NORTHERN ASSOCIATES, INC., & another [Note 1] vs. THOMAS M. KILEY [Note 2] & others. [Note 3]

DUFFLY, J. In August, 1994, Northern Associates, Inc., and Richard Benson (the plaintiffs or, collectively, Northern) entered into an agreement to lease a portion of the third floor of a commercial building located at 342 North Main Street, Andover. In February of 1995, the original owner-lessor conveyed the property to the defendant Frye Village Realty Trust. The defendant trustees, in turn, approached Northern about vacating the premises. Northern declined the offer. The trustees, thereafter, began renovations on the second floor of the property, which caused temporary disruption of some of the services to Northern's leased premises, as well as dust and debris. In the summer of 1995, the trustees did not provide air conditioning to Northern's premises, taking the position that it was not required under the lease.

Northern brought suit as a consequence of events arising from these renovations, claiming the trustees' actions resulted in

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breaches of the lease agreement (Count I), intentional infliction of emotional distress (Count II), interference with advantageous contractual relations (Count III), violation of G. L. c. 93A, § 11 (Count IV), and constructive eviction (Count V). Northern also sought, in Count VI, preliminary and permanent injunctive relief. The trustees, by way of counterclaim, sought declaratory judgments as to the amount of space that Northern was entitled to occupy under the terms of the lease, and whether Northern was entitled to air conditioning, maintenance and cleaning of its premises, and elevator services.

Prior to trial, a judge other than the trial judge entered partial summary judgment for the trustees on Count III. The trial judge dismissed Count II immediately prior to trial, and at the close of the evidence entered a directed verdict for the trustees on Counts IV and V. Following trial, judgment entered for Northern as to Count I; Northern's claim for injunctive relief (Count VI) was denied by the trial judge as to all claims except elevator service, and judgment entered substantially for the trustees on their counterclaim for declaratory judgments. [Note 4] Both sides sought an award of attorney's fees and costs.

Northern challenges as insufficient the $5,000 it was awarded on its claim for attorney's fees; challenges as erroneous the award of $100,000 in attorney's fees to the trustees [Note 5]; appeals the dismissal of and entry of directed verdicts on several of its claims; and argues the trial judge erred in excluding parol evidence regarding its right to air conditioning.

1. Attorney's fees. Northern and the trustees sought to recover attorney's fees and costs under the lease agreement, [Note 6] which provides, at § 10.05, as follows:

"If, on account of any breach or default by either

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Landlord or Tenant of their respective obligations under this Lease, it shall become necessary to employ an attorney to enforce or defend any of its rights or remedies hereunder, and should such party prevail, it shall be entitled to reasonable attorneys fees incurred."

We discuss below Northern's several challenges to the fee awards.

a. Fees were not "incurred." Northern first claims that the trustees were not contractually entitled to an award of attorney's fees because, although represented by legal counsel throughout the proceedings, the trustees had not, as of the date of the request for an award of fees and costs, been billed for or paid such fees and costs, and there was no agreement that such fees and costs would be paid. We reject Northern's claim and conclude that Lincoln St. Realty Co. v. Green, 374 Mass. 630 (1978), on which Northern principally relies, is inapposite. In Lincoln, a landlord commenced an action to evict an indigent tenant who was represented by a legal services organization that did not charge indigent clients for its services. After prevailing in the action, the tenant moved for an award of attorney's fees pursuant to provisions in the lease agreement that allowed recovery for reasonable attorney's fees "incurred" by a prevailing tenant. The court determined that " 'incurred' in this contractual context means 'personally obligated to pay.' " Id. at 632. The tenant's claim to an award for fees was rejected on the ground that the tenant was not personally liable for any attorney's fees. Id. at 633. See Colonial Estates Assocs. v. Montagna, 18 Mass. App. Ct. 972, 972-973 (1984).

The lease agreement in the present case provides for recovery of "reasonable attorney[']s fees incurred." Attorney's fees are "incurred" when a party renders himself liable to pay for such fees. See Oxford English Dictionary 1410 (Compact ed. 1971) ("incur" means "to render oneself liable to"); Webster's Universal Unabridged Dictionary 927 (2d ed. 1979) ("incur" means "to bring upon oneself"). The affidavits of the trustees' attorneys, specifying the nature of the services, the time expended and the hourly rate, establishes that services of private legal counsel had been engaged and provided, and supports the inference that the trustees were under an obligation to pay for their services.

