LISA COVIELLO v. PATRICIA K. RICHARDSON

This suit is brought by Lisa Coviello (“Plaintiff”) against Patricia Richardson (“Defendant”) claiming breach of an offer to purchase (“OTP”) agreement for condominium Unit #3 at 155 Amory Street in Boston, Massachusetts (“Unit”). Plaintiff seeks specific performance and completion of the sale of the Unit. Defendant argues that Plaintiff was the breaching party and seeks liquidated damages in the amount of the $1,000.00 deposit, plus any amount the court sees fit to assign for the bringing of a frivolous suit against the Defendant.

The OTP was signed by Plaintiff (buyer) and Defendant (seller) on or about February 12, 2008 and required the parties to enter into a standard form purchase and sale agreement (“P&S”), or one substantially similar to it, by 5:00 PM on February 26, 2008. The OTP contained several contingency clauses, including a “Time is of the Essence” clause. The mortgage contingency clause contained therein provided that:

“The buyer shall apply for a conventional bank or other institutional mortgage loan of $248,900.00 at prevailing rates, terms and conditions. If despite the Buyer’s diligent efforts a commitment for a loan cannot be obtained on or before February 29th, 2008 then the buyer shall have the option of revoking the agreement by written notice to the seller and/or the Broker representing the Seller prior to the expiration of such time, whereupon all deposits made by the Buyer shall be forthwith refunded, and this agreement shall become null and void without further recourse to either party. In no event will the Buyer be deemed to have used diligent efforts to obtain such commitment unless the buyer submits a complete mortgage loan application conforming to the foregoing provisions on or before February 13th, 2008.”

On February 25, 2008 at 3:03 PM, Plaintiff, through her attorney Scott D. Kriss (“Kriss”), emailed Paula Olender (“Olender”), Defendant’s attorney, to ask whether the Defendant would be willing to extend the mortgage contingency date to March 7, 2008. The pertinent part of the email stated: “In regard to the body of the Agreement and your Rider A, the only requested change is to move the commitment date to 3/7.” (Emphasis added).

Defendant answered the Plaintiff’s request in a phone call from Attorney Alan Sharaf (“Sharaf”) to Kriss, also on February 25, 2008. In that call, Sharaf informed Kriss that Defendant had rejected Plaintiff’s request to change the mortgage commitment date in the OTP and further stated that Defendant would not execute the P&S for the property because she viewed the request as a counter-offer, which voided the original OTP. Sharaf stated further that he believed the mortgage commitment term was material to the contract and that the Defendant was not obligated to accept a material change in the contract.

On February 26, 2008, the date on which the P&S was to be signed, Plaintiff had the $12,500.00 required as a deposit available in her bank account. [Note 1] Neither the Plaintiff nor the Defendant signed the P&S by 5:00PM on February 26, 2008, as the OTP required.

Plaintiff and Defendant have filed cross-motions for summary judgment. Plaintiff and Defendant came before me to argue their motions and both have submitted written memoranda in support of their respective positions. Since the OTP was undisputedly a contract binding both parties to sign the P&S, and since a P&S was never signed, it is clear that there was a breach of that OTP. [Note 2] The issue then becomes: When did that breach occur, and by whom was it committed?

In her Motion for Summary Judgment, Defendant argues that it was Plaintiff who breached the contract when she requested a one-week extension of the mortgage contingency date. In her own Motion, Plaintiff disagrees with Defendant’s assertion and alleges that the breach actually occurred when Defendant chose not to go forward with the signing of the P&S despite the fact that, on February 26, 2008, Plaintiff was, apparently, “ready, willing, and able” to purchase the property.

“Summary judgment is granted where there are no issues of genuine material fact, and the moving party is entitled to judgment as a matter of law.” Ng Bros. Constr., Inc. v. Cranney, 436 Mass. 638 , 643–44 (2002); Mass. R. Civ. P. 56(c). Whether a fact is material or not is determined by the substantive law, and “[a]n adverse party may not manufacture disputes by conclusory factual assertions.” Ng Bros., 436 Mass. at 648; see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). With respect to any claim on which the party moving for summary judgment does not have the burden of proof at trial, it may demonstrate the absence of a triable issue either by submitting affirmative evidence that negates an essential element of the opponent’s case, or “by demonstrating that proof of that element is unlikely to be forthcoming at trial.” Flesner v. Technical Communications Corp., 410 Mass. 805 , 809 (1991). However, the party opposing summary judgment “cannot rest on his or her pleadings and mere assertions of disputed facts to defeat the motion for summary judgment.” LaLonde v. Eissner, 405 Mass. 207 , 209 (1976). Here there is no factual dispute. Accordingly summary judgment may enter as to which was the actual breaching party.

