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COMMONWEALTH OF MASSACHUSETTS. APPEALS COURT. No. 2005-P-215. Plymouth County Division. Town of Hanover, v. Frank Cervelli, ON APPEAL FROM A JUDGMENT OF THE SUPERIOR COURT DEPARTMENT. Brief for |
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| John T. Spinale |
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| i. Table of Contents. Statement of the Issues Presented For Review............................................................................1 Statement of the Case and Facts.................................................................................................2 Argument
Conclusion..............................................................................................................................34 Addendum.......................................................................................................................... Post Statutory and Rule Addendum.............................................................................Post Addendum Record Appendix...................................................................Post Statutory and Rule Addendum Trial Transcript......................................................................................... Post Record Appendix ii. Table of Authorities. Cases Adoption of Astrid, 45 Mass. App. Ct. 538, 547(1998).........................................................17 Binder v. Binder, 7 Mass. App. Ct. 751,755(1978)................................................................17 Blackwell v. E.M. Helides, Jr., Inc. , 368 Mass.225(1975)...............................................16-17 Brash v. Brash, 406 Mass. 101, 105(1990)............................................................................18 Buker v. National Management Corporation, 16 Mass. App. Ct. 36, 44(1983)....................32 C & W. Dyeing & Cleaning Co., Inc. v. DeQuattro, Capital Bank & Trust Co. v. Richman, Cities Serv. Oil Co. v. National Shawmut Bank, Computune, Inc. v. Tocio, 44 Mass. App. Ct. 489, 492(1998) .............................................22 Felton v. Felton, 383 Mass. 232, 239(1981) ........................................................................16 Frostar Corp. v. Malloy, 63 Mass. App. Ct. 96,106-108(2005) ..........................................28 Greenstein v. Flatley, 19 Mass. App. Ct. 351(1985).......................................................31-32 Guardianship of Clyde, 44 Mass. App. Ct. 767, 774(1998).................................................17 Hunt v. Bassett, 269 Mass. 298, 302-303(1929) ...........................................................22; 24 Hurd v. Cormier, 358 Mass. 736, 738(1971) ................................................................24; 28 JRY Corp. v. LeRoux, 18 Mass. App. Ct. 153, 172-173(1984) ...........................................25 Kanavos v. Hancock Bank & Trust Co. , 395 Mass. 199(1985).........................................28 Kendall v. Salvaggio, 413 Mass. 618, 620-621(1992)........................................................17 iii. Krokyn v. Krokyn, 378 Mass. 206, 208(1979)....................................................................16 Lewis v. Chase, 23 Mass. App. Ct. 673, 676(1987)......................................................22; 24 Lighter v. Lumbermans Mutual Casualty Insurance Company, Loitherstein v. International Business Machines Corp., Loranger Construction Corp. v. E. F. Hauserman Co., Lowell Bar Ass'n v. Loeb, 315 Mass. 176,178(1943).........................................................17 Lucey v. Hero International Corp., 361 Mass. 569(1972).................................................21 Mansfield v. Wiles, 221 Mass. 75, 82(1915)......................................................................28 Merry v. A.W. Perry, Inc., 18 Mass. App. Ct. 628(1984)..................................................28 Morgan v. Forbes, 236 Mass. 480, 482(1921) ................................................................ 21 Mucci v. Brockton Bocce Club, Inc., National Medical Care, Inc. v. Zigelbaum, Nichols v. Sanborn, 320 Mass. 436, 438(1946)..........................................................23; 24 Nissan Automobiles of Marlborough, Inc. v. Glick, Nylander v. Potter, 423 Mass. 158, 159 n.5(1996)..........................................................17 Pappas Industrial Parks, Inc. v. Psarros, Pitts v. Halifax Country Club, Inc., Quaranto v. DiCarlo, 38 Mass. App. Ct. 411, 415(1995)..........................................22; 28 iv.
