CAB REALTY, LLC v. ANNE MARIE EARLY aka ANNE MARIE EARLY, TRUSTEE OF 301 NORTH MAIN STREET REALTY TRUST and TRUSTEE OF 307 NORTH MAIN STREET REALTY TRUST.

INTRODUCTION

In October of 2005, non-party Uxbridge C&B Associates, LLC executed two deeds, conveying two small parcels of land in Uxbridge, Massachusetts to Defendant Ann Marie Early, in her capacity as Trustee of two different realty trusts. Almost eight years later, Plaintiff CAB Realty, LLC filed this lawsuit claiming that, as a result of "inadvertence or mutual mistake," the two deeds failed to include Plaintiff and another non-party, KML Realty Trust, as co-grantees with Defendant. The single count Complaint, filed on March 28, 2013, and subsequently amended by right on April 30, 2013 (the "Amended Complaint"), prays for reformation of the two deeds to include Plaintiff and KML Realty Trust as grantees, to correct the alleged mistakes. [Note 1]

Consistent with the Amended Complaint, both the Joint Case Management Conference Memorandum and the Joint Pretrial Conference Memorandum describe Plaintiff's sole claim in this action as being one for reformation of the two subject deeds to correct a mutual mistake. However, when Plaintiff failed to go forward with its case on the date scheduled for trial, the court, taking into consideration the lack of ambiguity in the subject deeds and other agreed-upon instruments, as well as the agreed facts set forth in the Joint Pretrial Conference Memorandum, allowed Plaintiff to instead proceed with a summary judgment motion to be based primarily on those agreed facts and exhibits. Much to the surprise of the court and Defendant, Plaintiff's Motion for Summary Judgment filed on December 2, 2016 was argued almost entirely on a theory of constructive trust, as opposed to the deed reformation claim asserted in the Amended Complaint and advanced throughout all of the pretrial proceedings.

On December 30, 2016, Defendant opposed Plaintiff's Motion for Summary Judgment and also filed a Cross-Motion for Summary Judgment, which Plaintiff opposed on March 1, 2017. In opposing Plaintiff's Motion, and in cross-moving for summary judgment in its favor, Defendant argues that dismissal is appropriate because (1) Plaintiff failed to name parties necessary to adjudication, including the grantor; (2) Plaintiff failed to establish its standing to maintain the case; (3) Plaintiff failed to provide full, clear and decisive evidence of a mutual mistake of the parties to the deeds, or any other evidence entitling Plaintiff to a judgment reforming the deeds, as a matter of law; and (4) Plaintiff's constructive trust arguments, aside from being untimely and unfairly brought through its summary judgment motion, must fail under the Statute of Frauds, G.L. c. 259, § 1, because they are based only on alleged oral promises made to CAB's manager by an individual who is not a party to this case.

The court took the cross-motions under advisement following a hearing conducted on March 2, 2017. Now, having considered the pleadings, the Rule 56 materials filed with the Parties' respective summary judgment motions, as well as the arguments presented, the Parties' agreed statement of facts set forth in their Joint Pretrial Conference Memorandum, and viewing the evidence in the light most favorable to the non-moving party, I conclude that Plaintiff is not entitled to judgment in its favor, either reforming the deeds for the two lots or imposing a constructive trust on those lots. Instead, I find and rule that Defendant is entitled to summary judgment in its favor, dismissing the Amended Complaint.

STANDARD OF REVIEW

Summary judgment is appropriate when, drawing all inferences from the Rule 56 materials submitted in support of the motion in the light most favorable to the nonmoving party, the court determines that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Opara v. Mass. Mut. Life Ins. Co., 441 Mass. 539 , 544 (2004); Attorney General v. Bailey, 386 Mass. 367 , 370-71 (1982). See also Mass. R. Civ. P. 56(c) (summary judgment to be entered if the "pleadings, depositions, answers to interrogatories, and responses to requests for admission . . . together with the affidavits . . . show that there is no genuine dispute of material fact and that the moving party is entitled to a judgment as a matter of law."). Evidence submitted is viewed in the light most favorable to the non-moving party. Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117 , 120 (1991).

