Plaintiff Town of Groton (Town) filed its unverified Complaint on October 25, 2005, alleging breach of statutory obligation and promissory estoppel and seeking specific performance relative to a purchase and sale agreement for the conveyance of a railroad right-of-way consisting of approximately 8.61 acres of land located in Groton, MA (Locus) owned by Defendant Boston and Maine Corporation (B&M). On the same day this court heard (with both parties present) and allowed the Towns Motion for Temporary Restraining Order to prohibit B&M from selling Locus. On November 3, 2005, this court heard the Towns Motion for Preliminary Injunction, and on November 15, 2005, this court issued an Order (the Order) allowing the motion for preliminary injunction and ordering that B&M be enjoined from conveying Locus to any party except the Town until this case is settled or a decision is issued. B&M filed its Answer and Counterclaim to the Complaint on November 14, 2005, alleging the Towns material breach of the purchase and sale agreement by not delivering a timely survey plan. On December 6, 2005, the Town filed a Reply to B&Ms Counterclaim.
On November 2, 2005, Plaintiffs Robert V. Shattuck, Mary Satterthwaite, and J. Christian Shattuck (together, Shattuck) filed a Motion to Intervene and an unverified Complaint with Jury Demand in this case seeking specific performance relative to a purchase and sale agreement between them and B&M relative to Locus, and alleging intentional interference with contractual relations against the Town. [Note 1] At a hearing on Novermber 3, 2005, this court denied the Shattucks Motion to Intervene.
B&M filed their Motion for Summary Judgment on December 6, 2007, together with supporting brief, Affidavit of Darlene Ligor, Appendix, and Statement of Material Facts. On January 15, 2008, the Town filed its Opposition, together with supporting memorandum, Appendix, Affidavits of David J. Doneski, Barbara V. Ganem, Kenneth Conte, and Laura H. Pawle, and Request for Entry of Judgment. A hearing was held on the motion on February 4, 2008, at which time the matter was taken under advisement.
Summary judgment is appropriate where there are no genuine issues of material fact and where the summary judgment record entitles the moving party to judgment as a matter of law. See Cassesso v. Commr of Corr., 390 Mass. 419 , 422 (1983); Cmty. Nat'l Bank v. Dawes, 369 Mass. 550 , 553 (1976); Mass. R. Civ. P. 56(c).
This court finds that the following facts are not in dispute:
1. On July 19, 2005, B&M, as seller, executed a purchase and sale agreement with Shattuck, as buyer, for Locus (Agreement 1). [Note 2] Agreement 1 designated a closing date of October 26, 2005.
2. On July 19, 2005, B&M sent, by certified mail, an offer of first refusal (the Offer), together with a draft of purchase and sale agreement, to the Commonwealth of Massachusetts, through its Executive Office of Transportation and Construction (the Commonwealth), relative to the sale of Locus. The Offer stated:
We hereby offer [Locus] to the Commonwealth of Massachusetts as provided in [G. L. c. 161C, § 7(b)] . . . .
If the Commonwealth does in fact wish to acquire the property on the basis outlined above, please execute the enclosed Purchase and Sale Agreement in duplicate and return them to me together with a check in the amount of $4,500.00 covering the initial deposit within 90 days of receipt of this letter. . . .
On July 21, 2005, the Commonwealth received the Offer.
3. By Notice of Offered Railroad Property dated July 25, 2005, the Commonwealth notified the Town of the Offer. The Town received this Notice on July 26, 2005.
4. By letter dated August 2, 2005, the Town notified the Commonwealth of its interest in acquiring Locus and of its ability to fund the purchase.
5. By letter dated October 5, 2005, from the Commonwealth to the Town, with a copy sent to B&M, the Commonwealth stated that it
has received your response dated August 2, 2005, stating, [that the Town] [w]ishes to be designated as Purchaser in acquiring the railroad property located in Groton, Massachusetts as cited above. In accordance with the above-cited statute [G. L. c. 161C, § 7(b)], EOT [the Executive Office of Transportation] hereby designates the Town of Groton to act directly in this matter and to enter into discussions with the Boston and Maine Corporation or its agents to purchase the property as described above. Having made this designation under chapter 161C, Section 7, EOT will have no further role in this matter and will not be a party to negotiations between the town and the railroad. . . .
