First General Realty Corp. v. Carpinteri

13 Mass. L. Rptr. 39
CourtMassachusetts Superior Court
DecidedFebruary 7, 2001
DocketNo. 972289
StatusPublished

This text of 13 Mass. L. Rptr. 39 (First General Realty Corp. v. Carpinteri) 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
First General Realty Corp. v. Carpinteri, 13 Mass. L. Rptr. 39 (Mass. Ct. App. 2001).

Opinion

Houston, J.

Plaintiff First General Realty Corporation (“First General”) brings this action against defendant Joseph Carpinteri (“Carpinteri”), in his capacity as trustee of the D.A.B. Realty Trust, alleging breach of contract, breach of an implied covenant of good faith and fair dealing, and violation of G.L.c. 93A. This action arises from Carpinteri’s refusal to proceed with the sale of an office building that was the subject of an offer to purchase (“OTP”) executed by the parties on February 24, 1997. The case was tried before the court on November 6, 2000 through November 9, 2000. Based upon all the credible evidence, the court makes the following findings of fact and rulings of law.

FINDINGS OF FACT

1. First General is a Massachusetts corporation with its usual place of business at 93 Union Street, Newton Center, Massachusetts. First General is engaged in the business of real estate acquisition and management.

2. Carpinteri is, and at all relevant times has been, the sole trustee and beneficiary of the D.A.B. Realty Trust. The trust owns real estate located at 463 Worcester Road, Framingham, Massachusetts (the “Property”). The Property consists of a large four story office building and surrounding parcel of land.

3. Early in 1997, Carpinteri was contacted by Paul Pescosolido (“Pescosolido”), a real estate broker affiliated with Carlson Real Estate. On February 12, 1997, Carpinteri and Pescosolido entered into a written brokerage agreement whereby Carpinteri agreed to pay a three percent commission in the event Pescosolido provided a buyer for the Property. Exhibit 9.

4. Carpinteri authorized Pescosolido to advertise the Property at a sale price of $3.5 million dollars. Pescosolido then proceeded to create a brochure containing the purchase price, which was ultimately given to Richard V. Wakeman (“Wakeman"), Vice President of Acquisitions for First General.

5. On February 19, 1997, First General submitted a written OTP, drafted and signed by Wakeman, offering to purchase the Property for $3.2 million dollars. Exhibit 29. Carpinteri rejected that offer.

6. On February 24, 1997, Carpinteri, Wakeman, and Pescosolido held a meeting in a further attempt to forge a deal. During the meeting, the parties utilized the prior OTP that was previously rejected by Carpinteri, making handwritten changes to the face of the document. All handwritten changes were initialed by [41]*41Carpinteri and Wakeman. At the conclusion of the meeting both parties signed the OTP.

7. The OTP is a two-page document entitled “Offer to Purchase Real Estate" and sets forth the following:

A. the location and description of the Property;
B. that the “TOTAL PURCHASE PRICE” was “3,400,000" (the figure ”3,400,000" is handwritten and appears above the typed figure of “$3,200,000,” which was crossed out);
C. that a check for “$34,000.00" was to be placed in escrow by First General ”as a deposit to bind this offer" (similarly, the “$34,000.00" figure is handwritten above the typed figure of ”$32,000," which was crossed out);
D. that the OTP is “(s]ubject to a mutually acceptable Purchase and Sale Agreement, which, when executed on or before March 21, 1997 at 4:00 PM, shall be the Agreement between the-parties hereto;”
E. that the Buyer was to obtain financing of “$2,550,000 at conventional rates and terms” (the figure “$2,550,000" is handwritten over the typed figure of ”2,400,000," which was crossed out);
F. that any additional roof rental income, with the exception of income derived from AT&T, be capped at 10.5% and paid for at closing (this provision is handwritten at the bottom of page one of the OTP);1
G. that First General pay the balance at closing;
H. that Carpinteri provide title “that is . . . clear[,] . . . marketable, and insurable at standard rates”;
I. and that First General be allowed a fifteen-day due diligence period, during which First General would have the power to “terminate . . . [the] . . . agreement” if it was not satisfied;

Exhibit 1.

8. The signature line on the last page of the OTP recites that “(t]his offer is hereby accepted upon foregoing terms and conditions.” Both Wakeman and Carpinteri signed below typed language stating “witness my hand and seal.”

9. I find that the parties intended to be contractually bound by the OTP executed on February 24, 1997. The OTP was the end result of a process of negotiation, as reflected by the handwritten changes made to the face of the document. These handwritten changes, viewed in conjunction with the typed language of the OTP, objectively establish the parties’ intent to be contractually bound to the purchase and sale of the Property because all material terms were included in the document. The OTP specifically identifies and describes the Property, contains a specific purchase price, contains a provision relating to financing, sets forth the amount of the escrow deposit necessary to bind the deal, and sets forth a provision defining acceptable title standards. Moreover, the OTP recites familiar contractual language evincing the parties’ intent to be bound, using such terms as “offer,” “acceptance,” and “agreement”; also significant is the fact that both parties signed the OTP under “seal.”

10. In addition, at the February 24, 1997 meeting, the parties discussed seller financing, whereby Carpinteri would accept a promissory note in the amount of $400,000 and a second mortgage as partial payment of the purchase price. No provision as to seller financing, however, was included in the written terms of the OTP.2

11. Structuring a transaction with seller financing can be to the advantage of the seller, in that it permits the seller to defer a portion of the tax obligation on the gain, and of the buyer, in that it permits the buyer to purchase the property with less of its own funds.

12. On the same day that the OTP was executed, Wakeman sent a check for $34,000 to the escrow agent and attorney for First General, Lawrence Silverstein (“Silverstein”). Exhibit 7. Wakeman also sent a letter to Carpinteri informing him that a deposit check had been sent to Silverstein to “bind” the parties’ “agreement.” In the letter, Wakeman also requested that due diligence materials be made available. Exhibit 8.

13. The language of the OTP stated that the offer was good until “5:00 PM Eastern Time on the 21st day of February 1997.” The OTP was signed by both parties, however, on February 24, 1997, several days after this deadline had already passed. This oversight is undoubtedly attributable to the fact that the parties used the previously rejected OTP to facilitate their negotiations. Since the rejected OTP was originally dated February 19, 1997, and was intended to expire two days thereafter, I find that it was the parties intent that First General have two days after execution of the OTP to provide the appropriate deposit to bind the OTP.

14. Because the parties intended to be bound by the OTP and because Wakeman submitted the appropriate deposit on the same day as its execution, I find that the parties created an irrevocable firm offer that was accepted on February 24, 1997; thus, a contract was formed.

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Bluebook (online)
13 Mass. L. Rptr. 39, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-general-realty-corp-v-carpinteri-masssuperct-2001.