"On February 20, 1979, Chamberlayne entered into a lease with Massbury Realty Company to rent the second floor of a building located at 92-100 Massachusetts Avenue, Boston, Massachusetts. Section 9.2 of the Lease granted Chamberlayne the right of first refusal to purchase the premises at any time during the term or any extension thereof. This right of first refusal required Massbury, if it wished to sell the premises, to submit a signed purchase and sale agreement to Chamberlayne, and gave Chamberlayne ten days to accept the agreement. If Chamberlayne did not accept it within that time, Massbury was free to sell the premises upon the same terms and conditions and at the same price set forth in the agreement submitted.
"On July 30, 1981, Massbury advised Chamberlayne by letter delivered to Owen Todd, a Trustee and legal counsel for Chamberlayne, that it had entered into a Purchase and Sale Agreement to sell the premises to the Holmes Real Estate Trust, and attached to its letter a copy of its Purchase and Sale Agreement with Holmes. The purchase price for the Premises
under this Agreement was $1,160,000.00.
"That same day, July 30, Todd was contacted by Attorney Alan Stanzler of the law firm of Linsky, Finnegan and Stanzler, who said he had a party who was interested in acquiring Chamberlayne's right of first refusal for the premises. On Monday, August 3, 1981, Todd was contacted by the defendant, Robert Banker who indicated that he was involved with a group that wished to buy the premises; that he knew someone had made an offer to buy the premises from the owner and that Chamberlayne had a right of first refusal under its Lease; and that he would like to meet with Todd to talk about buying the right of first refusal from Chamberlayne. That same day, Todd met with Banker and Attorney Paul Finnegan of Linsky, Finnegan and Stanzler, who was representing Banker and his group. At the meeting, Banker again stated that he, and two others whom he represented, wanted to buy the premises, and wanted to use Chamberlayne's right of first refusal in order to buy it. Banker was acting on behalf of an entity known as Kensington Realty Trust and persons with an ownership interest in that Trust: Steven Belkin, Alan Lewis and himself. Belkin and Lewis were Banker's partners with respect to the potential acquisition of the premises and Banker was acting as a representative and agent of Belkin and Lewis in his negotiations with Chamberlayne and Todd. Todd told Banker that Chamberlayne would be interested in selling its right of first refusal.
"Neither party wished to make the first offer, and Todd suggested that they both put their figures on pieces of paper and show one another what their figures were. Both wrote their numbers down, and Banker's piece of paper said $50,000.00 while Todd's said 20% of the purchase price. Banker stated he thought that Todd's figure was too high, and they left the meeting agreeing that both would think about it further.
"Todd, Banker and Finnegan next met on Wednesday, August 5. Banker stated at this time that he had the authority to increase the offer of his group to $60,000.00. Todd responded that he thought that 10% of the purchase price ($116,000.00) was a reasonable figure. At that time, they could not agree, and Banker stated he would discuss it further with his partners. Todd stated he was going to contact the person that had made the offer to buy the building from Massbury to see if they were interested in buying Chamberlayne's position.
"On the next day, Thursday, August 6, 1981, Todd telephoned Stuart Pratt, one of the trustees of Holmes. He told Pratt that he had been contacted by someone who was interested in buying Chamberlayne's right of first refusal and asked whether Pratt's group was interested. Todd told Pratt that Chamberlayne was asking 10% of the purchase price for the property as the price for its right. Pratt indicated an interest in discussing the matter further. Pratt asked the identity of the other party with whom Todd was negotiating, and the amount which had been offered, and asked for a copy of the offer. Todd responded that he did not have authority to reveal the identity of the other party.
"After speaking with Pratt on August 6, Todd received a call from Attorney Timothy Jaroch of Goodwin, Procter & Hoar, attorney for Holmes. Jaroch asked Todd how he thought the transfer of Chamberlayne's rights to another party could be effected, indicating that he did not think Chamberlayne had the right to transfer its right of first refusal or its rights under the lease. Todd disagreed. Thereafter, Attorney Jaroch again called Todd and stated that his clients would like to meet with Todd about the matter or get back to Todd the next day, Friday.
"After the foregoing conversations, Todd received a call from Banker. Banker asked him whether he had contacted the group which had signed the agreement to buy the premises, and Todd said that he had and that they were going to meet to discuss it further. Banker stated that he had been discussing the matter with his partners and was taking the position that the offer which he had given Todd was to be accepted
or rejected and that Chamberlayne should not continue to negotiate the sale of its rights to anyone else, or Kensington's offer would be rescinded. In short, Banker told Todd that unless he accepted the offer then and there, it was rescinded. After thinking about the matter for a brief period, Todd indicated to Banker that they had 'a deal.'
"The basic elements of the agreement reached by Banker and Todd in this telephone conversation on Thursday, August 6, were that (1) Banker and his partners would pay Chamberlayne $60,000.00 for its right of first refusal; (2) Chamberlayne would keep the $60,000.00 irrespective of what happened in Kensington's negotiations to buy the building, and irrespective of whether Kensington's deal to buy the building thereafter went or fell through; and (3) Banker and his partners would indemnify Chamberlayne against any claims, losses or expenses arising out of the sale of the right of first refusal from Chamberlayne to Banker, and defend Chamberlayne against any suit, at Chamberlayne's option.
"An additional element of the agreement reached was that Todd would cease negotiations with Holmes or anyone else regarding the sale of Chamberlayne's right of first refusal, an element which Todd states he performed by not speaking with Pratt or Attorney Jaroch at any time on Thursday, August 6, or Friday, August 7, after reaching the agreement with the Kensington group.
"Todd and Banker did not discuss the specific mechanics of how Chamberlayne's rights were to be transferred to Kensington. It was clear to all parties, however, that Banker and his group wanted to own the building, and that Banker believed that they could do that through Chamberlayne's rights under its lease. Todd was willing on behalf of Chamberlayne, to give Banker whatever he wanted to effect his objectives, for $60,000.00 and an indemnity agreement. Accordingly, Todd and Banker agreed that Attorney Paul Finnegan, on behalf of Banker, and John Christoforo, on behalf of Chamberlayne, would proceed to work immediately on drafting the necessary documents to effect the transaction as agreed.
"Christoforo and Finnegan met at the offices of Hale & Dorr late that Thursday afternoon, August 6. At that meeting, Christoforo and Finnegan agreed at the outset that $60,000.00 was to be paid by the Kensington Group to Chamberlayne, and the only thing that had to be worked out was how Finnegan wished to implement the sale. Finnegan advised that he preferred to have Chamberlayne exercise its right of first refusal and that he would prior thereto give Chamberlayne a purchase and sale agreement to purchase the property. Christoforo told Finnegan that this proposal was fine with him. It was agreed that Christoforo would draft the agreement memorializing the responsibilities and obligations of each of the parties in relation to the exercise of the right of first refusal, and that Finnegan would draft the purchase and sale agreement. Finnegan stated that his clients would be at Hale & Dorr first thing the next morning to execute the documents and would at that time have the $110,000.00 necessary to pay the $60,000.00 to Chamberlayne plus the $50,000.00 deposit required under the purchase and sale agreement with Massbury. Finnegan also told Christoforo that he would produce another party to assure Chamberlayne that the $410,000.00 in cash, required at the closing under the purchase and sale agreement with Massbury, would be available.
"Christoforo and Finnegan specifically discussed the expiration of the right of first refusal, and agreed that they should act on Friday to exercise the right so as to avoid its possible expiration on Sunday, August 9. Christoforo drafted an agreement that night. Early Friday morning, Christoforo...
