On January 10, 2007, Robert and Judith Slocum (Plaintiffs) initiated this action by filing a two-count complaint against Heritage Heating and Plumbing Co., Inc., to secure a discharge of a mortgage held by Defendant on property owned by Plaintiffs. Plaintiffs seek a determination of the amount of the debt secured by the outstanding mortgage and ask this court to compel a discharge of the mortgage upon payment of the outstanding debt. On January 30, 2007, Defendant filed its Answer, in which it maintains that the amount due it from Plaintiffs is well in excess of what Plaintiffs claim they owe.
A one-day trial was held on November 20, 2008. At trial this court heard the testimony of Plaintiffs Judith Slocum and Robert Slocum, and Gordon Switzer, principal of Heritage Heating and Plumbing Co., Inc. (Heritage). Fourteen exhibits, including a stipulation of facts, were entered in evidence and both parties submitted post-trial briefs in December, 2008. [Note 1]
Based on all the evidence and reasonable inferences drawn therefrom, this court finds the following material facts:
1. Plaintiffs own and reside at property located at 241R (formerly numbered 237R) Haverhill Street in North Reading as tenants by the entirety The property is improved by a single-family house (Plaintiffs Property). Plaintiffs Property is subject to a first mortgage in favor of Washington Mutual, securing the payment of $675,000.
2. Plaintiff Judith Slocum has known Gordon Switzer since the 1980s and was, for some period of time, employed part-time by Defendant as an office manager. She left Defendants employ voluntarily in January of 2005.
3. Plaintiff Robert Slocum is the principal of SCI Construction, Inc., a Massachusetts corporation, which ceased doing business in 2007. SCI Construction, Inc. did general construction work including commercial and residential properties. Plaintiff Judith Slocum was employed by SCI Construction in January 2005, when she left Heritage, and she continued to work at SCI thereafter.
4. On August 19, 2003, SCI Construction hired Heritage to do plumbing and heating work at a house owned by a Mr. and Mrs. Riley in Lynnfield (Riley Job).
5. Defendant performed the requested work for the Riley Job and placed a mechanics lien against the Riley property pending payment by SCI for the work performed. Sometime in 2004, Plaintiffs asked Switzer to remove the mechanics lien in favor of Heritage from the Riley property so SCI could receive the final installment of money from the construction lender who was financing SCIs construction at the Riley property. [Note 2] Defendant agreed to release the lien in exchange for a promissory note from both Plaintiffs, secured by a mortgage on Plaintiffs Property.
6. On October 27, 2004, Plaintiffs granted Heritage a second mortgage on Plaintiffs Property to secure the payment of $25,000. On that same date, both Plaintiffs, in their individual capacities, signed a $25,000 promissory note to Heritage. The promissory note required the payment of $10,000 within seven days and the payment of an additional $15,000 within six months.
7. Before signing the promissory note, Robert Slocum met with Gordon Switzer. They agreed that $25,000 would be the amount of the promissory note. [Note 3]
8. Plaintiffs subsequently made the following payments to Heritage by credit card:
|November 5, 2004||$ 1,300|
|November 17, 2004||$10,000|
|December 28, 2004||$ 7,900|
Plaintiffs payments on the promissory note totaled $19,200.
9. On April 5, 2005, Plaintiffs filed for personal bankruptcy listing Defendant as a creditor. After filing for bankruptcy, Plaintiffs requested from Heritage an accounting stating the amount still outstanding under the promissory note. Plaintiffs subsequently received a statement dated February 11, 2005, on Heritage stationery, indicating that the balance due on the Riley Job was $542. [Note 4]
10. On January 25, 2006, Plaintiffs, through counsel, sent a money order for $542 to Defendant, which Defendant did not accept. [Note 5]
11. On September 14, 2008, Plaintiffs, through counsel, sent a letter to Defendant proposing to settle this action for $5,800, for which they sought a discharge of the mortgage held by Heritage. A copy of this letter was sent to the court. Defendant did not accept the proposed settlement offer.
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Plaintiffs assert that the amount due on the promissory note is $542, based on the invoice Plaintiffs they received from Heritage. Plaintiffs argue, alternatively, that if $542 is not the amount due on the promissory note, then the amount due must be $5,800 because Plaintiffs have already paid Heritage $19,200 against the $25,000, the stated amount of the promissory note. Heritage argues that the amount due on the promissory note is $24,504.25, because the $542 invoice did not reflect all the work performed by Defendant on the Riley Job.