. . . I recommend that you notify the railroad company as soon as possible to begin negotiations for your acquisition of this property. . . .
6. By certified letter dated October 5, 2005 (the Letter), the Commonwealth notified B&M that it has by letter dated October 5, 2005 designated the Town of Groton to act to acquire the above-cited property. On the same day, B&M received by facsimile a copy of the Letter.
7. There was communication between B&M and the Town on October 6, October 7, October 11, and October 12, 2005, relative to the proposed purchase of Locus.
8. By letter dated October 13, 2005, B&M mailed two copies of the purchase and sale agreement for Locus to the Town, and also sent a copy of such agreement by facsimile. This letter states:
The Purchase and Sale Agreement should be executed . . . and returned to this office with a check for the deposit . . . immediately upon receipt of this letter as the closing is scheduled for October 26, 2005.
Time is of the essence in this transaction. In the event that you do not return said Agreement and deposit check as stated above, the transaction contemplated by the enclosed Purchase and Sale Agreement shall be terminated without recourse to either party.
9. Paragraph 4 of the draft purchase and sale agreement provided, in part:
DEED PLAN. The Sellers obligations under this Agreement are conditioned upon the Buyer furnishing the following items to the Seller no later than ten (10) days prior to the Closing Date:
(a) A satisfactory linen or mylar deed plan of the Premises (the Plan) which: (i) is prepared by a registered land surveyor, (ii) is suitable in all respects for recording at the local registry of deeds, (iii) contains a certification by said registered land surveyor as to the actual land area comprising the Premises, (iv) conforms to the requirements set forth in Exhibit C, and (v) contains such other information as the Seller may reasonably require; and
(b) A description of the Premises by metes and bounds, consistent with and referring to the Plan, which description shall be attached to and become the Exhibit A referred to in the Deed. [Note 3]
10. Even though the draft purchase and sale agreement provided that any amendments to such document must be in writing, [Note 4] B&M (through Darlene Ligor and Roland Theriault) advised the Town by telephone conversations on October 14, and October 18, 2005, that they would not agree to a formal extension of the date for delivery of the survey plan, but that if the survey plan were submitted to B&M prior to October 26, 2009, B&M would proceed to a closing. This delivery date was confirmed by a letter from the Towns attorney (Doneski) to B&M dated October 19, 2005, which stated:
Thank you for speaking with me yesterday regarding the above-referenced property and the proposal of the Town of Groton to purchase the property under the provisions of G.L. c.161C pursuant to the designation of the Town as eligible purchaser in the October 5, 2005 letter to you from the Massachusetts Secretary of Transportation. I am writing to confirm the understanding reached in the following points of discussion.
1. Deed Plan. I indicated that the Town expects to have a plan, in accordance with the requirements of paragraph 4 of the purchase and sale agreement, by the evening of Monday, October 24, 2005. The Town will deliver the plan to Boston and Maine Corporation on the morning of Tuesday, the 25th. You indicated that provided the plan is in satisfactory form, this timing should be acceptable for purposes of closing the transaction on Wednesday, October 26.
As an update to this discussion, I can report that Ken Conti of Beals & Thomas, the engineer/surveyor retained by the Town, spoke today with Boston and Maines Land and Clearance Engineer, Vernon MacPhee, and it was confirmed that the so-called compiled plan Beals & Thomas proposes will satisfy your engineering departments requirements.
2. The Town requests that the deed of the property include a reference to G.L. c.40, §8C, as the property will be held by the Conservation Commission pursuant to the provisions of that statute. You indicated that was acceptable.
