BRIAN D. HOST v. VIRGINIA B. GRAY, as Trustee of the Adelaide Moors Pratt Nominee Trust

Introduction

The instant action was brought by Brian D. Host (plaintiff/ Host) against Virginia B. Gray (defendant/ Gray) in her capacity as Trustee of the Adelaide Moors Pratt Nominee Trust, the record owner of a parcel of property known as 98 Howard Gleason Road ( property / Locus), Cohasset, Massachusetts. The plaintiff alleges breach of contract, breach of the covenant of good faith and fair dealing, and seeks specific performance regarding an Offer to Purchase he submitted to the Defendant concerning the Locus. The plaintiff argues that the parties had an agreement to purchase the property, but that the defendant wrongfully reneged on that agreement. The defendant claims that the discussions regarding sale of the locus between the parties were no more than ongoing negotiations, and that no contract was ever formed. The defendant has filed a Motion for Summary Judgment which is opposed by the plaintiff.

Background

The defendant is the sole Trustee of the Adelaide Moors Pratt Nominee Trust, [Note 1] the owner of the Locus. [Note 2] The Locus includes the parcels referred to as Lot 18 and Lot 19 on an unrecorded plan of the Locus drawn by Ralph Cole (Cole Plan). [Note 3] Lot 19 is improved with a residential dwelling. While Lot 19 fronts on Howard Gleason Road, its current access is solely by means of a paved 20-foot wide paved road (Way) across Lot 18. [Note 4] This access arrangement is due to the presence of wetlands along the eastern edge of Lot 19. [Note 5] In addition, the defendant owns a piece of property to the west of the Locus, referred to as the “Cottage Property”. [Note 6]

In 2010 Coldwell Banker Residential Brokerage (CBRE / Coldwell) was engaged to market and sell Lot 19 only, inasmuch as the defendant wished to retain Lot 18. [Note 7] The asking price for Lot 19 was $2, 450,000.00. The potential sale created an issue of access as Lot 19 lacks an independent driveway. [Note 8] Coldwell advertised the property as comprising 8.6 acres, the precise area of Lot 19 as depicted on the Cole Plan, which was reproduced in Coldwell’s brochure. [Note 9]

In October of 2010, the Plaintiff visited the premises. [Note 10] He understood that the property intended for sale consisted of Lot 19 only, and did not include Lot 18. [Note 11] In the course of the plaintiff’s October 17, 2010 visit, Maureen Doran, the listing broker, discussed the lack of access with plaintiff. [Note 12] The plaintiff made it clear that before he would consider purchasing Lot 19 some arrangement needed to be reached regarding access via Lot 18. [Note 13] At no point was it indicated that the entirety of Lot 18 would be included as part of the sale of Lot 19. [Note 14] After the meeting between the plaintiff and Ms. Doran on October 17, 2010, as an attempt to resolve the access issue, the parties discussed the possibility of including a portion of Lot 18 (including the Way and the land to the east of the Way) in the sale of Lot 19. [Note 15]

On October 22, 2010, the plaintiff delivered to Ms. Doran an offer (Offer) to purchase both Lot 19 and Lot 18 for the sum of $2,450,000. The Offer was set out on the Massachusetts Association of Realtors’ Contract to Purchase Real Estate form. [Note 16] The written offer recited that it would remain valid until 4:00 p.m. on October 23, 2010, “by which time a copy of this Offer shall be signed by the SELLER, accepting this Offer and returned to the BUYER, otherwise this Offer shall be deemed rejected and the money tendered herewith shall be returned to the BUYER.” [Note 17] The Offer provided further that “The SELLER and the BUYER shall, on or before 4:00 p.m. on November 6, 2010 execute the Standard Purchase and Sale Agreement of the MASSACHUSETTS ASSOCIATION OR REALTORS or substantial equivalent which, when executed, shall become the entire agreement between the parties and this Offer shall have no further force and effect.” [Note 18] At the request of Ms. Doran, the plaintiff agreed to extend his offer until 5:00 p.m. on October 25, 2010. [Note 19] At 4:50 p.m. on October 25, 2010, Ms. Doran sent an e-mail (Response) to plaintiff that read in part as follows:

Hi Brian: Thank you for your offer on Howard Gleason Road . . . This is a conditional response until further items can be worked out to your and her benefit. She is accepting the offer for $2,450,000 but proposes working out a solution to Lot 18 that is mutually agreeable to both parties.

