Charles D. Clarke v. Donna M. Murphy.

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule
23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28,
as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties
and, therefore, may not fully address the facts of the case or the panel's
decisional rationale. Moreover, such decisions are not circulated to the entire
court and, therefore, represent only the views of the panel that decided the case.
A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25,
2008, may be cited for its persuasive value but, because of the limitations noted
above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260
n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

23-P-504

CHARLES D. CLARKE

vs.

DONNA M. MURPHY.1

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

This appeal arises from a partnership dissolution between

Charles D. Clarke and Donna M. Murphy. Murphy appeals from a

judgment entered March 28, 2023, raising various claims of error

with respect to (1) an order entered by a Superior Court judge

on Murphy's summary judgment motion that resolved certain issues

in Clarke's favor, and (2) the judgment, entered by a different

Superior Court judge after a jury-waived trial, in Clarke's

favor on all remaining claims. We see no cause to disturb the

judgment, thus we affirm.

1 Individually and as trustee of the 158 Adams Realty Trust.
Background. With respect to the summary judgment order, we

summarize the undisputed facts in the light most favorable to

Murphy, the party against whom the order entered.2

In March 2004, Clarke entered into a partnership agreement

with Murphy (Partnership Agreement), in which they agreed to

purchase a certain mixed-use property (Property) through a

trust, lease the commercial use part of it to Clarke's catering

company, Classic Catering, Inc. (CCI), and rent out the

residential units. On the same day they signed the Partnership

Agreement, Murphy formed and became trustee of the 158 Adams

Realty Trust (Trust), of which she and Clarke were the sole

beneficiaries. The Trust purchased the Property subject to a

seller-financed mortgage. The Trust, Murphy, and Clarke

executed a promissory note (Note), secured by a mortgage on the

Property (Mortgage), promising to pay the sellers the purchase

price of the property plus interest.

As established in the Partnership Agreement, Murphy

provided an initial $49,000 in cash to the Trust, and Clarke

2 While Murphy moved for summary judgment, the motion judge
properly entered a partial summary judgment order in Clarke's
favor even though he did not file a cross motion for summary
judgment. See Mass. R. Civ. P. 56 (c), as amended, 436 Mass.
1404 (2002) ("Summary judgment, when appropriate, may be
rendered against the moving party"). See also Targus Group
Int'l, Inc. v. Sherman, 76 Mass. App. Ct. 421, 422 n.2 & 428-434
(2010) (affirming summary judgment in favor of nonmoving party
in breach of contract claim based on court's interpretation of
written agreement).

2
contributed $1,000. Accordingly, Murphy initially owned ninety-

eight percent of the beneficial interest in the Trust, while

Clarke only owned two percent. However, the Partnership

Agreement provided that a share of CCI's monthly rent payments

would be counted as capital contributions to the Trust and that

Clarke's beneficial interest would increase accordingly until he

owned fifty percent of the Trust.

Clarke and Murphy orally agreed to waive CCI's rent

payments for January, February, and March 2014. In exchange,

Murphy paid herself a $5,400 disbursement from the Trust.

In May 2015, Clarke and Murphy formed Classic Catering

Concepts, Inc. (CCC) to operate using the Property and Clarke's

equipment and fixtures. Clarke and Murphy were equal owners of

CCC. Clarke ran the catering operations; Murphy provided all

necessary back office support.

In September 2017, Clarke told Murphy he could no longer

run CCC's catering business. Clarke sold the catering equipment

and fixtures installed at the Property when CCI started doing

business there. Clarke paid Murphy $1,000 from the proceeds of

the sale. At that time, the main fixtures (which included a

dishwasher, water heater, and range hood) had an aggregate value

of less than $1,000.

The trial judge found the following facts.

3
CCC struggled financially and regularly failed to pay the

Trust rent from September 2015 through July 2017. Murphy

treated CCC's use of the Property as a benefit solely to Clarke,

and when CCC failed to pay rent, she removed half of the

equivalent of CCC's rent from the Trust for her personal use.

In September 2017, Clarke told Murphy he wanted to sell

CCC's catering business. Clarke could not find a buyer. In

October 2017, Murphy removed Clarke's access to the Trust

account and denied his subsequent requests to restore it. In

November 2017, Clarke told Murphy he wanted to sell the Property

and dissolve the partnership.

In January 2018, Murphy stopped providing Clarke with money

from the Trust bank account for any purpose, including

distributions from the Trust's profit. From January 1, 2018,

through June 2021, Murphy paid herself at least $12,888.80 in

distributions. In September 2019, Murphy transferred $20,000

from the Trust account to her personal bank account.

