Daniel J. BENWAY 1 v. Craig J. CALLAHAN & others.2
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The plaintiff, Daniel Benway, appeals from a judgment entered in favor of defendants Craig and Cynthia Callahan following the allowance of their motion for judgment notwithstanding the verdict (JNOV), or in the alternative, for remittitur or a new trial. On appeal, Benway argues that the judge abused his discretion in denying his motion to amend the complaint as to all defendants. We conclude that the judge did not err in denying that motion. Benway also argues that the judge erred in allowing the motion for JNOV. We vacate judgment entered on September 3, 2019. The order on the Callahans’ motion for JNOV, or in the alternative, for remittitur or a new trial shall be modified to deny the request for JNOV. The matter is remanded for entry of a revised order on that motion giving Benway an opportunity to remit so much of the damages as are excessive, or for a new trial pursuant to Mass. R. Civ. P. 59 (a), 365 Mass. 827 (1974).
Background. “In reviewing [a] judgment [notwithstanding the verdict], we consider the facts and inferences therefrom in the light most favorable to the plaintiff to determine if ‘anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the plaintiff.’ ” Phelan v. May Dep't Stores Co., 60 Mass. App. Ct. 843, 844 (2004), quoting Stapleton v. Macchi, 401 Mass. 725, 728 (1988). Viewed in that light, the jury could have found the following. Benway owned a landscaping and irrigation system installation business and had done work for the Callahans, including at their personal residence. They had seldom, if ever, entered into formal contracts but rather had discussed the work to be done, and when Benway completed the work, he would submit an invoice or orally tell Craig the amount owed, and Craig would pay him.
Craig contemplated developing approximately eleven acres of land he and Cynthia owned (property) and once had retained Waterman Associates, an engineering firm, to draft plans to submit to the town of Northborough (town) for approval of a subdivision that would accommodate several residential lots. The Callahans did not obtain the town's approval that time. In 2014, Craig had discussions with a friend of Benway's about developing the property, but those discussions did not result in an agreement. Craig and Benway then negotiated about developing the property, as the Callahans acknowledged. Craig forwarded a draft written agreement to Benway entitled, “Purchase Agreement for Howard Street, Northboro Subdivision.” This document proposed that Benway would pay the Callahans $100,000 per lot for two lots in the anticipated subdivision, that he would front some development costs, and that the parties would divide the expected profits from the development of the property. Craig signed the document and e-mailed it to Benway, instructing him to make any changes he wished. Benway made no changes. Although Benway signed the document, when he did so is unclear. The document was never notarized as the parties had discussed. Benway never put any money down toward the purchase of the two lots.
It was undisputed, however, that over the next year and one-half, Benway and Craig worked to obtain town approval for the subdivision. Their first effort was denied on June 2, 2015. Their work continued, and Benway was identified in an application to the town as the developer. To aid in developing the subdivision plans, Benway hired Connorstone Engineering, Inc. (Connorstone), and Goddard Consulting, LLC (Goddard), a firm specializing in wetlands issues related to development projects. Benway advanced significant funds to pay them. Benway and Callahan also attended several meetings with the town's planning board (board) and conservation commission to secure the necessary approvals. Fifteen months later, on September 6, 2016, the board approved the subdivision plan. Both Craig and Benway were present at that hearing. The jury could reasonably infer from these facts that Benway was instrumental in obtaining the board's approval.
The property included both the Callahans’ home and a second structure that the parties referred to as the “deck house.” The deck house was repaired, upgraded, and sold as part of the development project. On or about October 4, 2016, the Callahans received an offer to purchase the deck house for $600,000. To proceed with a sale of the deck house, the Callahans needed documentation from Connorstone. Craig learned that Benway had not fully paid Connorstone or Goddard for their work. On October 4, 2016, Craig paid Connorstone $21,190, received the documentation Benway had commissioned from Connorstone, and terminated Benway's involvement in the project. On October 10, 2016, Craig paid Goddard $5,400.89. On October 13, 2016, Craig reimbursed Benway $39,854.07 for payments Benway had made to Connorstone and Goddard. Craig also paid Benway's company $4,062 for work done on the project.
Benway brought suit against the Callahans and Connorstone. Connorstone successfully moved to dismiss the breach of contract claim against it, and eventually, Benway and the Callahans proceeded to trial.