Essentially, Ginny would like to accept the offer and work out the conditions. The difficulty has been how to divide up Lot 18. She needs a portion of that for the cottage. But she is willing to work with you and it is addressed in the response from Mark Watson, that I will forward. She will include Lot 18 west of 20 feet wide paved way. [Note 20] She only wants a portion of Lot 18 to build a small garage and a place to park her cars. Again, we would have to meet and be precise and have to have new lot lines drawn. [Note 21] (emphasis added)

Neither Defendant nor Ms. Doran as her agent ever signed the acceptance portion of the Plaintiff’s Offer to Purchase. [Note 22] Subsequent discussions between the parties regarding the sale and/or division of Lot 18 ensued, but the parties were unable to reach a satisfactory conclusion. [Note 23] No Purchase and Sale Agreement was ever drafted or signed. [Note 24] On November 1, 2010, Ms. Doran informed plaintiff’s real estate broker that the defendant did not intend to proceed with regard to the plaintiff’s Offer. [Note 25] Notwithstanding, the plaintiff appeared at the Norfolk County Registry of Deeds with a bank check on the scheduled closing date of November 23, 2010. [Note 26] He waited for, without success, for the defendant to appear. [Note 27] He subsequently, initiated this action seeking, inter alia, to enforce the terms of his Offer. [Note 28]

Summary Judgment Standard

Summary judgment is appropriate when “pleadings, depositions, answers to interrogatories, and responses to requests for admission…together with affidavits…show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.” Mass. R. Civ. P. 56(c). The moving party bears the burden of proving the absence of controversy over material facts and that he or she deserves a judgment as a matter of law. See Highlands Ins. Co. v. Aerovox Inc., 424 Mass. 226 , 232 (1997). Accordingly, when acting upon motions for summary judgment, this court is to determine “whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as a matter of law.” Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117 , 120 (1991).

“The burden on the moving party may be discharged by showing that there is an absence of evidence to support the non-moving party’s case.” Kourouvacilis v. General Motors Corp., 410 Mass. 706 , 711 (1991), citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Thus, “regardless of whether the moving party accompanies its summary judgment motion with affidavits, the motion may, and should, be granted so long as whatever is before the . . . court demonstrates that the standard for the entry of summary judgment . . . is satisfied.” Kourouvacilis v. General Motors Corp., 410 Mass. at 713, quoting Celotex Corp. v. Catrett, 477 U.S. at 323-24. In cases where the “nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the pleadings, depositions, answers to interrogatories, and admissions on file.” Id.

A corollary to the moving party’s burden is that the court is to “make all logically permissible inferences” from the facts in the non-moving party’s favor. Willitts v. Roman Catholic Archbishop of Boston, 411 Mass. 202 , 203 (1991). That said, “the right of a party facing summary decision to have the facts viewed in a favorable light . . . does not entitle that party to a favorable decision” and reliance upon mere “bald conclusions” is an inadequate means of defeating the motion. Catlin v. Bd. of Registration of Architects, 414 Mass. 1 , 7 (1992).

Mass R. Civ. P. 56(c) permits the disposition of controversies if in essence there is no real dispute as to the salient facts, such that resolution of the matter depends solely upon judicial determination of a question of law. For summary judgment to enter, the undisputed facts have to be sufficient to furnish the judge with evidence upon which the key question of law might be resolved. As there are no genuine issues of material fact outstanding, this matter is ripe for summary judgment.

