NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557- 1030; SJCReporter@sjc.state.ma.us
22-P-1139 Appeals Court
ENI 131 COMMERCE WAY LLC vs. T.L. EDWARDS, INC.
No. 22-P-1139.
Norfolk. September 13, 2023. - March 20, 2024.
Present: Green, C.J., Desmond, & Hodgens, JJ.
Declaratory Relief. Practice, Civil, Declaratory proceeding, Motion to dismiss. Real Property, Right of first refusal, Specific performance. Lis Pendens.
Civil action commenced in the Superior Court Department on June 14, 2022.
A special motion to dismiss was heard by Joseph F. Leighton, Jr., J.
Matthew S. Furman for the defendant. James C. McGrath (Anthony J. LaPlaca also present) for the plaintiff.
HODGENS, J. ENI 131 Commerce Way LLC (ENI) filed a
verified complaint in the Superior Court seeking declaratory
relief and specific enforcement of its right of first refusal
(ROFR) to purchase property comprising approximately fifty-seven
acres of land in the town of Plymouth from T.L. Edwards, Inc. 2
(owner). ENI filed a motion for approval of a memorandum of lis
pendens; the owner filed an opposition and special cross motion
to dismiss pursuant to the procedure outlined in G. L. c. 184,
§ 15 (c). After a hearing, a judge allowed ENI's motion for
approval of a memorandum of lis pendens. After a separate
hearing, another judge (motion judge) denied the owner's special
cross motion to dismiss. The owner brings this interlocutory
appeal. We affirm.
To prevail on its special motion to dismiss, the owner had
to demonstrate by a preponderance of the evidence that ENI's
claim is "frivolous because (1) it is devoid of any reasonable
factual support; or (2) it is devoid of any arguable basis in
law; or (3) the action or claim is subject to dismissal based on
a valid legal defense such as the statute of frauds." G. L.
c. 184, § 15 (c). Accord Ferguson v. Maxim, 96 Mass. App. Ct.
385, 389 (2019). After holding a hearing and considering the
pleadings and affidavits, the motion judge concluded that the
owner did not meet that burden. On review of the record, we
discern no "abuse of discretion or error of law" by the motion
judge. Fariello v. Zhao, 101 Mass. App. Ct. 566, 569 (2022).
On appeal, the owner primarily contends that the motion
judge made an error of law in failing to dismiss a claim that is
"devoid of any arguable basis in law." G. L. c. 184, § 15 (c).
In addition, the owner claims that it never offered to sell the 3
property to ENI for $20 million, that the property was not
valued at $20 million, and that ENI's offer did not meet the
ROFR requirement of being on the "same terms and conditions" as
the third-party offer. Given the narrow scope of appellate
review, we are not positioned to resolve all these issues.
Instead, we examine only the issue raised that pertains to the
governing statute -- whether ENI's complaint has "any arguable
basis in law." G. L. c. 184, § 15 (c).
The record shows a dispute over the legal effect of ENI's
attempt to exercise its ROFR. The owner executed a ROFR
agreement with ENI's predecessor in interest and duly recorded
the agreement in the Plymouth County registry of deeds.
According to the ROFR agreement, the owner agreed that it would
not sell the property to a third party unless four conditions
were satisfied: (1) the owner received a bona fide offer to
purchase the property, (2) the owner provided ENI with written
notice of the offer, (3) the owner offered to sell the property
to ENI "on the same terms and conditions as said bona fide
offer," and (4) ENI had not elected within thirty days to
purchase the property "in accordance with said offer." Twelve
years after executing this ROFR agreement, the owner received an
offer from a third party to purchase the property in exchange
for a different parcel of land. The owner then notified ENI
about the terms of the third-party offer and the thirty-day 4
deadline "to elect to purchase the same in accordance with the
said offer." The notice stated that the third party and the
owner had agreed on a $20 million fair market value for the
property. In response, ENI notified the owner of its intent to
exercise its right to purchase the property in cash for the $20
million fair market value. The owner refused to sell to ENI.
In its verified complaint, ENI claimed that it had properly
exercised its ROFR. The owner countered in its special cross
motion to dismiss that the ROFR agreement did not contemplate a
cash equivalent for a "unique no-cash, land swap."
Based on this record, we cannot say that ENI's complaint is
"devoid of any arguable basis in law." G. L. c. 184, § 15 (c).
