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COMMONWEALTH OF MASSACHUSETTS
BARNSTABLE, ss. SUPERIOR COURT DEPARTMENT
C.A. No. BACV2013-00125
RICK YATSENICK & JOAL YATSENICK,
Plaintiffs,
Vv.
OLD WHARF VILLAGE, LLC, and CHARLES
EDGAR,
Defendants
DEFENDANTS? MEMORANDUM OF LAW IN OPPOSITION TO
PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT
The Defendants submit this memorandum of law in opposition to the Plaintiff
s’ Motion
for Summary Judgment and in support of its Cross-Motion for Summary Judgmen
t. The Court
should deny the Plaintiffs’ motion where genuine issues of disputed fact remain
as to each count
of the complaint.
I INTRODUCTION
This case arises out of the sale of Unit 204, 405 Old Wharf Village Road, Dennispo
rt, by
the Defendant, Old Wharf Village, LLC (“OWV”) to the Plaintiffs. The property
sold for
$223,000 on June 21, 2010. Ex. 6. The Plaintiffs claim that the Defendants misrepresented the
legally permitted use of the property by “market[ing] the property as single family
residential
units,” and by tendering a deed for the property which states that use shall be limited
to “single
family year round residential use.” The Plaintiffs have brought claims
for intentional
misrepresentation (Count 1), unfair and deceptive business practic
es under the Consumer
Protection Act (Count II), negligent misrepresentation (Count
TI), breach of contract (Count IV),
“money had and received” (Count V) and rescission (Count VI).
Ir ARGUMENT
A The Court Should Deny Summary Judgment Where the Defendants Disclos
ed the
Legally Permitted Use of Unit 204 in the Purchase and Sale
A ment b
Reference to the Master Deed and the Plaintiffs Were Represented by
Counsel,
The Plaintiffs allege that the Defendants engaged in unfair and decepti
ve business
practices and intentional and/or negligent misrepresentation by failing
to disclose “the material
fact that the property was a commercial motel enterprise regardless
of whether there was a duty
to disclose.” Plaintiffs’ Memorandum of Law at 11. In the usual real estate
transaction in
Massachusetts, neither the seller nor the seller's real estate agent owes
a fiduciary duty to the
buyer. Friedman y. Jablonski, 371 Mass. 482, 485 (1976). See Nei v. Burley,
388 Mass. 307,
310 (1983) (“Sellers .. . are not liable in fraud for failing to disclose every latent defect known
to
them which reduces materially the value of the property and of
which the buyer is ignorant).
However, the Supreme Judicial Court has stated that disclosure is require
d of facts that " ‘render
the property substantially less desirable or valuable to the objectively reasona
ble buyer." Urman
v. S. Boston Sav. Bank, 424 Mass. 165, 170 n.8 (1997).
Generally, to recover on a fraudulent misrepresentation claim,
“a plaintiff must allege and
prove that the defendant made a false representation of a materia
l fact with knowledge of its
falsity for the purpose of inducing the plaintiff to act thereon, and
that the plaintiff relied upon
the representation as true and acted upon it to her damage.” Masing
ill v. EMC Corp., 449 Mass.
532, 541 (2007), quoting Kilroy v. Barron, 326 Mass. 464 (1950).
However, “if the contract was
fully negotiated and voluntarily signed, [then the] plaintiffs may not
raise as fraudulent any prior
2
oral assertion inconsistent with a contract provision that specifically addressed the particula
r
point at issue.” Starr v. Fordham, 420 Mass. 178, 188 (1995).
The Plaintiffs signed an Offer to Purchase Unit 204 on Wednesday, March 24, 2010, Ex.
39, Deposition of Joal Yatsenick at 32-43, The Plaintiffs then hired Attomey
Stacey Curley to
“help us with the purchase and sales, put that in place, take us through
close.” Ex. 39,
Deposition of Joal Yatsenick at 54-58. Plaintiff Joal Yatsenick specifically told
Attorney Curley
that she wanted her to review the nature of the property. She testified:
we had written into the offer a review of the condo documents... I explained
to
[Attorney Curley] what our Connecticut attorney had told us about.. clients [of
his] who thought they had bought a single-family, year-round condominium down
the Street, and it turned out to be a time share. And that was our concern
.
Ex. 39, Deposition of Joal Yatsenick at 56.
The Plaintiffs signed the Purchase and Sale Agreement on April 15, 2010.
It describes
the property as:
Unit 204...of Old Wharf Village Condominium...created pursuant to
Chapter
183A of the Massachusetts General Laws...by Master Deed dated January 21st,
2010...together with...such other rights and easements appurtenant to the
Unit as
may be set forth in any document governing the operation of the Condominium,
including without limitation the Master Deed, the By-Laws of the organization
of
unit owners, and any administrative rules and regulations adopted pursuan
t
thereto..