Rex Lumber Co. v. Acton Block Co., Roberts-Neustadter Furs, Inc. v. Simon, Schuler v. Schuler, 382 Mass. 366, 368(1981) ................................................................16 Serino v. Serino, 6 Mass. App. Ct. 926(1978)..................................................................18 Simon v. Weymouth Agricultural & Industrial Soc., Stapleton v. Macchi, 401 Mass. 725, 729(1988) .............................................................23 Thurlow v. Shaw's Supermarkets, Inc., The Tristam's Group, Inc. v. Morrow, Tull v. Mister Donut Development Corp., Turner v. Community Homeowner's Association, Inc., Westinghouse Broadcasting Co., Inc. v. New England Patriots Zayre Corp. v. Computer Systems of America, Inc., Other Authorities. Mass. R. Civ. P. 52(a).......................................................................................................17 G.L.c. 61A, Sections 1 et seq. .................................................................................. passim 1 Corbin on Contracts (1963).................................................................................21; 24-25 1 Statement of the Issues Presented for Review. 1. Where the evidence showed that the plaintiff-appellee Town of Hanover had not and could not timely perform its part of the option contract which it sought to have enforced against the defendant-appellant Frank Cervelli, did the lower court err as a matter of law or as a matter of equity in nevertheless ordering specific enforcement of the purported option agreement? 2. Did the lower court err as matter of fact or as a matter of law in ruling that an enforceable option agreement had been consummated between the Town and Cervelli? 3. Did the trial judge err as a matter of law in ruling that the Town was entitled to “reliance damages” in the circumstances of this case? Statement of the Case and Facts. On June 20, 2000, the plaintiff-appellee Town of Han-over (“the Town”) brought this civil action against the defendant-appellant Frank Cervelli (“Cervelli”) in the Plymouth Division of the Superior Court Department seeking specific performance of an option agreement which allegedly obligated Cervelli to convey to the Town 74 acres of his land in Hanover (A.1;3;5-8). In addition, the Town sought damages “for the loss of state funding due to [Cervelli's] refusal to comply with the option agreement pursuant to the terms of the contract”(A.5). The Town alleged that on May 1, 2000, and after “substantial negotiations,” Cervelli executed an option giving the Town the right to purchase his land in Hanover (A.6). The option signed by Cervelli identified the property, specified the purchase price of $1.38 million dollars, the time for the exercise of the option as “any time before July 1, 2000” and for the closing upon the Town's exercise of the option “at a date no later than June 30, 2001" (A.6;88-89). The Town alleged that on or about May 1, 2000, the Town by its Town Meeting voted to authorize its Board of Selectmen to purchase Cervelli's property and appropriated the necessary funds for this purpose (A.6). In addition, on May 6, 2000, the Town at the annual Town elec-tion voted to exempt from the limitations of Proposition 2 1/2 the required bonding for the purchase; and it then applied for and received approval of State grants of about $100,000 to assist in its purchase of the property, a condition of which was that the deed be delivered to the Town no later than June 30, 2000 (A.6).
However, the Town alleged that on or about May 23, 2000, Cervelli purported to “revoke [his] signature]” on the option (A.6-7;105-106). Despite this revocation of the option by Cervelli, the Town's Board of Selectmen voted on May 31, 2000, to exercise the Town's option to purchase Cervelli's property and set a closing date for June 12, 2000, notifying Cervelli of same (A.7;107-111). When Cervelli refused to go through with the closing, the Town brought this civil action against him (A.1;5-8). Upon these facts, the Town claimed in Count I that it “relied to its detriment on the option agreement as evi-denced through its Town Meeting and Town Election vote approving the purchase...and time spent seeking state aid to alleviate the monetary costs of the purchase”(A.7). Alleging that Cervelli's land is unique and one of the largest undeveloped parcels in Hanover and that it stands ready, willing and able to exercise the option agreement, the Town sought specific performance (A.7-8).
In Count II, the Town sought compensatory damages as the result of Cervelli's refusal to honor the option agreement (A.8). As it alleged, because of Cervelli's actions, the Town is in jeopardy of losing about $100,000 in State grants in order to fund its purchase of the property (A.8). In its prayers for relief, the Town sought a judgment compelling Cervelli to perform consistent with the option agreement by tendering the Town a deed to his property; and it requested an award of the actual damages it sustained as a result of the loss of State funding (A.8). Cervelli's answer denied that the option agreement was legally binding upon him in the circumstances; he claimed that he had timely revoked his assent to the option agreement in a timely manner; and he asserted that to the extent that there was an agreement to give the Town an option to buy his property, it had been rescinded (A.9-11).
In affirmative defenses, Cervelli asserted inter alia that the purported option agreement was never delivered to or accepted by the Town and that it was rescinded by him in any event (A.11). He also claimed that the purported option was not supported by consideration and therefore the Town's claims “must fail due to a lack or failure of consideration”(A.11). In addition, Cervelli asserted that the Town failed to mitigate its damages, that it was not entitled to the remedy of specific performance in any event and that the option agreement was premised upon a mutual mistake of fact (A.11-12). Cervelli further claimed that the Town “engaged in con-duct whereby it acquiesced in the events complained of and acted in a manner consistent therewith, on occasion to the detriment of [Cervelli] and is, therefore, estop-ped from recovery by its own actions”(A.11). With the parties' pleadings in this posture, discov-ery ensued and the matter was eventually set down for trial on April 14, 2003 (A.3-4). A joint pretrial memoran-dum was filed and the parties were also able to enter into a stipulation of facts together with an agreement on all of the trial exhibits (A.4;13-18;60-117).
