Court Opinion

ID: 2963086
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:06:15.504963+00
Date Added: 2024-06-11T11:42:38.138214
License: Public Domain

USCA1 Opinion

	

          January 31, 1995                                [NOT FOR PUBLICATION]                            UNITED STATE COURT OF APPEALS                                 FOR THE FIRST CIRCUIT                                 ____________________        No. 94-1844                                 EDWARD J. MULLIGAN,                                      Appellant,                                          v.                            BOSTON HARBOR MARINA COMPANY,                                      Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Nathaniel M. Gorton, U.S. District Judge]
                                              ___________________                                 ____________________                                        Before                                Torruella, Chief Judge,
                                           ___________                          Boudin and Stahl, Circuit Judges.
                                            ______________                                 ____________________            Edward J. Mulligan on brief for appellant.
            __________________            Robert M. Gargill, Howard J. Levitan,  Diana K. Lloyd and  Choate,
            _________________  _________________   ______________      _______        Hall & Stewart, on brief for appellee.
        ______________                                 ____________________                                 ____________________

                 Per  Curiam.    Appellant  Edward Mulligan  appeals  the
                 ___________            bankruptcy  court's denial of  his claim for  return of money            deposited with appellee, Boston Harbor Marina Company [BHMC],            and retained  as liquidated  damages when Mulligan  failed to            close on a condominium unit in January 1988.  We affirm.                 The  option of a seller  to retain a  buyer's deposit as            liquidated damages  is the  common practice  in Massachusetts            conveyancing.  Lynch v.  Andrew, 20 Mass. App. Ct.  623, 627,
                           _____     ______            481  N.E.2d 1383,  1386, review  denied, 396 Mass.  1102, 484
                                     ______  ______            N.E.2d 102 (1985).   Massachusetts courts "are disinclined to            tamper  with  [such]  a  well  established  solution  to  the            problems of expense and uncertainty in litigating the precise            damages  in cases of this kind."   Id.  This is especially so
                                               __            when, as  here, nothing  suggests that the  liquidated damage            provision was  negotiated other than at  arm's length between            sophisticated parties.  See id.
                                    ___ __                 Two  points   must  be  considered   in  assessing   the            enforceability of a liquidated damages clause.  "Where actual            damages are difficult to  ascertain and where the  sum agreed            upon by  the  parties at  the time  of the  execution of  the            contract  represents  a  reasonable estimate  of  the  actual            damages, such  a contract will be  enforced. . . .  But where            the   actual  damages  are   easily  ascertainable   and  the            stipulated sum  is unreasonably and  grossly disproportionate            to the  real  damages  from a  breach,  or  is  unconsciously

            excessive, the court will  award the aggrieved party  no more            than his  actual damages."   Shapiro v.  Grinspoon, 27  Mass.
                                         _______     _________            App.  Ct. 596, 603, 541  N.E.2d 359, 365  (1989) (quoting A-Z
                                                                      ___            Servicenter,  Inc. v. Segall, 334 Mass. 672, 675, 138 N.E. 2d
            _________________     ______            266, 268 (1956) (citations omitted)).                   In the  instant case,  the bankruptcy  court supportably            found that Mulligan defaulted  at a time when the  local real            estate market was in a state of considerable flux.  Moreover,            nothing  in the  record  indicates  that  BHMC  ever  had  an            opportunity  after Mulligan's  breach  to sell  the  property            until it was compelled to do  so at auction three years later            and  at  a much  lower price.    Such circumstances  make the            seller's   actual  damages   "difficult  to   calculate  with            precision,"  Lynch,  20 Mass. App. Ct. at 682,  481 N.E.2d at
                         _____            1386 (finding damages difficult  to ascertain in part because            "house was not sold within days of the first buyer's default,            at about the same  price, and without complicating factors"),            and  "[w]hen losses  are difficult to  quantify, considerable            deference is due to  the parties' reasonable agreement  as to            liquidated damages,"  Id (citing cases).  Since Mulligan does
                                  __            not  claim   that  the  liquidated  damages   clause  was  an            unreasonable estimate of damages at the time the contract was            executed, we find no error  in the bankruptcy court's finding            the liquidated damages clause enforceable in this case.                                         -3-

                 In addition,  essentially for  the reasons given  by the            district court  in its  memorandum and order  dated July  19,            1994, we find Mulligan's other claims to be without merit.                 Affirmed.
                 ________                                         -4-