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We reject Northern's argument that evidence that the trustees had not yet been billed for or paid their attorneys, and had no agreement to do so, [Note 7] requires the conclusion that the trustees also were under no obligation to pay their attorneys. Northern points to nothing in the record that suggests the existence of an agreement between the trustees and their attorneys that the services would be rendered free of charge regardless of outcome. [Note 8]

In these circumstances, the question of whether legal fees were "incurred" is informed by United States Trust Co. v. Herriott, 10 Mass. App. Ct. 313 (1980), where we rejected as frivolous the defendants' argument that the plaintiff had not incurred any expenses because its attorneys had not billed or received any payment for their services. Id. at 321. Incurring a fee is to be distinguished from paying a fee. Cf. Penney v. First Natl. Bank, 385 Mass. 715, 723 (1982) (promissory note provided that plaintiff would "would pay all costs of collection and attorney's fees paid or incurred by the bank" [emphasis supplied]). Whether a party ultimately pays the fees for which he has obligated himself, or whether the attorney seeks to collect on the outstanding indebtedness, is not determinative. The judge's findings and conclusions to the effect that the trustees incurred attorney's fees are not plainly wrong.

b. Prevailing party. Northern claims that, even if attorney's fees were incurred by the trustees, they are not entitled to an award because they did not "prevail." We first note that any reliance on cases discussing the meaning of the phrase "prevailing party" in the context of a statutory framework such as workers' compensation or civil rights is misplaced. "There is no basis for relating [§ 10.05 of the lease agreement] to these specialized statutes." Bardon Trimount, Inc. v. Guyott, 49 Mass. App. Ct. 764, 779 (2000). See Bird v. Bird, 24 Mass. App. Ct. 362,

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365 (1987) ("In certain kinds of cases, [the achievement] of less than ultimate goals . . . may earn one status as a prevailing party for purposes of recovery of legal fees under [civil rights statutes]. Those cases, however, have a 'private attorney general' ingredient which is absent from actions based on private contracts" [citations omitted]).

Whether the trustees are entitled to an award of fees is governed by the terms of the parties' contract. The lease agreement provides that a party may recover attorney's fees "[i]f, on account of any breach or default by either Landlord or Tenant of their respective obligations under this Lease, it shall become necessary to employ an attorney to enforce or defend any of its rights or remedies hereunder, and . . . such party prevail[s]." Where the language of a contract is unambiguous, the words will be given their plain or well-established meaning. See Haverhill v. George Brox, Inc., 47 Mass. App. Ct. 717, 720 (1999).

Section 10.05 of the lease speaks broadly in terms of a party employing an attorney who prevails in enforcing or defending "any of its rights or remedies" under the lease. This provision plainly contemplates that one or both parties may prevail in the enforcement of rights or remedies under the lease as well as in the defense of a claimed breach or default of the lease. The parties here sought to enforce several different rights under the lease, including rights to common areas, heat, air conditioning, maintenance of common areas, and square footage of the leased premises -- Northern asserting its claims in multiple counts and the trustees asserting two counts for affirmative relief in its counterclaim. [Note 9] In addition, the trustees were compelled to defend against Northern's claims.

The trustees have not appealed the award to Northern and it appears that Northern, which was awarded at least a partial judgment in connection with its breach of contract claim [Note 10] and

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recovered $18,700 in damages, was correctly identified as the prevailing party in connection with Count I.

The judge's findings reflect that the award of fees to the trustees was in connection with their defense of Northern's claims that were "on account of a breach or default" under the lease, and in connection with the trustees' successful counterclaim seeking a declaratory judgment that limited the right of Northern to occupancy of 2100 square feet of the third floor. We will assume that the award was not intended to include fees incurred in connection with the emotional distress claim (Count II). [Note 11] See, e.g., Hannon v. Original Gunite Aquatech Pools, Inc., 385 Mass. 813, 828-829 (1982) (contract provision allowing recovery for fees and expenses incurred by either party as a result of actions or proceedings brought to determine or enforce either party's rights under a contract, or to enforce collection of payments required under the contract, did not permit the defendant to recover fees and expenses "attributable to litigation of the issues raised by [plaintiff's] unsuccessful attempt to obtain class certification. In raising class issues, [plaintiff] was not attempting to determine or enforce contractual rights").

The grant of summary judgment in favor of the trustees as to Count III, [Note 12] and a directed verdict in their favor as to Counts IV [Note 13] and V, [Note 14] supports the conclusion that, as to these counts, the trustees prevailed. See Bardon Trimount, Inc. v. Guyott, 49

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Mass. App. Ct. at 778-780 (litigant in whose favor judgment enters is "prevailing party"). This is not a situation in which the defense of the additional counts was subsumed in the defense of Count I. Rather, significant and favorable results were achieved for the trustees who, through the expenditure of additional effort, successfully defended against claims that they had failed to provide air conditioning, constructively evicted Northern, interfered with Northern's advantageous relations resulting in lost profits, and engaged in unfair and deceptive acts when they wrongfully threatened to evict Northern. [Note 15]