The interpretation of unambiguous contractual language is a matter of law for the judge, and not a matter of fact. Seaco Ins. Co. v. Barbosa, 435 Mass. 772 , 779 (2002). Moreover, it is well-settled that where [t]here is no ambiguity in the contract  it must be enforced according to its terms. Freelander v. G. & K. Realty Corp., 357 Mass. 512 , 515 (1970) (quoting Sherman v. Employers' Liability Assurance Corp. Ltd., 343 Mass. 354 (1961)). The promissory note signed by Plaintiffs on October 27, 2004, was a legally enforceable contract. Furthermore, it is clear from the face of that contract that Plaintiffs made a promise to pay the sum of $25,000 to Defendant. Additionally, the mortgage specifically references the promissory note and states This Security Instrument is given to Heritage Heating and Plumbing Co., Inc. whose address is 35 Pleasant Street, Stoneham, Massachusetts (Lender). Borrower owes Lender the principal TWENTY-FIVE THOUSAND (U.S. $25,000.000). This debt represents security for a promissory note executed on this date. . . The mortgage was signed on October 27, 2004 and Plaintiffs signed the mortgage in their individual capacities. The mortgage does not secure the repayment of any monies except those owed under the promissory note. It may be that Mr. Switzer meant to secure all future amounts owed Heritage by SCI for work performed on the Riley Job, but the promissory note and mortgage are not to that effect. There is nothing ambiguous in [the promissory note and mortgage] language and the court cannot subvert its plain meaning. Freelander, 357 Mass. at 515. The evidence established that Plaintiffs paid a total of $19,200 towards the balance due on the promissory note. Therefore, this court finds the remaining debt owed on the promissory note is $5,800.
Finally, Defendant contends that Plaintiffs are liable for the costs incurred by Defendant in this action pursuant to Mass. R. Civ. P. 68. Rule 68 states in relevant part:
At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against him for the money or property or to the effect specified in his offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the clerk shall enter judgment. . . . If the judgment exclusive of interest from the date of offer finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer . . . (emphasis added).
Mass. R. Civ. P. Rule 68, 365 Mass. 835 (1974). Therefore, Defendant argues, Plaintiffs are liable for costs incurred from September 14, 2008, the date of that letter. Although Rule 68 does require a defending party to pay costs where the judgment obtained is in excess of any settlement offer, it is inapplicable in the case at bar.
Rule 68 only applies to offers made by a party defending against a claim. It does not apply to settlement offers made by plaintiffs. Defendant did not file a counterclaim in this action. Therefore, at no time were Plaintiffs parties defending against a claim and Rule 68 is not applicable. Gentili v. Colonial Motel, Inc., 27 Mass. App. Ct. 1150 , 1150 (1989) (As to that counterclaim, Colonial Motel, Inc., was not a party defending against a claim; it was the plaintiff. Colonial Motel, Inc., may not, therefore, obtain costs under rule 68.); Bird v. Bird, 24 Mass. App. Ct. 362 , 365 n. 3 (1987); see SMITH & ZOBEL, RULES PRACTICE § 68.1 (2007).
Judgment to issue accordingly.
Karyn F. Scheier
Dated: January 9, 2009
[Note 1] The trial was conducted without a stenographer present.
[Note 2] While not stated explicitly, it appears SCI could not pay Heritage without drawing down funds from the construction loan.
[Note 3] In their trial testimony, Robert Slocum and Gordon Switzer disagreed as to what that $25,000 figure represented. Robert Slocum testified that it represented the monies then due Heritage plus a projection of addition monies that might become due under his contract to do the Riley Job. Mr. Switzer testified that the $25,000 represented monies then due and secured by the mechanics lien.
[Note 4] Defendant has alleged that the invoice sent for $542 was not generated by Heritage. He conjectured that Judith Slocum may have generated the invoice herself, since she was working for Heritage at the time, processed payments made by Plaintiffs and others, and was responsible for generating invoices and statements as part of her job with Heritage. However, no evidence supported this conjecture.
[Note 5] At trial, Mr. Switzer testified that upon realizing that Plaintiffs believed the amount due to be $542, he reviewed his records from the Riley Job and discovered that not all the work that had been performed on the Riley Job had been invoiced. Defendant then posted the missing work and charges and generated a new invoice to Plaintiffs in the amount of $24,504.25. (Exhibit 12, dated October 7, 2005.)