The stipulated facts established that sometime in 1998 or 1999, Douglas Thomson, Chairman of the Hanover Open Space Committee, contacted Cervelli about the sale of his seventy-four acres of property to the Town to be maintained as an open space; discussions between the two continued during the early part of 2000 (A.60). Even though no agreement had been reached about a sale, two articles (Articles 19 and 20) were placed on the Town Warrant for the Town Meeting for May 1, 2000, in order to fund the purchase as a two-thirds vote of the Town was required for the Town to acquire Cervelli's land (A.60). On April 13, 2000, Town Counsel James A. Toomey sent Douglas Thomson a first draft of the Town's proposed op-tion “as a means to guide the ongoing discussions” between the Town and Cervelli (A.60;65-67). The next part of the negotiations took place on May 1, 2000, when John Thomson, Douglas Thomson's father and an attorney in Hanover, faxed Cervelli's attorney, Charles C. Parris, a letter indicating that the Town would amend Article 20 of the Town Warrant (to be voted on that evening) to reflect the fact that Cervelli “might sign on if the Town agreed to buy the whole property, and agreed not to develop it” (A.70-72).
Later that same day, Attorney Parris faxed back to Attorney Thomson the Town's proposed option and asked Thomson to amend the option to make it subject to the Town's passage at the Town Meeting of the amended Article 20 as well as Article 19; and subject also to “the Grantor Frank Cervelli not having to pay rollback taxes” (A.60-61;74-77). Attorney Thomson in turn faxed Town Counsel and directed him to revise the option so that the option was subject to the passage at the Town Meeting of Article 19 and the amended Article 20 (A.61;79). As for the roll back taxes, Thomson asked Town Counsel Toomey:
(A.79). A few hours later, Attorney Toomey had revised the option and he faxed it to both Attorney Thomson and Attorney Parris (A.61;81-83). About thirty minutes later, he faxed another revised option to both Thomson and Parris (A.61;85-87). This last revision made the option in favor of the Town subject to: (1) the passage of Articles 19 and 20 at the Town Meeting later that day; (2) the Town's Parks and Recreation Commission's management and control of Cervelli's Lot 1A and its dedication of this parcel only to public recreational use; (3) the Town's agreement to erect no buildings on the property other than those for recreational use; and (4) Cervelli being discharged from any obligation to pay roll back taxes under G.L.c. 61A (A.87).
The Town Meeting vote, scheduled for that evening, addressed condition number (1); and the wording of the amended Article 20, up for vote at the Town Meeting that evening, addressed conditions numbered (2) and (3) (A.86). Attorney Parris faxed the new option to Cervelli who signed it, faxing it back to Parris who then faxed it to Attorney Thomson (A.61;89). Cervelli then destroyed the original signed copy (A.61). On the evening of May 1, 2000, the Town Meeting approved Articles 19 and 20 of the Town Warrant for the purchase of the property (A.61;91-94). On May 2, 2000, in the aftermath of the Town Meeting, Attorney Thomson in-formed Attorney Parris of the Town vote approving the Town's purchase of the property; and three days later, he asked Parris for the original of the option signed by Cervelli (A.61;96-99). On May 6, 2000, at a special elec-tion, the Town passed the debt exclusion override enab-ling it to purchase the property (A.61;101).
On May 12, 2000, Town Counsel Toomey faxed Cervelli's attorney Charles Parris asking for the original of the option signed by Cervelli (A.61;103-104). On May 23, 2000, Attorney Jeffrey Schlossberg, now representing Cervelli, wrote Toomey to revoke Cervelli's signature, i.e, his assent, to the option he executed on May 1, 2000 (A.61; 106). According to Schlossberg's letter, Cervelli felt pressured by the Town to go through with the transaction on the day of the Town's vote; he signed a document “which he did not understand fully all the implications;” and he wanted more time “to analyze the situation” (A.106). On June 2, 2000, Town Counsel Toomey replied in writing to Schlossberg's letter by stating that the Town through its Board of Selectmen had voted to exercise its option and had set a closing date for the Town's purchase of the property for June 12, 2000 (A.61;108-111). Toomey rejected the notion that Cervelli could now “revoke his signature” and indicated that it was the Town's intention to enforce the option by litigation, if necessary (A.108-109). In furtherance of this intention by the Town to enforce the option, on June 30, 2000, Town Counsel Toomey wrote Cervelli's attorney to inform him that the Town stood ready to close on the property and to go forward with the Town's already filed complaint on June 20, 2000, against Cervelli seeking specific performance of the op-tion agreement (A.61;113-114).
