MISC 19-000057

April 1, 2019

Middlesex, ss.



This action is a dispute concerning a failed real estate transaction in which the plaintiff was the seller and the defendant was the buyer designated in a purchase and sale agreement for improved commercial property located at 357 Broadway in Everett. Each party claims the transaction failed as a result of the fault of the other party. The plaintiff, the seller in the proposed transaction, filed a complaint in three counts styled as a complaint "for specific performance and for equitable relief and damages." Counts I and II of the complaint are styled as requests for relief in the nature of specific performance, and count III is a count seeking damages for the defendant buyer's breach of the agreement. The complaint incorporates the purchase and sale agreement between the parties, which is attached as Exhibit A to the complaint. The purchase and sale agreement, in paragraph 18, includes a liquidated damages clause familiar to any Massachusetts real estate practitioner. The liquidated damages clause provides that in the event of a default by the buyer, "all Deposits made hereunder by the BUYER shall be retained by the SELLER as liquidated damages and this shall be SELLER's sole and exclusive remedy at law and in equity." As plaintiff's counsel acknowledged at the hearing on this matter, this paragraph, incorporated as an allegation in the complaint and acknowledged to be the contract between the parties, precludes the plaintiff from seeking specific performance as a remedy for breach of the purchase and sale agreement. Accordingly, the only relief properly sought by the plaintiff is damages in the form of retention of the deposit.

The defendant, the buyer in the transaction, filed a counterclaim in eight counts, none of which is a claim for specific performance of the purchase and sale agreement. Specifically, the defendant's counterclaim includes counts for (in order of appearance) breach of contract, conversion, negligence, misrepresentation, negligent misrepresentation, violation of the implied covenant of good faith and fair dealing, a count seeking damages for unfair business acts or practices in violation of G. L. c. 93A, and a count seeking injunctive relief, but only to prevent the sale of the subject property during the pendency of this action in order to secure the claims for damages. These claims all sound either in tort or contract; none of them seek specific performance or any interest in the subject real estate.

This matter came before the court for a case management conference, but also on the defendant's motion for endorsement of a memorandum of lis pendens and the defendant's motion for a preliminary injunction seeking to enjoin the sale of the subject property during the pendency of this action. Counsel for the defendant acknowledged that the defendant does not assert a claim for specific performance or seek in any way any right, title or interest in the subject property, but filed the motion for lis pendens and the motion for preliminary injunction only to secure the defendant's claims for damages in his counterclaim. For this reason, both motions were denied. But more fundamentally, this matter is not properly in the Land Court because the plaintiff has no right to seek specific performance, and the defendant acknowledges that he seeks only damages. This case is a dispute over the deposit, in which the plaintiff seller cannot seek, and the defendant buyer does not seek, any determination with respect to any right, title or interest in the subject real estate as required by G. L. c. 185, § 1(k).

"Whenever it appears by suggestion of a party or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action." Mass. R. Civ. P. 12 (h) (3). The court may raise lack of subject matter jurisdiction sua sponte. Talmo v. Zoning Bd. Of Appeals of Framingham, 93 Mass. App. Ct. 626 , 629 (2018). The Land Court has jurisdiction over, among other things, "[a]ll cases and matters cognizable under the general principles of equity jurisprudence where any right, title or interest in land is involved, including actions for specific performance of contracts." G. L. c. 185, § 1(k). In the present case, however, the dispute is solely one for damages over a deposit for a failed real estate transaction, and not one for a right, title or interest in land. Nothing in the complaint or the counterclaims properly raises any question of title to real estate, nor does anything in the complaint (as it incorporates the liquidated damages clause in the purchase and sale agreement) or the counterclaim properly seek any judgment from this court that would alter title, or make a declaration as to title. Rather, the central issue is a contractual dispute over damages for breach of a contract that happened to be for the sale of real estate. This issue, concerning the parties' duties under the contract and whether they are subject to damages for breach of those duties, does not "implicate any special expertise of the Land Court." Steele v. Kelley, 46 Mass. App. Ct. 712 , 725 (1999).

Under these circumstances, the Land Court's general equity jurisdiction under G. L. c. 185, § 1(k) for disputes involving any right, title or interest in land, including actions for specific performance, is not implicated.

Therefore, it is

ORDERED that the complaint and the counterclaims in this action are hereby

DISMISSED for lack of subject matter jurisdiction.

So Ordered.