Ex. 5,92. The Master Deed of January 21, 2010, 4 9 “Use of Units” states:
[A]ll of the Units are intended to be used as a condominium motel in accorda
nce
with the By-Laws of the Condominium Trust; with all applicable codes, laws
and
regulations; and specifically, with the following as may be amended or
modified
from time to time: ..Town of Dennis Zoning Board of Appeals Special Permit
Modification in File No. A-1447 registered with the Barnstable County Registry
District of the Land Court as Document No. 1,112,020.
Ex. 40 (emphasis supplied). Special Permit A-1447, dated March 24, 2009, states, “Property is
£0 remain a motel with the length of stay requirements subject to Board of Health Standards.”
Ex. 7 (emphasis supplied).
Given the Plaintiffs’ representation by counsel! to whom they specifically expressed.
concern about the possibility that the property could be something other than what they wanted
to own, and after three weeks in which to investigate and ensure that the property was
accurately
described, and in which the description in the Purchase and Sale specifically included
a reference
to the Master Deed that in turn, referenced the Special Permit restricting the property
to use as a
motel, it appears that the Plaintiffs chose to waive the encumbrance and accept the title
that the
Defendants had to convey. See Parkhurst v. Maynard, 285 Mass. 59 (1933). A reasonable fact
finder could conclude that the contract was fully negotiated and voluntarily signed,
and thus, that
the Defendants are not liable for misrepresentation of any kind, whether intention
al or negligent.
Thus, a genuine issue of material fact remains as to whether the Defendants disclose
d the zoned
use of the property.
B Any Oral or Extraneous Written Representations Merged Upon Execution of the
Purchase and Sale Agreement.
1 The negligent misrepresentation claim.
The Defendants cannot be liable for negligent misrepresentation in any event
because the
Purchase and Sale Agreement contained an exculpatory clause acknowledging
that the Plaintiffs
did not rely on any representations other than those included in the Purchas
e and Sale
Agreement. Generally, a defendant is liable for a claim of negligent misrepresentation if in
the
course of his business, he supplies false information for the guidance of others
in their business
transactions causing pecuniary loss to others resulting from their justifiable
reliance on the
information, while failing to exercise reasonable care or competence in obtainin
g or
4
4
communicating the information. Fox v. F&J Gattozzi Corp., 41 Mass.App.Ct.
581, 587, 672
N.E.2d 547 (1996).
An exculpatory clause in a Purchase and Sale agreement can bar recovery to a
misrepresentation claim under common law claims and G.L. c. 93A. Cone v. Ellis, 59 Mass
App. Ct. 748, 748 (Mass. App. Ct. 2003). See Shawmut-Canton v. Great Spring Waters, 62
Mass.App.Ct. 330, 335 (2004) (stating that “an integration clause bar[s] parol
evidence on a
claim of negligent misrepresentation”), citing Sound Techniques v. Hoffman, 50
Mass. App. Ct.
425, 432-34, 737 N.E.2d 920 (2000). When determining whether an exculpatory
clause is the
result of a deliberate, uncoerced, and businesslike process that cannot be undone, courts
look at
the length of negotiations; whether the plaintiffs were represented by counsel; who
proposed
changes that became part of the final agreement; and whether the subject of
the purported
misrepresentation is specifically addressed in the contract. Cone v. Ellis, 59 Mass.
App. Ct. 748
(2003).
Paragraph 25 of the Purchase and Sale Agreement states:
The BUYER acknowledges that the BUYER has not been influenced to enter
into
this transaction nor has relied upon any warranties or representations not set forth
or incorporated in this agreement or previously made in writing, except for
the
following additional warranties and representations, if any, made by either the
SELLER or the Broker(s): NONE.
Ex. 5. The exculpatory clause in this case bars recovery for negligent misrepresentatio
n.
2. The breach of contract claim.
The exculpatory clause also bars recovery for breach of contract. “If the terms of the
contract are clear, then any other discussions or writings not contained in
the written contract
itself are not to be considered in explaining the terms of the agreement.” Massach
usetts Superior
Court Civil Practice Jury Instructions § 14.3.3, citing Mass. Mun. Wholesale Elec. Co. v. Town
2: f Danvers, 411 Mass. 39, 48 (1991); Chase Commercial Corp. v. Owen, 32 Mass. App. Ct. 248
(1992); Fairfield 274-278 Clarendon Trust v. Dwek, 970 F.2d 990 (Ast Cir. 1992); see
also
Suffolk Constr. Co. v. Lanco Scaffolding Co., 47 Mass. App. Ct. 726 (1999). In disputes
over
sales of real property, the “acceptance of a deed of conveyance of land from one who
has
previously contracted to sell it, discharges the contractual duties of the seller to the party so
accepting except as such as are embodied in the deed.” Pybus v. Grasso, 317 Mass.