Finally, the parties agreed that at some point “[i]n the course of the above described events,” the Town applied for and was selected for an Urban Self-Help Grant in the amount of $50,000 for the purchase of Cervelli's property (A.62;116-117). However, this grant to the Town by the Massachusetts Executive Department of Environ-mental Affairs was dated April 26, 2000, five days before Cervelli's execution of the option (A.116-117). On April 14, 2003, the matter came on for a one-day, jury-waived trial in the Plymouth Division of the Superior Court Department before Murphy, J. (A.4;118;Tr.1-101). All of the testimony of Douglas Thomson, Attorney John Thomson and Frank Cervelli tracked for the most part the stipulation of facts already entered into by the parties concerning the negotiations leading up to Cervelli's execution of the option (Tr.1-101).
On June 6, 2003, Judge Murphy issued his findings of fact, rulings of law and order for judgment(A.4;118-125). Consistent with the parties' stipulation of facts, the lower court found that from late 1998 or early 1999 and through the early part of 2000, Douglas Thomson, the chief negotiator for the Town's Open Space Committee, pursued Cervelli about the Town's purchase of his two parcels of farmland, totaling 74 acres (A.118-119). Cer-velli had reservations about the sale; he was concerned about the uses to which the parcels would be put by the Town and whether the two parcels would be sold together or separately (A.119). With no agreement yet in place to acquire Cervelli's property, it was found that the Town nevertheless took steps in early 2000 to submit an application to the State's Executive Office of Environmental Affairs to secure a grant from the Urban Self-Help Program in order to fund a portion of the sale price (A.119). On April 26, 2000, the Environmental Affairs office awarded the Town a grant of $50,000 contingent upon completion of the “project” by June 2000 (A.116-117;119).
On April 30, 2000, the Town's Douglas Thomson once again visited Cervelli in an attempt to secure his assent to a sale of the property before the Town Meeting on the evening of the next day, May 1, 2000 (A.119). He told Cervelli that most likely the Town would quash the project if Cervelli would not permit building on the property(A.119). Later that day, Douglas Thomson's father, Attorney John Thomson, saw Cervelii's attorney, Charles Parris and early the next day, May 1, 2000, Attorney Thomson faxed Parris an option for Cervelli to sign before the Town Meeting convened that evening (A.69-72;119-120). Attorney Parris responded to this fax by requesting that the option be subject to the passage of Articles 19 and 20 of the Town Warrant (which would appropriate the monies to fund the purchase of both parcels) and altering it so that Cervelli would not have to pay roll back taxes on the property under G.L.c. 61A, Sections 1 et seq. (A.74-77;119-120). Town Counsel Toomey made the revisions to the option and added the condition that no buildings, other than for recreational uses, would be constructed on the property, a particular “sticking point” for Cervelli during the negotiations (A.85-87;120). Without making any alterations or notations on the document, Cervelli signed the document and it was faxed back to Attorney Thomson (A.89;120). Cervelli then destroyed the original and no one from the Town ever signed the option (A.89;120).
