Harris v. Scarcelli (In Re Oak Knoll Associates, L.P.)

835 F.3d 24, 2016 WL 4410065
CourtCourt of Appeals for the First Circuit
DecidedAugust 19, 2016
Docket15-2189P
StatusPublished
Cited by49 cases

This text of 835 F.3d 24 (Harris v. Scarcelli (In Re Oak Knoll Associates, L.P.)) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harris v. Scarcelli (In Re Oak Knoll Associates, L.P.), 835 F.3d 24, 2016 WL 4410065 (1st Cir. 2016).

Opinion

HOWARD, Chief Judge.

Appellant Robert Harris seeks to recover a real estate broker’s commission that he claims is owed to him by Appellees Rosa Scarcelli and Oak Knoll Associates, L.P. (collectively, “Oak Knoll”). Conclud-ing on these facts that Oak Knoll is not contractually obligated to pay Harris a commission and that Harris has failed to identify a basis upon which he would be entitled to equitable relief, we affirm the grant of summary judgment in favor of Oak Knoll.

I. Background

Oak Knoll Associates, L.P., is a limited partnership whose general partners at all relevant times consisted of Pamela Gleich-man and Rosa Scarcelli. This case began when the partnership sought to sell some apartment buildings that it owned in Nor-walk, Connecticut. To that end, Oak Knoll enlisted the services of Robert Harris, a real estate broker.

The parties accordingly entered into an agreement dated May 16,2011 (“the listing agreement”). The listing agreement was to remain in effect for six months and out-lined two scenarios under which Oak Knoll would be obligated to pay Harris a com-mission for his services. 1 First, Harris could earn a commission if the property were to be sold during the six-month term of the listing agreement. Second, Harris could earn a commission if an offer to purchase or lease the property were to be accepted during the six-month term or within six months of the termination of the listing agreement (and if the accepted offer in fact resulted in a sale). The listing agreement also provided that if negotia-tions continued after the six-month term, the listing agreement would be automati-cally renewed until the conclusion of those negotiations. A rider to the listing agreement, in turn, provided that Harris’s com-mission for selling the property would be 4.8 percent.

Harris subsequently located a potential buyer, Navarino Capital Management, LLC (“Navarino”). On October 11, 2011, Navarino and Oak Knoll executed a pur-chase and sale agreement (“2011 P&S”), whereby Navarino agreed to purchase the property from Oak Knoll for $6,300,000. The deal gave Navarino 45 days to inspect the property and allowed Navarino to ter-minate the deal for a number of reasons not relevant for present purposes.

In November 2011, Navarino requested and received the first in a series of exten-sions to the inspection period. Navarino had discovered that the property was sub-ject to a number of restrictive covenants that Oak Knoll had agreed to at the behest of the Connecticut Housing Finance Au-thority when Oak Knoll first purchased the property in 1988. On February 24, 2012, Navarino wrote to Oak Knoll, offering to purchase the property at a reduced price in light of those covenants.

Oak Knoll did not accept this revised offer. Instead, intra-partnership disputes spilled into federal court: on February 28, 2012, Scarcelli sued Gleichman in United States District Court for the District of Maine. Scarcelli obtained a default judgment against Gleichman and the district *28 court in turn issued a permanent injunction in Scarcelli’s favor. See Scarcelli v. Gleichman, No. 2:12-CV-72-GZS, 2012 WL 1965681 (D. Me. May 81, 2012). Among other things, the injunction for-bade Gleichman from entering into a con-tract to sell the property without Scarcel-li’s prior written consent. See id. at *4.

Harris, in turn, was kept apprised of these developments. On June 25, 2012, Scarcelli’s attorney emailed Harris to in-form him that Scarcelli would seek con-tempt sanctions against Gleichman or any third party who—knowing of the district court’s injunction—acted in violation of that injunction. The record is silent as to what transpired over the following months, save for the fact that on November 13, 2012, Harris sent an invoice to Gleichman demanding payment for his services, and some months after that recorded a lien against the property for a broker’s com-mission.

The story picks up again on March 18, 2013, when the partnership filed for Chap-ter 11 bankruptcy in United States Bank-ruptcy Court for the District of Maine. Within days, Navarino demanded the re-turn of its escrow deposit from Oak Knoll. On April 1, 2013, the partnership filed an application to retain Harris as a real estate broker, and on June 18, 2013, Harris filed a proof of claim for his brokerage ser-vices. 2

Although the retention application had not yet been approved, on August 21,2013, the partnership’s counsel sent Harris an email telling Harris to “get us a contract for the $6,275,000.” That same day, Harris informed Navarino that Oak Knoll was amenable to selling the property for that amount.

Then, on August 28, 2013, Scarcelli filed an objection to the application to retain Harris. The bankruptcy court held a hear-ing on the application on September 4, 2013. At the conclusion thereof, the court granted the application, provided that Oak Knoll file a revised proposed order re-flecting certain changes. However, such a proposed order was never filed and the bankruptcy court thus never approved the retention application. In October 2013, the partnership’s counsel withdrew the still-pending retention application with the court’s approval. That same month, Na-varino and Oak Knoll Associates executed a new purchase and sale agreement. This second agreement eventually resulted in the successful sale of Oak Knoll’s apartment buildings.

But although Navarino got the property and Oak Knoll got its money, Harris re-ceived nothing for his efforts. Oak Knoll never paid him. Unsurprisingly, Harris pursued claims against both the partnership and Scarcelli in federal bankruptcy court, seeking the commission that he be-lieved he was owed. Eventually, Oak Knoll moved for summary judgment, arguing that there was no material dispute of fact and that Harris was—as a matter of law— not owed a commission. Following oral ar-gument, the bankruptcy court granted the motion and denied Harris’s claims.

The bankruptcy court’s decision, in turn, was appealed to United States District Court for the District of Maine, which affirmed the grant of summary of judgment. This appeal timely followed.

II. Standard of Review

“[T]he legal standards traditionally applicable to motions for summary judgment apply [] without change in bankruptcy proceedings.” Daniels v. Agin, 736 F.3d 70, 78 (1st Cir. 2013). Thus, summary judgment is proper “if no genuine issue of *29 material fact exists and the moving party is entitled to judgment as a matter of law.” Soto-Rios v. Banco Popular de P.R., 662 F.3d 112, 115 (1st Cir. 2011). The evidence, of course, must be viewed in the light most favorable to the nonmoving party (in this case Harris) and all reasonable inferences must be taken .in that party’s favor. See In re Varrasso, 37 F.3d 760, 763 (1st Cir. 1994).

We review, in turn, a bankruptcy court’s grant of summary judgment de novo. See Soto-Rios, 662 F.3d at 115. 3

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