716, 717
(1945), citing Restatement of Contracts, § 413. See also Holihan v. Rabenius Builders, Inc.,
355
Mass. 639, 642, 246 N.E.2d 638 (1969); Lipson v. Southgate Park Corp., 345 Mass. 621, 625
(1963); Solomon v. Birger, 19 Mass. App.Ct. 634, 641 (1 985). This doctrine “has been applied
in a number of cases where the defect in the conveyance consists of a failure to convey all
the
land contracted for as well as in cases where the defect is in the title to the land actually
conveyed.” Pybus, 317 Mass. at 717-18 (citations omitted); Holihan, 355 Mass. at 642 (the
doctrine of merger or waiver by acceptance of the deed “applies to defects in the conveyan
ce
itself, such as failure to convey all the area contracted for as well as to defects
in the title”).
Even if parol evidence were admissible here, in civil actions the mule of the common
law
long has been recognized that “mere statements of the vendor concerning either real
or personal
property, where there is no warranty as to its value or the price which he has given or
has been
offered for it, are to be treated as ‘seller's talk’; that the rule of caveat emptor applies,
and
therefore they are not actionable even if the statements are false and intended to deceive.
Kabatchnick v. Hanover-Elm Bldg. Corp., 328 Mass. 341, 343 (1952). Moreover, while the
flyer
seen by the Plaintiffs uses the phrase “year round,” the Unit can be used throughout
the year, so
it is not an inaccurate statement; and the same flyer also alerts potential buyers to the
nature of
the property by stating that the units are “not motel room size.” Ex. 1.
Cc. The Erroneous Language in the Deed Did Not Cause the Plaintiffs to Act to Their
Detriment Because the Plaintiffs Did Not Read the Deed Until After May 2, 2011,
A quitclaim deed conveys “all the estate which could lawfully be conveyed by
deed of
bargain and sale.” MCLE Real Estate Title Practice in Massachusetts § 5.1.2 (2013).
The
language in the deed that inaccurately describes the use of the property did not
impact the
Defendants’ conveyance of its interest in Unit 204 to the Plaintiffs. Nor did it
impact the
Plaintiffs’ decision to purchase the property, as the meeting of the minds took place upon signing
of the Purchase and Sale Agreement, and the Plaintiffs did not read the deed to Unit
204 until
after May 2, 2011—after they had owned the property for nearly a year. Ex 39, Depositi
on of
Joal Yatsenick at 100-101.
D. The Court Should Not Grant Summary Judgment for the Plaintiffs on Thei
Claims for Equitable Relief Where They Have Had Unfettered Access to and Use
of Unit 204 Since the Purchase Date.
The Court should also deny summary judgment for the Plaintiffs on their claims
of
rescission and money had and received where the Plaintiffs still possess Unit 204 and have had
full and unfettered access to it since their purchase on June 21, 2010. Ex. 41. The Plaintiffs,
citing to no authority, claim that the deéd they received “did not transfer any tangible
interest in
the property as the property had no zoning relief other than to be one singular motel.”
The
Plaintiffs confuse economic lack of marketability, which relates to physical conditions
affecting
the use of the property, with title marketability, which relates to defects affecting legally
recognized rights and incidents of ownership. Chicago Title Ins. Co. v. Kumar, 24 Mass. App.
Ct. 53, 57 (1987). Compare Bianchi v. Lorenz; 701 A.2d 1037 (Vt. 1997), in which
the court
held that a zoning violation that was discernable from the municipal records, but
not the land
7
oe
records, and that substantially impaired the purchaser's use of the property amounte
d to an
encumbrance on title. Here, the Plaintiffs did receive all rights to Unit 204 that the Defendan
ts
owned. That Unit 204 has tangible value and marketable title is demonstrated by the sale of
Unit
107 in February, 2012. Ex. 37. Equitable remedics are therefore inappropriate.
Ill. CONCLUSION
The Court should deny the Plaintiffs’ motion where the Defendants disclosed,
by
reference to condominium documents in the Purchase and Sale agreement that
the current zoning
rules restricted use of the property to a motel; where inaccurate language describi
ng use in the
Deed, which the Plaintiffs did not see until long after the closing, did not cause the Plaintiffs
to
take any action to their detriment; and where any superfluous oral or written representations
to
the contrary merged into the Purchase and Sale Agreement.
se .
Respectfully submitted,
Defendants, Old Wharf Village, LLC
And Charles Edgar
By their attorneys,
Djuna\Pérkins, BBO #561909
Lynne M. Chiodo, BBO# 657428
DP Law
619 High Street, Suite 103
Dedham, MA 02026
Phone: (781) 326-6320
Fax: (781) 326-6321
dp@djunaperkinslaw.com
Ichiodo@djunaperkinslaw.com
DATED: “Mareh 12, 2017
CERTIFICATE OF SERVICE
Thereby certify that I served a copy of the foregoing opposition on counsel for the Plaintiffs by
hand on March 12, 2017.
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