At the time of trial, the development project had not been completed and had not realized any profits. At trial, Benway did not offer any expert testimony or other evidence about the value of the property with and without the subdivision approval.4 Benway testified to spending approximately 530 hours as a developer working on the subdivision project.5
The jury found that the parties never entered into a contract to develop the Callahans’ property. However, the jury found that the Callahans were unjustly enriched and awarded Benway $200,000 in damages. The Callahans filed a motion for JNOV, or in the alternative, for remittitur or a new trial. The judge allowed the request for JNOV, and a new judgment entered accordingly.6
Discussion. 1. Motion to amend complaint. A party that has missed the opportunity to file an amended pleading as of right, as here, nevertheless “may amend his pleading ․ by leave of court or by written consent of the adverse party.”7 Mass. R. Civ. P. 15 (a), 365 Mass. 761 (1974). Leave to amend a pleading is to be “freely given when justice so requires,” id., but denial may be justified by “undue delay ․ [or] futility of amendment.” Lipsitt v. Plaud, 466 Mass. 240, 254 (2013), quoting Goulet v. Whitin Mach. Works, Inc., 399 Mass. 547, 549-550 (1987).
a. Connorstone. Benway's original complaint contained one count against Connorstone for breach of contract, alleging that Connorstone had released drawings of the subdivision to Craig without Benway's knowledge or consent. On February 10, 2017, Connorstone filed a motion to dismiss for failure to state a claim on which relief can be granted. See Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754 (1974). The same date, Benway filed a motion to amend his complaint, without attaching the proposed amended complaint. Benway sought to add claims for violation of the covenant of good faith and fair dealing, negligent misrepresentation, and tortious interference with advantageous business relations.
Before addressing the order denying Benway's motion to amend the complaint, we first explain the basis for the order allowing Connorstone's motion to dismiss. To survive a motion to dismiss for failure to state a claim pursuant to Mass R. Civ. P. 12 (b) (6), a complaint must contain “factual allegations plausibly suggesting (not merely consistent with) an entitlement to relief” (quotation and citation omitted). Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008). In allowing Connorstone's motion to dismiss, the judge reasoned that Benway's allegations failed to establish a breach of contract or damages. Benway's complaint alleged that he and Craig were partners in an effort to develop the property, and the contract that Connorstone entered with Benway includes both his and Craig's names. The count alleging that Connorstone breached the contract that expressly referenced Craig by providing a deliverable to Craig failed to state a claim.8 Benway did not appeal this order. Instead, Benway argues that the judge abused his discretion in denying Benway's motion to amend the complaint.
The factual allegations of the proposed amended complaint relied on the same events at issue in the original complaint and suffered the same deficiency, making amendment futile. Bass River Lobsters, Inc. v. Smith, 7 Mass. App. Ct. 197, 198 (1979) (“Notwithstanding the liberality of rule 15(a) a judge properly may deny a motion to amend because the complaint as amended would fail to state a claim on which relief could be granted” [quotation and citation omitted]); Castellucci v. United States Fid. & Guar. Co., 372 Mass. 288, 292 (1977) (futility of amendment may justify denial of motion to amend). Benway offers no argument why the motion was not futile. There was good reason here to deny the motion to amend the complaint as to Connorstone because the proposed amendment was futile.
b. Callahans. The judge also denied Benway's request to add a fraud claim against the Callahans, concluding that Benway had unduly delayed in seeking to amend the complaint. The judge found that the proposed amended complaint contained only “matters which either were known, or should have been known, to Benway when he first filed the verified complaint” and that Benway did not “proffer a sufficient reason for any alleged delay in discovering the additional facts alleged in the amended complaint, or for not proceeding sooner with the motion to amend.” See Minkina v. Frankl, 86 Mass. App. Ct. 282, 294 (2014), quoting Mathis v. Massachusetts Elec. Co., 409 Mass. 256, 264-265 (1991) (“[U]nexcused delay in seeking to amend is a valid basis for denial of a motion to amend”). Benway fails to offer any reason why he could not have included this claim in his original complaint or any argument that the judge abused his discretion in concluding Benway could have done so. The judge acted within his discretion in denying this portion of the motion on the basis of undue delay. See Barbosa v. Hopper Feeds, Inc., 404 Mass. 610, 621–622 (1989).
