Vaks v. Ryan

2014 Mass. App. Div. 37
CourtMassachusetts District Court, Appellate Division
DecidedFebruary 28, 2014
StatusPublished

This text of 2014 Mass. App. Div. 37 (Vaks v. Ryan) is published on Counsel Stack Legal Research, covering Massachusetts District Court, Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vaks v. Ryan, 2014 Mass. App. Div. 37 (Mass. Ct. App. 2014).

Opinion

Swan, J.

In Vaks v. Ryan, 2012 Mass. App. Div. 17 (“Vaks D, we deferred determining the enforceability of a contract’s provision on attorney’s fees to another day. That day has arrived.

Rimma Vaks and her husband Steven Mangano (collectively, “the Vaks”) sued Ryan Auction Co. and its owner, Denise Ryan (collectively, “Ryan”), on various causes of action arising from the auction sale by Ryan of some of the Vaks’ personalty. By a multipage, preprinted form (the “agreement”), the Vaks consigned to Ryan over 150 items of furniture and other property. The front of each page of the agreement listed property to be sold and noted Ryan’s “conditions of acceptance” on the reverse. One of those conditions, contained in paragraph 9, stated that Ryan would be entitled to attorney’s fees, costs, and expenses in the event of any litigation arising out of the agreement (“fee clause”).

Partially allowing Ryan’s motion for summary judgment, the trial court dismissed all counts of the Vaks’ complaint except those for breach of contract and conversion. Those remaining counts, along with Ryan’s counterclaim for attorney’s fees, were tried to a jury (“first trial”). The judge in the first trial reformed the fee clause, and charged the jury that only in the event that Ryan prevailed would Ryan be entitled to a fee award. The jury returned a verdict for Ryan and awarded Ryan $5,500.00 in attorney’s fees. The Yaks appealed the allowance of summary judgment on their other counts. In Vaks I, we affirmed and reversed in part, and specifically returned the fraud and G.L.c. 93A counts for trial.3

In a subsequent jury-waived trial, Ryan prevailed on the fraud and G.L.c. 93A counts as well (“second trial”). The judgment in the second trial did not include an award of attorney’s fees, and Ryan moved for correction of the judgment to include the fee award from the first trial. The Vaks opposed the motion. The trial judge did [38]*38not amend the judgment but, instead, ruled that the judgment “for Ryan stands,” presumably leaving unimpaired the fee award in the judgment from the first trial.4 The Vaks have appealed that ruling. Ryan has neither briefed nor in any other way contested the Vaks’ appeal.

In Vaks I, we addressed the enforceability of the fee clause in footnote 3 (“footnote 3”), which states in its entirety:

Paragraph 9 of the agreement provides: ‘Should any action be brought arising out of this agreement ... [Ryan] shall be entitled to reasonable attorney’s fees costs and expenses....’ We note that this provision does not condition recovery of such fees, costs, and expenses on who initiates the action or on its outcome. The enforceability of paragraph 9 has not been raised on appeal, and we leave that issue to the sound discretion of the trial court should it arise in subsequent proceedings.

Id. at 21 n.3. The trial judge answered our admittedly enigmatic invitation while addressing Ryan’s motion to correct the judgment to include the fee award, stating:

Vaks now contests the award of Attorney fees found by the jury. Her argument is primarily focused on the contract term permitting such whether [or] not Ryan prevailed. To the extent the argument was not mooted by the Jury, it fails for several reasons. First, it appears that it was largely subsumed by the Appellate Division’s findings that Vaks’ ‘uncon-scionability’ allegations involved questions of Law and were properly denied. ... Second, to the extent this argument was not proffered to the Appellate Division, which finds some support in footnote 3 of the Decision, it is waived. (Citation omitted.) Third, while the Appellate Division may well have chosen to decide the issue despite its not having been briefed, it did not do so leaving the Jury’s decision intact.... Last, to the extent footnote 3 permitted reconsideration, that burden would have fallen on Vales rather than Ryan.

As to the first point cited by the trial judge, two of the counts in the Vaks’ complaint alleged that the terms of the agreement were unconscionable and unenforceable, violating G.L.c. 106, §2-302 (1). They were dismissed in the ruling on Ryan’s ini[39]*39tial motion for summary judgment that “ [t]he contract between the parties was neither procedurally nor substantively unconscionable.” We agreed that this “conclusion was not erroneous, and counts 5 and 6 were properly removed from consideration at trial [and] that [no] further proceedings [were] required regarding these claims.” Vaks I at 21. From that statement, the trial court understandably concluded that any challenge to the fee clause was “largely subsumed by the Appellate Division’s findings [in Vaks I\ that Vaks’ ‘unconscionability’ allegations involved questions of Law and were properly denied.” However, our ruling on the uncon-scionability allegations was modified by footnote 3, which specifically left the fee issue open. We find that no subsummation occurred. For the same reason, footnote 3 was designed further to foreclose mootness or waiver of the issue to the Vaks’ detriment.

The trial judge was correct that we “may well have chosen to decide the issue despite its not having been briefed, [and] did not do so.” The judge was also correct in further stating that the appellate “process requires a degree of finality and disfavors piecemeal attacks on underlying issues [that] were capable of resolution on the initial sally” and that the trial court had addressed only the three counts returned by Vaks I. Nevertheless, as stated, the issue of the validity of the fee clause was still left open by footnote 3, and given the manner in which the appeal has been presented to us, we now declare the fee clause unconscionable and unenforceable. Having not opposed the appeal, Ryan gives us no reason to do otherwise.

The doctrine of unconscionability “has long been recognized as grounds for avoiding a contract. Historically, a contract was considered unconscionable if it was ‘such as no man in his senses and not under delusion would make on the one hand, and as no honest and fair man would accept on the other.’ Hume v. United States, 132 U.S. 406, 411 (1889), quoting Earl of Chesterfields. Janssen, 28 Eng. Rep. 82,100 (Ch. 1750). ‘Later, a contract was determined unenforceable because unconscionable when “the sum total of its provisions drives too hard a bargain for a court of conscience to assist.’” Waters v. Min Ltd., 412 Mass. 64, 66 (1992), quoting Covich v. Chambers, 8 Mass. App. Ct. 740, 750 n.13 (1979). The determination that a contract or term is or is not unconscionable is made in the light of its setting, purpose and effect.’ RESTATEMENT (SECOND) OF CONTRACTS §208 comment a (1981).” Miller v. Cotter, 448 Mass. 871, 679 (2007). In determining unconsciomWllJ as used in the Uniform Commercial Code, the Supreme Judicial Court stated, “Because there is no clear, all-purpose definition of ‘unconscionable,’ nor could there be, unconscionability must be determined on a case by case basis (see Commonwealth v. Gustafison, 370 Mass. 181, 187 (1976)), giving particular attention to whether, at the time of the execution of the agreement, the contract provision could result in unfair surprise and was oppressive to the allegedly disadvantaged party.” Zapatha v. Dairy Mart, Inc., 381 Mass. 284, 292-293 (1980).

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Vaks v. Ryan
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Bluebook (online)
2014 Mass. App. Div. 37, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vaks-v-ryan-massdistctapp-2014.