Lukas v. Ollila-Pickus, 122315 MESUP, CV-13-010

Docket Nº:Civil Action CV-13-010
Opinion Judge:Nancy Mills, Justice, Superior Court Justice.
Case Date:December 23, 2015
Court:Superior Court of Maine




Civil Action No. CV-13-010

Superior Court of Maine, York

December 23, 2015


Nancy Mills, Justice, Superior Court Justice.


Jury-waived trial on plaintiffs' complaint and defendant's counterclaim was held on September 3-4, 2015. Proposed findings of fact and conclusions of law were filed September 18, 2015.

In their complaint plaintiffs allege breach of contract (failure to purchase property), breach of contract (failure to forfeit earnest money), and negligent misrepresentation, 1 In her counterclaim, defendant alleges breach of contract (failure to release earnest money).


Plaintiffs built their home at 6 Shore Road in Biddeford, Maine in 2006-2007. In May 2012, plaintiff Mark Lukas was employed as an investigator for the Department of Health and Human Services. Plaintiff Suzanne Lukas was Superintendent of Schools in Buxton and, Later, Ellsworth. Their children were no longer living in the family home. In order to keep their options open, plaintiffs listed the property for sale in March 2010 for $1, 250, 000.00.

Plaintiffs believed the prime selling season for the area was May through mid-September. According to Ginny Whitney, a real estate broker from Sotheby's with 29.5 years of experience in the business, the prime selling season for York County is spring and summer. Plaintiffs' first agent, Peter McPeters, listed the property for one year beginning April 1, 2011 but the property did not sell. Plaintiffs next listed the property with Ms. Whitney, who represented plaintiffs in their dealings with defendant.

Ms. Whitney believed plaintiffs' property was difficult to price because of the absence of comparables. Based on three offers of $750, 000.00, $810, 000.00, and $850, 000.00, Ms. Whitney believed plaintiffs' price could not be supported. (Def.'s Ex. 14.)

Defendant is a physician and works at the Maine Center for Healthcare and the Cosmetic Enhancement Center. In the spring of 2012, defendant and her husband, Owen Pickus, a physician and an attorney, decided to separate and defendant agreed to move from the home they occupied with their two children. Defendant was not listed on the deed or mortgage for that home. They agreed defendant would find a new residence during the separation. Plaintiffs' property was .4 miles from Owen Pickus's home.. The location and the fact the house was one the children would want to visit were favorable factors for defendant.

Owen Pickus participated in viewing plaintiffs' property with defendant. He reviewed the Purchase and Sale Agreement and advised defendant to sign it. The down payment was to consist of defendant's selling stock and a contribution from Owen Pickus. The Pickuses had significant assets.

Real estate broker Marc Fishman represented defendant in the sale. He was aware she and her husband were in the process of separating but thought the situation was as amicable as a separation could be.

On May 1, 2012, Mr. Fishman sent an offer on plaintiffs' property to Ms. Whitney. He stated the buyer "is qualified and pre-approved for the loan." (Pls.' Ex. 2.) Although plaintiffs were pleased with the preapproval, Heidi Maynard, a real estate broker with 23 years of experience and owner of Pack Maynard, stated that a preapproval letter does not mean a buyer will obtain financing.

The Purchase and Sale Agreement was prepared by both brokers and was effective May 5, 2012. (Jt. Ex. 1.) Among the provisions in the Agreement are the following:

1. PURCHASE PRICE: For such Deed and conveyance Buyer agrees to pay the total purchase price of $890, 000.00. Buyer will deliver to the Agency within 3 days of the Offer Date, a deposit of earnest money in the amount $5, 000.00. If said deposit is to be delivered after the submission of this offer and is not delivered by the above deadline, this offer shall be void and any attempted acceptance of this offer in reliance on the deposit being delivered will not result in a binding contract. Buyer agrees that an additional deposit of earnest money in the amount of $35, 000.00 will be delivered within 10 days of acceptance. Failure by Buyer to deliver this additional deposit in compliance with the above terms shall constitute a default under this Agreement. The remainder of the purchase price shall be paid by wire, certified, cashier's or trust account check upon delivery of the Deed. (Jt. Ex. 1 ¶ 5.)