With respect to Counts III, IV and V, the award appropriately reflects that "the plaintiff has dragged the defendant through a costly and ultimately fruitless exercise." Bardon Trimount, Inc. v. Guyott, supra at 780, quoting from Anderson v. Melwani, 179 F.3d 763, 766 (9th Cir. 1999). [Note 16] In addition, the trustees prevailed on their claims for declaratory judgment. There was no error in the award of attorney's fees to the trustees as prevailing parties under the terms of the lease.

c. Allocation of fees. Northern further challenges as insufficient the amount of fees it was awarded, and as excessive the

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amount of the award to the trustees, on the basis that the judge failed to make allocations that identified the amount of fees being awarded with respect to each claim defended or pressed by the parties. Northern complains that while it was penalized for not delineating the time expended in connection with each of its claims, the judge unfairly awarded the trustees one-third of their requested fees, even while citing a similar lack of specificity in the trustees' request. This was not unreasonable, based on the judge's reliance on the pleadings and her firsthand experience at trial. See Stowe v. Bologna, 417 Mass. 199, 202 (1994) (single justice based determination of reasonable attorney's fees "on his familiarity with the case and the numerous filings with the court"). See also Heller v. Silverbranch Constr. Corp., 376 Mass. 621, 629 (1978) ("A judge presiding over the action for which the plaintiff seeks reasonable attorney's fees has ample opportunity to acquire firsthand knowledge" of the relevant factors to be considered in determining a reasonable award). A trial judge has wide discretion in determining the amount of attorney's fees to be awarded to a party. See Downey v. Downey, 55 Mass. App. Ct. 812, 819 (2002). See also Fontaine v. Ebtec Corp., 415 Mass. 309, 324 (1993).

The judge appropriately relied on factors set out in Cummings v. National Shawmut Bank, 284 Mass. 563, 569 (1933), to determine what would constitute a reasonable award to each prevailing party. [Note 17] With respect to the award to Northern, the trial judge's memorandum reflects that she based her determination of the plaintiffs' award on her "firsthand observations as well as a review of the docket," and "consider[ed] along the way all of the factors articulated in Cummings." As a result of this exercise, the trial judge concluded that much of the time expended by Northern's counsel was in pursuing groundless claims and for work on claims that did not directly arise from

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the lease. Cf. Hannon v. Original Gunite Aquatech Pools, Inc., 385 Mass. at 828-829.

In contrast, the trial judge concluded that the trustees were required to expend countless hours defending groundless claims and were subjected to needless costs and fees in connection with the trustees' defense of Northern's lease-related claims. Fees also were incurred in connection with the trustees' substantially successful efforts to obtain a declaratory judgment that enforced their rights under the lease. Northern's reliance on Ingram v. Sonitrol Sec. Sys. of Worcester, Inc., 11 Mass. App. Ct. 754, 758 (1981), for the proposition that fees incurred in connection with a declaratory judgment action may not be recovered is misplaced. [Note 18] The judge's determination that approximately one-third of the total cost of services provided by the trustees' attorneys was in connection with litigation of lease-related claims was not plainly wrong.

d. Prolonging litigation. Northern claims that the trial judge's finding that Northern had improperly prolonged the litigation was erroneous because both parties were responsible for the delay. The trial judge's findings in this respect are amply supported by the record and are not erroneous.

2. Dismissal of claim for intentional infliction of emotional distress. Richard Benson, the individual plaintiff, complains that the judge wrongly dismissed his emotional distress claim in response to the trustees' motion in limine to exclude evidence supporting the claim. Benson challenges both the procedure -- arguing that a motion in limine was an improper vehicle for dismissing a claim -- and the merits of the judge's action.

Benson's contention that the judge essentially treated the motion in limine as one for summary judgment without providing

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Benson the opportunity to prepare and submit an opposition is belied by the record. The judge offered Benson ample time and opportunity to respond to the trustees' arguments. [Note 19]

3. Directed verdict on constructive eviction claim. At the close of Northern's evidence, the trustees argued that as a matter of law, the disruptions to which the witnesses testified were not sufficiently substantial to constitute constructive eviction. [Note 20] The trial judge allowed the trustees' motion for a directed verdict on Northern's constructive eviction claim. Northern argues that in so doing, the judge ignored evidence supporting reasonable inferences in Northern's favor, and that, at a minimum, the evidence was sufficient to go to the jury.

As with the emotional distress claim, Northern's evidence of misconduct did not rise to the level required to make out a claim for constructive eviction. The landlord's acts must be of a character which "deprive the tenant permanently or for a substantial time of the enjoyment of the property." Westland Hous. Corp. v. Scott, 312 Mass. 375, 382 (1942) quoting from 3 Williston, Contracts § 891 (rev. ed. 1936). Northern points to the same conduct on the part of the trustees that supported the jury verdict for Northern on its breach of lease claim: periodic heat problems, poor maintenance of common areas, debris from a broken skylight, construction dust and disruption. [Note 21] However, Northern's own witnesses testified to the short duration of these

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problems [Note 22] and to the fact that most of Northern's business (providing mortgage companies with plot plans and surveys) was conducted by its employees away from the premises.

