IN TERED AUG 1 9 2014 '1
STATE OF MAINE SUPERIOR COURT YORK, SS. DOCKET NO. RE-13-10
SUZANNE LUKAS and MARK ) JON- 'foR- D~-11-lLf LUKAS, ) ) Plaintiffs, ) v. ) ORDER ON CROSS-MOTIONS FOR ) SUMMARY JUDGMENT GERALDINE OLLILA-PICKUS, ) M.D. ) ) Defendant. )
I. Background
Plaintiffs Suzanne and Mark Lukas owned the property located at 6 Shore Road
Biddeford, Maine (the "Property"). 1 Supp. S.M.F. «J[ 1. Plaintiffs and Defendant
Geraldine Ollila-Pickus entered into a Purchase and Sales Agreement (the "P & S
Agreement") on May 5, 2012. Supp. S.M.F. «J[«J[ 2, 3. Pursuant to the P & S Agreement,
Defendant agreed to purchase the Property for $890,000. Supp. S.M.F. «J[«J[ 4, 5.
Defendant deposited $40,000 earnest money into escrow. Supp. S.M.F. «J[ 6. The
purchase was contingent upon Defendant obtaining a conventional loan of seventy
percent of the purchase price. Supp. S.M.F. «J[ 8. Defendant was under a good faith
obligation to seek and obtain financing on these terms. Opp. S.M.F. «J[ 9.
On May 31, 2012, Mr. Fishman, Defendant's real estate agent, asked for an extension
of the June 13, 2012 closing date on Defendant's behalf stating that the Wells Fargo Bank
underwriters were backed up. Supp. S.M.F. «J[«J[ 20, 21.The Lukas's agreed to extend the
closing date to June 28, 2012. Supp. S.M.F. «J[ 22.
1 Defendant qualifies this fact by stating that Plaintiffs made the admission that they are currently the owners of the Property. However, both parties agree that the Property has since been sold to a third party.
1 At some point, Wells Fargo requested that Defendant provide them with a divorce
decree in order for her to obtain a loan. Supp. S.M.F. <][<][ 23-25; Opp. S.M.F <][<][ 23-25.
Defendant and her husband were separated at the time she entered the purchase and
sales agreement. Opp. S.M.F. <][ 17. Plaintiffs contend that the bank requested the
divorce decree prior to Defendant's request for an extension of the June 131h closing date
and that Defendant had an obligation to inform Plaintiffs of the request. Supp. S.M.F <][<][
24, 18. Defendant contends that the bank requested a divorce decree shortly before the
June 28, 2012 closing date along with a gift letter. Opp. S.M.F. <][<][ 24, 25. Defendant
alleges that she is not exactly sure why she requested the first extension but that she
believes it is because she did not yet qualify for financing. Opp. S.M.F. <][ 26.
On June 25, 2012, Mr. Fishman requested a second extension of the June 28, 2012
closing date until July 31, 2012, in order for Defendant to fulfill the conditions of the
loan. Supp. S.M.F <][ 34. The request was made via email. Opp. S.M.F. <][ 34. Plaintiffs did
not accept the offer to extend the closing date until July 31, 2012. Supp. S.M.F <][ 36. Mr.
Fishman received an email from Attorney Adam Taylor on June 27, 2012, offering to
extend the closing date if Defendant agreed to the following: (1) the extension would be
until July 6, 2012; (2) the $40,000 in escrow would be released to Attorney Taylor's firm
and become non-refundable; and (3) Defendant would deposit an additional $40,000 in
escrow within 48 hours. Opp. S.M.F. <][ 37. Mr. Fishman passed the email along to
Defendant and her attorney, Greg Orso. Opp. S.M.F. <][ 40. Defendant did not accept the
offer to extend the closing date set forth in Attorney Taylor's letter. Supp. S.M.F <][ 47.
Defendant did not close on the property on June 28, 2012. Supp. S.M.F <][ 48. Attorney
Taylor did not receive notice that Defendant was exercising a financing contingency.
Supp. S.M.F <][51. Attorney Taylor followed up with a letter on July 2, 2012 indicating
2 that it was Plaintiffs' position that Defendant breached the P & S Agreement. Supp.
S.M.F 9I 49.
Plaintiffs sold the property, and closed on January 13, 2014, at a price of $850,000.
