St. John's Holdings, LLC v. Two Electronics, LLC

2016 WL 1460477 (2016)

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Nature of the Case

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Facts

The Subject Property is a one-story commercial building. Cefalo is a licensed Massachusetts real estate broker who acted as the broker and authorized agent of P at all times relevant with respect to the Subject Property. Barry is a licensed Massachusetts real estate broker who acted as the broker and authorized agent of D at all times relevant with respect to the Subject Property. P first reached out to Barry expressing interest in leasing space at the Subject Property from D. In January 2016, P indicated that they were interested in purchasing the Subject Property. The parties met several times. On January 27, 2016, Barry received by email a written 'Binding Letter of Intent' from Cefalo, on behalf of P, that contained a description of the terms under which P would buy the Subject Property, including the purchase price of $3,232,000, due diligence period, deposit, and the closing date. The First LOI was not signed by a representative of P. On January 29, 2016, Barry received by email a second 'Binding Letter of Intent' from Cefalo on behalf of P. The Second LOI contained revisions of the essential terms in the First LOI and was also not signed by a representative of P. The only difference between the First and Second Letters of Intent was that the nonrefundable deposit offered by P was increased from $128,000 to $168,000. D indicated to Barry that the provision that P would pay $200,000 of the purchase price on a date 60 months after the closing without interest was unacceptable, that the proposed due diligence period was too long, and that P's right to unilaterally extend the closing date for 30 days was unacceptable. On February 1, 2016, Barry sent an email to Cefalo stating that D was 'ready to do this,' but that it had three issues regarding the offer in the Second LOI. Barry wrote: The first matter is he would like to give you guys three weeks instead of 4 on the due diligence. Number two, he doesn't want to give the 30-day extension. And number three is he would like to have a penalty applied to the deal if the $200,000 is not paid at the end of 48 months.' On February 2, 2016, Cefalo sent Barry as an email attachment a third written 'Binding Letter of Intent' (Final LOI). The Final LOI was also not signed by a representative of P. The only revision contained in the Final LOI was the date on which the final $200,000 of the purchase price would be due and payable to the seller. It was reduced from 60 months post-closing to 48 months post-closing. None of the issues raised in the February 1, 2016 email from Barry to Cefalo were incorporated into the Final LOI. Barry sent an email to D with the Final LOI the same day, which D received at 7:58 PM on February 2, 2016. D states that he did not review the substance of the offer at that time because the document was not signed by P. On February 2, 2016, D received a signed offer to purchase the Subject Property from a third party for a purchase price of $3,080,000. On February 3, 2016, Barry sent Cefalo the following text message in response to receiving the Final LOI from Cefalo the previous day: 'Steve. It [D] wants you [P] to sign first, with a check, and then he will sign. Normally, the seller signs last or second. Not trying to be stupid or contrary, but that is the way it normally works. Can Rick [McDonald] sign today and get it to me today? Tim.' On February 3, 2016, P executed four original copies of the Final LOI with the deposit check and gave them to Cefalo to deliver to Barry for signature by D. At 4:25 PM on February 3, 2016, Cefalo sent a text message to Barry stating: 'Tim, I have the signed LOI and check it is 424 [PM] where can I meet you?' Cefalo and Barry spoke by telephone and agreed that Cefalo would bring the signed Final LOI and the deposit check to Barry's office for D's execution. Cefalo met with Barry in person and delivered the four originals of the executed Final LOI and the deposit check to be passed along to D to sign. D accepted the third party's offer to buy the Subject Property by countersigning that written offer on February 3, 2016. On February 4, 2016, Cefalo sent a text message to Barry looking for an update on the executed Final LOI. Barry responded: 'D was out of town today. He will get back to us tomorrow.' P brought this complaint seeking to enforce its rights as a buyer of the Subject Property pursuant to a binding letter of intent. P claims that the letter of intent was binding based on an exchange of emails and text messages between the parties' real estate brokers that constitute an agreement on all essential terms that satisfies the Statute of Frauds. P is suing for Breach of Contract, (2) Declaratory Judgment, and (3) Specific Performance. P filed its complaint, a Motion for Ex Parte Approval of Memorandum of Lis Pendens, and a Motion for Temporary Restraining Order. D then filed a Special Motion to Dismiss and Memorandum in Support of Special Motion to Dismiss.