Whitehall Co. v. Barletta

536 N.E.2d 333, 404 Mass. 497, 1989 Mass. LEXIS 96
CourtMassachusetts Supreme Judicial Court
DecidedApril 6, 1989
StatusPublished
Cited by39 cases

This text of 536 N.E.2d 333 (Whitehall Co. v. Barletta) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Whitehall Co. v. Barletta, 536 N.E.2d 333, 404 Mass. 497, 1989 Mass. LEXIS 96 (Mass. 1989).

Opinion

Nolan, J.

The plaintiff, Whitehall Company, Ltd. (Whitehall), and the defendants (Barletta) have filed cross appeals from a judgment of the Superior Court. We transferred the case on our own motion. We remand for action consistent with this opinion.

In late 1978 and early 1979, Whitehall and C.A. Barletta, Inc., both Massachusetts corporations, entered into discussions with respect to the construction of a prefabricated steel building. The building, which would serve as Whitehall’s warehouse and office space, would be constructed by Barletta on a site located in Norwood. On February 14, 1979, Whitehall signed a contract with Barletta for the construction of the building on a “cost-plus” basis.2 Prior to the signing of the contract between Whitehall and Barletta, Barletta communicated with National Steel Products Company (National), a manufacturer of prefabricated buildings. Barletta negotiated with National a discount of 10%, plus an additional 6% discount on the total price of the prefabricated steel for the building, a saving of approximately $50,000. Whitehall, however, maintains that, during contract discussions and even upon signing the contract with Barletta, Barletta continued to quote a higher price for the building that did not reflect the additional discount National had given to Barletta. Whitehall essentially contends that Barletta fraudulently misrepresented the actual cost of the building so that Barletta, and not Whitehall, would gain the benefit of the discounts.

When National learned that Barletta had never informed Whitehall of the additional discounts, National commenced an action against Barletta in the United States District Court for [499]*499the District of Massachusetts.3 The case was tried without a jury and the ultimate determination was adverse to Barletta. Barletta did not appeal.

When Whitehall learned of Barietta’s concealment of the discounts, Barletta explained that it had intended to pass the discounts along to Whitehall upon written confirmation of the contract with National, as a “surprise.”4 In July, 1979, Whitehall rescinded the contract with Barletta. Whitehall then commenced this action by filing a complaint against Barletta seeking damages resulting from Barietta’s allegedly unfair and deceptive business practices under G. L. c. 93A (1986 ed.). The complaint also alleged deceit, breach of fiduciary duty, and two counts alleging breach of contract. Barletta’s counterclaim sought damages from Whitehall allegedly due under the contract between the parties.5 Barletta’s counterclaim was tried to a jury; the jury acted in advisory capacity with regard to Whitehall’s c. 93A claim. By a pretrial motion Whitehall attempted to preclude Barletta from relitigating facts determined adversely to it in the Federal court litigation, but the motion judge refused to apply collateral estoppel principles.

The jury returned an “advisory verdict” against Whitehall on its c. 93 A claim.6 The judge adopted the jury’s determination [500]*500and entered judgment consistent with it. Whitehall then filed a motion for reconsideration, or in the alternative, to alter or amend the judgment, objecting to the judge’s acceptance of the jury’s advisory verdict on Whitehall’s c. 93A claim. The judge denied the motion.

The judge, instructing on the issue of Barietta’s counterclaim, charged that, even if Barietta breached the contract, Whitehall was required first to obtain an architect’s certificate from the project architect stating that sufficient cause existed to justify termination. Whitehall objected to the instruction. The jury also returned a verdict for Barietta on its counterclaim, but awarded no damages. Barietta moved for a new trial with respect to damages only. Whitehall moved for a judgment notwithstanding the verdict on the breach of contract issue. The judge denied both parties ’ motions. The parties appealed.

Whitehall raises four issues on appeal: (1) whether the motion judge erred in concluding that State law and not Federal law applied in determining the preclusive effect of a prior Federal court judgment against the defendant; (2) whether the trial judge erred in denying Whitehall’s motion to alter or amend the judgment; (3) whether the judge erred in instructing the jury that Whitehall had no right to terminate its contract with Barietta without first obtaining an architect’s certificate; and finally, (4) whether the judge erred in denying Whitehall’s motion for a directed verdict and motion for judgment notwithstanding the verdict.7

Barietta raises one issue on appeal: whether the judge erred in denying Barietta’s motion for a new trial on the issue of damages.

1. Collateral estoppel. Before trial, Whitehall moved for an order to preclude B arietta from relitigating facts resolved by National’s case against Barietta in Federal District Court.8 A [501]*501Superior Court judge denied Whitehall’s motion, concluding: (1) that State law, and not Federal law, should be applied to determine the preclusive effect of a prior Federal court judgment; and (2) that this court’s holding in Albernaz v. Fall River, 346 Mass. 336, 339-340 (1963), precludes persons who are neither parties to an action nor their privies from asserting collateral estoppel “offensively.”9 In ruling that State and not Federal law governed whether collateral estoppel applied, the judge examined the facts as required by .this court’s decision in Anderson v. Phoenix Inv. Counsel of Boston, Inc., 387 Mass. 444 (1982). In Anderson, we stated that, “if a set of facts gives rise to a claim based on both State and Federal law, and the plaintiff brings the action in a Federal court which had ‘pendent’ jurisdiction to hear the State claim but the plaintiff declines to assert such State claim, he may not subequently assert the State ground in a State court action.” Id. at 450. Determining that the instant facts fell outside the scope of Anderson, the judge concluded that the State law of collateral estoppel applied. The judge then examined Whitehall’s claim for collateral estoppel in light of Albernaz v. Fall River, supra. In Albernaz, we concluded that, absent mutuality of estoppel, a prior judgment could not be used offensively against a defendant. Id. at 339-340. Accordingly, since Whitehall sought to assert the doctrine offensively, the judge denied Whitehall’s motion.

This court’s decision in Fidler v. E.M. Parker Co., 394 Mass. 534 (1985), decided subsequent to the order denying Whitehall’s attempt collaterally to estop Barletta from relitigating facts determined by the Federal court, definitively established that Massachusetts courts, when considering the preclusive effect of a Federal court judgment, look to Federal law to determine whether to apply collateral estoppel. Id. at 540-541. Accordingly, the judge’s application of State law requires us to remand for reexamination of the issue in light of the Federal law.

[502]*502While Albernaz, supra at 339-340, announced the Massachusetts law that, absent mutuality of estoppel and technical privity, this court would rarely allow collateral estoppel to be applied to a prior judgment offensively, the Federal law is somewhat more flexible. In Parklane Hosiery Co. v. Shore,

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Bluebook (online)
536 N.E.2d 333, 404 Mass. 497, 1989 Mass. LEXIS 96, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whitehall-co-v-barletta-mass-1989.