Supp. S.M.F 9I 57. Plaintiffs plead expenses of $106,914.75 for the mortgage, real estate
taxes, homeowners' insurance, heating fuel, heating mechanical services, propane,
electricity, snow removal, homeowners' association dues, lawn care, gardening, moving
furniture in and out of the home, and travel costs. Supp. S.M.F 9I9I 58-61. Plaintiffs plead
attorneys fees and costs of $24,656.52. Supp. S.M.F 9I 62. Plaintiffs have brought this
action for two counts of breach of contract, negligent misrepresentation, and specific
performance. The parties bring cross motions for partial summary judgment.
II. Standard of Review
Summary judgment is appropriate where no genuine issue of material fact exists
and the moving party is entitled to judgment as a matter of law. Beal v. Allstate Ins. Co.,
2010 ME 20, 9I 11, 989 A. 2d 733 (Me. 2010); Dyer v. Department of Transportation, 2008
ME 106, 9I 14,951 A.2d 821 (Me. 2008). When reviewing a motion for summary
judgment, the court reviews the parties' statements of material facts and the cited
record evidence in the light most favorable to the non-moving party. Id.
A genuine issue of material fact exists where the fact finder must make a
determination between differing versions of the truth. Reliance National Indemnity v.
Knowles Industrial Services Corp., 2005 ME 29, 91:7, 868 A.2d 220; citing Univ. of Me.
Found. v. Fleet Bank of Me., 2003 ME 20, 91:20, 817 A.2d 871. Furthermore, "a fact is
material if it could potentially affect the outcome of the case." Id.
ill. Discussion
Plaintiffs have filed a motion for summary judgment asking the court to find that as
a matter of law that Defendants did not exercise the financing contingency in the P & S
3 Agreement and that they are in breach of contract for failing to close on June 28, 2012.
Defendant argues that there is no requirement under the P & S Agreement that
Defendant actively "exercise" the financing contingency. Defendant contends that when
Defendant was unable to secure financing the P & S Agreement became void pursuant
to the financing contingency. Defendant argues that she fulfilled all of her obligations.
Plaintiff cites to Williams v. Ubaldo, for the proposition that the financing
contingency may be waived. Williams v. Ubaldo, 670 A.2d 913, 916 (Me. 1996).
However the court finds important distinctions between Williams and the case at hand.
In Williams, the buyer sought to go forward with a sale despite his inability to secure
financing under the terms set out in the purchase and sales agreement. The Williams
court held that a buyer may choose to waive the financing contingency where he is not
able to find financing on terms as favorable as those in the contract, however the waiver
precludes the use of the financing contingency as a defense for any subsequent breach
of contract. Lei at 916-17. In this case, Defendant claims to have exercised the financing
contingency because she was unable to secure financing. While in both cases there is a
question as to whether the buyer waived the financing contingency, the issue as to why
there may be a waiver is different in the two cases. In the Williams case, the buyer chose
to seek less favorable financing terms instead of exercising the financing contingency
available to him. In the current case, Plaintiffs assert that Defendant waived her right to
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IN TERED AUG 1 9 2014 '1
STATE OF MAINE SUPERIOR COURT YORK, SS. DOCKET NO. RE-13-10
SUZANNE LUKAS and MARK ) JON- 'foR- D~-11-lLf LUKAS, ) ) Plaintiffs, ) v. ) ORDER ON CROSS-MOTIONS FOR ) SUMMARY JUDGMENT GERALDINE OLLILA-PICKUS, ) M.D. ) ) Defendant. )
I. Background
Plaintiffs Suzanne and Mark Lukas owned the property located at 6 Shore Road
Biddeford, Maine (the "Property"). 1 Supp. S.M.F. «J[ 1. Plaintiffs and Defendant
Geraldine Ollila-Pickus entered into a Purchase and Sales Agreement (the "P & S
Agreement") on May 5, 2012. Supp. S.M.F. «J[«J[ 2, 3. Pursuant to the P & S Agreement,
Defendant agreed to purchase the Property for $890,000. Supp. S.M.F. «J[«J[ 4, 5.
Defendant deposited $40,000 earnest money into escrow. Supp. S.M.F. «J[ 6. The
purchase was contingent upon Defendant obtaining a conventional loan of seventy
percent of the purchase price. Supp. S.M.F. «J[ 8. Defendant was under a good faith
obligation to seek and obtain financing on these terms. Opp. S.M.F. «J[ 9.
On May 31, 2012, Mr. Fishman, Defendant's real estate agent, asked for an extension
of the June 13, 2012 closing date on Defendant's behalf stating that the Wells Fargo Bank
underwriters were backed up. Supp. S.M.F. «J[«J[ 20, 21.The Lukas's agreed to extend the
closing date to June 28, 2012. Supp. S.M.F. «J[ 22.
