margin.5 See also Kannavos v. Annino, 356 Mass. 42, 48 (1969); Nei v. Burley, 388 Mass. [78]*78307, 310 (1983); Solomon v. Birger, 19 Mass. App. Ct. 634, 639 (1985); Spencer Cos. v. Chase Manhattan Bank, N.A., 81 B. R. 194, 202 (Bankr. D. Mass. 1987). We note that the nondisclosure question is revisited in Restatement (Second) of Torts § 551 (1976).

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Bluebook (online)
628 N.E.2d 1291, 36 Mass. App. Ct. 73, Counsel Stack Legal Research, https://law.counselstack.com/opinion/greenery-rehabilitation-group-inc-v-antaramian-massappct-1994.