3. Payment of Purchase Price. You indicated that a Town of Groton check would be acceptable.
4. Indemnification Obligation. I stated the Towns request that the words to the extend permitted by law, be inserted at the start of paragraph 17 of the agreement and after the phrase Grantee agrees in paragraph 6 of the deed. You indicated that you would need to review this matter internally and would get back to me.
I will forward to you under separate cover the necessary adjustments to the agreement and the deed to accomplish the purpose stated above.
11. Beals & Thomas (on behalf of the Town) contacted B&M on October 19, 2005, to discuss the survey plan.
12. On October 20, 2005, the Town hand delivered to B&M two purchase and sale agreements executed by them relative to Locus (Agreement 2), together with a deposit check of $4,500.00 dated October 14, 2005. Agreement 2 designated a closing date of October 26, 2005, and Paragraph 4, regarding the survey plan, remained the same as in the draft agreement. On the same day the Town ordered a rush title search of Locus.
13. Faxed communications continued between the Town and B&M on October 20 and 21, 2005, relative to title, survey, deed, and purchase and sale agreement issues.
14. By letter to the Towns attorney (Doneski) dated October 21, 2005, Roland L. Theriault, Vice President of B&M, stated,
I am in receipt of your letter dated October 19, 2005 and its contents are noted. Please be advised that while I am able to add the language on the Release Deed that the Conservation Commission is acting to buy the subject property, I am not able to change or insert any other language or provision relative to the Deed or Purchase and Sale Agreement. Please be advised that the executed Purchase and Sale Agreement (which includes Exhibit B-Release Deed) was hand delivered to this office yesterday (October 20, 2005).
As an update to the discussion regarding the survey, please note that even though the Railroads engineering department confirmed with Beals & Thomas that the so-called compiled plan will satisfy the engineering departments requirement, we have yet to see it and would hesitate to state that it will meet all requirements without physically seeing the plan. I also have concerns relative to a compiled survey as the purchase price is based on a per acre basis and I would think it will be difficult getting an exact acreage and consideration without an actual land survey which could cause problems right before closing. As you are well aware, the closing is scheduled for October 26, 2005.
15. On October 24, 2005, Beals and Thomas delivered two copies of a survey plan of Locus to B&M.
16. By letter dated October 24, 2005 (the Termination Letter), B&M notified the Town that the Town has defaulted under M. G. L. Ch. 161C sec.7, and Paragraph 4 of the Purchase and Sale Agreement. The survey was to have been received by the Boston and Maine Corporation ten (10) days prior to the closing date.
17. On October 25, 2005, Beals and Thomas delivered an original of the survey plan to B&M. B&M refused to accept the plan.
The sole issue in this case is whether the Town timely accepted the Offer. G. L. c. 161C, § 7, states:
(a) To the extent not inconsistent with federal law, no railroad company which conducts or has conducted operations within the commonwealth shall sell, transfer or otherwise dispose of railroad rights-of-way or related facilities without first offering such rights-of-way or facilities for sale, transfer or disposition to either the executive office, acting on behalf of the commonwealth, or such other department, authority, agency, or political subdivision of the commonwealth as may be designated by the executive office for the purpose of such sale, transfer or disposition; provided, that such sale, transfer or disposition may be made by the railroad company to a party other than the executive office or its designee, but only if (i) the executive office or its designee has notified the railroad company in writing of its rejection of such offer; or (ii) ninety calendar days have elapsed from the date on which said offer or a copy of such offer, as provided in the second paragraph, is made to the executive office.
(b) Said railroad company shall make such offer in writing and shall offer by certified mail to the executive office or to its designee. In the event that such offer is made to a designee of the executive office, a notarized copy of such offer shall be sent by certified mail to the executive office. Any such offer shall include the price at which said company proposes to offer such rights-of-way or facilities to the commonwealth, and such other terms or conditions which said company proposed to include as part of such sale, transfer or disposition. The executive office or its designee shall notify in writing and by certified mail said railroad company of its acceptance or rejection of such offer within ninety calendar days of such offer, and in the event that the designee of the executive office sends such notice, said designee shall also send a notarized copy of such notice to the executive office. The executive office is hereby authorized to notify any person that the conditions provided in clauses (i) and (ii) of paragraph (a) have been satisfied and that the commonwealth no longer has the option to acquire the rights-of-way or facilities as provided in said paragraph. Any such notice shall be binding on the commonwealth.