1 Defendant qualifies this fact by stating that Plaintiffs made the admission that they are currently the owners of the Property. However, both parties agree that the Property has since been sold to a third party.
1 At some point, Wells Fargo requested that Defendant provide them with a divorce
decree in order for her to obtain a loan. Supp. S.M.F. <][<][ 23-25; Opp. S.M.F <][<][ 23-25.
Defendant and her husband were separated at the time she entered the purchase and
sales agreement. Opp. S.M.F. <][ 17. Plaintiffs contend that the bank requested the
divorce decree prior to Defendant's request for an extension of the June 131h closing date
and that Defendant had an obligation to inform Plaintiffs of the request. Supp. S.M.F <][<][
24, 18. Defendant contends that the bank requested a divorce decree shortly before the
June 28, 2012 closing date along with a gift letter. Opp. S.M.F. <][<][ 24, 25. Defendant
alleges that she is not exactly sure why she requested the first extension but that she
believes it is because she did not yet qualify for financing. Opp. S.M.F. <][ 26.
On June 25, 2012, Mr. Fishman requested a second extension of the June 28, 2012
closing date until July 31, 2012, in order for Defendant to fulfill the conditions of the
loan. Supp. S.M.F <][ 34. The request was made via email. Opp. S.M.F. <][ 34. Plaintiffs did
not accept the offer to extend the closing date until July 31, 2012. Supp. S.M.F <][ 36. Mr.
Fishman received an email from Attorney Adam Taylor on June 27, 2012, offering to
extend the closing date if Defendant agreed to the following: (1) the extension would be
until July 6, 2012; (2) the $40,000 in escrow would be released to Attorney Taylor's firm
and become non-refundable; and (3) Defendant would deposit an additional $40,000 in
escrow within 48 hours. Opp. S.M.F. <][ 37. Mr. Fishman passed the email along to
Defendant and her attorney, Greg Orso. Opp. S.M.F. <][ 40. Defendant did not accept the
offer to extend the closing date set forth in Attorney Taylor's letter. Supp. S.M.F <][ 47.
Defendant did not close on the property on June 28, 2012. Supp. S.M.F <][ 48. Attorney
Taylor did not receive notice that Defendant was exercising a financing contingency.
Supp. S.M.F <][51. Attorney Taylor followed up with a letter on July 2, 2012 indicating
2 that it was Plaintiffs' position that Defendant breached the P & S Agreement. Supp.
S.M.F 9I 49.
Plaintiffs sold the property, and closed on January 13, 2014, at a price of $850,000.
Supp. S.M.F 9I 57. Plaintiffs plead expenses of $106,914.75 for the mortgage, real estate
taxes, homeowners' insurance, heating fuel, heating mechanical services, propane,
electricity, snow removal, homeowners' association dues, lawn care, gardening, moving
furniture in and out of the home, and travel costs. Supp. S.M.F 9I9I 58-61. Plaintiffs plead
attorneys fees and costs of $24,656.52. Supp. S.M.F 9I 62. Plaintiffs have brought this
action for two counts of breach of contract, negligent misrepresentation, and specific
performance. The parties bring cross motions for partial summary judgment.
II. Standard of Review
Summary judgment is appropriate where no genuine issue of material fact exists
and the moving party is entitled to judgment as a matter of law. Beal v. Allstate Ins. Co.,
2010 ME 20, 9I 11, 989 A. 2d 733 (Me. 2010); Dyer v. Department of Transportation, 2008
ME 106, 9I 14,951 A.2d 821 (Me. 2008). When reviewing a motion for summary
judgment, the court reviews the parties' statements of material facts and the cited
record evidence in the light most favorable to the non-moving party. Id.
A genuine issue of material fact exists where the fact finder must make a
determination between differing versions of the truth. Reliance National Indemnity v.
Knowles Industrial Services Corp., 2005 ME 29, 91:7, 868 A.2d 220; citing Univ. of Me.
Found. v. Fleet Bank of Me., 2003 ME 20, 91:20, 817 A.2d 871. Furthermore, "a fact is
material if it could potentially affect the outcome of the case." Id.
ill. Discussion
Plaintiffs have filed a motion for summary judgment asking the court to find that as
a matter of law that Defendants did not exercise the financing contingency in the P & S
3 Agreement and that they are in breach of contract for failing to close on June 28, 2012.
Defendant argues that there is no requirement under the P & S Agreement that
Defendant actively "exercise" the financing contingency. Defendant contends that when
Defendant was unable to secure financing the P & S Agreement became void pursuant
to the financing contingency. Defendant argues that she fulfilled all of her obligations.
