NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
24-P-956
RAUHAUS FREEDENFELD & ASSOCIATES, LLP
vs.
CARROLLTON WEST PET HOSPITAL.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The plaintiff, Rauhaus Freedenfeld & Associates, LLP (RFA),
brought this action against the defendant, Carrollton West Pet
Hospital (CWPH), alleging breach of contract, violation of G. L.
c. 93A, and various quasi contract claims. Following a five-day
bench trial, a Superior Court judge entered judgment in favor of
RFA. CWPH appeals, challenging the manner in which the judge
determined RFA's damages. We affirm.
Background. We summarize the facts as set forth in the
judge's findings, supplemented by uncontroverted facts drawn
from the exhibits.
1. Project origins. RFA is an architectural firm in
Boston that is nationally recognized for its expertise in the design of veterinary facilities. Among the firm's principals is
Warren Freedenfeld, whose professional practice has focused on
the design of large veterinary hospitals.
CWPH is an animal hospital in Carrollton, Texas, owned by
Lynda Van Antwerp, DVM, and managed by Ross Barnes. In 2011,
Barnes approached RFA about designing a two-level, 9,000 square
foot animal care facility adjacent to CWPH's existing veterinary
hospital (project). From the outset, Barnes told RFA that CWPH
wanted the new facility to be "the best of the best." Among
other things, Barnes envisioned a waiting area with a waterfall,
an aquarium large enough to hold sea turtles, a bone-shaped pond
with a paw print island in the middle, and a residential unit
that would allow Barnes and Van Antwerp to live on-site. Barnes
stated that although CWPH had a $3.3 million budget, "price was
no object."1
2. The contract. On July 21, 2011, CWPH and RFA executed
a standard form owner-architect agreement (contract),2 which the
parties modified in limited ways. The cover page of the
contract stated that it was "for [c]onstruction [p]rojects of
1 Van Antwerp was aware that Barnes had made this statement but later expressed that Freedenfeld "did not take this comment in the context it was offered."
2 Specifically, the template agreement they used was the 1987 edition of the "Abbreviated Form of Agreement Between Owner and Architect" by the American Institute of Architects.
2 [l]imited [s]cope," and warned that it had "important legal
consequences" and that "consultation with an attorney is
encouraged."
a. Project phases. The contract divided the project into
three phases: the "design phase," the "construction documents
phase," and the "construction phase -- administration of the
construction contract." Only the first two phases are relevant
to the present appeal because the parties severed their
relationship before construction began.
With respect to the design phase, the parties agreed that,
after "review[ing] with [CWPH] alternative approaches to design
and construction of the [p]roject," RFA would prepare "[d]esign
[d]ocuments" for CWPH's approval, "consisting of drawings and
other documents" consistent with the parties' "mutually agreed-
upon program, schedule and construction budget requirements" and
"shall submit . . . a preliminary estimate of [c]onstruction
[c]ost." This construction cost estimate would be "based on
square foot area of the [p]roject."
In the construction documents phase, RFA agreed to prepare,
"[b]ased on the approved [d]esign [d]ocuments, . . .
[c]onstruction [d]ocuments consisting of [d]rawings and
[s]pecifications setting forth in detail the requirements for
the construction of the [p]roject and [RFA] shall advise [CWPH]
of any adjustments to previous preliminary estimates of
3 [c]onstruction [c]ost." Once CWPH approved the construction
documents and the latest preliminary cost estimate, RFA agreed
to assist CWPH in obtaining bids or negotiated proposals and in
preparing and awarding contracts for construction.
The contract also included provisions addressing additional
services compensable beyond RFA's base fee, including "detailed
[c]onstruction [c]ost estimates;" a 1.8 percent interest rate on
amounts due; and payment of counsel fees in the event of breach.
"Revisions requested by [CWPH] after the completion of any
previously approved portion of the [a]rchitects [s]ervices, or
of the [p]roject" were specifically identified as hourly
billable additional services. The contract also provided that
CWPH's failure to make payments constitutes "substantial
nonperformance."
b. Compensation framework. RFA's compensation "for basic
services" in the design and construction documents phases was
set at the greater of "8% of the construction cost or $18 per
square foot," setting the "preliminary construction cost" at
$200 per square foot. In turn, the contract defined "the
[c]onstruction [c]ost" as "the total cost or estimated cost to
[CWPH] of all elements of the [p]roject designed or specified by
[RFA]."
