Opinion
21-P-835
07-14-2022
NEW ENGLAND PRESERVATION AND DEVELOPMENT, LLC & another [1] v. TOWN OF FAIRHAVEN.
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).
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The plaintiffs, New England Preservation and Development, LLC and Zachary Mayo (collectively, buyer), appeal from an order of a Superior Court judge allowing the special motion of the town of Fairhaven to dismiss and to dissolve a memorandum of lis pendens and awarding attorney's fees. Concluding that the buyer's claim of breach of contract is not "frivolous" within the meaning of G. L. c. 184, § 15 (c), we reverse the judge's order and remand to the Superior Court for further proceedings consistent with this memorandum and order.
1. Background.
We rely on the facts in "the verified pleadings and affidavits that were before the judge." Citadel Realty, LLC v. Endeavor Capital N., LLC, 93 Mass.App.Ct. 39, 40 (2018). On July 23, 2019, the parties executed a purchase and sale agreement (agreement) for the sale of real property. A rider to the agreement stated that the sale was contingent on six conditions, four of which are relevant to this appeal: (1) that, within 180 days, the buyer notify the town when it "obtained financing commitments sufficient to fund the development of the project," (2) that the buyer notify the town when it obtained the necessary permits and that the town assist the buyer in obtaining them, (3) that the buyer apply to have the property placed on the National Register of Historic Buildings and notify the town of the application, and (4) that the buyer "provide the [town] with a Letter of Credit sufficient to guarantee the completion of the work as shown on the approved plans." The agreement gave the town the right to cancel the sale if the buyer did not satisfy the conditions in the rider within one year.
On July 24, 2020, the town terminated the agreement because the buyer failed to fulfil the four conditions above. The buyer sued the town for breach of contract and breach of the implied covenant of good faith and fair dealing. The buyer argued below, as they do on appeal, that the town refused to accept the buyer's submission of documents required by the agreement, imposed requirements beyond those in the agreement, failed to assist the buyer in obtaining the necessary permits, and prematurely terminated the agreement.
2. General Laws c. 184, § 15 (c).
General Laws c. 184, § 15 (c), provides "an expedited mechanism for dissolving a lis pendens," Ferguson v. Maxim, 96 Mass.App.Ct. 385, 389 (2019), and "permits a defendant to bring a 'special motion to dismiss' any 'frivolous' action or claim on which a lis pendens is based." Id., quoting St. 2002, c. 496, § 2. A claim is "frivolous" for the purposes of § 15 (c) if "(1) it is devoid of any reasonable factual support; or (2) it is devoid of any arguable basis in law; or (3) the action or claim is subject to dismissal based on a valid legal defense such as the statute of frauds." Ferguson, supra, quoting G. L. c. 184, § 15 (c). On a special motion to dismiss, the defendant bears the burden "to demonstrate, by a preponderance of the evidence, that the plaintiff's claim is completely lacking in 'reasonable factual support . . . or . . . any arguable basis in law.'" Ferguson, supra at 390, quoting G. L. c. 184, § 15 (c). The Supreme
Judicial Court has described "reasonable factual support" as "evidence that, if believed, would support a finding in the [party's] favor." Benoit v. Frederickson, 454 Mass. 148, 154 n.7 (2009) (discussing special motions to dismiss in anti-SLAPP context).
In reviewing a special motion to dismiss, the judge must "consider alleged facts beyond the plaintiff's initial pleading," Ferguson, 96 Mass.App.Ct. at 390, and should not consider "which of the parties' pleadings and affidavits are entitled to be credited or accorded greater weight." Id., quoting Benoit, 454 Mass. at 154 n.7. We review the motion judge's ruling for an abuse of discretion or error of law, examining "the same factors properly considered by the judge in the trial court." Citadel Realty, 93 Mass.App.Ct. at 44. The motion judge's "conclusions of law are subject to broad review and will be reversed if incorrect." Id. at 44-45.
3. Breach of contract.
a. Financing commitment. Before one year had passed, the buyer sent the town a letter from Bart Bussink of Millers River Development, LLC. In the letter, Bussink stated that he was "confirm[ing] [his] interest and commitment to the project" and that his bank had assured him "that financing [the project] would not present any kind of problem for [the bank]." In addition, Bussink stated that he and his business partners own real estate valued at more than $14 million; that he owns real estate valued at $3 million; and that he has "liquid assets" valued at $2.7 million. The town rejected this letter on the ground that the agreement requires that the buyer execute a binding contract to finance the project. The judge, accepting the town's position, found that the documentation that the buyer provided did not evidence "financing commitments sufficient to fund the development of the project," as the agreement requires.
