NC MARSTELLER, INC. and another [Note 1] v.DANIEL R. NEWCOMB and another [Note 2]

FINNERTY, J. Following a bench trial in which the court found in favor of the defendants, Daniel R. Newcomb ("Newcomb") and The Atlantic Restaurant Group, Inc. ("Atlantic"), on claims by the plaintiffs, NC Marsteller, Inc. and NCM Clanoderry, LLC (hereinafter "Aalders," the principal of both entities), for breach of fiduciary duties, conversion, and unfair and deceptive acts in violation of G.L. c. 93A, Aalders appeals.

Aalders contacted Atlantic, of which Newcomb is the principal, in connection with Aalders's interest in purchasing a restaurant for which Atlantic was the seller's broker. After that successful transaction, when his business did not succeed, Aalders contacted Newcomb in order to have Atlantic broker Aalders's sale of the restaurant. The written "Exclusive Right to Sell" brokerage agreement they signed on December 2, 2008 is the crux of this litigation.

That contract between Aalders and Atlantic provided that Aalders would pay Atlantic a professional fee upon the sale or voluntary transfer of the property equal to the greater of 8% of the purchase price or $22,500.00. It also provided that Atlantic would be entitled to 25% of any deposits forfeited to Aalders by any prospective buyer. If any potential buyer introduced by Atlantic became involved in the business "in any manner, either as a manager, consultant, employee, partner, shareholder or in any other capacity," Aalders would pay Atlantic the minimum fee. By its terms, the agreement was still in effect when Aalders produced a buyer, Capital Consulting Group, Inc. ("CCG"). The purchase agreement between CCG and Aalders provided for a deposit of $125,000.00 to be held in escrow by Atlantic and a $50,000.00 nonrefundable deposit

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to be paid directly to Aalders. CCG was permitted under a management agreement with Aalders to begin operation of the restaurant before government approval of license transfers that were a prerequisite to the consummation of the sale. During the period pending consummation, which lasted a year, Aalders left the United States and used Newcomb as a conduit for communication between him and CCG. Ultimately, the license transfers were not approved, and the pending sale was terminated. Litigation between CCG and Aalders followed. Meanwhile, Atlantic arranged a sale by Aalders to the original seller (Aalders's predecessor). Atlantic received a $26,000.00 commission from the proceeds of that sale and $10,000.00 for the transfer of the restaurant operations by Aalders to CCG, which was paid out of funds received by Aalders at that sale.

The litigation between Aalders and CCG ended with a settlement between them in which the $125,000.00 escrow deposit was to be divided $47,500.00 to CCG and $77,500.00 to Aalders (plus the $812.50 interest that had accrued).

In an accounting of the escrow deposit held by Atlantic from the CCG purchase agreement, Atlantic retained $19,578.12, representing 25% of Aalders's part of the escrow. Aalders then filed the instant suit against Atlantic. The trial court found that Atlantic was entitled to the portion of the escrow deposit it retained, that Atlantic had not waived its claim to 25% of the deposit, nor had it released Aalders from his obligations regarding the deposit under the brokerage agreement. Further, the court found that the acceptance of the $10,000.00 did not settle the amount due to Atlantic from the escrow deposit.

In its appeal, Aalders raises four issues. First, that the trial court erred in construing the agreement to provide for cumulative bases for compensation as opposed to alternative bases; second, that the trial court erred in ruling that the CCG payment of part of the escrow deposit to Aalders constituted a forfeiture; third, that the trial court erred in finding no waiver by Atlantic to any compensation beyond the $10,000.00 it accepted for its professional services; and fourth, that the court erred in finding no violation of G.L. c. 93A by Atlantic.

A trial court's interpretation of an unambiguous written contract constitutes a ruling of law, and is reviewed de novo. Baby Furniture Warehouse Store, Inc. v. Meubles D&F Ltee., 75 Mass. App. Ct. 27, 29 (2009). A trial court's determination that a contract is ambiguous also constitutes a ruling of law that is reviewed de novo. Bank v. Thermo Elemental, Inc., 451 Mass. 638, 648 (2008). If a contract is found to be ambiguous, extrinsic evidence may be introduced. "[B]oth parties may testify as to what they understood by the terms of the contract when they executed it. The [fact finder] will then determine what were its terms and apply the law to such facts as [the fact finder] find[s] comprised its terms." Dotson v. Cogswell, 2010 Mass. App. Div. 17, 19, quoting Trafton v. Custeau, 338 Mass. 305, 307 (1959). "A contract should 'be construed to give reasonable effect to each of its provisions.' It should 'give it effect as a rational business instrument and in a manner which will carry out the intention of the parties.'" Kosanovich v. 80 Worcester St. Assocs., LLC, 2014 Mass. App. Div. 93, 97, quoting McMahon v. Monarch Life Ins. Co., 345 Mass. 261, 264 (1962). The question is whether the phraseology can support a reasonable difference of opinion as to the meaning of the words employed and the obligations undertaken. Indus Partners, LLC v. Intelligroup, Inc., 77 Mass. App. Ct. 793, 795 (2010).