Judge Murphy further found that the Town Meeting held later that day passed Articles 19 and 20, which contained the funding for the Town's purchase of each of Cervelli's two parcels as well as the limitation on any buildings on the property except for those dedicated to recreational uses (A.91-94;120-121). Two subsequent Town referenda on May 6, 2000, authorized an exemption of required bonding enabling the Town to purchase the property (A.101-121). In response to the Town's requests for the original of the option, Cervelli's attorney, on May 23, 2000, wrote Town Counsel Toomey and revoked Cervelli's signa-ture from the option (A.106;121). Town Counsel replied by indicating that the Town “was proceeding to acquire the Property and voted to exercise its option” on June 2, 2000 (A.108-111; 121). On June 30, 2000, Town Counsel in-formed Cervelli's attorney in writing that the Town stood ready to close on the property (A.113-114;121). Upon these findings of fact, Judge Murphy ruled as a matter of law that Cervelli's signed option of May 1, 2000, was valid and enforceable by the Town which “was ready, willing and able to perform on [its] terms”(A.121-123). As the trial court reasoned,
(A.123). Finding in the circumstances that the equitable rem-edy of specific performance was appropriate, Judge Murphy further determined as a matter of law that Cervelli was liable to the Town under the decision in Loranger Construction Corp. v. E. F. Hauserman Co., 376 Mass. 757, 760-761 (1978) for “reliance damages” in the amount of $50,000(A.124). As he found, on May 2, 2000, and again on May 12, 2000, Town representatives informed Cervelli and his attorney that any delay in the option and transfer would cause a loss in funding (A.124). The lower court concluded:
(A.124). Judgment accordingly entered in the Town's favor on Count I of its complaint for specific performance and on Count II for damages in the amount of $50,000 together with interest and costs (A.4;124-125;126). This appeal by Cervelli followed (A.4;127-128). Argument. It Was Wrong As A Matter of Law For The Lower In prosecuting this appeal, Cervelli has reproduced in his Record Appendix all of the parties' pleadings, the stipulation of facts and all of the testimonial evidence and trial exhibits adduced below together with the trial judge's findings of fact and conclusions of law. This Court therefore has before it a sufficient record upon which to review and decide every question of law, fact and discretion. Felton v. Felton, 383 Mass. 232, 239 (1981) quoting Schuler v. Schuler, 382 Mass. 366, 368(1981) and Krokyn v. Krokyn, 378 Mass. 206, 208 (1979). In the first place, this Court is not obligated to reach the same conclusions of law as the Superior Court Department and it may reverse the judgment below if any of the trial judge's rulings is tainted in any respect by an error of law. See Simon v. Weymouth Agricultural & Industrial Soc., 389 Mass. 146, 148-149(1983); Blackwell v. E.M. Helides, Jr., Inc., 368 Mass. 225, 226 (1975); Lowell Bar Ass'n v. Loeb, 315 Mass. 176, 178 (1943).
Second, this Court may set aside a trial judge's finding of fact where it is clearly erroneous within the meaning of Mass. R. Civ. P. 52(a), as amended, 423 Mass. 1402(1996). Thurlow v. Shaw's Supermarkets, Inc., 49 Mass. App. Ct. 175, 177 (2000). Binder v. Binder, 7 Mass. App. Ct. 751, 755 (1978). A finding of fact is “clearly erroneous” when there is no evidence in the record to support it, Adoption of Astrid, 45 Mass. App. Ct. 538, 547 (1998); Guardianship of Clyde, 44 Mass. App. Ct. 767, 774 (1998), or even if there is some evidence to support a finding, when this Court on the entire evidence is “left with the definite and firm conviction that a mistake has been committed.” Lighter v. Lumbermans Mutual Casualty Insurance Company , 43 Mass. App. Ct. 415, 418 (1997) quoting Nylander v. Potter, 423 Mass. 158, 159 n.5 (1996). Kendall v. Salvaggio, 413 Mass. 618, 620-621 (1992). There is no question that Judge Murphy was in the best position to assess the credibility of the parties' proof and to assign it appropriate weight in his findings. Brash v. Brash, 406 Mass. 101, 105 (1990). Serino v. Serino, 6 Mass. App. Ct. 926 (1978). See Capital Bank & Trust Co. v. Richman, 19 Mass. App. Ct. 515, 519 (1985). However, there was overwhelming agreement about the operative facts contained in the parties' stipulation of facts, most of the testimony and all of the exhibits, as specifically set forth by Cervelli in his Statement of the Case and Facts, supra, and in Judge Murphy's findings of fact recited herein.
Given this core of essentially undisputed operative facts, Cervelli submits that the trial judge erred as a matter of law when he concluded from this record that the Town was entitled to the equitable relief of specific performance. The terms of the option which Cervelli executed expressly made the option given to the Town on May 1, 2000, subject to (1) the passage of Articles 19 and 20 at the Town Meeting later that day; (2) the Town's Parks and Recreation Commission's management and control of Cervelli's Lot 1A and its dedication of this parcel only to public recreational use; (3) the Town's agreement to erect no buildings on the property other than those for recreational use; and (4) Cervelli being discharged from any roll back taxes on the property under G.L.c. 61A, Sections 1 et seq. (A.87). The Town Meeting vote, approving Articles 19 and 20 the evening of May 1, 2000, satisfied condition number (1); and the wording of the amended Article 20, passed by the Town Meeting that evening, satisfied conditions numbered (2) and (3). However, the Town through its Board of Assessors never satisfied the fourth condition of Cervelli's option and never demonstrated its ability or willingness to discharge Cervelli for roll back taxes on the property under Chapter 61A at any time prior to July 1, 2000, the deadline for the Town's acceptance of Cer-velli's option. While Attorney Thomson's facsimile to Town Counsel containing Cervelli's proposed conditions for the option asked if the Town could accomplish this roll back tax discharge for Cervelli per his request (A.79), the Town never addressed this condition in any way, never showing in writing, even after suit was brought against Cervelli on June 20, 2000, that it or its Board of Assessors stood ready, willing and able to discharge Cervelli for roll back taxes on the property under G.L.c. 61A, Sections 9, 13 and 17. Having failed to satisfy timely one of the fundamental conditions for its exercise of Cervelli's option before it expired on July 1, 2000, the Town failed to “turn its corners squarely” in exercising the option in its favor and should have been denied the equitable remedy of specific performance. Second, the stipulated facts and the lower court's own findings establish that the Town applied for and received State funding for its land purchase before Cervelli signed the option, at a time when neither the Town not Douglas Thomson had any expectation that its purchase of Cervelli's property was probable, much less imminent. On these established facts, there was no basis in law to award the Town “reliance damages” under Loranger for Cervelli's failure to go through with the conveyance. For these reasons, this Court should reverse and vacate the judgment below and enter a new judgment denying the Town the equitable relief of specific performance as well as any award of damages based upon the rationale of Loranger.
