DocketNumber: No. 05-P-215
Citation Numbers: 66 Mass. App. Ct. 672
Judges: Gelinas
Filed Date: 7/7/2006
Status: Precedential
Modified Date: 6/25/2022
Frank Cervelli appeals from a Superior Court judgment in favor of the town of Hanover (town) in its action for breach of contract damages and specific performance of the parties’ option contract for the purchase of Cervelli’s land. We affirm the grant of specific performance, but reverse the award of damages.
Facts. We set out the facts generally, as stipulated by the parties,
On May 5 and 12 of 2000, letters were faxed to Cervelli’s attorney requesting that the original option agreement be submitted to the town. On May 23, 2000, Cervelli’s attorney responded by letter, purporting to revoke Cervelli’s signature on the option agreement. On June 2, 2000, the town’s counsel sent Cervelli’s attorney a letter expressing the town’s position that Cervelli lacked the legal ability to revoke his signature, and that the town was exercising its option to purchase and intended to proceed with the transaction. On June 30, 2000, the town’s counsel faxed a letter to Cervelli’s attorney that documented their telephone conversations that the town stood ready all day to close on the transaction.
Specific performance. Cervelli argues that the town is not entitled to specific performance because it failed to properly exercise the option agreement by failing to meet one of its conditions,
The town argues that Cervelli waived this argument by fail
Prescinding from the town’s argument of waiver, we conclude that this condition of the option agreement was adequately fulfilled by the town based on G. L. c. 61A, § 13, inserted by St. 1975, c. 794, § 7, which mandates in part that “no roll-back taxes shall be applicable if the land involved is purchased for a public purpose by the city or town in which it is situated.” Regardless whether the town, prior to July 1, 2000, failed to “demonstrat[e] its abihty or wilhngness in writing to discharge Cervelli” of any obligation to pay these taxes, given the language of the statute, any such formal assurance would be redundant and meaningless. In addition, the town gave no indication that it would attempt to impose roll-back taxes, and even had it done so, the statute would provide a clear, impenetrable defense to any such attempt. This condition of the option agreement merely reflected the statutory reality, and Cervelli cannot be excused from performance based on the town’s failure to formally assure CervelH that it would adhere to the statute.
Damages. CervelH also argues that the town was not entitled to “reHance damages.” Prior to CervelH signing the option agreement, the town sought and conditionally received a State grant in the amount of $50,000 for the purchase of lands for public recreational use. The grant, which expired in June of 2000, was lost when CervelH failed to convey the land. The town agrees with CervelH that it is not entitled to damages on a reliance theory. The town, however, argues that, although characterized by the trial judge as reHance damages, the amount is really ordinary breach of contract damages, which the town is entitled to receive, and therefore this court may affirm the award. See Dorchester Mut. Fire Ins. Co. v. First Kostas Corp., 49 Mass. App. Ct. 651, 653 (2000) (“It is well established that, on appeal, we may consider any ground apparent on the record
“The fundamental principle of law upon which damages for breach of contract are assessed is that the injured party shall be placed in the same position [that it] would have been in[] if the contract had been performed, so far as loss can be ascertained to have followed as a natural consequence and to have been within the contemplation of the parties[,] as reasonable [people] [,] as a probable result of the breach . . . .” John Hetherington & Sons, Ltd. v. William Firth Co., 210 Mass. 8, 21 (1911). See Weeks v. Calnan, 39 Mass. App. Ct. 933, 934 (1995). The determination whether a given consequence was within the parties’ contemplation as a likely result of a breach is made by reference to the time at which the contract was made, as distinguished from a point or points in time subsequent to the time of contracting. See Bucholz v. Green Bros. Co., 272 Mass. 49, 54 (1930); Boylston Hous. Corp. v. O’Toole, 321 Mass. 538, 562 (1947); First Pa. Mort. Trust v. Dorchester Sav. Bank, 395 Mass. 614, 627 (1985). See also Short v. Riley, 150 Ariz. 583, 585 (Ct. App. 1986); Fairfield Dev., Inc. v. Georgetown Woods Senior Apartments Ltd. Partnership, 768 N.E.2d 463, 473 (Ind. Ct. App. 2002); Restatement (Second) of Contracts § 351 (1981).
Nothing in the record indicates that the town had informed Cervelli, prior to the time of his signing the option agreement, that it would lose $50,000 if Cervelli breached the agreement, or that Cervelli had any knowledge of the grant. In support of its damage claim, the town refers only to record evidence, in the form of letters written by its counsel well after Cervelli had faxed the signed option agreement and, thereby, bound himself to the agreement. In the town’s May 12, 2000, letter, the town’s counsel informed Cervelli that delay in receiving the original option agreement and in closing the land transfer “could jeopardize funding of $100,000 or more” because the town “need[ed] to meet . . . deadlines to receive state funding and grants.” In the town’s June 30, 2000, letter, the town’s counsel stated that “[wjithout a deed in hand today the state grant is lost and our claim for damages will be pursued.” Letters referring to the grant being lost as a consequence of Cervelli’s
Conclusion. The town is entitled to specific performance under the terms of the option agreement upon its tendering of the agreed upon sales price of $1,380,000. It was error, however, for the judge to award the town damages. The judgment is reversed insofar as it awards damages to the town in the amount of $50,000, and in all other respects the judgment is affirmed.
So ordered.
The trial judge’s findings of fact are consistent with the parties’ stipulations.
The relevant language of the option agreement is as follows: “Grantee’s option to purchase is subject to . . . (3) Grantor being discharged from any obligation to pay roll-back taxes under G. L. c. 61A” (emphasis supplied).
Cervelli’s land was assessed as agricultural land and taxed at favorable rates pursuant to G. L. c. 61 A. When land taxed as such is taken out of agricultural use, G. L. c. 61A, § 13, provides, subject to certain exceptions,