Plaintiff cites to Williams v. Ubaldo, for the proposition that the financing
contingency may be waived. Williams v. Ubaldo, 670 A.2d 913, 916 (Me. 1996).
However the court finds important distinctions between Williams and the case at hand.
In Williams, the buyer sought to go forward with a sale despite his inability to secure
financing under the terms set out in the purchase and sales agreement. The Williams
court held that a buyer may choose to waive the financing contingency where he is not
able to find financing on terms as favorable as those in the contract, however the waiver
precludes the use of the financing contingency as a defense for any subsequent breach
of contract. Lei at 916-17. In this case, Defendant claims to have exercised the financing
contingency because she was unable to secure financing. While in both cases there is a
question as to whether the buyer waived the financing contingency, the issue as to why
there may be a waiver is different in the two cases. In the Williams case, the buyer chose
to seek less favorable financing terms instead of exercising the financing contingency
available to him. In the current case, Plaintiffs assert that Defendant waived her right to
assert the financing contingency by seeking different financing than that specified in the
P & S Agreement. The question is not the effect of a knowing waiver of the financing
contingency, as it was in Williams, but whether Defendant sought financing in good
faith according to the terms of the agreement.
Whether Defendant sought financing in good faith under the terms of the contract is
contested by the parties. The contract states: "This Agreement is subject to Buyer
4 obtaining a conventional loan of 70.000% of the purchase price, at an interest rate not to
exceed prevailing % and amortized over a period of 30 years. Buyer is under a good
faith obligation to seek and obtain financing on these terms." Plaintiffs argue that
because Defendant was working with Wells Fargo to secure an 80 I 20 loan instead of
the 70 I 30 prescribed in the P & S Agreement, Defendant breached the financing term of
the agreement and waived her right to exercise the financing contingency. Defendant
claims that she sought financing with Wells Fargo and was offered a better financing
package than that outlined in the P & S Agreement. Defendant argues that even if she is
obligated to seek the exact financing specified in the Agreement, she complied. Being
offered a better financing product and pursuing it should not mean that she has
breached her obligations under the contract.
What was required of Defendant under the terms of the Purchase and Sales
Agreement is a question of law, whether Defendant acted with diligence in seeking
financing is a question of fact. Williams v. Ubaldo, 670 A.2d 913, 916 (Me. 1996); Lynch
v. Andrew, 20 Mass. App. Ct. 623, 625, 481 N.E.2d 1383, 1385 (1985). According to the P
& S Agreement, Defendant was "under a good faith obligation to seek and obtain
financing on these terms", referring to the 70 I 30 terms specified in the Purchase and
Sales Agreement.
Whether Defendant did make a good faith effort to seek financing under those terms
is a question of fact. The Court denies Summary Judgment.
a. Exercise of contingency
Plaintiffs argue that Defendant failed to properly exercise the financing contingency
because she did not notify Plaintiffs in writing. The P & S Agreement states as follows:
b. Buyer to provide Seller with letter from lender showing that Buyer has made application for loan specified in (a) and, subject to verification of information, is qualified for the loan requested within 5 days from the
5 Effective Date of the Agreement. If Buyer fails to provide Seller with such letter within said time period, Seller may terminate this Agreement and the earnest money shall be returned to Buyer. c. Buyer hereby authorizes, instructs and directs its lender to communicate the status of the Buyer's loan application to Seller, Seller's licensee or Buyer's licensee. d. After (b) is met, Buyer is obligated to notify Seller in writing if a lender notifies Buyer that it is unable or unwilling to provide said financing. Any failure by Buyer to notify Seller within two days of receipt of Buyer of such notice from a lender shall be a default under this Agreement.
There is no indication in the pleadings that Defendant provided Plaintiffs with the letter
specified in (b). Additionally, if (b) was met, the parties disagree as to whether Wells
Fargo notified Defendant that it was unable or unwilling to provide financing such that
Defendant was obligated to notify Plaintiffs according to (d). Genuine issues of material
fact remain. Summary Judgment is denied.
N. Conclusion
The court DENIES the cross-motions for Summary Judgment.
DATE: John O'Neil, Jr. Justice, Superior Court
6 ATTORNEYS FOR PLAINTIFFS: ADAM TAYLOR H ILSE TEETERS TRUMPY TAYLOR MCCORMACK & FRAME LLC 30 MILK STREET 5TH FLOOR PORTLAND ME 04101
ATTORNEYS FOR DEFENDANT: THEODORE IRWIN ROBERT WEAVER IRWIN TARDY & MORRIS PA PO BOX 7030 PORTLAND ME 04112-7030