2. Judgment notwithstanding the verdict. Following the entry of judgment on the jury verdict, the Callahans moved for JNOV, or in the alternative, for remittitur or a new trial. The motion judge allowed the motion based on the request for JNOV, citing three reasons: (1) Benway failed to show that he conferred a benefit on the Callahans, (2) Benway did not expect to be paid on an hourly basis, and (3) Benway failed to prove a financial loss.9 Benway rightly concedes that the jury's award of $200,000 was unsupported by the evidence.10 Because Benway proved that he conferred a benefit -- the subdivision approval -- on the Callahans, that he expected to be compensated for his work, and that he suffered the opportunity cost of other work, a remittitur is the more appropriate remedy here.
Even though the subdivision had not been developed at the time of trial, the Callahans retained the subdivision approval that they had sought for years and that was acquired with the help of Benway's efforts. While it is correct that Benway expected to share in the profits of the development, when Craig ended the relationship and Benway could not realize this expectation, he could nonetheless seek compensation in an amount by which the Callahans were unjustly enriched. The jury were to have considered the reasonable expectations of the parties in the context of Benway's claim of unjust enrichment, on a theory of quasi contract that is implied in law “for reasons of justice, without any expression of assent.” Salamon v. Terra, 394 Mass. 857, 859 (1985), quoting 1 A. Corbin, Contracts § 19 (1963). Benway testified to spending 530 hours working on the project and that he did not intend to offer free labor to the project. The jury also could infer Benway did not intend to work for free, that Craig knew that Benway was not working for free, and that Benway expected to receive as much as the opportunity cost in the form of his usual work rates. Benway testified that his hourly work rates could range from $100 to $150 an hour to as much as $200 if he used bigger machinery such as an excavator, because he would need to spend extra money to rent equipment for projects requiring equipment that he did not own. Accordingly, there was a basis for a remittitur. It is appropriate for the trial judge to determine the amount of any remittitur in the first instance. See Dubuque v. Cumberland Farms, Inc., 93 Mass. App. Ct. 332, 350, 353 (2018) (“a judge may reduce a verdict where the damages awarded were ‘greatly disproportional to the injury proven’ ” [citation omitted] and appellate court will not “substitute [its] judgment for that of the judge who heard the evidence and saw the witnesses”).
Conclusion. The judge did not err in denying the motion to amend the complaint. The judgment entered on September 3, 2019, is vacated. The order allowing the Callahans’ motion for JNOV, or in the alternative, for remittitur or a new trial shall be modified to deny the request for JNOV. The matter is remanded for entry of a revised order on that motion giving Benway an opportunity to remit so much of the damages as are excessive, the amount of which is to be determined by the trial judge in the first instance, or for a new trial, pursuant to Mass. R. Civ. P. 59 (a), 365 Mass. 827 (1974).
vacated and remanded
4. Benway had never worked as a real estate developer prior to this project and so could not offer his own opinion of the value of his services.
5. Although Benway testified that he spent 530 hours on the project, the record often reflects this amount as 540 hours. We use the amount consistent with Benway's testimony. In any event, even though Benway did not provide written documentation for his hours, this was a credibility issue for the jury. See Patriot Power, LLC v. Rounder, 91 Mass. App. Ct. 175, 181 (2017) (“credibility questions must be resolved by the fact finder”).
6. Benway does not challenge on appeal the jury's verdict that there was no contract or the judge's order ruling in the Callahans’ favor on the G. L. c. 93A claim.
7. The proposed amended complaint was not an amendment by right as to the Callahans or Connorstone because each had filed an answer at the time Benway sought leave to amend. See Mass. R. Civ. P. 15 (a), 365 Mass. 761 (1974).
8. Moreover, rather than suffer damages, Benway benefited from the approval of the subdivision plan and the sale of the deck house. Indeed, his suit against the Callahans was to recoup a portion of that benefit.
9. To prevail on his unjust enrichment claim, Benway had to establish that “(1) [he] conferred a measurable benefit on the defendant[s]; (2) [he] reasonably expected compensation from the defendant[s]; and (3) the defendant[s] accepted the benefit with the knowledge, actual or chargeable, of the plaintiff's reasonable expectation.” Stewart Title Guar. Co. v. Kelly, 97 Mass. App. Ct. 325, 335 (2020).
10. Benway's offer to pay the Callahans $100,000 for each of two lots does not establish that the Callahans were unjustly enriched by that amount.
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