GTE Government Systems Corp. v. Rackemann, Sawyer & Brewster, P.C.

5 Mass. L. Rptr. 634
CourtMassachusetts Superior Court
DecidedApril 4, 1996
DocketNo. CA 901067C
StatusPublished

This text of 5 Mass. L. Rptr. 634 (GTE Government Systems Corp. v. Rackemann, Sawyer & Brewster, P.C.) 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
GTE Government Systems Corp. v. Rackemann, Sawyer & Brewster, P.C., 5 Mass. L. Rptr. 634 (Mass. Ct. App. 1996).

Opinion

McHugh, J.

I. BACKGROUND

This is an action in which GTE Government Systems Corporation (“GTE”) seeks to recover damages from Rackemann, Sawyer & Brewster, P.C. (“Rackemann”) for what GTE claims was Rackemann’s malpractice and conflict of interest.

The essential, and essentially uncontested backdrop for the action concerns a piece of industrial property in Needham, Massachusetts. Title to that property was held by New England Industrial Center Trust (“NEIC”), a nominee trust. On March 12, 1954, NEIC entered a long-term lease with Farrington Manufacturing Company (“Farrington”) with respect to a site on the property. The lease provided for an initial term of twenty years together with six successive five-year renewal options. The lease thus contemplated at least the possibility of a total term of fifty years.

Simultaneously with execution of the lease, NEIC and Fairing ton executed a purchase option that gave Farrington an option to purchase the property at certain specified intervals during the initial term or renewed terms of the lease, provided that the lease was in effect and was not in default when the purchase option was exercised.

The lease, of course, contained other terms but those are not significant to the dispute here at issue. Both the lease and the option were assignable.

In January of 1963, GTE purchased Farrington’s entire interest in the lease and the option.1 On January 23, 1963, as part of that transaction, Rackemann wrote a letter addressed to GTE.2 The letter, authored by Albert B. Wolfe, Esq., stated that, in the opinion of Rackemann, Sawyer & Brewster, NEIC had good title to the property that was the subject of the lease, that a variety of other aspects of the transaction were regular and duly recorded and that the instruments the trust had executed had been duly executed and were “binding upon” the trust.

When it sent the January 23, 1963 letter, Rackemann represented NEIC. Nevertheless, GTE with NEIC’s permission, sought from Rackemann, obtained and paid for the opinions specified in the January 23, 1963 letter. Rackemann maintained throughout the trial that the letter simply was an expression of Rackemann’s opinion as to the state of title of the property in which GTE was interested. GTE maintained that the letter expressed an opinion as to the validity of the option.3

In any event, in 1974, 1979 and 1984, GTE renewed the lease as the renewal time arrived. GTE also made substantial improvements on the property. In 1989, however, when it came time to decide whether to renew the lease again, GTE decided instead to exercise the purchase option. Accordingly, on June 16, 1989, GTE gave NEIC timely notice of its intention to exercise the option at the option price of $652,750.

Upon its receipt of GTE’s notice, NEIC’s trustees sent that notice to Rackemann.4 Discussions between Rackemann and the trustees ensued. Ultimately, at the trustees behest, Rackemann sent GTE a letter dated January 11, 1990 stating that Rackemann had advised the trustees that they “would be unwarranted in recognizing the purchase option ... as valid or as now creating rights in GTE ... to purchase the property in accordance with its terms” because the option violated the rule against perpetuities.5

Upon receiving Rackemann’s letter, GTE filed this action against the trustees, seeking to compel them to honor the option, and against Rackemann seeking damages. In September of 1992, GTE settled its claims against the trustees by paying them $1.3 million more than the option price for the property.

GTE’s action against Rackemann contained three separate counts. Count I alleged that Rackemann negligently issued the January 23, 1963 opinion letter because that letter failed to point out potential problems regarding the rule against perpetuities, problems that could have been resolved easily by simple drafting changes. Count II alleged that Rackemann broke the contract it made with GTE in 1963 by rendering advice to NEIC in 19896 that directly attacked the opinion Rackemann had given to GTE in 1963. Count III alleged that Rackemann’s conduct in 1989 violated G.L.c. 93A.

The case was submitted to the jury on special questions. The jury concluded that Rackemann was not negligent with respect to the January, 1963 opinion. The juiy concluded, however, that Rackemann broke its contract with GTE in 1989 when it gave advice to NEIC and that that breach of contract damaged GTE in the amount of $400,000.7 With respect to Count III, the jury concluded that GTE’s election to [636]*636give advice to Rackemann in 1989, in addition to breaking Rackemann’s contract with GTE, amounted to a knowing and willful unfair and deceptive practice.

II. APPLICABLE LAW

Following the jury’s return of the verdict on special questions, the court ordered entry of judgment in favor of Rackemann on Count I, in favor of GTE against Rackemann in the sum of $400,000 on Count II and reserved decision on the appropriate judgment with respect to Count III.

Both Rackemann and GTE have filed motions for a new trial and for judgment n.o.v. with respect to the judgments the court ordered and both have filed motions with respect to the form of the judgment that should enter with respect to Count III.

In considering a motion for judgment n.o.v., the court cannot weigh conflicting evidence. Instead, the court must uphold the verdict as long as “anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor” of the verdict winner. Brown v. Gerstein, 17 Mass.App.Ct. 558, 560 (1984).

In considering a motion for a new trial, on the other hand, the judge “may, and indeed should, judge credibility and weigh conflicting evidence.” J. Smith & H. Zobel, Rules Practice, 8 Mass. Prac. Series 442 (1977) (footnotes omitted). “A new trial may be granted whenever the judge is ‘satisfied that, by reason' of some accident, mistake, or misfortune in the conduct of the trial, a new trial is necessary to prevent a failure of justice.’ ” Davis v. Boston Elevated Ry. Co., 235 Mass. 482, 496 (1920), quoting Greene v. Farlow, 138 Mass. 146, 147 (1884). Nevertheless, the court is not empowered to set aside a verdict simply because of a disagreement with the jury’s conclusions. Instead, exercise of the court’s discretionary power is limited to instances in which the court is “satisfied that the jury have failed to exercise an honest and reasonable judgment in accordance with the controlling principles of law.” Hartmann v. Boston Herald-Traveler Corp., 323 Mass. 56, 60 (1948). Moreover, the court should exercise its discretion in favor of granting a new trial only when the verdict “is so greatly against the weight of the evidence as to induce in [the court’s] mind the strong belief that it was not due to a careful consideration of the evidence, but that it was the product of bias, misapprehension or prejudice.” Scannell v. Boston Elevated Ry. Co., 208 Mass. 513, 514 (1911). In the last analysis

[a] motion 'to set aside a verdict as against the evidence is addressed to the sound discretion of the judge.

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Bluebook (online)
5 Mass. L. Rptr. 634, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gte-government-systems-corp-v-rackemann-sawyer-brewster-pc-masssuperct-1996.