Specific payment milestones distributed RFA's total fee
across project subphases: programming ($3,500 fixed fee for a
4 project area of over 10,000 square feet), schematic design
(thirty percent), construction documents (fifty-five percent),
bidding and negotiation (five percent), and construction
administration (ten percent).
3. Project design phase. After executing the contract,
Freedenfeld met with Barnes and Van Antwerp to develop the
project program. On November 18, 2011, Barnes sent Freedenfeld
a series of photographs depicting his vision for the facility:
a European-style chateau with steeply pitched roofs, intricate
masonry, a great hall, and ornate finishes.
RFA issued the first version of the project program on
November 21, 2011, dividing the project into two phases, and
reflecting a total project area of 21,887 square feet.3 A cover
letter accompanying the program noted that the first phase was
estimated to cost more than $2 million over CWPH's initial
articulated budget. Freedenfeld then had "numerous discussions"
with Barnes and Van Antwerp concerning ways to reduce the
project's square footage. On December 9, 2011, RFA sent CWPH a
revised project program, this time reflecting a total project
area of 17,575 square feet. On December 17, 2011, Barnes and
Van Antwerp approved the revised project program thereby
3 The first project program is dated November 21, 2012, but there does not appear to be any dispute that it was sent to CWPH on November 21, 2011.
5 allowing the schematic design phase to proceed. Barnes wrote
"3.3 million budget" next to his signature.
On January 12, 2012, Freedenfeld presented an initial
schematic design to Van Antwerp and Barnes, reflecting a two-
phase project with a total gross area of 19,032 square feet.4
Neither Barnes nor Van Antwerp requested a reduction in the size
of the project, though they asked for interior layout
adjustments and additional amenities.
Freedenfeld incorporated the requested changes and
presented a second schematic design on January 31, 2012,
increasing the total gross area to 19,322 square feet "due to
the addition of [an] added corridor." CWPH requested further
upgrades and aesthetic enhancements -- including a dog exercise
area, gazebo with fountain, wildlife refuge, and larger windows
-- and instructed that "[t]he entire site should be designed to
resemble an English Garden." The second schematic design was
then approved and on February 15, 2012, RFA sent CWPH revised
floor plans, reflecting the improvements CWPH had requested.
4 At trial, Freedenfeld explained that projects typically include a thirty percent factor to account for exterior walls, interior partitions, and circulation, and that these considerations, in part, caused the gross area of the project to increase. Barnes requested a twenty-five percent factor and RFA submitted calculations reflecting both twenty-five and thirty percent factors in the schematics.
6 RFA informed CWPH that it was going to advance to the
construction documents phase.
4. Construction documents and cost estimation. Once the
construction documents were close to being completed, RFA
selected ICI Construction (ICI) to prepare a cost estimate for
the project to address Barnes's "concerns over the cost that
[Freedenfeld] was building into [the] project." On August 20,
2012, Freedenfeld forwarded ICI's estimate of $7.2 million to
Barnes, which Barnes rebuffed as "grossly inaccurate."
In October 2012, Barnes asked Freedenfeld to send the
construction documents to another contractor, Tri-Star
Construction, Inc. (Tri-Star), for bidding. Freedenfeld
refused, asserting that they had agreed no contractor would be
solicited for additional bids until RFA incorporated CWPH's
latest requested changes.
The parties' communications thereafter revealed a
fundamental disagreement over CWPH's payment obligations. CWPH
refused to pay an advance to RFA, asserting it was unwarranted
because the construction documents were incomplete and
unapproved, and that the latest round of revisions were part of
RFA's basic services. CWPH further maintained, based on
Barnes's personal calculations, that it had already paid RFA the
majority of its total fee. RFA countered that the redesign
requests represented significant compensable changes. Despite
7 the dispute, in November 2012, CWPH requested thirty-one
material upgrades and eleven area increases.
In December 2012, RFA solicited bids -- all were in excess
of $7 million.
5. Breakdown of relationship and 2013 litigation. After
the bids came in, RFA invoiced CWPH for a balance due of
approximately $237,030, based on RFA's total base fee calculated
at eight percent of a construction cost of $7,165,361 (which was
the lowest bid received during the bid solicitation).5 Based on
Barnes's belief that the bids were unreasonable and had been
solicited without proper approval, CWPH refused to pay the
invoice. RFA treated the nonpayment as a material breach and,
after unsuccessful efforts to resolve the dispute informally,
filed suit in April 2013.