In no event shall said railroad company offer to sell, transfer, or otherwise dispose of railroad rights-of-way or facilities to any person on terms of conditions more favorable to said person than those offered to the commonwealth.
B&M argues that the Town neither properly nor timely accepted the Offer pursuant to the provisions of G. L. c. 161C, § 7, which requires that [t]he executive office or its designee shall notify in writing and by certified mail said railroad company of its acceptance or rejection of such offer within ninety calendar days of such offer. B&M also contends that the actions of the parties can not waive a statutory requirement. [Note 5] Specifically, B&M argues that the Town had a statutory obligation to accept the Offer in writing by certified mail within ninety days of the Offer. [Note 6] The Offer was mailed to the Commonwealth on July 19, 2005, and received by the Commonwealth on July 21, 2005. As such, an acceptance of the Offer by the Town by certified mail should have been made by October 19, 2005 (the ninetieth day). The Town delivered an executed Agreement 2 and a deposit check to B&M on October 20, 2005, which B&M argues is the operative date of the acceptance of the Offer.
The Town claims that it accepted the Offer on October 5, 2005, when B&M received notice from the Commonwealth that the Town was the designee of the Commonwealth to acquire Locus. On October 5, 2005, two events occurred. First, the Commonwealth sent a certified letter to B&M notifying them that it had designated the Town to act to acquire the above-cited property. Second, the Commonwealth sent a letter to the Town, with a copy sent to B&M, acknowledging that the Town wishes to be designated as Purchaser in acquiring the railroad property and advising the Town
to act directly in this matter and to enter into discussions with the Boston and Maine Corporation or its agents to purchase the property . . . .
Enclosed is a copy of the proposed purchase and sale agreement. I recommend that you notify the railroad company as soon as possible to begin negotiations for your acquisition of this property.
A week later, by letter dated October 13, 2005, B&M mailed two copies of the proposed purchase and sale agreement to the Town, stating that The Purchase and Sale Agreement should be executed . . . and returned to this office with a check for the deposit . . . immediately upon receipt of this letter as the closing is scheduled for October 26, 2005. There were numerous telephone conversations and emails between B&M and the Town over the next week. The deposit check was prepared and executed on October 14, 2005. On the same date the Town and B&M discussed the survey plan. On October 19, 2005, the ninetieth day for the exercise of the Offer, Doneski sent a letter to B&M confirming the closing date on October 26. [Note 7] The executed Agreement 2 and the deposit check were hand delivered by the Town the next day, October 20, 2005. [Note 8]
There is nothing in G. L. c. 161C, § 7 that requires the execution of a purchase and sale agreement to acknowledge acceptance of an offer. [Note 9] The statute does, however, require an acceptance or rejection of the Offer. In the view of this court, the October 5, 2005, letter from the Commonwealth to B&M did not accept the Offer; it merely notified B&M that the Town was its designee. [Note 10], [Note 11] Moreover, the Town has never sent B&M any certified letter accepting the Offer, or any certified letters at all. [Note 12] Finally, in the extensive negotiations between B&M and the Town, there is no evidence that the Town ever formally accepted the Offer orally. In light of the foregoing, I find that the Town did not accept the Offer pursuant to the terms of G. L. c. 161C, § 7.
