Eldamar Development Co. v. Sweeney

27 Mass. L. Rptr. 63
CourtMassachusetts Superior Court
DecidedMay 11, 2010
DocketNo. 082109
StatusPublished

This text of 27 Mass. L. Rptr. 63 (Eldamar Development Co. v. Sweeney) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eldamar Development Co. v. Sweeney, 27 Mass. L. Rptr. 63 (Mass. Ct. App. 2010).

Opinion

Fremont-Smith, Thayer, J.

Based on all of the credible evidence at trial, the Court finds and rules as follows.

Plaintiff Eldamar is a real estate development company which, on May 22,2006, entered into a purchase and sale agreement (“P&S”) with the defendants for the purchase of real estate in Boxborough for the development of a residential subdivision.

The Eldamar-Sweeney P&S provided that Eldamar would obtain the permits and approvals necessary to build a subdivision on a combined parcel consisting of the Sweeney Land and about 22 acres of adjoining land owned by Harvey and Douglas Trefiy. Once those permits and approvals were in place, the Sweeneys would grant Eldamar a perpetual easement allowing Eldamar to build a proposed subdivision access road over the Sweeney Land.1 Once the subdivision road was completed, Eldamar would buy the Sweeney Land for $1,540,000, or $308,000 per lot. Rider A to the P&S specified that the “Closing Date” for Eldamar’s purchase of Sweeney’s land was: the earlier of (i) the date eight months following the Subdivision Approval Date, or (ii) the date that the subdivision roadway has been [64]*64bonded with the Town and the lots have been released from any subdivision covenant by the Town. The closing date for provision of the right of way was one day after the subdivision approval date, which the parties agree turned out to be November 14, 2007.

After the expenditure of over $300,000 in expenses pursuing the development, including engineering and permitting costs and the payment of the taxes on other property acquired for the development, by November 14, 2007 Eldamar had obtained all of the necessary permits and demanded that defendants provide the agreed easement to construct the road.

In the months leading up to obtaining subdivision approval, Eldamar had became concerned with the softening of the residential real estate market and, in August 2007, had met with Michael Sweeney and his friend and consultant Michael Lionetta with a request to restructure the parties’ agreement, including a reduction in the purchase price for the Sweeney property. This Sweeney refused to do. The Court does not credit Sweeney’s testimony contradicted by Kaulbach, that, at that meeting, Kaulback threatened that he would not go forward with the P&S on its original terms and would sue Sweeney unless Sweeney agreed to a reduction in price.2 While Kaulback admittedly did seek a reduction in price, all of Eldamar’s subsequent communications and actions discussed below evince a continued intention to consummate the deal, with or without the requested price reduction.

Thus, Eldamar continued to spend money to obtain the final permits obtained on November 13, 2007. Shortly before obtaining the permits moreover on October 15, 2007, Eldamar executed a purchase and sale agreement with a developer with which it had worked successfully in the past, Kendall Homes, pursuant to which Kendall Homes agreed to buy eleven of the 15 lots for $3,355,000 (at an average lot price of approximately $305,000), and Kendall Homes agreed to advance Eldamar $450,000 to finance the construction of the road.

As noted above, by November 13, 2007, Eldamar had obtained Planning Board approval, the necessary Conservation Commission Order of Conditions, and approval by the Boxborough Zoning Board of Appeals for the subdivision (October 23, 2007). Accordingly, pursuant to Rider A and §7 of the May 2006 P&S, the Sweeneys were obligated to tender, as of November 14, 2007, the “Grant of Construction and Right of Way Easement” containing the terms agreed to in the May 2006 P&S.

On December 4, 2007, the Sweeneys’ attorney tendered an easement to Eldamar, stating that “We understand that you have been successful in obtaining subdivision approval.” Enclosed with the letter was a “Grant of Temporary Construction Easement” executed by the Sweeneys. This was not the perpetual easement required by the terms of the May 2006 P&S. The instrument was titled “Grant of Temporary Construction Easement” (emphasis supplied) and by its terms would have given Eldamar only a temporary easement and right of access to construct the subdivision roadway which would have terminated and expired. This nonconforming easement also included other provisions that were not in conformity with the May 2006 P&S, including indemnification and other obligations not contained in the P&S.

On December 11, 2007, Eldamar, in writing, rejected this nonconforming easement, and while reserving its rights, requested that the Sweeneys convey the Perpetual Easement they had agreed to convey, with the plain, unambiguous and simple terms recited in the May 2006 P&S.

While rejecting the nonconforming easement and reserving its rights, Eldamar also continued to work on the project in the belief that the Sweeneys would comply with the P&S so as to permit the project to go forward. Thus, Eldamar continued to pay for septic design work, to seek road construction quotes, and to pay the taxes on the Trefiy land.

By letter dated January 3, 2008, Sweeneys’ attorneys tendered a second easement, entitled “Grant of Construction and Right of Way Easement.” This easement, too, failed to include or use the plain, unambiguous and simple language the parties agreed to in the May 2006 P&S but contained terms that were not agreed to in the P&S, including a broad indemnification provision. It also contained a restoration obligation, which was not agreed to in the P&S, and was also characterized as a “temporary construction easement” which would become permanent and perpetual only “upon completion of the subdivision roadway.”

On January 11, 2008, Eldamar, in writing, rejected this second nonconforming easement, and requested that the Sweeneys convey the perpetual easement they had agreed to convey with the plain, unambiguous and simple terms recited in the P&S. Eldamar’s letter also again expressly reserved Eldamar’s rights.

After rejecting the second nonconforming easement, Eldamar continued to work on the project in the belief that the Sweeneys would eventually tender a conforming easement so that the project could go forward. Eldamar continued to pay for septic design work, seek road construction quotes, and pay the taxes on the Trefry land.

After Eldamar rejected the second nonconforming easement, a meeting was held in February 2008 to discuss a settlement of the easement dispute and a modification of the May 2006 P&S. The meeting was attended by Kaulbach for Eldamar, Michael Sweeney, Michael Lionetta (Sweeney’s friend and consultant) and attorney Cathy Netburn, counsel to the Sweeneys. Kaulbach and Lionetta each testified that they left the meeting with the belief that the parties had reached an agreement in principle or, as Lionetta put it, “we were all on the same page.”3 Following the meeting, Eldamar circulated a “P&S Amendment Outline” re-[65]*65fleeting the discussions which did not envision any reduction by Sweeney in the purchase price such as Kaulbach had requested in the summer of 2007 and which Sweeney had rejected. Rather, the purchase price for the lots remained $1,540,000, or an average of $308,000 per lot. The proposed amendment provided the Sweeneys some additional security for Eldamar’s performance, and that Sweeney would provide a “clean easement.”

The proposed modification to the P&S, however, was never executed.

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Cite This Page — Counsel Stack

Bluebook (online)
27 Mass. L. Rptr. 63, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eldamar-development-co-v-sweeney-masssuperct-2010.