2. TITLE AND CLOSING: A deed, conveying good and merchantable title . .. shall be delivered to Buyer and this transaction shall be closed and Buyer shall pay the balance due and execute all necessary papers on June 13, 2012 (closing date) or before, if agreed in writing by both parties. If Seller is unable to convey in accordance with the provisions of this paragraph, then Seller shall have a reasonable time period, not to exceed 30 calendar days, from the time Seller is notified of the defect, unless otherwise agreed to in writing by both Buyer and Seller, to remedy the title. Seller hereby agrees to make a good-faith effort to cure any title defect during such period. If, at the later of the closing date set forth above or the expiration of such reasonable time period, Seller is unable to remedy the title, Buyer may close and accept the deed with the title defect or this Agreement shall become null and void in which case the parties shall be relieved of any further obligations hereunder and any earnest money shall be returned to the Buyer. (Jt. Ex. 1 ¶7.)

3. FINANCING: (a) This Agreement is subject to Financing. If subject to Financing: This Agreement is subject to Buyer 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.

(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 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 by Buyer of such notice from a lender shall be a default under this Agreement. (Jt. Ex. 1 ¶ 14(a)-(d).)

4. DEFAULT/RETURN OF EARNEST MONEY: In the event of default by the Buyer, Seller may employ all legal and equitable remedies, including without limitation, termination of this Agreement and forfeiture by Buyer of the earnest money. In the event of a default by Seller, Buyer may employ all legal and equitable remedies, including without limitation, termination of this Agreement and return to Buyer of the earnest money. Agency acting as escrow agent has the option to require written releases from both parties prior to disbursing the earnest money to either Buyer or Seller. (Jt. Ex. 1 ¶ 16.)

Based on the agreed purchase price of $890, 000.00, plaintiffs understood the 30% down payment would be $267, 000.00. Plaintiffs believed the higher down payment bode well for the mortgage to be approved and they would not have accepted a 10% down payment. The sale price and the 30% down payment led plaintiffs and their broker to believe they had received "a good, strong offer."

The parties signed the Agreement effective May 5, 2012 for the sale of plaintiffs' property. (Jt. Ex. 1.) Defendant understood her obligations under paragraph 14 of the Agreement. Mr. Fishman referred defendant to Donald Murdoch, a home mortgage consultant at Wells Fargo, who began the loan application process. Mr. Fishman had worked with Mr. Murdoch for many years. Mr. Murdoch was the only representative from Wells Fargo Mr. Fishman communicated with. Mr. Fishman was not sure which loan product defendant decided to apply for.

After execution of the Agreement, defendant deposited $5, 000.00 in escrow. (Jt. Ex. 1 ¶ 5.) The additional $35, 000.00 of earnest money was received late, which upset plaintiff Mark Lukas.

During the loan application process, Mr. Murdoch is Wells Fargo's primary contact with a customer such as defendant. It was his obligation to inform the customer if information was needed or conditions had to be met.

Although defendant understood she had a good faith obligation to apply for 70% financing with a 30% down payment, she applied to one lender only, Wells Fargo, and applied for 80-20 financing. Defendant applied for the loan herself with no co-borrower. Mr. Murdoch discussed her options and it made more sense for her to pay less money for the down payment.

Defendant did not inform the person who made the welcome call on May 23, 2012 that defendant was going through a divorce but stated that Mr. Fishman and Mr. Murdoch knew about the divorce from the beginning. Defendant was prequalified for the loan, which was then sent to underwriting at Wells Fargo. At the time, Wells Fargo had a backlog of three months on loan applications. Mr. Murdoch was not certain when the condition on the loan "came through." While a loan was in suspense, Wells Fargo could not provide a loan.

The Wells Fargo underwriters were located in Ohio and Mr. Murdoch communicated with them through assistants. The loan notes were sent to the assistants and Mr...

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