6. The 2014 addendum. While the 2013 litigation was still
pending, the parties attempted to resolve their dispute without
the assistance of counsel and, on July 16, 2014, executed a
written addendum to the original contract. The addendum
provided, inter alia, that RFA's base fee would remain eight
percent of the construction cost as calculated on the "lowest
responsible bid" received for the project, and that CWPH
retained the right of final approval of the successful bidder.
5 The "first bid matrix" was not in the record at trial.
8 The addendum did not define the term "lowest responsible bid" or
specify what would happen if the parties disagreed on which bid
met that term.6
7. Rebid and renewed dispute. In October 2015, RFA rebid
the project with agreed-upon changes to the plans. Ultimately,
nine contractors submitted bids ranging from approximately $3.9
million to $7.9 million. RFA analyzed the submissions and
determined that the lowest "responsible bid" that included "a
complete schedule of values for each line item, no conflicts or
inconsistencies in the numbers, reference checks, responsiveness
of bidders to RFA's requests for further information, and . . .
a reasonable cost per square foot," had been submitted by Tri-
Star, the contractor from whom CWPH had previously sought a bid,
at approximately $7.29 million. CWPH, however, insisted that
Dunvegan Construction (Dunvegan), which bid approximately $3.99
million, was the "lowest responsible bidder," despite RFA's
documented concerns about Dunvegan's limited qualifications and
the incomplete scope of its bid.7
6 The parties voluntarily dismissed the 2013 action, though there is no documentation in this record.
7 Freedenfeld testified that the Dunvegan bid included an estimated cost per square foot that was unreasonable and stated that CWPH planned to complete the exterior site work itself.
9 RFA invoiced CWPH for its fee based on eight percent of the
Tri-Star bid, representing compensation for all work performed
to date. CWPH refused to pay. RFA then issued a supplemental
invoice for $38,087 in additional services, reflecting the work
it had performed to incorporate the latest changes. In
September 2016, after the parties' relationship had fully
deteriorated, RFA filed the instant suit to recover its unpaid
fees.8
8. Trial. A bench trial commenced in February 2023. On
June 30, 2023, the trial judge issued his findings of fact,
rulings of law, and order for judgment. The judge found the
addendum to the contract "fundamentally flawed" and
unenforceable because there was no meeting of the minds on
essential terms; to wit, how to "define 'lowest responsible
bid'" or the mechanism for resolving disputes about the bid
process. The judge reasoned that the evidence showed that
Freedenfeld, who was "far better qualified," believed he would
determine the lowest responsible bid, whereas Barnes believed
CWPH could unilaterally select the lowest bidder based simply on
price. Because the parties did not agree on who had final
8 While this action was pending, the parties executed a limited stipulation allowing CWPH to use RFA's plans to complete construction, after payment by CWPH to RFA of $50,000 and deposit of $350,000 in escrow pending resolution of RFA's claims.
10 decision-making authority, and the addendum lacked a method to
resolve such a dispute, the judge deemed the addendum
unenforceable and that the parties' rights were governed by the
contract.
The judge then analyzed the parties' conduct under the
contract and found that CWPH committed a breach when it
"unilaterally walked away from the [contract] in late 2015"
without paying RFA the balance of its fee, and deciding, based
on its own calculation of "estimated cost," that it had already
paid RFA in full. The judge credited Freedenfeld's testimony as
"an experienced architectural design professional . . . with
decades of experience in this niche area of practice" and found
that Tri-Star's bid of $7,287,167 reflected a "reasonable
'estimated cost'" of the project. The judge concluded that the
total fee owed to RFA was $582,973.36, which, when reduced by
ten percent for unperformed construction administration services
and payments CWPH had already made of $404,702.76, left a
balance due of $119,973.27, plus contractual interest of 1.8
percent per month from December 2015, bringing total damages to
$314,329.97, inclusive of prejudgment interest. The judge also
awarded RFA $146,584.40 in attorney's fees under the contract.
The judge also found that RFA was not entitled to payment
of the $38,087 it later billed for additional services because
Freedenfeld admitted that he had intended to perform the work as
11 a professional courtesy. The judge additionally concluded that
CWPH's conduct did not rise to the level of a G. L. c. 93A
violation, but merely reflected Barnes's lack of prior
experience and unrealistic cost expectations rather than
coercive tactics.