Procedural history. In May 2018, Clarke filed this action

in Superior Court, seeking dissolution of the partnership and

alleging breach of fiduciary duty in his complaint. With her

amended answer, Murphy filed an eleven count counterclaim

likewise seeking dissolution of the partnership and alleging

breach of fiduciary duty, breach of the duty of loyalty, breach

of contract, breach of the implied covenant of good faith and

4
fair dealing, conversion, fraud, breach of guarantee, breach of

lease, and c. 93A violation; she also sought to pierce the

corporate veil to hold Clark jointly and severally liable with

CCC.

In an order dated December 10, 2020, a Superior Court judge

(motion judge) granted partial summary judgment in favor of

Clarke, holding, as relative to Murphy's appeal, that,

(1) Clarke fulfilled his obligation to guarantee the Note and

Mortgage and that, if it were found this obligation were to be a

condition precedent to Clarke accruing a substantial beneficial

interest in the Trust, Clarke satisfied this condition;

(2) Clarke did not breach the lease by failing to pay rent from

January through March 2014; (3) Murphy and the Trust received

the fair value of the trade fixtures Clarke removed; and,

(4) Murphy could not pierce the corporate veil of CCC and hold

Clark personally liable for the alleged failure to pay rent to

the Trust.3

A different Superior Court judge (trial judge) concluded

all claims in favor of Clarke after a jury-waived trial. The

trial judge awarded Clarke damages and ordered that the

Murphy does not here challenge so much of the motion
3

judge's order as dismissed her counterclaim seeking to pierce
the corporate veil.

5
partnership and Trust be dissolved and the Property sold, with

Clarke and Murphy each receiving half the sales proceeds.

Discussion. 1. Summary judgment. As mentioned above, the

motion judge granted partial summary judgment in favor of

Clarke. "We review a grant of summary judgment de novo,"

Deutsche Bank Nat'l Trust Co. v. Fitchburg Capital, LLC, 471

Mass. 248, 252-253 (2015), to determine "whether the evidence,

viewed in the light most favorable to the losing party,

establishes all material facts and entitles the successful party

to a judgment as a matter of law." Targus Group Int'l, Inc. v.

Sherman, 76 Mass. App. Ct. 421, 428 (2010). "Where the language

of a contract is clear and unambiguous, summary judgment is an

appropriate vehicle for judicial interpretation because the

court may interpret the meaning of the contract as a matter of

law without resort to extrinsic evidence or determinations of

fact." Sullivan v. Southland Life Ins. Co., 67 Mass. App. Ct.

439, 440 (2006). "Where . . . the material facts are not in

dispute, and the question of the parties' intention turns on the

language of original and revised written agreements, the

question of intention [is] to be determined by the usual process

of interpretation, implication, and construction [quotation

omitted]." Community Bldrs., Inc. v. Indian Motocycle Assocs.,

Inc., 44 Mass. App. Ct. 537, 548 (1998).

6
a. Guarantee of the Note and Mortgage. On appeal,

Murphy's primary argument is that, under the terms of the

Partnership Agreement, Clarke's beneficial interest in the Trust

never exceeded his initial two percent. She so argues because

Clarke purportedly did not satisfy his obligation to guarantee

the Note and Mortgage insofar as he failed to execute a separate

personal guaranty.4 Murphy contends that doing so was a

condition precedent to counting CCI's rent payments as Clarke's

capital contributions to the Trust.5

As comakers of the Note, Clarke, Murphy, and the Trust were

jointly and severally liable for the debt. See G. L. c. 106,

§ 3-116 (a) ("Except as otherwise provided in the instrument,

two or more persons who have the same liability on an instrument

as makers . . . are jointly and severally liable in the capacity

in which they sign"). The liability of a guarantor of a

promissory note is generally "indistinguishable from that of a

co-maker" (quotation omitted). D'Annolfo v. D'Annolfo Constr.

4 Murphy further claims the Partnership Agreement's penalty
clause entitled her to eliminate Clarke's equitable interest in
the Trust. While the motion judge held that clause
unenforceable, we need not reach that issue because we conclude
no default occurred.

5 Because we conclude, as discussed below, the motion judge
did not err in ruling that Clarke satisfied his obligations
under the Partnership Agreement, we need not decide if
guaranteeing the Note and Mortgage was a condition precedent to
Clarke accruing beneficial interest in the Trust.

