NIKOLAY POLINOVSKIY v. EDM HOLDINGS, INC. and another [Note 1]

COVEN, P.J. In a consolidated action, [Note 3] the trial judge found in favor of the plaintiff on a claim for water-related damage to residential property caused by occupants residing at the premises with the permission of the defendants. On the defendants' counterclaims for breach of the security deposit law, G.L. c. 186, § 15B, judgment entered against the plaintiff. On the counterclaims for breach of warranty of habitability and breach of quiet enjoyment, judgment entered for the plaintiff.

In this Dist./Mun. Cts. R. A. D. A. 8C appeal, the defendants claim that (1) the evidence did not support a finding that the occupants caused the water damage; (2) the plaintiff failed to prove damages; (3) the record supported a per se violation of the warranty of habitability and breach of quiet enjoyment; and (4) there was error in offsetting the award of attorney's fees on the security deposit claim against the judgment for the plaintiff.

We agree that it was error to offset the judgment total awarded to the plaintiff with the defendants' award of attorney's fees on the security deposit claim. We also find error in the amount of the judgment itself. We otherwise affirm. Accordingly, we reverse and direct the entry of judgment in the amount consistent with this opinion.

We first address a serious misstep in the Rule 8C appeal. No transcript was available, and the defendants elected to file a Rule 8C(e) statement of evidence with the trial judge for approval. The judge approved the statement and noted that it was presumed that both parties agreed. The statement, however, refers only to documentary evidence. As a result, we are unaware of what testimony the trial judge may have relied upon in reaching a judgment. The statement did not include a statement of evidence presented

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through oral testimony. Moreover, the statement presented to the trial judge refers to thirty exhibits; however, the appendix filed in this appeal does not include all of the referenced documents.

It is axiomatic that a party appealing has a duty to provide a record adequate to address the issues on appeal. Without an adequate record, a reviewing court cannot say whether a finding was unsupported or contrary to the evidence. Holyoke Med. Ctr., Inc. v. George, 2011 Mass. App. Div. 30, 32. Presumably, the trial judge was of the understanding that all referenced exhibits in the submitted statement were relevant to the understanding of the judgment that entered. The failure to include all of the documents is a serious misstep. We limit our review to error clear on the record as presented.

Attorney's fees offset. The trial judge awarded the defendants $2,100.00 in attorney's fees on the security deposit claims, which themselves totaled $4,100.00. [Note 4] The attorney's fee award, together with the trebled award for the security deposit itself ($12,300.00), was offset against the award of $24,700.00 for the plaintiff. Judgment entered for the plaintiff in the amount of $9,524.50. This judgment amount was plain clerical error. Judgment, without the error we discuss below, would have totaled $11,075.50 ($24,700.00, minus $12,300.00, minus $2,100.00, plus $775.50).

As to the offset, the issue is controlled by the reasoning of PGR Mgt. Co., Inc., Health Props. v. Credle, 427 Mass. 636 (1998) (PGR). General Laws c. 221, § 50, provides, in pertinent part: "From the authorized commencement of an action, counterclaim or other proceeding in any court, . . . the attorney who appears for a client in such proceeding shall have a lien for his reasonable fees and expenses upon his client's cause of action, counterclaim or claim, upon the judgment, decree or other order in his client's favor entered or made in such proceeding, and upon the proceeds derived therefrom." As explained in PGR, "[b]ecause [an] attorney's lien under c. 221, § 50, takes effect on commencement of the suit and has priority over any later accruing right of setoff under c. 186, § 14 [breach of warranty of habitability and breach of quiet enjoyment], any attorney's fees awarded a tenant may not be set off against a judgment for the landlord." Id. at 640-641.

Although PGR involved G.L. c. 186, § 14 claims and this case involves a security deposit claim under G.L. c. 186, § 15B, we find no relevant distinction. "Enforcing an attorney's lien serves two policy interests. First, it 'protects attorneys . . . "by disabling the clients from receiving the fruits of recoveries without paying for the valuable services by which the recoveries were obtained."' (Citation omitted.) Second, and more importantly, by ensuring that lawyers will be compensated for their services, the lien provides access to legal services to clients with colorable claims who otherwise could not afford legal services." PGR, supra at 640.

The plaintiff argues that the second policy interest is not applicable in this case. The ability of the defendants to afford or not afford legal services is not in evidence in this appeal. But, in any event, given the priority of the lien and the "provision in c. 186, § 1[5B], that seeks to encourage the private enforcement of particular laws chosen by the Legislature," id. at 641, we find no meaningful distinction. In either case, to allow setoff would burden the attorney and discourage enforcement of rights deemed important by the Legislature.

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Contract vs. Lease. Defendants argue that because not all repairs were proven to have been made, the evidence did not support the award of damages in the amount found. We again state that the record is deficient. The lease is not part of the record, and we therefore do not have evidence of its terms. In any event, whether governed by principles of contract law or negligence, the same result follows. As to contract law, the landlord would be entitled to the cost of repairs to place him back into predamage position. See generally Laurin v. DeCarolis Constr. Co., 372 Mass. 688, 691 (1977). As to the negligence claim, contrary to the position of the defendants, the reasonable cost of repair is an appropriate measure of damages. Restatement (Second) of Torts § 928 (1979). [Note 5]

Notice to quit. Defendants argue that the failure of the plaintiff to list water damage from a shower in the Revere property notice to quit is fatal to the claim for water damage. The defendants' claim has no merit. The defendants' argument is that this omission should have persuaded the trial judge that the water damage was not caused, as found by the trial judge, due to the improper use of the shower. As presented, it is not an issue of law, but an issue of fact, that the defendants ask for review on an inadequate record.

Breach of warranty of habitability. The existence of a material or substantial breach is a question of fact and must be determined in the circumstances and facts of each case. "Factors . . . aiding the court's determination of the materiality of an alleged breach . . . include: (a) the seriousness of the claimed defects and their effect on the dwelling's habitability; (b) the length of time the defects persist; (c) whether the landlord . . . received written or oral notice of the defects; (d) [whether] the residence could be made habitable within a reasonable time; and (e) whether the defects resulted from abnormal conduct or use by the tenant." Boston Hous. Auth. v. Hemingway, 363 Mass. 184, 200-201 (1973). In his findings of fact, the trial judge ruled that damage to the Revere property occurred as a result of misuse of the apartment by employees of the defendants. The record does not support a finding that this determination was clearly erroneous. It follows that in these circumstances there was no error in not finding a G.L. c. 93A violation.

Breach of quiet enjoyment. Defendants argue that the trial judge committed error in failing to find against the plaintiff on their breach of quiet enjoyment claim. As argued by the defendants, the breach flows from the breach of the warranty of habitability. "[T]he covenant of quiet enjoyment pertains to 'acts or omissions that impair the character and value of the [leased premises].'" Kelly v. Jones, 80 Mass. App. Ct. 476, 478 (2011), quoting Doe v. New Bedford Hous. Auth., 417 Mass. 273, 285 (1994). With our having found no error with regard to the breach of warranty of habitability, it follows in these circumstances that there was no error with regard to the breach of quiet enjoyment.

The judgment is reversed. Judgment shall enter for the plaintiff in the amount of $13,175.50. Judgment shall enter for the defendants on their counterclaims for attorney's fees in the amount of $2,100.00.