The party moving for summary judgment bears the burden of affirmatively demonstrating the absence of a triable issue of fact and that the record entitles them to judgment as a matter of law. Kourouvacilis v. Gen. Motors Corp., 410 Mass. 706 , 711 (1991). "[A] party moving for summary judgment in a case in which the opposing party will have the burden of proof at trial is entitled to summary judgment if he demonstrates, by reference to material described in Mass. R. Civ. P. 56(c), unmet by countervailing materials, that the party opposing the motion has no reasonable expectation of proving an essential element of that party's case." Id. at 716.

UNDISPUTED MATERIAL FACTS

I find the following material facts to be undisputed:

1. Plaintiff, CAB Realty, LLC ("Plaintiff" or "CAB") is a Massachusetts limited liability company with a principal place of business at 307 North Main Street, Uxbridge, Massachusetts.

2. Defendant, Ann Marie Early is Trustee of two trusts: the 301 North Main Street Realty Trust and the 307 North Main Street Realty Trust ("Defendant" or "Early"). [Note 2]

3. CAB owns the land with a mixed use building thereon, located at 307 North Main Street in Uxbridge, which CAB purchased from Early, as Trustee of 307 North Main Street Realty Trust, in August 2005. [Note 3]

4. Early, as Trustee of 307 North Main Street Realty Trust, took back a note and mortgage security agreement from CAB for the purchase of the property at 307 North Main Street. [Note 4]

5. Early, as Trustee of 301 North Main Street Realty Trust, at one time owned the land with a multi-family dwelling thereon, located at 301 North Main Street, Uxbridge, which is currently owned by 301 North Main Street Realty, LLC. [Note 5]

6. Early, as Trustee of 301 North Main Street Realty Trust, KML Realty Trust (the owner of land and buildings located at 303 North Main Street, Uxbridge, hereinafter referred to as "KML"), and Plaintiff CAB each own a one-third, undivided interest in a parking lot located to the rear of the properties at 303 and 307 North Main Street (the "Shared Parking Lot").

7. CAB's one-third interest in the Shared Parking Lot was conveyed to it in the same August 31, 2005 deed that conveyed 307 North Main Street to CAB.

8. The Shared Parking Lot is comprised of two parcels identified as tax parcels 3531 and 3534 on the Town of Uxbridge Assessors Map 12C.

9. The Shared Parking Lot is separated from the properties at 303 and 307 North Main Street by a private right of way, or paper street, approximately 30 feet in width. One must cross the private right of way in order to access the Shared Parking lot from the properties at 301, 303 and 307 North Main Street.

10. In June, 2005, prior to CAB's acquisition of 307 North Main Street and a one-third interest in the Shared Parking Lot, Uxbridge C&B Associates, LLC (hereinafter "Uxbridge C&B"), the owner of certain property encumbered by a portion of the private right of way, proposed a redevelopment of its land for a CVS store. As proposed, the redevelopment would necessitate a relocation of the private right of way at its intersection with North Main Street.

11. In conjunction with such relocation, in November 2005, Early, as Trustee of 301 North Main Street Realty Trust, CAB, and KML each entered into a separate agreement with Uxbridge C&B, releasing their respective rights in the then-existing right of way in exchange for rights to use the relocated right of way. The agreements were each entitled: "Agreement to Alter Right-of-Way" (the "Relocation Agreements").

12. The agreement terms contained in each of the Relocation Agreements are identical. After reciting the identities of the two parties to the agreement, and describing the two parties' respective property ownerships, each Relocation Agreement recites the following:

WHEREAS, pursuant to that certain plan recorded with the Registry at Plat Book 28, page 37, the Abutting Property may benefit from a right-of-way (paper street) easterly of North Main Street passing through the [Uxbridge C&B] Property; and

WHEREAS, [Uxbridge C&B] has offered to relocate and upgrade the portion of the right-of-way which crosses the [Uxbridge C&B] Property; and the Owners [of the Abutting Property [Note 6] ] have agreed to such relocation on the terms and conditions contained herein.

NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

1. The Owners hereby release unto [Uxbridge C&B] all of the Owners' right, title and interest in and to that certain Right of Way shown on Plat Book 28, Page 37;

2. [Uxbridge C&B] hereby grants unto the Owners, with quitclaim covenants, a right of way for vehicular and pedestrian access over that portion of the [Uxbridge C&B property] shown as the 'Proposed/Relocated Right of Way 6,807 ± square feet' on that certain Plan entitled "Proposed Right of Way", dated as of May 4, 2005, prepared by Vanasse Hagen [sic] Brustlin, Inc. attached hereto as Exhibit A and made part hereof.