9. Postjudgment motions. After judgment entered for RFA,
CWPH filed several postjudgment motions, including (1) a motion
to alter or amend the judgment under Mass. R. Civ. P. 59 (e),
365 Mass. 827 (1974) (rule 59 [e] motion); and (2) a motion to
take additional testimony as to current or projected
construction cost, brought pursuant to Mass. R. Civ. P. 59 (a),
365 Mass. 827 (1974) (rule 59 [a] motion).
In support of its rule 59 (e) motion, CWPH asserted that in
view of the judge's recognition that the purpose of the addendum
was to move the project forward and reduce construction costs,
it was error to void the addendum rather than insert a curative
term or, in the alternative, that the payment terms in the
contract were just as ambiguous as the payment terms in the
addendum insofar as the contract did not identify "who gets to
select between the 'total cost' or 'estimated cost' for purposes
of calculating RFA's fee."
In its companion rule 59 (a) motion, CWPH asked the judge
to take additional testimony from Barnes and Mike Villalobos
(the principal of the project's general contractor since 2019)
12 regarding the project's current and projected total construction
cost, or alternatively, to stay execution of the judgment until
construction was complete so that the judge could consider the
final cost.
The judge denied CWPH's motions and reiterated that the
addendum was unenforceable because there was no meeting of the
minds on essential terms, and that the contract terms were "not
so latently ambiguous as to prevent proper calculation of
damages." This appeal followed.9
Discussion. "The interpretation of a contract is a
question of law, which we review de novo." James B. Nutter &
Co. v. Estate of Murphy, 478 Mass. 664, 667 (2018).
9 CWPH noticed an appeal from the judgment and from the postjudgment order denying its rule 59 (e) motion; however, CWPH's appeal from the latter is waived because it did not set forth any specific argument in its brief regarding that order. See Mass. R. A. P. 16 (a) (9) (A), as appearing in 481 Mass. 1628 (2019) ("The appellate court need not pass upon questions or issues not argued in the brief"). To the extent that CWPH also purports to appeal from the postjudgment orders that denied CWPH's rule 59 (a) motion and granted RFA's request for attorney's fees, those orders were not included in CWPH's notice of appeal. Accordingly, they are not properly before us. See Mass. R. A. P. 3 (c) (1) (A), as appearing in 491 Mass. 1601 (2023) ("The notice of appeal shall designate . . . in civil cases, the judgment, decree, adjudication, or separately appealable order from which the appeal is taken"); Robinson v. Boston, 71 Mass. App. Ct. 765, 771 (2008), quoting Siles v. Travenol Labs., Inc., 13 Mass. App. Ct. 354, 354 n.1 (1982) (judgment or order not designated in notice of appeal "is not properly before this court"). Although those orders are not before us, we nevertheless briefly address CWPH's arguments pertaining to them.
13 1. The addendum. The judge found that because there was
no meeting of the minds as to the essential terms of the
addendum, it is unenforceable and the contract is thus the
controlling document between the parties. Although CWPH
initially challenged this finding, it withdrew its reliance on
the addendum at oral argument and in writing thereafter.
Accordingly, we need not discuss the addendum further.
2. Calculation of RFA's fee under the contract.10 The
judge found that because the project was only fifty percent
complete at the time of trial in 2023, "the '[c]onstruction
[c]ost' of the [p]roject under [a]rticle 5.1.1 must be
calculated using the 'estimated cost' of the [p]roject." CWPH
argues that the contract must be read "assum[ing] the project
will be constructed," and that the term "construction cost"
should be construed to be the actual cost of construction;
therefore, CWPH contends, the judge erred by basing RFA's fee on
estimated construction costs. We are not persuaded. As the
judge noted, under the contract, "construction cost" is defined
in article 5.1.1 as "the total cost or estimated cost to the
[o]wner of all elements of the [p]roject as designed or
10 The judge found that CWPH committed a breach of the contract by moving forward with the project after refusing to pay RFA's fees. CWPH does not challenge this finding on appeal.
14 specified by the architect" (emphasis added).11 This definition
allows for flexibility in computation of cost, permitting
calculation based on estimated cost before a project's
completion.
CWPH argues, relatedly, that the judge erred in denying its
postjudgment rule 59 (a) motion to reopen the record to take
testimony regarding the actual construction costs for the fifty
percent of the project that had been completed. However, where
the construction was not complete, cost thus far was of no
relevance; actual cost of the entire project could not be
ascertained, and some amount of estimation would have been
required. Additionally, the judge found that CWPH committed a
material breach of the contract before construction began, a
finding not challenged by CWPH, and prior to any actual costs
being incurred; therefore, we agree that the use of estimated
cost in the calculation of RFA's fee as of the time of the
breach in 2015 was appropriate.