An option to purchase real estate is a unilateral contract by which the owner of the property (the option- or) gives the holder of the option (the optionee) the right to buy the property according to the terms and conditions of the contract. Lucey v. Hero International Corp. , 361 Mass. 569, 573-574(1972) citing Morgan v. Forbes , 236 Mass. 480, 482(1921). 1 Corbin on Contracts , Section 25(1963). If the option is effectively exercised, it ripens into a bilateral contract which can be enforced by specific performance. Cities Serv. Oil Co. v. National Shawmut Bank , 342 Mass. 108, 110-111(1961). Turner v. Community Homeowner's Association, Inc., 62 Mass. App. Ct. 319, 325(2004). Roberts-Neustadter Furs, Inc. v. Simon, 17 Mass. App. Ct. 262, 264-265 (1983). The conditions which attach to the exercise of an option require a more strict degree of adherence than may be the case with the constructive conditions of exchange attaching to traditional bilateral contracts; being unilateral in nature, an option must be exercised, if at all, by the optionee “turn[ing] [its] corners squarely.” Computune, Inc. v. Tocio, 44 Mass. App. Ct. 489, 492(1998). Quaranto v. DiCarlo, 38 Mass. App. Ct. 411, 415(1995). The Tristam's Group, Inc. v. Morrow, 22 Mass. App. Ct. 980, 981 (1986) citing Loitherstein v. International Business Machines Corp., 11 Mass. App. Ct. 91, 94-96 (1980). Westinghouse Broadcasting Co., Inc. v. New England Patriots Football Club, Inc., 10 Mass. App. Ct. 70, 73(1980). Furthermore, “one ‘who stumbles in exercising an option is generally not entitled to equitable relief.'” Mucci v. Brockton Bocce Club, Inc., 19 Mass. App. Ct. 155, 161 (1985) quoting Loitherstein, 11 Mass. App. Ct. at 96.
In determining whether the Town as optionee has “turned its corners squarely,” the terms of the instru-ment forming the option and giving the Town a unilateral right exclusively for its own benefit are strictly construed. Hunt v. Bassett, 269 Mass. 298, 302-303 (1929). Lewis v. Chase, 23 Mass. App. Ct. 673, 676(1987). National Medical Care, Inc. v. Zigelbaum, 18 Mass. App. Ct. 570, 576(1984). The reason for this stricter construction of option contracts was justified by Judge Kass in Westinghouse:
10 Mass. App. Ct. at 73 (citations omitted).
Where the parties intend that the exercise of the option itself and any related performance be accomplished by the optionee within a date certain, “time is of the essence of an option.” C & W. Dyeing & Cleaning Co., Inc. v. DeQuattro, 344 Mass. 739, 742-743(1962). Cities Serv. Oil Co. v. National Shawmut Bank, 342 Mass. at 110-111. Loitherstein, supra, quoting Hurd v. Cormier, 358 Mass. 736, 738(1971). Accord , Nichols v. Sanborn , 320 Mass. at 438. Hunt v. Bassett, 269 Mass. at 302. Thus an option agreement calling for both notice and other related performance by the optionee within a specified period of time requires a timely compliance with all conditions for its proper exercise. Loitherstein, 11 Mass. App. Ct. at 94-95 and case cited. In this way, time is of the essence not only for the exercise of the option itself but also for the optionee's related performance which “follows hard” upon the exercise of that option. See Westinghouse, 10 Mass. App. Ct. at 74.