7
Co., 39 Mass. App. Ct. 189, 192 (1995). See Seronick v. Levy,

26 Mass. App. Ct. 367, 371 (1988) ("If one is primarily liable

as a maker, jointly and severally, it adds nothing to say one is

liable all over again").6 Nevertheless, Murphy argues that

Clarke was required to execute a separate guaranty to satisfy

the terms of the Partnership Agreement.7 We disagree.

The objective of contract interpretation is to "construe

the contract as a whole, in a reasonable and practical way,

consistent with its language, background, and purpose"

(quotation omitted). Balles v. Babcock Power Inc., 476 Mass.

565, 578 (2017). "[I]nterlocking documents [that] are part of a

single transaction and are 'interrelated in purpose,' must be

read together to effectuate the intention of the parties."

Striar v. American Med. Int'l, Inc., 45 Mass. App. Ct. 87, 95

(1998), quoting Chase Commercial Corp. v. Owen, 32 Mass. App.

Ct. 248, 250-251 (1992).

The Partnership Agreement required Clarke's "personal and

individual guarantee on the Note, Mortgage and Lease." Those

documents were attached to the Partnership Agreement and

6 While there are circumstances in which the liability of a
guarantor may exceed that of the primary obligor, none are
applicable here. See, e.g., SKW Real Estate Ltd. Partnership v.
Gold, 428 Mass. 520, 525 (1998).

7 It is undisputed that the Trust paid off the Note in May
2013.

8
executed simultaneously. The lease document included a guaranty

for Clarke to sign personally. There was no separate guaranty

of the Note attached for Clarke to sign.

Reading the documents together, the requirement that Clarke

"guarantee" the Note required only that he cosign the Note.

While a cosigned promissory note is not a guaranty in the

technical sense, that is the intended meaning as used in the

Partnership Agreement. See Doral Country Club, Inc. v.

O'Connor, 355 Mass. 27, 31 (1968) ("It was not a guaranty . . .,

because the defendant's obligation, unlike a guarantor's, ran

directly and originally to the plaintiff"). Murphy's suggested

interpretation fails to explain why Clarke's signature was

required on the Note despite no other provision in the

Partnership Agreement requiring him to cosign it. Implausibly,

she suggests that Clarke gratuitously signed the Note, incurring

liability for the loan for no benefit, but failed to sign a

guaranty, imposing identical liability with significant

financial benefit.

Likewise, the obligation to guarantee the Mortgage required

only a guarantee of the loan obligation that the Mortgage

secured. See Deutsche Bank Nat'l Trust Co., 471 Mass. at 254

(construing statutory reference to "maturity date of [a]

mortgage" as referring to "the date on which the underlying debt

9
is due because a mortgage derives its vitality from the debt

that it secures").

b. Breach of lease. Although Murphy does not dispute she

entered into an oral agreement to waive CCI's rent from January

through March 2014, she argues that only CCI's liability under

the lease was relieved, not Clarke's obligation to pay rent as a

guarantor. This argument is without merit. The parties'

undisputed oral agreement that CCI did not have to pay rent for

the first three months of 2014 was an effective modification of

the lease, and did not constitute a breach by Clarke. See

Commonwealth Inv. Co. v. Fellsway Motor Mart, Inc., 294 Mass.

306, 314 (1936). Though the lease states that it can only be

modified in writing, such a provision is unenforceable when

there is clear evidence of subsequent oral modification. See,

e.g., Cambridgeport Sav. Bank v. Boersner, 413 Mass. 432, 439

(1992) ("a provision that an agreement may not be amended orally

but only by a written instrument does not necessarily bar oral

modification of the contract"). Likewise, the parties' oral

agreement effectively modified the lease guaranty. See Federal

Fin. Co. v. Savage, 431 Mass. 814, 817 (2000) ("A guaranty is a

contract like all other contracts" [quotation omitted]).

Murphy's reliance on Cedar-Fieldstone Marketplace, LP v.

T.S. Fitness, Inc., 93 Mass. App. Ct. 33 (2018), for the

proposition that a modification of the underlying lease cannot

10
relieve a guarantor's obligation to pay, is misplaced. In that

case, the court's holding rested on the terms of the guaranty,

which expressly disclaimed any limitation of liability based on

"any consent, release[,] indulgence or other action, inaction or

omission under or in respect of the [l]ease." Id. at 37. No

such language was included in the lease guaranty in this case.