Even if the buyer's position is ultimately unsuccessful, it is not frivolous. In the letter, Bussink declared his "commitment to the project" and asserted that he has financial resources that are quantitatively "sufficient to fund the . . . project." The terms of the parties' agreement do not expressly require a binding contract. See McMann v. McGowan, 71 Mass.App.Ct. 513, 517 (2008), quoting Continental Cas. Co. v. Gilbane Bldg. Co., 391 Mass. 143, 147 (1984) ("We read the [contract] as written" and "are not free to revise it"). Whether the agreement should be interpreted to require more than the buyer provided need not be resolved at this stage; it is enough that the buyer's position is not frivolous.
b. Permits.
The buyer claimed in his pleadings and affidavit that he sought the town's help in getting permits and preparing plans, but the town ignored his requests and demanded additional documents and information that the agreement does not require. The judge found that "[t]his evidence provides at least an arguable basis in fact and law to conclude that the [buyer's] compliance with Condition C was legally excused." We agree.
c. National register of historic buildings. The buyer claimed in his pleadings and affidavit that he applied to have the property listed on the National Register of Historic buildings, as the agreement requires. The town argued in its special motion to dismiss that the buyer did not do so.
The judge found that, notwithstanding the buyer's alleged application, there is no evidence that the buyer notified the town after applying, as the agreement requires. The judge concluded that, as a result, the buyer did not fulfil this condition. The buyer argues that the town's refusal to accept certain documents and demand for documents not required under the agreement made it difficult for the buyer to comply strictly with the notification requirement. Whether this argument is ultimately successful, it is not frivolous, especially in light of the arguable immateriality of the breach. Cf. Dalrymple v. Winthrop, 97 Mass.App.Ct. 547, 556 (2020), quoting Duff v. McKay, 89 Mass.App.Ct. 538, 547 (2016) ("A party to a contract generally is relieved of [its] obligations under that contract only when the other party has committed a material breach, that is, 'a breach of "an essential and inducing feature of the contract[]"'").
d. Letter of credit.
The buyer claims that, after the agreement was formed, the town modified the agreement by telling the buyer "that it could provide either a letter of credit or performance bond at closing." The agreement, however, requires that modifications be in writing. The judge found that the buyer's claim of an oral modification was insufficient to overcome the presumption that the agreement is complete as written. "[A] conclusion to that effect was premature." Schinkel v. Maxi-Holding, Inc., 30 Mass.App.Ct. 41, 46 (1991) (judge improperly dismissed breach of contract claim where plaintiff alleged that oral agreement reached before contract was executed modified contract). The buyer must have a chance to "present evidence that the parties reached an agreement as to [the] terms" of the alleged oral modification. Sea Breeze Estates, LLC v. Jarema, 94 Mass.App.Ct. 210, 217 (2018). If, after discovery, the buyer has not met his burden of introducing evidence that is "sufficiently weighted and of competent probity to present a material issue for trial," Wells Fargo Bus. Credit v. Environamics Corp., 77 Mass.App.Ct. 812, 817 (2010), on whether the parties orally modified the agreement, summary judgment may be appropriate. See Sea Breeze Estates, supra at 218. The claim, however, is not frivolous. Accordingly, we conclude that the judge abused his discretion in dismissing the buyer's amended complaint, dissolving the memorandum of lis pendens, and awarding attorney's fees.
Because the breach of contract claim was not frivolous, we need not consider whether the claim of breach of the covenant of good faith and fair dealing was supported or whether that count, by itself, constitutes a "claim of a right to title to real property" that could support a memorandum of lis pendens, rather than simply a claim for monetary damages. G. L. c. 184, § 15 (b).
Because the buyer's claims are not "frivolous" within the meaning of G. L. c. 184, § 15 (c), the town's request for appellate attorney's fees is denied.
4. Conclusion.
The order allowing the motion to dismiss, dissolving the memorandum of lis pendens, and awarding attorney's fees is reversed and the matter is remanded for further proceedings.
So ordered.
Milkey, Sullivan & Ditkoff, JJ.
The panelists are listed in order of seniority.