The language employed by the Town in this respect seems clear enough. See JRY Corp. v. LeRoux, 18 Mass. App. Ct. 153, 172-173(1984). Town Counsel's last revi-sion, the one signed by Cervelli on May 1, 2000, gave the Town the unilateral right to purchase Cervelli's land for $1.38 million dollars by notifying him in writing “at any time before July 1, 2000,” that it will do so and by having a closing on the property “no later than June 30, 2001 " (A.87;89). In addition, the option in favor of the Town was subject to: (1) the passage of Articles 19 and 20 at the Town Meeting later that day, May 1, 2000; (2) the Town's Parks and Recreation Commission's management and control of Cervelli's Lot 1A and its dedication of this parcel only to public recreational use; (3) the Town's promise to erect no buildings on the property other than those for recreational use; and (4) Cervelli being discharged by the Town from any roll back taxes on the property under G.L.c. 61A, Sections 1 et seq. (A.87; 89).
Town Counsel's letter to Cervelli's attorney on June 2, 2000, satisfied the written notice requirement for the Town's timely exercise of the option(A.108). In addition, the Town Meeting vote on the evening of May 1, 2000, satisfied condition number (1); and the wording of the amended Article 20, passed by the Town Meeting that same evening, satisfied conditions numbered (2) and (3). However, the Town failed to discharge Cervelli from any obligation to pay roll back taxes on the property within the time set for exercising the option, i.e., from May 1, 2000, through July 1, 2000. At no point from May 1, 2000, when Cervelli's signature created the option, through July 1, 2000, the deadline established by the Town itself for the exercise of its option, did the Town through its Board of Assessors satisfy one of the fundamental conditions of the option by demonstrating its ability or willingness in writing to discharge Cervelli for roll back taxes on the property under Chapter 61A, as required by the plain terms of the option. Attorney Thomson's facsimile to Town Counsel contain-ing Cervelli's proposed conditions for the option asked if the Town could accomplish this roll back tax discharge per Cervelli's request(A.79). As he put it, “I assume that we can agree not to impose them?”(A.79). Yet the Town never answered this question and never showed in writing, even after suit was brought against Cervelli on June 20, 2000, and before the option expired by its own terms on July 1, 2000, that it or its Board of Assessors stood ready, willing and able to discharge Cervelli for roll back taxes under G.L.c. 61A, Sections 9, 13 and 17. Time was of the essence not only for the exercise of the option itself but also for the Town's related performance which “follow[ed] hard” upon the exercise of this option, i.e., the discharge of Cervelli for any obligation to pay roll back taxes on the property. No other construction of the option can be advanced which is more in accord with the dominant intention of the parties as inferred from the plain language they used in the in-strument. Mansfield v. Wiles , 221 Mass. 75, 82(1915). Merry v. A.W. Perry, Inc., 18 Mass. App. Ct. 628, 630-631 (1984). Loitherstein, 11 Mass. App. Ct. at 64-65. No other reading comports with the strict construction which the above cited decisional law demands of an instrument which gives a unilateral right exclusively for the benefit of the optionee, the Town. Whether characterized as “considerable nonchalance,” Hurd v. Cormier, 358 Mass. at 740, or the taking of “too few steps,” Mucci v. Brockton Bocce Club, Inc., 19 Mass. App. Ct. 155, 160-161 (1985), the Town's failure to satisfy one of the fundamental conditions for its exercise of the option by discharging Cervelli from the obligation to pay roll back taxes on the property under Chapter 61A before the option expired on July 1, 2000, extinguished the Town's option right to purchase Cervelli's property as a matter of law. Hurd, 358 Mass. at 739-740. Mucci, supra. See Quaranto v. DiCarlo, 38 Mass. App. Ct. at 414-415. See also Frostar Corp. v. Malloy, 63 Mass. App. Ct. 96,106-108 (2005); Kanavos v. Hancock Bank & Trust Co., 395 Mass. 199, 204-205 (1985). The Town failed to carry its burden below to show that it “turn[ed] its corners squarely” in exercising the option given it by Cervelli and one who stumbles in exercising an option is not entitled to the equitable remedy of specific performance. Mucci, 19 Mass. App. Ct. at 161 citing Loitherstein, 11 Mass. App. Ct. at 96. In the absence of any proof below by the Town that its Board of Assessors had discharged Cervelli from paying any roll back taxes on the property before the option expired on July 1, 2000, the trial judge was wrong as a matter of law to rule that the option agreement was valid and enforceable and then to order Cervelli to convey his land to the Town consistent with its provisions. B. The Town Is Not Entitled To An Award of “Reliance Damages. Although the Supreme Judicial Court declined to use the term “promissory estoppel” in Loranger Construction Corp. v. E.F. Hauserman Co., 376 Mass. 757, 760-761 (1978), affirming id., 6 Mass. App. Ct. 152 (1978), because this term lends to confusion rather than clarity, the High Court recognized that liability in contract could be founded upon a promise which is relied upon by the promisee to his detriment. 