The law requires more substantial or ongoing interference than was established by this evidence. See, e.g., Shindler v. Milden, 282 Mass. 32, 33-34 (1933) (landlord's deliberate failure to install a heating system, as promised, rendered the premises unfit for the commercial tenant's restaurant business and constituted a constructive eviction); Westland Hous. Corp. v. Scott, 312 Mass. at 382 (smoke, soot, and fumes from a defective oil burner entering an apartment over a three-month period, causing illness to the tenant and damage to clothing and furniture, constituted a constructive eviction); Charles E. Burt, Inc. v. Seven Grand Corp., 340 Mass. 124, 127 (1959) (landlord's failure to provide any power, electricity, lights, heat, or elevator service to commercial premises constituted a constructive eviction). Compare Sims v. Mason, 361 Mass. 881 (1972) (failure to provide proper cleaning services, suitable heat and air conditioning, and promised improvements, while breaches of the lease, were not sufficient to make out a constructive eviction). [Note 23]

The judge did not err in allowing the trustees' motion for a directed verdict.

4. Directed verdict on Northern's claim for lost profits. Northern sought to recover lost profits allegedly caused by the disruption of its business. To prove its lost profits, Northern offered the testimony of its "controller," Jack Crawley, and introduced Northern's tax returns for the years 1991 through 1997. Crawley testified that Northern had lost clients because of the trustees' breach, but went on to say that he could not "quantify that figure." On cross-examination, Crawly also testified

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to the erratic pattern in Northern's revenues over the course of the 1990's, and admitted that the profits for 1995, the year of the alleged breaches, were actually greater than the average percentage of profit for the years 1991 to 1997.

At the end of Crawley's testimony, the trustees moved to strike. The judge, after hearing argument, allowed the motion, stating from the bench that Crawley was not qualified as an expert witness and that he had offered no facts to support his opinion that any lost profits were tied to the trustees' wrongful acts. Subsequently, the judge also allowed the trustees' motion for a directed verdict on the breach of contract claim for lost profits, relying on Augat, Inc. v. Aegis, Inc., 417 Mass. 484 (1994). [Note 24]

On appeal, Northern cites Dyecraftsmen, Inc. v. Feinberg, 359 Mass. 485, 486- 487 (1971), for the proposition that "it was for the jury to decide whether a causal connection was to be inferred." In the Dyecraftsmen case, the landlord deliberately cut off steam to the premises, causing the tenant's commercial dyeing business to shut down for nine days at the end of 1963, and affecting its production for several weeks after. See ibid. The tenant's sales manager "testified to the total amount of a decline in sales to named firms from 1963 to 1964." Id. at 488. Here, by contrast, Northern's controller testified to only a vague knowledge of lost clients, specifically adding that he could not "quantify" the loss. Hence, no lost clients were identified, nor were any losses shown to be connected to even the relatively brief periods in 1995 that the disruptions to the leased premises occurred.

The judge was correct in ruling that any finding of causation based on Northern's evidence would be purely speculative.

5. Air conditioning. Northern concedes that the lease was silent on the subject of air conditioning. At trial, Northern's

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counsel represented to the judge that he would offer evidence to show that the lease was ambiguous and that the requirement that the trustees provide electricity was meant to include air conditioning. Northern would, he claimed, present evidence that the air conditioning was physically tied in to the electricity for the building in such a way that providing electricity necessarily required the provision of air conditioning.

No such proof emerged, however. In her memorandum on the defendants' motion for a new trial, the judge detailed the shortcomings with Northern's evidence in this regard. She correctly determined that nothing in Northern's evidence demonstrated that an ambiguity existed as to whether the landlord's obligation to supply electricity under the lease necessarily included air conditioning. The judge also did not err when she ruled that because the lease contained an integration clause and was not ambiguous, the jury could not consider evidence that air conditioning was intended to be included in the lease.

On appeal, Northern relies on Cooley v. Bettigole, 1 Mass. App. Ct. 515 (1973). We ruled in that case that parol evidence was admissible to show what the parties intended with respect to whether the landlord of an office building could charge tenants' customers for parking, refundable upon validation. See id. at 520-521. In Cooley, the lease required the landlord to provide, in "the manner customary in office buildings," parking for the tenants and their invitees, without additional charge, while also giving the landlord the exclusive right to regulate and control the parking area. Id. at 517. Here, the lease specifically identified electricity and heat as the services to be paid for by the landlord, but made no mention of air conditioning. There was no error.

Conclusion. Based on the foregoing, we see no reason to disturb the orders and judgments of the trial court. We decline to award appellate attorney's fees or costs to either party.

Judgments affirmed.

Orders affirmed.