13. The Relocation Agreement between Uxbridge C&B and Early, as Trustee of 301 North Main Street Realty Trust, is dated November 28, 2005 and was recorded on December 16, 2005. [Note 7] The Relocation Agreement between Uxbridge C&B and CAB is dated November 29, 2005 and was also recorded on December 16, 2005. [Note 8]

14. A plan entitled: "Parcel Reconfiguration Uxbridge C&B Associates, LLC, Owner" dated August 19, 2005, shows the right of way/private street in its record location crossing through the Uxbridge C&B property, with the notation "To Be Relocated." It also shows creation of six new parcels of land (numbered 1 through 6) to be divided from the Uxbridge C&B property, each labeled "Not a Buildable Lot" and each with a notation as to its intended conveyance to an abutting landowner. New lots numbered 1 through 5 are shown as a division of the strip of land directly abutting several parcels of land identified by: tax map and parcel numbers, name of the now or former owner, and the pertinent recorded deed reference. [Note 9] Said plan was endorsed by the Uxbridge Planning Board as "Approval Under the Subdivision Control Law Not Required" on November 9, 2005, and was recorded on November 10, 2005 (the "ANR Plan"). [Note 10]

15. The ANR Plan is not the same plan which is referenced in, and attached to, the Relocation Agreements as Exhibit A. Unlike the ANR Plan, the Exhibit A Plan (which was prepared some three and a half months before the ANR Plan) shows the layout of the proposed relocated right of way, but does not show the creation of six small parcels through division of the Uxbridge C&B land, and does not contain any reference to any parcels being conveyed to abutting landowners.

16. Before the Relocation Agreements were signed in November 2005, Uxbridge C&B executed a quitclaim deed to Ann Marie Early, Trustee of 301 North Main Street Realty Trust, in October 2005, conveying the unbuildable parcel shown as lot 3 on the ANR Plan. [Note 11] On the same date, Uxbridge C&B executed a quitclaim deed to Ann Marie Early, Trustee of 307 North Main Street Realty Trust, conveying the unbuildable parcel shown as lot 4 on the ANR Plan. [Note 12] Although both of said deeds are dated October 28, 2005, they were not recorded until December 16, 2005 – the same date that the Relocation Agreements signed in November were recorded.

17. On August 31, 2005, when Early, as Trustee of 307 North Main Street, conveyed to CAB the property at 307 North Main Street together with the one-third interest in the Shared Parking Lot, she did not hold any interest in the parcels shown as lots 3 and 4 on the ANR Plan, and had no intention of conveying any interests in said land to CAB. [Note 13]

18. There is no writing evidencing an agreement by Early, or any other individual or entity, to convey an interest in lots 3 and 4 to CAB.

DISCUSSION

In the Amended Complaint, Plaintiff seeks reformation of the deeds for lots 3 and 4 on the grounds of either mutual mistake or a scrivener's error. However, in moving for summary judgment, Plaintiff shifts its focus from the issue of mutual mistake and only makes passing reference to its pleaded reformation claim. [Note 14] Instead, Plaintiff spends the bulk of its summary judgment argument attempting to recast its deed reformation claim as one for the imposition of a constructive trust on Early's ownership of the two lots. For the reasons discussed below, this attempt is futile. First, I will address Plaintiff's pleaded reformation claim and, second, Plaintiff's attempt to raise a new constructive trust claim.

Reformation

The doctrine of reformation for mutual mistake or scrivener's error exists to effectuate the purpose intended by the parties to an agreement where the language fails to capture that purpose. See Caron v. Horace Mann Co., 466 Mass. 218 , 223 (2013). The term "mutual mistake" in the context of a claim for deed reformation "means a mistake common to all parties to a written contract or instrument, and it usually relates to a mistake concerning the contents or the legal effect of a contract or instrument." Page v. Higgins, 150 Mass. 27 , 30-31 (1889). A mistake by less than all of the parties to the instrument is insufficient; both parties must make the same mistake. See id. at 31. A party may be entitled to reformation of a deed or similar instrument on the theory of mutual mistake if both parties were laboring under the same misapprehension as to an essential fact; but only if those parties had a meeting of the minds and reached a prior agreement that the written document fails to express. Caron, 466 Mass. at 223 (quoting 66 Am. Jur. 2d Reformation of Instruments § 21 (2011)). To succeed on summary judgment, the party seeking reformation must "establish that the undisputed material facts fully, clearly, and decisively show[] a mutual mistake." Polaroid Corp. v. Travelers Indem. Co., 414 Mass. 747 , 756 (1993). [Note 15]