The contract language at issue here appears as follows:

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FEE: Owner agrees to pay Agent a professional fee, upon the voluntary transfer [Note 3] of the property, at such price, terms and conditions that are accepted by the owner. Payment of such fee shall be due and payable at the closing of the sale, and shall be the greater of:

8% of the purchase price of the business; or

Minimum Fee of $22,500.00

This fee shall be paid to The Atlantic Restaurant Group, Inc. if the restaurant is sold, leased or transferred within the term of this Agreement to any party. The Atlantic Restaurant Group, Inc. shall also be due a fee if the restaurant is sold, leased or transferred within 12 months of the termination of this Agreement or any extensions thereof to anyone who has been exposed to the property by the Agent prior to the termination of this Agreement.

DEPOSIT: The Agent is authorized to accept and hold all deposits on behalf of Owner. In any case where the actions of a prospective Buyer have caused his/her/its own deposit for the purchase of this business to be forfeited, the forfeited down payment shall be divided and paid as 75% to the Owner(s) and 25% to the Agent. . . .

EMPLOYMENT: Should a buyer introduced by the Agent become involved with the business in any manner, either as a manager, consultant, employee, partner, shareholder or in any other capacity, Owner agrees to pay Agent the minimum fee noted above. [Note 4]

We cannot say that the trial court's holding with respect to the circumstances under which compensation was to be paid by Aalders to Atlantic was erroneous as a matter of law. The plain language of the agreement does not use words suggesting that the three defined circumstances are alternatives. Even if we were to find as a matter of law that the language was ambiguous, we cannot say as a matter of law that the trial court's determination, after having had the benefit of the trial testimony of the parties, was not supported by the evidence.

Aalders's appeal as to the issue of waiver also fails. Waiver is ordinarily a question of fact, provided there is sufficient support for that finding in the evidence. Cueroni v. Coburnville Garage, Inc., 315 Mass. 135, 138 (1943); Porter v. Harrington, 262 Mass. 203, 208 (1927). A judge's finding of fact is binding on appeal and "will not be deemed 'clearly erroneous' unless the appellate court on the entire evidence is left with the firm conviction that a mistake has been made." Capitol Bank & Trust Co. v. Richman, 19 Mass. App. Ct. 515, 519 (1985). The trial judge made a specific factual finding that Atlantic did not waive its right to 25% of the deposit or release Aalders from his obligations regarding the deposit under the agreement. That finding has support in the evidence, and Aalders has not sustained his burden of showing that the finding is clearly erroneous. See Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 509 (1997).

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Aalders next argues that the escrow deposit was not "forfeited" notwithstanding the trial court's specific finding on that question. As noted earlier, the trial court found that the deposit forfeiture was not an alternative to the other payments provided for in the agreement, and the finding that the deposit was forfeited is not clearly erroneous. Aalders's narrow construction of the term forfeiture is not in keeping with the principle of construing a contract to give reasonable effect to each of its provisions and to give it effect as a rational business instrument and in a manner that will carry out the intentions of the parties. McMahon, supra at 264. Aalders's reliance on Zimmerling v. Affinity Fin. Corp., 86 Mass. App. Ct. 136 (2014) is misplaced. That case concerned the enforceability of a security interest in a court-ordered escrow account and application of the Uniform Commercial Code regarding security interests. See G.L. c. 106, § 9-332.

As to Aalders's claim of a violation of G.L. c. 93A, in order to sustain a violation in a business-to-business relationship, the court must focus on the nature of the challenged conduct and on the purpose and effect of that conduct. Massachusetts Employers Ins. Exchange v. Propac-Mass., Inc., 420 Mass. 39, 43 (1995); New Kappa City Constr., Inc. v. National Floor Direct, Inc., 2011 Mass. App. Div. 249, 250-251. The trial court's finding that no G.L. c. 93A violation was committed is consistent with its finding in favor of Atlantic and Newcomb on Aalders's other claims [Note 5] and is supported by the evidence.

In short, the trial court's rulings of law were correct, and the trial evidence supported its factual findings and the result below.

The appeal is dismissed.