Schaumberg v. Friedmann

888 N.E.2d 963, 72 Mass. App. Ct. 52
CourtMassachusetts Appeals Court
DecidedJune 13, 2008
DocketNo. 06-P-1841
StatusPublished
Cited by2 cases

This text of 888 N.E.2d 963 (Schaumberg v. Friedmann) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schaumberg v. Friedmann, 888 N.E.2d 963, 72 Mass. App. Ct. 52 (Mass. Ct. App. 2008).

Opinion

Vuono, J.

The defendant, Gary Friedmann, appeals from an amended judgment against him on a claim alleging that he breached a purchase and sale agreement and acted unfairly and deceptively, in violation of G. L. c. 93A, by refusing to provide marketable title to a residential condominium unit that he had agreed to sell to the plaintiffs, Debra A. Schaumberg and Reza [53]*53Dana, and by failing to agree to a return of the $100,000 deposit, plus interest, to the plaintiffs when the purchase and sale did not occur.2 We affirm.

Facts. We summarize the facts as found by a Superior Court judge following a jury-waived trial. On September 29, 2003, the plaintiffs entered into a purchase and sale agreement to purchase from the defendant a condominium unit located in Cambridge. The closing was scheduled for Monday, November 3, 2003. On the preceding Friday, the plaintiffs learned that their lender’s title insurance company had discovered potentially serious issues with the title. As a result, the plaintiffs requested an extension of the closing date. Under the terms of the purchase and sale agreement, if the defendant was unable to deliver good title at closing, he could elect to extend the closing for thirty days in order to correct title defects. Notwithstanding the extension provision that provided the defendant with the opportunity to extend the closing date in order to take care of any title defects, the defendant rejected all requests from the title company, the plaintiffs’ attorney, and the designated escrow agent, Hammond Residential Real Estate (Hammond),3 to extend the closing date.

Over the weekend, the plaintiffs retained new counsel, who conducted a partial title search on the morning of the closing. The search disclosed a number of encumbrances on the title, including a petition to foreclose a tax lien from the city of Cambridge; a tax taking from the city of Cambridge; and two writs of attachment, recorded only a few weeks previously, concerning ongoing litigation in the Boston Municipal Court. On Monday, November 3, 2003, the defendant arrived at the Middlesex County registry of deeds (registry) at the appointed time, and the plaintiffs’ counsel informed him that there were some title issues to resolve. The defendant responded by becoming “aggressive and agitated and stated that the encumbrances were ‘invalid.’ ” In addition, the deed that the defendant presented purported to convey title from a partnership in which the [54]*54defendant was not the named general partner, and the defendant failed to present a partnership agreement or a power of attorney authorizing him to convey title on behalf of the partnership.

The tenor of the proceedings rapidly deteriorated. Although the defendant offered to place the sale proceeds in an escrow account until the title issues were resolved, the plaintiffs declined the offer because the amount needed to cure the encumbrances was unknown and they were uncertain whether the defendant had authority to act on behalf of the partnership. Furthermore, as the judge noted, the defendant made this and other offers in a “hostile, sometimes threatening and irregular manner.” After several hours of discussion, the parties left the registry without having completed the transaction.

The same afternoon, the plaintiffs wrote the defendant a letter stating that they were still interested in purchasing the condominium unit and forwarded copies of the bank checks that they had brought to the closing. The defendant responded with a series of letters stating that the plaintiffs’ attorney had given them incorrect advice, that they would be forced to testify before the “State Disciplinary Board,” and that they risked losing their $100,000 deposit “as liquidated damages.” He suggested that they hire the “best malpractice firm in the state,” and refused to carry through with the transaction until the plaintiffs had obtained new counsel and “a few conditions are met.”

During the month of November, 2003, the defendant continued to make new demands. He refused to participate in clearing any of the title defects and failed to produce any partnership documents to show that he was authorized to convey title to the property. When advised by the plaintiffs’ counsel that the purchase and sale agreement was still in effect and legally binding, the defendant replied that the plaintiffs were in breach of the agreement and that he would only consider selling the unit in January if the plaintiffs obtained financing from a different lender, concluding that, “I would seriously recommend that if your client wants to occupy this property in the near future that they should realize the ‘bind’ they are in and attempt to resolve this amicably.”

On December 2,2003, the plaintiffs’ counsel notified the defendant that the closing would take place at noon on December 3, 2003, thirty days after the initially scheduled closing. The defend[55]*55ant responded by leaving a voice-mail message stating that he would not attend and that the plaintiffs would have to sign a new purchase and sale agreement if they wished to purchase the condominium unit. The plaintiffs appeared at the registry at the designated time, with bank checks for the purchase price, but the defendant did not appear. The defendant later refused to sign a release authorizing Hammond to return the plaintiffs’ deposit and did not respond to a G. L. c. 93A demand letter that counsel sent on December 23, 2003.

Disposition. Based on these facts, the judge found and concluded that the defendant had breached the purchase and sale agreement by failing to provide “ ‘good, clear and marketable title’ free from encumbrances.” The judge made a related finding, well-supported in the record, that the defendant was in breach of par. 10 of the purchase and sale agreement, which required the defendant to provide the plaintiffs with written notice of the title defects at or before the closing. The judge also found that the defendant had breached the agreement by failing and refusing to authorize Hammond to return the $100,000 deposit to the plaintiffs.

The judge further determined that the defendant’s actions in refusing “to clear the title defects while threatening suit against the plaintiffs and their representatives” were “a knowing, willful violation of G. L. c. 93A.” Specifically, the judge ruled:

“Upon learning that there may [have] be[en] some issues with the plaintiffs’ financing (issues which never materialized), the defendant viewed the Agreement as an opportunity to extort money from the plaintiffs. This is evidenced through [the defendant’s] refusal to clear the title defects while threatening suit against the plaintiffs and their representatives. In addition, [the defendant] repeatedly made demands to the plaintiffs outside the scope of the original agreement and threatened to keep the plaintiffs’ $100,000 deposit as leverage to re-negotiate the original agreement for greater personal gain. These actions were a knowing, willful violation of contractual obligations taken for the purpose of securing unwarranted benefits from the plaintiffs in violation of G. L. c. 93A.”

The judge further ruled that the c. 93A demand letter sent by [56]*56the plaintiffs was adequate and that the defendant’s failure to respond “was done unreasonably and in bad faith in violation of G. L. c. 93A, § 9(3).”

The judge ordered that the money held in escrow be returned to the plaintiffs. In the amended final judgment, the judge included, pursuant to G. L. c.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
888 N.E.2d 963, 72 Mass. App. Ct. 52, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schaumberg-v-friedmann-massappct-2008.