Discussion

The plaintiff alleges that the defendant breached a contract for the sale of the Locus, [Note 29] breached the covenant of good faith and fair dealing implicit in that contract, [Note 30] and requests specific performance as a remedy. These claims are predicated on the plaintiff’s understanding that a valid contract existed between the parties as of October 25, 2010 when Ms. Doran e-mailed the response to his Offer. Plaintiff also argues that the parol evidence rule [Note 31] should not bar the admission of extrinsic evidence as the terms of the contract are ambiguous. For her part, the Defendant claims that a valid, enforceable contract never existed, and therefore there is no need to consider extrinsic evidence. She also raises the statute of frauds as a defense. The dispositive issue underlying both claims is whether a valid contract existed between the parties. Accordingly, the court will address that threshold issue.

I. Existence of a Contract

As an initial matter, “[w]here the existence of a contract is in issue, the burden is on the [party seeking performance].” Canney v. New England Tel. & Tel. Co., 353 Mass. 158 , 164 (1967). Here, the plaintiff is the party requesting performance. Therefore, he bears the burden of proving the existence of a valid contract between the parties.

A contract is created when there is a valid offer and acceptance. [Note 32] An offer is defined as a representation of the offeror’s willingness to enter into a bargain such that another party (the offeree) would rely on the representation. Restatement (Second) of Contracts § 24 (1981). Acceptance occurs when the offeree responds as requested in the offer. Restatement (Second) of Contracts § 50(1) (1981). An offeror has full control over the offer and may require a particular and exclusive mode of acceptance. If the offeror sets out an exclusive method for acceptance the acceptance must be made in that manner, otherwise it will be ineffective. Lawrence v. Rosenberg, 238 Mass. 138 , 141 (1921); Horne v. Niver, 168 Mass. 4 , 5 (1897); see 1 Williston, Contracts § 76 (3d ed. 1957).

This court is satisfied that no contract was ever formed between the plaintiff and the defendant as there was no meeting off the minds with respect to the offer and acceptance. The plaintiff made a clear and unambiguous offer by way of his signed Offer to Purchase. That Offer, made on the Massachusetts Association of Realtors form, specified the precise manner in which defendant was to accept, i.e. the seller “shall” sign the Offer in order to accept, otherwise the Offer “shall be deemed rejected.” [Note 33] The specified method of acceptance required that the defendant, or her agent, execute the plaintiff’s Offer to Purchase where indicated, by the extended deadline of 5:00 p.m. on October 25, 2010, if the acceptance were to be effective. It is undisputed that neither the defendant nor her agent ever signed the Offer to Purchase. The plaintiff was entitled to specify the manner of acceptance, but once doing so, he is then bound by that requirement. [Note 34] When the defendant failed accept in the requisite manner prior to the deadline, the offer, by its own terms, was deemed rejected and no contract was thereafter formed. [Note 35] Accordingly, the Response did not function as an acceptance of the offer.

Even should this court construe the Response as an attempted acceptance of the Offer, there is an additional reason that no contract was ever formed – the lack of agreement regarding a crucial and material term of the contract, namely, the precise piece of property to be conveyed. In the formation of a contract, the element of agreement or mutual assent is often designated as a “meeting of the minds.” Restatement (Second) of Contracts § 17 comment c (1981). The parties have an agreement only when they have reached a “meeting of the minds,” the same interpretation of the same contract terms at the same time. See Situation Mgmt. Sys. Inc., 430 Mass. at 878. “It is not required that all terms of the agreement be precisely specified, and the presence of undefined or unspecified terms will not necessarily preclude the formation of a binding contract.” Id. There is some leeway allowed to account for the possibility of future uncertainties that are difficult to define at the moment the contract is entered into. “If parties specify formulae and procedures that, although contingent on future events, provide mechanisms to narrow present uncertainties to rights and obligations, their agreement is binding.” See Lafayette Place Assocs. v. Boston Redev. Authy., 427 Mass. 509 , 517-519 (1998) (approving a formula for calculation of the price of redevelopment land amid later major uncertainties); Situation Mgmt. Sys., Inc. v. Malouf Inc., 430 Mass. at 878-879 (a party's general oral promise to renew the terms of a prior commercial agency contract was sufficiently definite for enforcement); Basis Technology Corp. v. Amazon.com, Inc., 71 Mass. App. Ct. 29 , 38-39 (2008) (a party's acceptance of a referenced and discoverable stock conversion formula was binding upon it even though it had not specifically consulted the formula at the time of agreement).

