Opinion
16-P-1104
04-21-2017
Dana S. PIXLEY v. PEOPLE'S UNITED BANK& another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, Dana S. Pixley, appeals from a judgment dismissing, pursuant to Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974), his four-count second amended complaint, which asserted claims for breach of contract, breach of fiduciary duty, negligent misrepresentation, and violation of G. L. c. 93A. We affirm.
The allegations of the second amended complaint (together with the documents attached to it), taken as true and read favorably for Pixley, set out the following. Defendant People's United Bank (bank) held a durable power of attorney on behalf of one of its customers, Judith Gerrish, and also acted as trustee of a trust she had established. At some point before the events at issue here, Gerrish had executed a pour-over will under which her property would transfer to the trust upon her death. Article Four C of Gerrish's trust provided that Pixley, would:
"have the option of purchasing [her] residence located at 421 Glendale Road, Hampden, Hampden County, Massachusetts. The purchase price, however to be discounted by Twenty-Five percent (25%) of the value as determined by an independent qualified appraiser selected by the Trustee. Mr. Pixley, after being notified of [her] intent by the Trustee hereunder, shall have sixty (60) days within which to exercise this option and must complete the purchase thereof within thirty (30) days of his exercise of the option, time being of the essence. If Mr. Pixley does not purchase the real estate, the Trustee shall sell the real estate and the proceeds are to be added to the principal of this Trust and distributed in accordan[ce] with its terms."
At some point before April 15, 2014, Gerrish moved to an assisted living facility and the bank had been informed that, due to her health, she would not return to 421 Glendale Road (the property). Accordingly, the bank, acting under Gerrish's durable power of attorney, made the decision to sell the property, and also to grant Pixley the same option to purchase, on the same terms, as he would have had under the trust after Gerrish's death, assuming the property had not been alienated before then. It should be noted that, at this time, the property was not part of the trust res since Gerrish was still alive.
By letter dated April 15, 2014, the bank informed Pixley of the option and its terms, setting them out exactly as they were contained in the trust and as we have quoted them above. The letter was signed by defendant Timberly V. Grout, a senior vice-president of the bank. In addition to informing Pixley of the option, Grout wrote that she would be getting an appraisal done to determine the fair market value of the property.
The bank arranged for an appraisal of the property by an independent appraiser, Matthew Krach, who arrived at a fair market value of $152,000 for the property. The appraisal noted that the property had significant deferred maintenance, recommended a structural mechanical inspection as well as other types of inspections, and noted that possible hidden conditions might require additional repairs that could "change the final value." Krach's report was provided to Pixley on May 16, 2014.
In a letter dated June 12, 2014, Pixley wrote to the bank, "Please accept this letter as [his] acceptance of Mrs. Gerrish's offer pending the execution of a mutually acceptable Purchase and Sale Agreement." The letter continued, however, that "the Gerrish property is in a dilapidated state which requires extensive and potentially expensive renovations. ... As there are still several unanswered questions with regard to the property that require more formal inspections, we would want those inspections to be made part of the Purchase and Sale Agreement." Pixley avers that this letter represents his exercise of the option and his acceptance of the bank's offer.
In an electronic mail message dated June 13, 2014, Grout wrote to Pixley that she was "happy to hear you have decided to purchase the property," and that the bank's attorney would draft a purchase and sale agreement to be forwarded to Pixley's lawyer. Grout added that "[i]t is understood that [he] would want to do a house inspection to determine all costs before a closing date is determined."
Thereafter, Pixley arranged for his own inspections, which revealed the need for expensive repairs. As a result, the parties engaged in protracted negotiations over the price, eventually resulting in the bank's agreement to accept $102,000 for the property. On June 30, 2015 (more than one year after the original offer letter), the bank's counsel wrote to Pixley's counsel, stating that no further concessions would be made and that, if no written acceptance were received from Pixley on or before July 10, 2015, "we will presume that he has refused the $102,000 offer and will market the property for (sic )[ ] highest and best price." This litigation followed.
As so written.
Discussion. Breach of contract. Pixley's theory of his breach of contract claim is that "[t]he defendants' demand that the plaintiff accept the price, as they determined it, amounts to a material breach of their agreement that the sale of the 421 Glendale Road property would be handled ‘per the trust provision, based on Judy's (Judith Gerrish) wishes ...,’ in that the ‘value’ and resultant purchase price was to be established by ‘independent qualified appraiser,’ not the defendants." This theory of liability rests on Pixley's assertion that Krach was not an "independent qualified appraiser." As to damages, Pixley asserts that he "suffered the loss of the opportunity to acquire the 421 Glendale Road property, he has incurred the loss of funds expended to close the transaction and he has been deprived of the gift of value expressed in Article Four C of the trust."