A ROFR "provision is designed to afford the holder protection
against a sale to others." Roy v. George W. Greene, Inc., 404
Mass. 67, 71 (1989), S.C., 408 Mass. 721 (1990). That
protection is effective only if the holder of the ROFR "has a
realistic opportunity to meet the offer." Id. Here, the record
shows that the owner proposed to sell the property, albeit
through the mechanism of a land swap. In accordance with the
ROFR agreement, the owner provided ENI with an opportunity to
meet the offer made by the third party: the notice sent by the
owner to ENI expressly referenced the ROFR agreement; the notice
provided the information required by the terms of the ROFR
agreement; the notice included a reference to the thirty-day 5
deadline to exercise the ROFR; and the notice included a fair
market valuation for the property of $20 million, as agreed on
by the owner and the third party. These facts arguably
suggested an offer by the owner, in accordance with the ROFR
agreement, to sell to ENI "on the same terms and conditions" as
the third-party offer. See Uno Restaurants, Inc. v. Boston
Kenmore Realty Corp., 441 Mass. 376, 384 (2004) ("[i]nherent in
a [ROFR] is the fact that a third party, not the holder of the
right, will dictate the price").
Whether ENI will ultimately prove its case remains to be
seen. See, e.g., Fienberg v. Hassan, 77 Mass. App. Ct. 901, 901
(2010) (invalid exercise of ROFR where offer included different
closing date that "materially deviated" from third-party offer);
Christian v. Edelin, 65 Mass. App. Ct. 776, 779 (2006) (invalid
exercise of ROFR where offer included mortgage contingency that
deviated from third-party cash offer); Franklin v. Wyllie, 443
Mass. 187, 195-196 (2005) (exercise of ROFR involves purchasing
on "substantially the same terms and conditions" as third-party
offer). On the special cross motion to dismiss, however, the
inquiry was limited to whether the owner had proven by a
preponderance of the evidence that ENI's claim was "frivolous."
G. L. c. 184, § 15 (c). The motion judge concluded that it was
not frivolous, and on a review of the record, we discern no
abuse of discretion or error of law in this determination. 6
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NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557- 1030; SJCReporter@sjc.state.ma.us
22-P-1139 Appeals Court
ENI 131 COMMERCE WAY LLC vs. T.L. EDWARDS, INC.
No. 22-P-1139.
Norfolk. September 13, 2023. - March 20, 2024.
Present: Green, C.J., Desmond, & Hodgens, JJ.
Declaratory Relief. Practice, Civil, Declaratory proceeding, Motion to dismiss. Real Property, Right of first refusal, Specific performance. Lis Pendens.
Civil action commenced in the Superior Court Department on June 14, 2022.
A special motion to dismiss was heard by Joseph F. Leighton, Jr., J.
Matthew S. Furman for the defendant. James C. McGrath (Anthony J. LaPlaca also present) for the plaintiff.
HODGENS, J. ENI 131 Commerce Way LLC (ENI) filed a
verified complaint in the Superior Court seeking declaratory
relief and specific enforcement of its right of first refusal
(ROFR) to purchase property comprising approximately fifty-seven
acres of land in the town of Plymouth from T.L. Edwards, Inc. 2
(owner). ENI filed a motion for approval of a memorandum of lis
pendens; the owner filed an opposition and special cross motion
to dismiss pursuant to the procedure outlined in G. L. c. 184,
§ 15 (c). After a hearing, a judge allowed ENI's motion for
approval of a memorandum of lis pendens. After a separate
hearing, another judge (motion judge) denied the owner's special
cross motion to dismiss. The owner brings this interlocutory
appeal. We affirm.
To prevail on its special motion to dismiss, the owner had
to demonstrate by a preponderance of the evidence that ENI's
claim is "frivolous because (1) it is devoid of any reasonable
factual support; or (2) it is devoid of any arguable basis in
law; or (3) the action or claim is subject to dismissal based on
a valid legal defense such as the statute of frauds." G. L.
c. 184, § 15 (c). Accord Ferguson v. Maxim, 96 Mass. App. Ct.
385, 389 (2019). After holding a hearing and considering the
pleadings and affidavits, the motion judge concluded that the
owner did not meet that burden. On review of the record, we
discern no "abuse of discretion or error of law" by the motion
judge. Fariello v. Zhao, 101 Mass. App. Ct. 566, 569 (2022).
On appeal, the owner primarily contends that the motion
judge made an error of law in failing to dismiss a claim that is
"devoid of any arguable basis in law." G. L. c. 184, § 15 (c).
In addition, the owner claims that it never offered to sell the 3
property to ENI for $20 million, that the property was not
valued at $20 million, and that ENI's offer did not meet the
ROFR requirement of being on the "same terms and conditions" as
the third-party offer. Given the narrow scope of appellate
review, we are not positioned to resolve all these issues.
Instead, we examine only the issue raised that pertains to the
governing statute -- whether ENI's complaint has "any arguable
basis in law." G. L. c. 184, § 15 (c).
The record shows a dispute over the legal effect of ENI's
attempt to exercise its ROFR. The owner executed a ROFR
agreement with ENI's predecessor in interest and duly recorded
the agreement in the Plymouth County registry of deeds.