Because Defendant argues that Plaintiff was the initial breaching party, I will address that argument first. Defendant contends that Plaintiff breached the OTP when, on the day prior to the closing, she asked via e-mail that the Plaintiff extend the period, by seven days, within which she had to get a mortgage. [Note 3] There is no dispute that this request to extend was denied. An OTP may be a binding and enforceable contract. McCarthy v. Tobin, 429 Mass. 84 , 86-88 (1999). Since the OTP was clear and unambiguous in regard to the obligation to sign a P&S agreement, it must be enforced. McMann v. McGowan, 71 Mass. App. Ct. 513 , 516-517 (2008). Defendant argues that the mortgage contingency clause is a material term and that the request to extend the time period by the Plaintiff constituted an attempt to unilaterally change a material term of the OTP.

It is true that a material term may not be unilaterally altered by one party. Bossi v. Whalen, 19 Mass. App. Ct. 966 , 967 (1985). However, Massachusetts courts have explicitly recognized the buyer’s right to ask for an extension of the mortgage contingency date. See Tremoularis v. Pina, 23 Mass. App. Ct. 722 , 726 (1987) (If buyer neither exercises her power to terminate by giving notice that she cannot get financing, nor requests an extension of the mortgage contingency date, seller has right to declare agreement null and void). Accordingly, the request would not, by itself, result in a unilateral modification of a material term. The Buyer may ask the seller to extend the date and the seller is well within her rights to deny such a request. However, the request alone does not constitute breach and a new offer, as Defendant argues. It is simply a request for modification. Because there was no unilateral modification, we need not address whether the mortgage contingency term was material. Therefore, Defendant’s argument that Plaintiff’s request for an extension was the source of the breach fails.

Plaintiff argues that the breach actually occurred when the Defendant told Plaintiff that she would not sign the P&S. Defendant’s counter-argument on this point is that because neither party signed the P&S, it voided automatically at 5:01PM on February 26, 2008; I do not agree. It is undisputed that neither party signed the P&S. However, the law does not require a party to tender performance if the other party has shown that she will not perform. See Charles River Park v. Boston Redevelopment Auth., 28 Mass. App. Ct. 795 , 804 (1990); citing Park, Real Estate Law § 964, at 421 (1981). Once Defendant told Plaintiff that she had no intention of signing the P&S due to her opinion that Plaintiff was in breach, Plaintiff was relieved of any duty to sign the document.

Contrary to Defendant’s argument, the P&S did not become void when the deadline to sign the P&S passed. Rather, the P&S was definitively breached by the Defendant when she made the poorly informed decision that Plaintiff had breached and refused to move forward with the signing. If the Defendant truly believed that Plaintiff could not get a mortgage by the date stipulated in the contingency clause, all she had to do was reject the extension, as was her right, and go forward with the signing of the P&S. If, as she believed, Plaintiff could not get a mortgage by February 29, 2008, the P&S would expire on that date and the Defendant could proceed with the property as she pleased. Instead, Defendant chose not to go forward, as required by the valid and binding OTP. For this breach, I find Defendant liable.

PLAINTIFF’S Motion for Summary Judgment is therefore GRANTED and DEFENDANT’S Motion for Summary Judgment is DENIED.

For damages, Plaintiff requests the remedy of specific performance. It is “well-settled law in this Commonwealth that real property is unique and that money damages will often be inadequate to redress a deprivation of an interest in land.” Greenfield Country Estates Tenants Ass’n., Inc. v. Deep, 423 Mass. 81 , 88 (1996). The OTP was a valid and binding agreement that, barring Plaintiff’s inability to attain a mortgage by February 29, 2008, the parties enter into an agreement by which Defendant would sell Unit 3 at 155 Amory Street in Boston, MA to Plaintiff. Defendant breached that contract and the property is suitably unique such that any monetary remedy would not be sufficient to recoup the losses caused by that breach. Specific performance is therefore the proper remedy to deal with that breach.

For all of the above reasons, it is

ORDERED that the Defendant Patricia K. Richardson specifically perform and abide by all of the terms of the OTP executed by her and Lisa Coviello on February 12, 2008; it is further

ORDERED that Patricia K. Richardson convey to the Plaintiff, Lisa Coviello, title to the locus at 155 Amory Street, Unit 3 in Boston, MA at 12:00 PM on January 5, 2009, unless another time and place are agreed upon in writing by Plaintiff and Defendant or ordered by the court. Defendant shall duly execute, acknowledge as appropriate, and deliver to the Plaintiff at said time at the office of Plaintiff’s counsel, Barry Finkel Esq., 27 Goldsmith Street, Jamaica Plain, Massachusetts, the deed and all other instruments and papers called for to be provided by her under the Purchase and Sale agreement; it is further

ORDERED that should the Defendant fail to perform in the manner and by the date set forth in this Decision, the Plaintiff may seek any appropriate remedies against her. The parties are to report in writing to the court promptly after the date established in this Decision for defendant to perform specifically. Based on the report filed, the court will proceed to enter an appropriate order.

Charles W. Trombly, Jr.

Justice

Dated: November 12, 2008