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Massachusetts Court Finds No Purchase and Sale Agreement Existed in Real Estate Dispute

The Appeals Court of Massachusetts released a recent opinion in a real estate case, Goddard v. Goucher (Mass. App. Ct. Feb. 2, 2016), addressing whether a purchase and sale agreement was valid and enforceable. The plaintiff filed the action seeking enforcement of a 2007 purchase and sale agreement. However, despite a pretrial stipulation regarding the contractual negotiations and their legal consequences, the Superior Court ruled that the parties had failed to enter into a valid and enforceable purchase and sale agreement. The plaintiff subsequently appealed the court’s decision.neighborhood-1-1496240-640x480

In Goddard, the defendant agreed to sell the plaintiff a parcel of property in 2007. The plaintiff signed and sent the defendant an agreement that provided for delivery of the deed in June 2007, and it also stated that the closing date could be extended for a period of not more than 30 days. The defendant sent the agreement to his attorney, who made a number of handwritten amendments to the agreement, including a provision that the plaintiff agreed to assume any and all encumbrances of record or otherwise, and any and all past and future taxes.

In the meantime, real estate taxes on the property went unpaid. The town recorded a tax taking of the property, filed an action in the Land Court, and obtained a judgment foreclosing and barring all rights of redemption as to the property. The plaintiff then filed a petition with the Land Court to vacate the judgment of foreclosure, asserting that he had standing as a buyer under the 2007 agreement.  That case was held in abeyance pending the current action in Superior Court, in which the plaintiff alleged breach of contract claims and sought specific performance of the agreement.

The town, the plaintiff, and the defendants entered into a pretrial stipulation that stated the 2007 purchase and sale agreement was valid and enforceable. However, the judge found that based on his credibility determinations of the witnesses, the amendments written by the defendant’s attorney caused the plaintiff to forgo signing the agreement. The judge specifically rejected testimony that the revised contract was accepted by the parties.

Generally, factual stipulations are binding on the parties and respected by the courts, unless a court determines that to do so would be improvident or not conducive to justice. However, stipulations regarding the legal effect of admitted facts require a different consideration, since the court cannot be controlled by the agreement of counsel on a subsidiary question of law.

On appeal, the court found that the parties’ stipulation was one of law, seeking to bind the court regarding the legal effect of the admitted facts. As a result, the judge was not bound to accept the stipulation as controlling. In particular, the court asserted, it is not bound when such stipulations are self-serving, incomplete, misleading, and an incorrect application of legal principles. Therefore, having properly rejected the legal stipulation, the court concluded that the judge was not in error. The court also affirmed the judge’s finding that no agreement had actually been reached by the parties.

The Massachusetts attorneys at Pulgini & Norton provide experienced legal representation in a variety of real estate matters, including mortgages and refinancing, home purchases and sales, and other property transactions. To discuss your real estate needs with one of our attorneys, call (781) 843-2200 or contact us online.

More Blog Posts:

Massachusetts Zoning Laws and Construction Permits, Massachusetts Real Estate Lawyer Blog, published May 14, 2015

Massachusetts Court of Appeals Rules that Residents Do Not Own the Homes They Built on Property Leased from Town, Massachusetts Real Estate Lawyer Blog, published August 28, 2015

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