The motion judge dismissed Pixley's breach of contract claim on the ground that, even accepting the allegations of the complaint as true, no enforceable contract was formed given the absence of two material terms: price and closing date. Schwanbeck v. Federal-Mogul Corp., 412 Mass. 703, 710 (1992) ("The price of a parcel of land, is undoubtedly an essential element of a contract for its sale" [citation omitted] ). Even accepting the notion that price can be open to some further adjustment, "[t]he parties must ... have progressed beyond the stage of ‘imperfect negotiation.’ " Situation Mgmt. Sys., Inc. v. Malouf, Inc., 430 Mass. 875, 878 (2000), quoting from Lafayette Place Assocs. v. Boston Redev. Authy., 427 Mass. 509, 517 (1998), cert. denied, 525 U.S. 1177 (1999).
Here, assuming that the parties had progressed beyond that point, Pixley's contract claim would fail. In order to create an enforceable contract, Pixley needed to accept the bank's offer without adding new terms. "It is elementary law that an offer must be accepted in the terms in which it is made in order to become a binding contract, and that a conditional acceptance or one that varies from the offer in any substantial respect is in effect a rejection and is the equivalent of a new proposition." Moss v. Old Colony Trust Co., 246 Mass. 139, 148 (1923). The terms of Gerrish's trust (and the terms of the bank's offer) did not allow Pixley to conduct inspections as further conditions in a purchase and sale agreement. Thus, Pixley's addition of this requirement operated as a rejection of the bank's offer.
We note further that, even were we to assume that an enforceable contract were formed, it required Pixley to close on the property within thirty days of his exercise of the option, "time being of the essence." By his own account, Pixley exercised the option on June 12, 2014. He does not allege (and in fact cannot do so) that he completed the purchase by July 11, 2014. Indeed, there is not even an allegation that he was ready, willing, and able to do so. Instead, he embarked on a course designed to negotiate a more favorable purchase price. Although the bank subsequently acquiesced in that course of conduct, agreeing that the closing date could be moved so as to permit Pixley's desired inspections, that does not help Pixley's contract claim, which rests entirely on the terms of Gerrish's trust, as contained in the bank's initial offer to him.
Breach of fiduciary duty. Pixley's theory of this claim is that the bank's decision "to give present effect to Judith Gerrish's post-mortem wishes as expressed in Article Four C and Mr. Pixley's acceptance of those conditions on June 12, 2014, a present gift was made by the [bank] on behalf of Judith Gerrish with a corresponding obligation or duty in the [bank] to see to the full performance of that beneficence." Simply put, the claim is defective as a matter of law. Pixley has not cited, nor have we found, any authority to support the proposition that the bank's initial offer, even assuming Pixley accepted it, constituted a completed gift. To be the recipient of a completed gift, a plaintiff "must demonstrate a settled donative intent on the part of the donor, together with an actual or symbolic delivery of the subject matter of the gift to him or to someone in his behalf in such manner as completely to transfer the dominion and control of it." Silverman v. A. & L. Heel Corp., 353 Mass. 108, 110 (1967). Absent facts plausibly suggesting a completed gift, the bank had no duty to Pixley and, accordingly, the second amended complaint fails to state a claim for breach of fiduciary duty. See Van Brode Group, Inc. v. Bowditch & Dewey, 36 Mass. App. Ct. 509, 516 (1994).
Negligent misrepresentation. Pixley next argues that the defendants engaged in negligent misrepresentation by failing to complete the sale of the property in accordance with the trust provision. The claim essentially reasserts Pixley's breach of contract claim by attempting to recast it as a tort. In any event, the claim was properly dismissed because the second amended complaint alleges facts contrary to Pixley's theory of liability. See Zimmerman v. Kent, 31 Mass. App. Ct. 72, 77 (1991) (false statement must "not merely [be] a matter of opinion, estimate, or judgment, but [rather] susceptible of actual knowledge" [quotation omitted] ). Specifically, the second amended complaint alleges that the defendants explicitly informed Pixley that they were acting pursuant to Gerrish's durable power of attorney, not as trustee of her postmortem trust—a matter self-obviously true because Gerrish was alive at all pertinent times and the property was not res of the trust.
General Laws c. 93A. Similarly, Pixley claims that the defendants violated G. L. c. 93A by failing to carry out the sale of the property in accordance with the terms of the trust. The claim is not viable for the same reasons set out above, namely, the second amended complaint alleges that the bank acted pursuant to Gerrish's durable power of attorney and the property was not property of the trust. Even were we to assume that Pixley has raised a good faith dispute over whether "performance of some kind is due," that "is not the stuff of which a c. 93A claim is made." Duclersaint v. Federal Natl. Mort. Assn., 427 Mass. 809, 814 (1998).
Judgment affirmed.