Moreover, unlike the landlord in Cedar-Fieldstone Marketplace,

the modification left Murphy no worse off than under the

original lease terms. See id. at 35. Murphy withdrew the full

three months' rent, twice what she would have received as a

distribution from the Trust had the rent been paid. In other

words, despite the agreed amendment of the lease, Murphy

received the full benefit of the rent payments called for under

the lease, and would therefore not have been entitled to recover

anything under the guaranty. That the Trust is the nominal

injured party is immaterial. See Morrison v. Lennett, 415 Mass.

857, 862 (1993) ("there is logic in treating the beneficiaries

of a nominee trust as the true owners of the property for the

purposes of liability as well as benefit" [quotation omitted]).

c. Sale of Fixtures. Murphy alleges that Clarke's sale of

the catering fixtures constituted, inter alia, a breach of his

fiduciary duty, a breach of contract, and conversion. The

motion judge correctly ruled this claim fails as a matter of law

because Murphy could not prove damages. See Schwartz v.

11
Travelers Indem. Co., 50 Mass. App. Ct. 672, 682 (2001)

(affirming summary judgment for defendant on contract claim

because plaintiff could not establish damages). The facts were

undisputed that Clarke paid Murphy $1,000 from the amount

received for selling the catering equipment and fixtures, and

that the aggregate fair market value of the equipment was less

than that at the time.

Accordingly, we discern no error in the motion judge's

grant of partial summary judgment.

2. Trial. The trial judge found that Clarke did not

engage in fraud or conversion and did not breach his fiduciary

duty to Murphy, his duty of loyalty, the Partnership Agreement,

the implied covenant of good faith and fair dealing, or any

guaranty. The trial judge further found that Murphy breached

her fiduciary duty to Clarke. The trial judge awarded Clarke

damages and ordered the partnership and Trust to be dissolved

and the Property to be sold, with Clarke and Murphy each

receiving half the sales proceeds. Murphy argues, in summary,

that the trial judge erred by (1) including the Property among

partnership assets because the Trust owns the Property, (2) not

awarding damages for CCC's breach of the lease, and (3) failing

to find that Clarke defrauded her.

On appeal from a judgment entered following a jury-waived

trial, we review the trial judge's findings of fact for clear

12
error and review de novo her rulings on questions of law.

Central Ceilings, Inc. v. Suffolk Constr. Co., 91 Mass. App. Ct.

231, 235 (2017).

We first note that Murphy has failed to provide this court

with an adequate record of the proceedings below. "It is the

obligation of the appellant[] to include in the appendix those

[materials] . . ., which are essential for review of the issues

raised on appeal (both to determine whether the evidence

supports the theory on appeal and whether the issue was properly

presented and preserved)." Shawmut Community Bank, N.A. v.

Zagami, 30 Mass. App. Ct. 371, 372-373 (1991), S.C., 411 Mass.

807 (1992). See Wooldridge v. Hickey, 45 Mass. App. Ct. 637,

641 (1998) ("A party claiming an insufficiency of evidence,

therefore, has the burden on appeal of furnishing the court with

all the evidence").

Here, Murphy provided this court with only select exhibits

and no trial transcript. Murphy's duty to provide this court

with a record adequate to review her claims of error is not

diminished because she is self-represented. See Davis v.

Tabachnick, 425 Mass. 1010, 1010, cert. denied, 522 U.S. 982

(1997). Consequently, we are unable to review any issue raised

based on a claimed clearly erroneous factual finding, and our

review is limited to the judge's legal conclusions based on the

facts as found. See Mass. R. A. P. 18 (a) (1) (D), as appearing

13
in 491 Mass. 1603 (2023). See also Smith v. Jones, 67 Mass.

App. Ct. 129, 134 (2006) ("As appellant, it is the defendant's

obligation to provide an adequate record for review").

a. Partnership Assets. Murphy argues the trial court

erred by holding that the Trust's assets, including the

Property, are assets of the Partnership, of which Clarke and

Murphy each held a fifty percent interest. We disagree.

"All property originally brought into the partnership stock

or subsequently acquired, by purchase or otherwise, on account

of the partnership is partnership property." G. L. c. 108A,

§ 8 (1). "[L]and, whatever the aspect of the legal title, may

nevertheless be proved in equity to be part of the joint stock

of a copartnership, and as such, liable to all the equitable

conditions of partnership property." Fall River Whaling Co. v.

Borden, 10 Cush. 458, 461 (Mass. 1852). "That partnership

property may be held in [trust for the partnership], rather than

in the name of the partnership, is expressly contemplated by

G. L. c. 108A, § 10." Sullivan v. Lawlis, 93 Mass. App. Ct.

409, 413 (2018).