CWPH also argues that the judge's analysis of the contract
was flawed because he failed to read the contract as a whole by
ignoring that the term "estimated costs" is explicitly used to
11CWPH argues, without support, that because the term "Construction Cost" appears within the agreement both with capital Cs and with lower case Cs, the terms were intended to have materially different meanings. We do not read any material difference into the term based on capitalization.
15 calculate RFA's fee only twice in the contract: when the owner
decides to provide materials or perform work personally on the
project, or when portions of the project are not constructed.
CWPH argues that, other than in these two provisions, only
actual construction costs are used for calculating payment. To
be sure, when interpreting a contract, it "is to be construed so
as to give it effect as a rational business instrument . . . ,
[and] the parties' intent must be gathered from a fair
construction of the contract as a whole and not by special
emphasis upon any one part" (quotations and citations omitted).
Kingstown Corp. v. Black Cat Cranberry Corp., 65 Mass. App. Ct.
154, 158 (2005). However, a reading of the contract as a whole
shows that the parties contemplated that payments would be made
to RFA throughout the term of the relationship and prior to
completion of the project. The parties specifically agreed that
"progress payments" of a percentage of the construction cost
would be made upon the completion of the schematic design and
the construction documents phases. Indeed, ninety percent of
RFA's fee was to be paid before the construction phase of the
project began. Also, the parties agreed that the "[a]rchitect
shall be entitled to compensation in accordance with this
[a]greement for all services performed whether or not the
[c]onstruction [p]hase is commenced" (emphasis added). Clearly,
16 the parties intended for payment to be made to RFA even if the
construction did not take place.
We also agree with the judge that the calculation of
estimated cost, and RFA's fee therefrom, must be based on a
reasonable bid and not simply the lowest bid, and that the Tri-
Star bid of $7,287,167 was a reasonable estimated construction
cost because (1) the cost per square foot is reasonable based on
Freedenfeld's testimony as credited by the judge; (2) the bid is
close to the amount of the initial bid offered by ICI; (3) the
bid is in the same general range as the first round of bids; and
(4) the Tri-Star bid is the lowest of the three bids that
Freedenfeld, in his professional opinion, found to be
reasonable.
3. Ambiguity. CWPH further argues that the contract is
flawed because, like the addendum, it does not specify which
party has ultimate decision-making authority over whether
estimated cost or total cost is used in determining the fee,
creating contractual ambiguity.12 We disagree. "The mere
existence of the parties' disagreement does not make the
language ambiguous." Browning-Ferris Indus., Inc. v. Casella
Waste Mgt. of Mass., Inc., 79 Mass. App. Ct. 300, 307 (2011).
12We note that the judge did not find that the addendum was ambiguous, but rather that there was no meeting of the minds as to its terms.
17 "Contractual language is ambiguous if it is susceptible of more
than one meaning and reasonably intelligent persons would differ
as to which meaning is the proper one" (quotation and citation
omitted). James B. Nutter & Co., 478 Mass. at 669. As
discussed, the flexible "construction cost" definition ensures
that a fee can be ascertained throughout the project's phases
and if the construction phase is never commenced. There is no
ambiguity.
4. Attorney's fees. CWPH argues that in awarding
attorney's fees to RFA, the judge erred in applying the
contractual attorney's fees provision. CWPH concedes, however,
that after the judge found that CWPH's breach of the agreement
entitled RFA to an award of attorney's fees, RFA submitted a
motion for fees, supported by an affidavit, which CWPH did not
oppose. "An issue not raised or argued below may not be argued
for the first time on appeal" (citation omitted). Carey v. New
England Organ Bank, 446 Mass. 270, 285 (2006). Moreover, on
this record, we are unable to discern whether the issue of
attorney's fees was addressed at the hearing held on the
postjudgment motions. If that issue was indeed heard, it was
CWPH's obligation, as the appellant, to provide a hearing
transcript, but no transcript was provided. See Mass. R. A. P.
18 (b) (4), as appearing in 481 Mass. 1637 (2019). Finally,
CWPH's notice of appeal did not designate the postjudgment order
18 awarding fees. Thus, that order is not properly before us. See
Robinson v. Boston, 71 Mass. App. Ct. 765, 771 (2008).13
Judgment affirmed.
By the Court (Massing, Sacks & Allen, JJ.14),
Clerk
Entered: April 30, 2026.
13 RFA's request for appellate attorney's fees is denied.
14 The panelists are listed in order of seniority.