To obtain summary judgment on the reformation claim, Plaintiff was required to establish sufficient, undisputed material facts to demonstrate that the failure to include CAB and KML as co-grantees in the two deeds was either the result of (1) a mutual mistake between Uxbridge C&B and Early, the parties to the deeds, or (2) a scrivener's error in failing to incorporate the intentions of those parties. In either case, both parties to the deeds – Uxbridge C&B as grantor and Early as grantee – must be shown to have shared the same intention and the same mistake about the contents of the deeds.

But here, Plaintiff has not named Uxbridge C&B as a party to this lawsuit and has not adduced any evidence of Uxbridge C&B's intentions with respect to the deeds. [Note 16] , [Note 17] Moreover, Plaintiff's statement of undisputed material facts includes no reference at all to a scrivener's error in the deeds. Without any evidence that Uxbridge C&B made a mistake as to the intended grantees in the deeds – an essential element of a reformation claim based on mutual mistake or a scrivener's error – Plaintiff cannot prevail on its pleaded claim. As Plaintiff has proffered no admissible Rule 56 materials on this issue, and thus "has no reasonable expectation of proving an essential element" of its claim, Defendant is entitled to summary judgment on this basis, dismissing Plaintiff's single-count Amended Complaint. Kourouvacilis, 410 Mass. at 716.

Plaintiff is also not entitled to the relief requested because, as a stranger to the deeds in question, it lacks standing to maintain a reformation claim. "Reformation may be granted at the request of any party to the contract, including an intended beneficiary, or of a party's successor in interest." Restatement (Second) of Contracts, § 155, comment e (1981). Plaintiff is not a party to these deeds, nor a successor in interest to a party. While Plaintiff may argue it is an "intended beneficiary" of the deeds (read: intended party), Plaintiff's failure to adduce any admissible evidence of a written agreement to grant an interest in lots 3 and 4 to CAB is fatal to this contention. [Note 18] Plaintiff has submitted no documentation evidencing the intentions of either Uxbridge C&B or Early relative to the conveyance of lots 3 and 4, other than the unambiguous deeds themselves. And notably absent from Plaintiff's summary judgment filings is any deposition testimony or affidavit from a representative of Uxbridge C&B attesting to an agreement to convey lots 3 and 4 to Plaintiff. Because Plaintiff cannot prove an agreement in compliance with the statute of frauds to convey lots 3 and 4 to CAB (i.e., prove that Plaintiff was an intended grantee of the deeds at issue), Plaintiff does not have standing to seek reformation of those deeds. Accordingly, summary judgment must enter against Plaintiff and for Defendant, dismissing the Amended Complaint.

Constructive Trust

Seemingly in recognition of some of the fundamental flaws in its case, including its failure to name the grantor, Uxbridge C&B, Plaintiff advances a theory of constructive trust for the first time in its motion for summary judgment. In support of the theory, Plaintiff contends that it relied to its detriment upon the representations of Early's husband, Thomas Woloski, [Note 19] that Uxbridge C&B had agreed to convey the strip of land behind the Shared Parking lot (including lots 3 and 4) to the owners of that Shared Parking Lot. In particular, through the Rule 56 materials submitted, CAB contends that its manager, Cheryl Bergeron, signed the Relocation Agreement with Uxbridge C&B in November 2005, based upon Woloski's representation (allegedly made on behalf of Early) that CAB, as a one-third owner of the Shared Parking Lot, would become the owner of a one-third interest in lots 3 and 4. According to CAB, it wasn't until 2012 that Bergeron learned that the deeds for lots 3 and 4 named only Early as grantee. After suggesting (without evidence) that the failure to name CAB as a grantee in the deeds was due to either a mistake or fraud, CAB argues at length that Woloski violated his (alleged) fiduciary obligations to Bergeron when he "offered her signature on the Agreement to Alter Right of Way in exchange for a deed to his partner and business associate Ann Marie Early." It is on these grounds that Plaintiff requests that the court reform the deeds "or impose a constructive trust to reflect that Cheryl Bergeron [Note 20] is a one third owner of lots 3 and 4."