The parties created the Trust under the terms of the

Partnership Agreement for the sole purpose of holding legal

title to the Property. The Partnership Agreement required the

Trust to purchase the Property, allocated the parties'

beneficial interest in the Trust, and stipulated the lease terms

14
between the Trust and CCI. Because the essence of the

partnership was the management of the Property through the

Trust, both are partnership assets.

b. CCC's failure to pay rent. It is undisputed that CCC

regularly failed to pay the rent owed to the Trust. However,

unlike CCI, for which Clarke was solely responsible, CCC was a

corporation jointly owned by Clarke and Murphy. Murphy's claim

for damages based on Clarke's breach of the lease rests on the

faulty premise that she owned 100 percent of the Trust.

Instead, Clarke and Murphy owned CCC's profits and losses

equally. They likewise had an equal stake in the Trust. The

goal in awarding "contract damages is that the aggrieved party

should be put in as good a position as if the other party had

fully performed [quotation omitted]." Selmark Assocs. Inc. v.

Ehrlich, 467 Mass. 525, 543 (2014). Because any increase in

Trust assets from CCC paying rent would be offset by an equal

decrease in CCC's assets, Murphy is no worse off than if CCC had

paid the rent. Accordingly, we affirm the trial judge's holding

that Murphy suffered no damages from CCC's breach of the lease.

c. Fraud. To prove her claim of fraud, Murphy was

required to "prove that [Clark] made a false representation of a

material fact with knowledge of its falsity for the purpose of

inducing [Murphy] to act thereon, and that [she] relied upon the

representation as true and acted upon it to [her] damage."

15
O'Connor v. Merrimack Mut. Fire Ins. Co., 73 Mass. App. Ct. 205,

212 (2008), quoting Barrett Assocs., Inc. v. Aronson, 346 Mass.

150, 152 (1963). We discern no error in the trial judge’s

ruling that the facts do not support a conclusion of fraud based

on any of the following claims made by Murphy.

i. Catering jobs. Murphy's claim that Clarke falsely

concealed revenue from CCC’s catering business during the time

period from June through July 2015, thus depriving her of a

share of the revenue, finds no support in the record. The

judge's findings demonstrate that the catering contracts Clarke

secured during this time were not CCC jobs, as CCC had yet to be

incorporated. Rather, Clarke had resumed operating CCI out of

the Property with Murphy's knowledge in February 2015. The

judge's findings show that the parties formed CCC in May 2015

but only began booking jobs in August 2015.

ii. Taxes and utilities. The terms of the lease called

for CCI to pay its proportionate share of water/sewer charges

and its proportionate share of the increase in real estate

taxes. However, as the trustee, Murphy never billed CCI for

these charges during the ten-year term of CCI's lease. Murphy

did not seek to enforce these provisions until December 2017,

after Clarke indicated his desire to dissolve the partnership.

The trial judge found Murphy's inaction as the trustee waived

CCI's contractual obligations to make the additional water and

16
tax payments to the trust. See Pear v. Davenport, 67 Mass. App.

Ct. 239, 241 (2006) (waiver a question of fact decided from all

facts and circumstances surrounding each case).8

3. Appellate costs and fees. We agree Murphy's appeal is

frivolous and allow Clarke's request for appellate attorney's

fees and costs. See Mass. R. A. P. 25, as appearing in 481

Mass. 1654 (2019); Avery v. Steele, 414 Mass. 450, 455 (1993)

("An appeal is frivolous [w]hen the law is well settled, when

there can be no reasonable expectation of a reversal. . . . The

determination whether an appeal is frivolous is left to the

sound discretion of the appellate court" [quotation omitted]).

In accordance with the procedure specified in Fabre v. Walton,

441 Mass. 9, 10-11 (2004), Clarke may, within fourteen days of

the issuance of the rescript in this matter, submit an

application for his reasonably incurred attorney's fees and

costs with the appropriate supporting materials. Murphy shall

8 We have not overlooked issues not addressed above. Any
issue not addressed has either been waived by the appellant, or
we find the claims do not merit further discussion.
Commonwealth v. Domanski, 332 Mass. 66, 78 (1954).

17
have fourteen days thereafter to file a response to that

application.

Order entered December 14,
2020, affirmed.

Judgment affirmed.

By the Court (Green, C.J.,
Walsh & Smyth, JJ.9),

Clerk

Entered: August 16, 2024.

9 The panelists are listed in order of seniority.

18