The Town also argues promissory estoppel, stating that B&M waived the formal requirements of acceptance of the Offer by their negotiations with the Town relative to Agreement 2. The Town argues that the actions of B&M induced the Town to act on the Offer and it will be significantly harmed in the event that the sale does not take place, as the Town has expended time and money in preparation for a purchase of Locus. B&M failed to respond to this argument in their summary judgment brief but they did challenge the Towns position during the summary judgment oral argument, contending that G. L. c. 161C, § 7 is not subject to the doctrine of promissory estoppel. However, B&M failed to provide, and this court is not aware of, any supporting case law to this argument. The plain language of Section 7 does not exclude the application of promissory estoppel to the action of parties conducted as part of a railroad right-of-way transfer. Moreover, the Supreme Judicial Court has noted that [c]ommon-law principles apply to a right of first refusal created by statute. Sudbury v. Scott, 439 Mass. 288 , 297 n.12 (2003). [Note 13] In light of the above, a review of the merits of the Towns argument is appropriate.
Estoppel consists of three factors:
(1.) A representation or conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation is made. (2.) An act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made. (3.) Detriment to such person as a consequence of the act or omission.
Cellucci v. Sun Oil Co., 2 Mass. App. Ct. 722 , 728 (1974) (quoting Industrial Bankers of Mass. Inc. v. Reid, Murdoch & Co., 297 Mass. 119 , 124 (1937). See also Corea v. Bd. of Assessors of Bedford, 384 Mass. 809 , 809-10 (1981) (quoting Boston & Albany R.R. v. Reardon, 226 Mass. 286 , 291 (1917)). The record on summary judgment indicates that on October 13, 2005, B&M mailed two copies of the draft purchase and sale agreement to the Town, which the Town received on October 14. On October 14 and October 18, 2005, the Town and B&M discussed the Towns obligation to provide a deed plan to B&M no later than ten days prior to the closing date. At that time, B&M represented to the Town that closing could proceed if the Town provided a compliant plan prior to October 26, 2005. The Town faxed a letter to B&M on October 19, 2005, which: (1) confirmed that delivery of the deed plan by October 26 was acceptable; (2) requested the deed to refer to G. L. c. 40, § 8C; (3) confirmed that a check from the Town would be acceptable; and (4) requested certain indemnification language to be inserted in the deed. The October 19 letter references the proposal of the Town of Groton to purchase the property under the provisions of G.L. c.161C pursuant to the designation of the Town as eligible purchaser in the October 5, 2005 letter to you from the Massachusetts Secretary of Transportation.
The parties continued to exchange communications throughout October 20 and October 21, 2005, two days after the ninety-day period had expired. B&M responded to the Towns October 19 letter, in which it acknowledged receipt of the executed Agreement 2, gave additional title information, negotiated the terms of the deed and the contents of the survey plan, and confirmed the closing date of October 26, 2005. Based on these discussions, the Town continued to spend time and money on preparing a survey plan, title research, and document preparation. As promised, on October 24, 2005, the Town delivered two copies of a survey plan of Locus to B&M. That same day, B&M notified the Town that the Town had defaulted under the statute and Agreement 2.
Based on the foregoing, it is clear that, even after the ninetieth day, B&M indicated a willingness to go forward under Agreement 2, and until the Termination Letter was sent, both B&M and the Town intended to close Agreement 2 on October 26, 2005, and B&M intended to have the Town rely on its representations in that regard. Moreover, at the time of the Termination Letter, B&M did not take the position that there was not a valid acceptance of the Offer by the Town. [Note 14] The stated reason for the Termination Letter was the ten-day survey plan deadline, which, as discussed, supra, was agreed to by both parties, and was not argued by B&M in their summary judgment motion. I find that B&M, based on its conduct, is estopped from denying the acceptance of the Offer. [Note 15]
As a result of the foregoing, I DENY B&Ms Motion for Summary Judgment.
Judgment to enter accordingly.
Alexander H. Sands, III
Dated: April 10, 2009
[Note 1] On January 31, 2008, Shattuck filed a separate unverified Complaint against B&M and the Town (Misc. Case No. 368970), which is on hold pending the outcome of the case at bar.
[Note 2] Agreement 1 is dated July 21, 2005, but the Affidavit of Darlene Ligor states that it was executed by B&M on July 19, 2005.