According to the ROFR agreement, the owner agreed that it would
not sell the property to a third party unless four conditions
were satisfied: (1) the owner received a bona fide offer to
purchase the property, (2) the owner provided ENI with written
notice of the offer, (3) the owner offered to sell the property
to ENI "on the same terms and conditions as said bona fide
offer," and (4) ENI had not elected within thirty days to
purchase the property "in accordance with said offer." Twelve
years after executing this ROFR agreement, the owner received an
offer from a third party to purchase the property in exchange
for a different parcel of land. The owner then notified ENI
about the terms of the third-party offer and the thirty-day 4
deadline "to elect to purchase the same in accordance with the
said offer." The notice stated that the third party and the
owner had agreed on a $20 million fair market value for the
property. In response, ENI notified the owner of its intent to
exercise its right to purchase the property in cash for the $20
million fair market value. The owner refused to sell to ENI.
In its verified complaint, ENI claimed that it had properly
exercised its ROFR. The owner countered in its special cross
motion to dismiss that the ROFR agreement did not contemplate a
cash equivalent for a "unique no-cash, land swap."
Based on this record, we cannot say that ENI's complaint is
"devoid of any arguable basis in law." G. L. c. 184, § 15 (c).
A ROFR "provision is designed to afford the holder protection
against a sale to others." Roy v. George W. Greene, Inc., 404
Mass. 67, 71 (1989), S.C., 408 Mass. 721 (1990). That
protection is effective only if the holder of the ROFR "has a
realistic opportunity to meet the offer." Id. Here, the record
shows that the owner proposed to sell the property, albeit
through the mechanism of a land swap. In accordance with the
ROFR agreement, the owner provided ENI with an opportunity to
meet the offer made by the third party: the notice sent by the
owner to ENI expressly referenced the ROFR agreement; the notice
provided the information required by the terms of the ROFR
agreement; the notice included a reference to the thirty-day 5
deadline to exercise the ROFR; and the notice included a fair
market valuation for the property of $20 million, as agreed on
by the owner and the third party. These facts arguably
suggested an offer by the owner, in accordance with the ROFR
agreement, to sell to ENI "on the same terms and conditions" as
the third-party offer. See Uno Restaurants, Inc. v. Boston
Kenmore Realty Corp., 441 Mass. 376, 384 (2004) ("[i]nherent in
a [ROFR] is the fact that a third party, not the holder of the
right, will dictate the price").
Whether ENI will ultimately prove its case remains to be
seen. See, e.g., Fienberg v. Hassan, 77 Mass. App. Ct. 901, 901
(2010) (invalid exercise of ROFR where offer included different
closing date that "materially deviated" from third-party offer);
Christian v. Edelin, 65 Mass. App. Ct. 776, 779 (2006) (invalid
exercise of ROFR where offer included mortgage contingency that
deviated from third-party cash offer); Franklin v. Wyllie, 443
Mass. 187, 195-196 (2005) (exercise of ROFR involves purchasing
on "substantially the same terms and conditions" as third-party
offer). On the special cross motion to dismiss, however, the
inquiry was limited to whether the owner had proven by a
preponderance of the evidence that ENI's claim was "frivolous."
G. L. c. 184, § 15 (c). The motion judge concluded that it was
not frivolous, and on a review of the record, we discern no
abuse of discretion or error of law in this determination. 6
In support of its argument that the claim is frivolous, the
owner contends that "this appeal undoubtedly presents an open
question under Massachusetts law." Indeed, the motion judge
agreed to the absence of reported decisions on the precise facts
presented: "There does not appear to be any Massachusetts
authority squarely addressing whether the holder of a [ROFR] can
meet the terms of an offer proposing a land swap for the
burdened property by offering the burdened property's fair
market value." The motion judge noted cases from Alaska that
state the holder of a ROFR "may propose comparable terms to the
original offer." Castle Props., Inc. v. Wasilla Lake Church of
the Nazarene, 347 P.3d 990, 995 (Alaska 2015), quoting Roeland
v. Trucano, 214 P.3d 343, 349 (Alaska 2009). The owner further
argues that the motion judge erred by referencing these cases.
In our view, neither the perceived open question under
Massachusetts law nor the reference to persuasive authority from
a sister State evinces a frivolous claim under G. L. c. 184,
§ 15 (c), or any error by the motion judge. Cf. Dacey v.
Burgess, 491 Mass. 311, 319 (2023) (appeal not frivolous where
it "involved a question of law that this court previously had
not addressed directly"); Abuzahra v. Cambridge, 486 Mass. 818,
829 (2021) (appeal not frivolous where it "involved a novel
question of law"); McMillen v. McMillen, 57 Mass. App. Ct. 568, 7
574 (2003) ("analogous cases from other jurisdictions can be
instructive when there is no controlling local authority").
Both parties' requests for attorney's fees are denied. The
order denying the special motion to dismiss is affirmed.
So ordered.