376 Mass. at 760-761. This kind of liability antedates the modern doctrine of consideration and enforcement of the contract is reached irrespective thereof. Id. at 761. For recovery against Cervelli on these principles of detrimental reliance, the Town's burden was to show that it reasonably relied on whatever promise Cervelli allegedly made to it, Zayre Corp. v. Computer Systems of America, Inc., 24 Mass. App. Ct. 559, 569-570 (1987); or it had to show a pattern of conduct by Cervelli which, in effect, “dangled [the Town] on a string.” Pappas Industrial Parks, Inc. v. Psarros, 24 Mass. App. Ct. 596, 598(1987). The concept of reasonable reliance depends upon the circumstances and imposes a duty upon the Town to look out for its own interests and to make at least reasonable inquiry into the realistic validity of a contemplated undertaking. Kennedy v. Josephthal & Co., Inc., 814 F.2d 798, 804-805 (1st Cir. 1987). The Town's proof below failed to show that there was any promise by Cervelli to convey the property before it applied for assistance from the State in early 2000 for the supposed purchase. Nor was there evidence of any pattern of conduct by Cervelli showing that he somehow “dangled [the Town] on a string,” inducing it to apply for the State assistance. In fact, Douglas Thomson testified without contradiction that as late as April 30, 2000, the day before the Town Meeting but after the Town had already been awarded State funding for part of the purchase , he believed that there would be no bargain struck with Cervelli about the sale of his property because of the conditions he wanted attached to the sale (A.116-117; Tr.34-36; 40). Thus there was absolutely no proof adduced below to show that the Town applied for or received any State assistance based upon any outstanding promise by Cervelli to convey the property to the Town or based upon any conduct by Cervelli which “dangled [it] on a string.”
All of the evidence indicated that the Town through Douglas Thomson appreciated the fact that at all times prior to May 1, 2000, there probably was not going to be a deal struck between it and Cervelli in time for the Town Meeting. The Town was not being misled or “kept on a string” as in Rex Lumber Co. v. Acton Block Co., 29 Mass. App. Ct. 510, 516-518(1990), or Greenstein v. Flatley , 19 Mass. App. Ct. 351, 356-357(1985). Cervelli accurately and honestly conveyed to Thomson his sincere wish not to convey to the Town during all of this time. Yet despite this lack of an agreement between it and Cervelli about the property, the Town nevertheless applied for State assistance for the anticipated purchase in early 2000. As in Buker v. National Management Corporation, 16 Mass. App. Ct. 36, 44(1983) and Tull v. Mister Donut Development Corporation, 7 Mass. App. Ct. 626, 631-632(1979), the circumstances were such that a reasonably astute business person would know that the Town's negotiations with Cervelli before May 1, 2000, were inchoate and that no presumed agreement could be relied upon. See also Pappas Industrial Parks, Inc. v. Psarros, 24 Mass. App. Ct. at 599; Zayre Corp. v. Computer Systems of America, Inc., 24 Mass. App. Ct. at 570. Because all the evidence, the stipulated facts and the lower court's own findings establish that the Town applied for and received State funding for its land purchase before Cervelli ever signed the option, at a time when neither the Town nor Douglas Thomson had any expectation that its purchase of Cervelli's property was probable, much less imminent, there was no basis in fact to find any reliance by the Town on the inchoate transaction and no basis in law to award the Town “reliance damages” under Loranger for Cervelli's refusal to go through with the conveyance. Contrary to the Town's allegations in its complaint (at paragraphs 4 through 10) and irrespective of Town Counsel's letter to Cervelli's lawyer on May 12, 2000, by the time Cervelli had executed the option on May 1, 2000, the Town had already sought and received State assistance for its hoped-for purchase. In these circumstances, the Town, not Cervelli, bore the risk that the conveyance would not take place. The lower court therefore erred in shifting this risk to Cervelli by awarding the Town damages in the amount of $50,000. Conclusion. For all of the reasons identified herein, this Court should vacate and reverse the judgment below in favor of the Town and enter a new judgment denying the Town the equitable relief of specific performance as well as any award of damages based upon the rationale of Loranger; or provide Cervelli with such other relief as is fair and just in the circumstances of this case.
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