[Note 3] Paragraph 1(d) of the draft purchase and sale agreement provided: PURCHASE PRICE: The agreed purchase price is Five Thousand and 00/100 ($5,000.00) Dollars for each and every acre contained in said premises as shown on plan referred to in paragraph 4(a).
[Note 4] Paragraph 26 of the draft purchase and sale agreement provided: This Agreement may only be modified or amended by a writing which states that it modifies or amends this Agreement and which is signed by all parties.
[Note 5] It is interesting to note that B&M did not raise the validity of the acceptance as an issue in the Termination Letter. Instead, B&M argued that the Town had breached the agreement by failing to deliver the survey plan on time. B&M chose not to argue the issue of the survey plan delivery in its summary judgment brief. It should be noted that the delayed delivery of the survey plan was discussed and agreed to by the Town and B&M on October 14, 2005, and followed up in writing by both parties in their letters of October 19 and October 21, 2005, indicating agreement by both parties that the delay in the survey plan was not fatal to the closing. While technically not a valid amendment under the terms of any of the purchase and sale agreements, B&M would be hard pressed to deny that their conduct was not detrimentally relied upon by the Town. Given that B&M does not argue the invalidity of the ten-day survey plan delivery provision, this court need not make such a finding.
[Note 6] B&M agrees that the ninety days runs from the date of receipt of the Offer.
[Note 7] Doneskis October 19, 2005, letter was the Towns first written communication to B&M.
[Note 8] This executed agreement and check were not sent by certified mail and a notarized copy was not sent to the Commonwealth.
[Note 9] Even so, Section 7 allows offers to include such other terms or conditions . . . proposed . . . as part of such sale. B&M made acceptance of the Offer contingent upon all terms set forth in Agreement 2.
[Note 10] The October 5, 2005, certified letter from the Commonwealth to B&M stated: The Executive Office of Transportation (EOT) hereby notifies you that it has by letter dated October 5, 2005 designated the Town of Groton to act to acquire the above-cited property. In the letter from the Commonwealth to the Town, the EOT further recommended that the Town notify the railroad company as soon as possible to begin negotiations for your acquisition of this property. (emphasis added).
[Note 11] The October 19, 2005, letter from the Town to B&M did reference the proposal of the Town of Groton to purchase the property under the provisions of G.L. c.161C pursuant to the designation of the Town as eligible purchaser in the October 5, 2005 letter to you from the Massachusetts Secretary of Transportation. It is arguable that this letter was an acceptance of the Offer. This letter, however, was not certified.
[Note 12] In addition to complying with the plain language of the statute, correspondence via certified mail is sound business practice. See Town of Andover v. State Fin. Servs., 432 Mass. 571 , 575 (2000) (noting that certified mail, as opposed to first class mail provides greater assurance to our property owners that notice will actually be received); see also Carmel Credit Union v. Bondeson, 55 Mass. App. Ct. 557 , 560 (2002) (Notice by certified or registered mail is a common method of providing notice in business, governmental, and legal contexts . . . .).
[Note 13] Scott arose in context of G. L. c. 61A, regarding property taxed as agricultural land, and involved the common law right of first refusal. Scott, 439 Mass. at 289.
[Note 14] In the Order, it was also noted that Massachusetts recognizes waiver of contract provisions relative to the survey plan date. Massachusetts common law defines waiver as the intentional relinquishment of a known right, or . . . the excuse of the nonoccurrence of or delay in the occurrence of a condition of a duty. Dynamic Machine Works, Inc. v. Machine & Electrical Consultants, Inc., 444 Mass. 768 , 772 (2005) (quoting 2 E.A. Farnsworth, Contracts § 8.5, at 447 (3d. Ed. 2004)) (internal citation omitted). The parties did not brief the issue of waiver as it applies either to the survey plan date or to the ninety-day acceptance deadline in the case at bar, so this court need not address the issue further.
[Note 15] This argument of promissory estoppel was fully explored in the Order, and this courts analysis made there is equally relevant today.