As a threshold matter, Plaintiff is not entitled to summary judgment on a constructive trust claim not set forth in its pleadings. See Hardick v. Tremblay Moving & Storage Co., 67 Mass. App. Ct. 1109 , *1 (2006) (Rule 1:28 Decision) (holding that trial court need not consider new theories of liability not presented in the pleadings, offered for the first time at summary judgment) (citing Tetrault v. Mahoney, Hawkes & Goldings, 425 Mass. 456 , 463 & n. 7 (1997) (court need not consider allegations of fraud, mistake, duress, or undue influence that are not pleaded with particularity)). A constructive trust is an equitable remedy that may be imposed "in order to avoid the unjust enrichment of one party at the expense of another where the legal title to the property is obtained (a) by fraud, (b) in violation of a fiduciary relationship, or (c) where information confidentially given or acquired is used to the advantage of the recipient at the expense of the one who disclosed the information." Sanguinetti v. Nantucket Const. Co., 5 Mass. App. Ct. 227 , 236-37 (1977). Even under the most liberal of constructions, neither the original-filed Complaint, nor the Amended Complaint, can be read as including a claim to impose a constructive trust, as there are no allegations pleading fraud with particularity as required under Mass. R. Civ. P. 9(b), and no allegations which might be construed as asserting the existence of a fiduciary relationship between Plaintiff and Defendant. See Nessralla v. Peck, 403 Mass. 757 , 762 (1989) (finding that the lower court judge correctly declined to impose a constructive trust on property defendant purchased after making an oral agreement to convey it to plaintiff, where there was no a fiduciary relationship between the parties and no showing that the legal title to the property was obtained by fraud.)

Furthermore, Plaintiff has failed to demonstrate the existence of any agreement between CAB and Early that would be enforceable under the statute of frauds, G.L. c. 259, § 1. See Bibi v. Courville, 357 Mass. 782 , 782 (1970) (rescript) (affirming trial court's refusal to impose constructive trust where "statute of frauds (G.L. c. 259, s 1) barred the enforcement of any oral agreement for the conveyance of an interest in land."). It is undisputed that: (1) Early was not a party to the Relocation Agreement between Uxbridge C&B and CAB; (2) the Relocation Agreement between Uxbridge C&B and CAB contains no reference to any consideration for CAB's release of its interest in the Right of Way other than Uxbridge C&B's grant to CAB of rights over the relocated and upgraded right of way; and (3) Bergeron signed the Relocation Agreement as Manager of CAB on November 29, 2005 – a month after Uxbridge C&B had already executed the two quitclaim deeds conveying lots 3 and 4 to Early. Plaintiff has produced no competent evidence of any agreement between CAB and Uxbridge C&B, between Early and Uxbridge C&B, or between CAB and Early concerning the conveyance of lots 3 and 4 to CAB.

Instead, Plaintiff relies almost exclusively on inadmissible hearsay statements and statements not made upon personal knowledge, which are contained in an affidavit of Cheryl Bergeron, as to conversations Bergeron had with Early's husband, Woloski (a non-party to this lawsuit). [Note 21] That affidavit purports to attest to what Bergeron understood from those conversations to have been an agreement that CAB would share in the ownership of lots 3 and 4 if CAB cooperated in signing the Relocation Agreement.

But even putting aside the inadmissibility of Bergeron's statements [Note 22] (and the fact that they are, in any event, contradicted by statements contained in the affidavits of both Early and Kathleen M. Laverdiere, Trustee of KML), and putting aside, too, whether Bergeron's purported understandings were reasonable in the circumstances, the lack of any evidence of a written agreement signed by Early, or any signed memorandum evidencing an oral contract to convey an interest in lots 3 and 4 to CAB, is fatal to Plaintiff's constructive trust theory. Because such a claim would be barred by the statute of frauds, as a matter of law, Bergeron's personal understandings and beliefs (even if they were admissible) are completely irrelevant to the question of whether CAB is entitled to an interest in the two subject lots.

CONCLUSION

For the reasons set forth above, Plaintiff's Motion for Summary Judgement is denied, and summary judgment shall enter instead in favor of Defendant pursuant to Mass. R. Civ. P. 56(c), dismissing the Amended Complaint.