However, all material terms must be present and sufficiently complete and definite, and the parties must have a present intent to be bound by those terms. See McCarthy v. Tobin, 429 Mass. 84 , 87 (1999); Situation Mgmt. Sys., Inc. v. Malouf Inc., 430 Mass. at 878. “It is a settled principle of contract law that ‘[a] promise made with an understood intention that it is not to be legally binding, but only expressive of a present intention, is not a contract.’” Schwanbeck v. Federal-Mogul Corp., 412 Mass. 703 , 706 (1992), quoting Kuzmeskus v. Pickup Motor Co., 330 Mass. 490 , 493 (1953). “A failure of the parties to agree on material terms may not merely be evidence of the intent of the parties to be bound only in the future, but may prevent any rights or obligations from arising on either side for lack of a completed contract.” Rosenfield v. U.S. Trust Co., 290 Mass. 210 , 216 (1935). The material terms of a contract for the purchase and sale of real property include: 1) an adequate description of the property; 2) the purchase price; and 3) the closing date. See McCarthy v. Tobin, 429 Mass. at 87. When considering both the offer and acceptance, if the terms of the purported acceptance substantially vary from the offer’s terms, the acceptance is ineffective, and there is no contract. Bank of the United States v. Thomson & Kelly Co., 290 Mass. 224 , 228 (1935); see Peretz v. Watson, 3 Mass. App. Ct. 727 , 728 (1975). “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.

Here, the Response indicates a lack of intent to be presently bound on the part of defendant, and includes a wholly different property description from that specified in the offer. The Offer to Purchase sets out the material terms for a sale of real property: the property description (Lot 18 and 19), the price ($2,450,000), and a closing date (November 23, 2010). If the Response is to function as an acceptance and thereby create a contract, it must be unconditional, unqualified, and consonant with the material terms set out in the Offer. See Moss v. Old Colony Trust Co., 246 Mass. 139 , 148 (1923).

The plain language of the Response shows no intention on the part of the defendant to be presently bound. The first paragraph states “[t]his is a conditional response until further items can be worked out to your and her benefit.” [Note 36] Although the next sentence begins with “[s]he is accepting the offer for $2,450,000 . . ." [Note 37] the remainder of the sentence makes it clear that the entire Offer is not being accepted, but only that the price is acceptable. The defendant “proposes working out a solution that is mutually agreeable to both parties.” [Note 38] Other language in the Response lends further support to the conditional nature of Ms. Doran’s response: “[e]ssentially, Ginny would like to accept the offer and work out the conditions;” [Note 39] “[t]he difficulty has been how to divide up Lot 18;” [Note 40] “[b]ut she is willing to work with you . . . ;” [Note 41] “[s]he only wants a portion of Lot 18 to build a small garage and a place to park her cars;” [Note 42] “[a]gain, we would have to meet and be precise and have to have new lot lines drawn;” [Note 43] and “Ginny wants to keep the dialogue open and hopes we can conclude this for both parties.” [Note 44] This was not a “comment, purported clarification, or expression of dissatisfaction appended to an endorsement of acceptance . . . in the category of ‘grumbling acceptances,’ acceptances made without enthusiasm but acceptable nonetheless.” Massachusetts Hous. Fin. Agency v. Whitney House Assocs., 37 Mass. App. Ct. 238 , 241 (1994).

