CYMA SYSTEMS, INC. v. AVCO CONSULTING, INC.

NOONAN, J. In this case, the defendant, AVCO Consulting, Inc. (“AVCO”), appeals the trial court’s order that judgment enter in favor of the plaintiff, CYMA Systems, Inc. (“CYMA”). For the reasons set forth below, the trial court’s decision is reversed.

Before addressing the substantive issues involved in this appeal, the pleadings filed by the parties reflect some confusion as to the manner in which this case was decided -- by summary judgment or following a jury-waived trial. Some clarification as to the procedural history of this matter is therefore required.

CYMA commenced this action in March, 2011, asserting the right to recover on an account annexed, breach of contract, and unjust enrichment. In 2012, CYMA moved for summary judgment, and its motion was denied after a hearing. The case was scheduled for a jury-waived trial, and after several continuances, the parties appeared in the trial court on May 10, 2013. On that date, the parties, through counsel, reported that there were several stipulations of fact, and those were read to the trial judge. CYMA’s counsel made what was described as an opening statement, followed by an opening statement by AVCO’s counsel. After hearing from both sides, the trial judge suggested that there appeared to be no material facts in dispute and that the case could be decided through a motion for summary judgment. Both parties agreed to this, and AVCO subsequently filed a motion for summary judgement. CYMA filed a written opposition, and the parties waived further argument. We have been provided with no written decision on the motion for summary judgment, but the record indicates that pursuant to the judge’s order, judgment entered on July 12, 2013, for CYMA for $13,641.00, plus interest and costs. This appeal followed.

A review of the pleadings and, in particular, the transcript of the May 10, 2013, hearing clearly demonstrates that the parties did in fact agree that there were no genuine issues of material fact to be resolved at a trial, and that the controversy between the parties was to be decided on a motion for summary judgment.

The standard of review of the grant of summary judgment is well known. In a case such as this, where all material facts were established, the question before us is whether CYMA was entitled to a judgment as a matter of a law. Mass. R. Civ. P. 56(c).

With regard to established facts, AVCO and CYMA were both in the business of providing technology consulting services. In August of 2009, the parties entered into a written agreement pursuant to which CYMA agreed to provide a consultant who would perform services for a client of AVCO or its designee (the “Client”) on

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one or more projects at an agreed-upon hourly rate. The consultant performed the services, and CYMA submitted invoices indicating the hours the consultant worked. The invoices totaled $39,073.00. AVCO paid CYMA $25,432.00, leaving a balance of $13,641.00. The Client did not pay AVCO the balance that was invoiced for the consultant’s work, and AVCO did not pay CYMA.

The agreement between AVCO and CYMA included a clause that called for AVCO to pay CYMA within thirty-five days of AVCO’s receipt of monthly invoices for hours that the consultant worked. The same clause also included the following provision:

“The Client of AVCO is the ultimate arbiter of acceptance of and payment for Services. In the event Client refuses to accept and pay AVCO for Contractor’s work, AVCO shall be relieved of paying Contractor for same.”

AVCO relies upon this provision, asserting that it is not legally obligated to pay CYMA because the Client did not “accept and pay” AVCO. For its part, CYMA asserts that the Client accepted the consultant’s work and that it is entitled to full payment from AVCO.

AVCO contends, and this Division concurs, that the plain meaning of the last line of clause 1.6 creates a condition precedent, or essentially two conditions precedent, before an obligation to pay compensation to CYMA is triggered. A condition precedent defines an event (or events in this case) that must occur before a contract becomes effective or before an obligation to perform arises under the contract. Woods v. Roy Lapidus, Inc., 10 Mass. App. Ct. 761, 763 n.5 (1980). “Emphatic words” are generally considered necessary to create a condition precedent, the failure of which will limit or forfeit rights under the agreement. Massachusetts Mun. Wholesale Elec. Co. v. Town of Danvers, 411 Mass. 39, 46 (1991). Emphatic words include “on the condition of,” “when,” and “if.” Id. In this case, we have such emphatic words set out in the last line of clause 1.6, i.e., “In the event.” The parties have stipulated that the Client did not accept and pay AVCO for CYMA’s services. Consequently, by agreement, AVCO was relieved from paying CYMA for those services. Once the Client did not pay AVCO, which all parties agree occurred, AVCO was relieved from compensating CYMA.

The decision of the trial court granting judgment to CYMA when the two conditions precedent were not met was in error. Accordingly, the judgment for CYMA is vacated and the decision reversed. Judgment shall enter in favor of AVCO.