Rather, this was at best, a conditional acceptance. The Response indicates that any acceptance was conditioned upon the defendant retaining all or part of Lot 18. “[A] conditional acceptance . . . is in effect a rejection,” Moss v. Old Colony Trust Co., 246 Mass. 139 , 148 (1923), Defendant did not accept the plaintiff’s Offer. The court notes that the plaintiff himself acknowledged that the acceptance was only conditional, as he wrote “[m]y offer was conditionally accepted on Monday . . .” and “ [I] received conditional acceptance [of my offer].” [Note 45]

Furthermore, the property description in the Response, a material term in a contract for the sale of real property, is markedly different from that in Plaintiff’s Offer. Plaintiff offered to purchase both Lots 18 and 19, but the Response contemplates a wholly different, as yet undefined, conveyance. [Note 46] While a response that proposes additional terms may function as an acceptance sufficient to create a contract, see Restatement (Second) of Contracts § 61 (1979) (“An acceptance which requests a change or addition to the terms of the offer is not thereby invalidated unless the acceptance is made to depend on an assent to the changed or added terms.”), a response that contemplates different terms is, in effect, a counteroffer. Bank of U.S. v. Thomson & Kelly Co., 290 Mass. 224 , 228 (1935) (“A substantial variation in contract terms incident to a purported acceptance is not a binding acceptance but a counter offer.”); David J. Tierney, Jr., Inc. v. T. Wellington Carpets, Inc., 8 Mass. App. Ct. 237 , 240 (1979). Such is the case here. The Response was merely a counteroffer to Plaintiff’s Offer, and therefore functioned as a rejection of the Offer. [Note 47] See Moss v. Old Colony Trust Co., 246 Mass. at 148 (““[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.”). Although the parties may have considered including part of Lot 18 in the sale, the communications include no specified “formulae and procedures” for later determine of the property description sufficient to overcome the deficiency. Therefore, no contract ever formed between the Plaintiff and the Defendant. As no contract was formed, Plaintiff cannot sustain his claims of breach of contract and breach of the covenant of good faith and fair dealing, as both of those claims are predicated upon the existence of a valid contract.

II. Statute of Frauds

Assuming arguendo, that this court were to deem the Response an effective acceptance, the contract would still be unenforceable. Pursuant to the statute of frauds, a contract is for the sale of land, must be in writing and signed by the party to be charged, to be enforceable. M.G.L. ch. 259, § 1. To satisfy the statute of frauds, the writing “must contain directly, or by implication, all of the essential terms of the parties’ agreement” and include the “essential element[s] with reasonable certainty.” Simon v. Simon, 35 Mass. App. Ct. 705 , 709 (1994). If an essential term is omitted from the writing, parol evidence may not be used to prove the missing term. Simon v. Simon, 35 Mass. App. Ct. 705 , 709-11 (1994); A.B.C. Auto Parts Inc. v. Moran, 359 Mass. 327 , 329 (1971). “Unless the writing, considered alone, expresses the essential terms with sufficient certainty to constitute an enforceable contract, it fails to meet the demands of the statute.” 4 Williston on Contracts, § 575 at 77-78. Accordingly, where the statute of frauds is invoked, parol proof of material terms omitted from the writings may not be used to prove the existence of a contract and therefore constitute the foundation for recovery. [Note 48]

Plaintiff argues that the court should consider significant amounts of parol evidence and extrapolate therefrom a property description encompassing both Lots 18 and 19. Defendant raises as a defense the statute of frauds, arguing that as the property description was not agreed to in writing, parol evidence is inadmissible to supply the missing term. No one disputes that the Offer and Response were both in writing. However, as discussed supra, on the face of the writings the property description, an essential term, is not defined with sufficient certainty. As the defendant has raised the Statute of Frauds, parol evidence is inadmissible to substitute terms or repair any deficiency. Therefore, the writings are insufficient to constitute an enforceable contract. Although plaintiff presents a substantial amount of material in this case, the basic lack of a valid, enforceable contract at the heart of the matter, renders the voluminous filings futile.

CONCLUSION

In light of the foregoing discussion, plaintiff’s claims cannot be sustained. In the absence of a valid, enforceable contract, there can be no merit to his claims for breach of contract and breach of the covenant of good faith and fair dealing. In the absence of such breach, this court need not consider plaintiff’s request for specific performance. As a consequence, it is hereby

ORDERED that the defendant’s Motion for Summary Judgment be, and hereby is, ALLOWED.

Judgment to issue accordingly.

SO ORDERED.

By the Court. (Grossman, J.)