Sparks v. Fidelity Nat. Title Ins. Co., 01-1330.

• Decision Date: 01 July 2002
• Docket Number: No. 01-1330.,01-1330.
• Citation: 294 F.3d 259
• Parties: Robert V. SPARKS, d/b/a Watermark Properties, Plaintiff, Appellant, v. FIDELITY NATIONAL TITLE INSURANCE COMPANY and Nations Title Insurance Company of New York, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

294 F.3d 259

Robert V. SPARKS, d/b/a Watermark Properties, Plaintiff, Appellant, v. FIDELITY NATIONAL TITLE INSURANCE COMPANY and Nations Title Insurance Company of New York, Defendants, Appellees.

No. 01-1330.

United States Court of Appeals, First Circuit.

Heard December 6, 2001.

Decided July 1, 2002.

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Nelson G. Apjohn, with whom Augustus F. Wagner, Francis R. Powell and Nutter, McClennen & Fish, LLP, were on brief, for appellant.

John H. Henn, with whom Matthew C. Baltay and Foley, Hoag & Eliot, LLP, were on brief, for appellees.

Before TORRUELLA, Circuit Judge, STAHL, Senior Circuit Judge, and O'TOOLE,^* District Judge.

O'TOOLE, District Judge.

Appellant Robert V. Sparks appeals from the district court's grant of summary judgment in favor of the defendants, Fidelity National Title Insurance Company("Fidelity") and Nations Title Insurance Company of New York ("Nations").¹ Sparks, a real estate broker doing business as Watermark Properties, sued the defendants for failing to compensate him for his efforts on their behalf to sell certain property on Martha's Vineyard. Sparks claims that the defendants breached their brokerage listing agreements with him, misrepresented the extent of their ownership of the property in question, breached an implied covenant of good faith and fair dealing, and committed unfair or deceptive acts or practices in violation of Mass. Gen. Laws ch. 93A, §§ 2 and 11. After thorough review of the detailed summary judgment record, we affirm the judgement of the district court.

I. Background

The dispute between the parties centers around a 235-acre property situated in Edgartown, Martha's Vineyard, alternatively called "Wintucket Farms" or "Vineyard Acres II." During the time period at issue, the property was zoned and permitted as a 148-lot residential subdivision. As a result of prior title problems affecting land within the development, Nations, and later Fidelity as its successor, acquired ownership of 99 of the lots. Another 45 lots were owned by Nicholas Cambio and his associates, and four lots were owned by the Sheriff's Meadow Foundation, a conservation group. In addition, a previous developer of the property, Louis Giuliano, had the right under an agreement with Nations' predecessor to approve the minimum price at which the defendants sold any of the lots in the subdivision, subject to the proviso that he could not unreasonably withhold his approval. Moreover, in a suit he filed against Nations in 1996, Giuliano asserted an ownership interest in the property arising from his dealings with Nations' predecessor. In January 1998, this court affirmed the district court's rejection of his ownership claim. See Giuliano v. Nations Title, Inc., 134 F.3d 361 (table), No. 96-2331, 1998 WL 45459 (1st Cir. Jan.23, 1998).

Sparks entered into three successive listing agreements regarding the Wintucket Farms property. The first was executed between Sparks and Nations and covered the period from June 27, 1995 through December 31, 1995. In the agreement, Sparks agreed to "use reasonable efforts to procure BUYERS for said PROPERTY, ready, willing, and able to purchase same in accordance with the price, terms, and conditions to be agreed upon." Nations, in turn, agreed to pay Sparks a specified broker's fee for each homesite or home that he sold in the subdivision. Under the agreement, Sparks had the exclusive right to list, represent, and sell the property.

The agreement described the property to be sold as follows:

This LISTING AGREEMENT covers and includes those lots or homesites and model homes located in the Wintucket Farms subdivision, located in Edgartown on the Island of Martha's Vineyard, off the West Tisbury Road, further identified by the Town of Edgartown's Assessor's Book Map 22, Lots numbered 57 through 210 as shown on a plan drawn by Smith & Dowling, engineers, dated 1982 and filed at the County of Dukes County Registry of Deeds as case file 279 for the Town of Edgartown.

The parties agree that this is a reference to the 148 residential lots that comprise the Wintucket Farms subdivision. The agreement also recited that Nations "represents and warrants that it is the owner of said property."

The second listing agreement, also between Sparks and Nations, covered the period from January 1, 1996 to December 31, 1996, and contained substantially the same terms as the first, with one notable difference. In this second agreement, Sparks agreed to "use reasonable efforts to procure BUYERS for said property, ready, willing, and able to purchase same in accordance with the price, terms, and conditions, described in attachment `A'." Attachment "A" listed 15 specific lots in Wintucket Farms and named prices for all but three of the identified lots.

The third agreement was executed between Sparks and Fidelity, a corporate affiliate of Nations that had succeeded to its interest in the property. This agreement covered the period from May 1, 1996 to October 31, 1996. It was substantially similar to the second agreement, but different in three significant ways. First, the attachment "A" to the agreement listed 23 lots (including the same 15 listed in the second agreement) and specified prices for all but two. Second, the third agreement provided: "It is understood and agreed that the Seller [Fidelity] shall have the exclusive right to modify the prices on Attachment `A' provided it notifies Broker thereof at least ten (10) days before the prices are changed." Third, the agreement stated that if Fidelity were to secure "a single buyer to purchase more than ten (10%) percent of the entire property during the term of this agreement," Sparks would not receive a commission from such sale.

Sparks alleged that during the effective terms of the three listing agreements he made selling Wintucket Farms his full-time job. He closed his office and relocated his business to a model home on the property, and he forewent other brokering opportunities. He attempted both to sell individual lots and to sell the entire property to a single buyer. Over time, he generated and presented to the defendants offers from buyers both for particular individual lots and for the whole property.

None of the offers presented by Sparks for the purchase of individual lots was accepted by the defendants. The closest Sparks came to concluding the sale of an individual lot was an offer in September 1996 by Elizabeth and David Kotek to purchase a lot that had a model home built on it. Although the sale price was acceptable to Fidelity (the owner at the time), Fidelity responded to the Koteks' offer with a counteroffer that insisted on two conditions: Fidelity would have the right to repurchase the property within a year for a stipulated price and the Koteks would agree to accept the subsequent imposition of any covenants, conditions and restrictions that might in the future be placed uniformly on all lots within the subdivision. Fidelity and the Koteks never settled on final terms and never signed a purchase and sale agreement.

Sparks also located several buyers who made offers to purchase the entire property. These offers ranged in price from $6 million to $13 million and included a variety of additional terms. For example, the offers varied in the size of the down payment and the length of time over which the balance of the purchase price would be paid. The offers were generally contingent on governmental approvals and on the buyer's ability to obtain the necessary financing. In no case was a binding purchase and sale agreement executed between a prospective purchaser and either of the defendants.

The defendants came close to completing a sale of the entire subdivision with only one potential buyer. In 1997, the Osprey Vineyard Trust ("Osprey"), a potential buyer located by Sparks, offered to purchase the entire property for the purpose of developing it into a golf course. Negotiations between Fidelity and Osprey resulted in a draft purchase and sale agreement in which Osprey promised to buy the property for $15 million to be paid if certain contingencies were met. However, Osprey ultimately notified Fidelity that it could not obtain the necessary financing and withdrew the unsigned purchase and sale agreement.

After Sparks' listing agreements with the defendants had expired, Fidelity ultimately sold the subdivision for $15.93 million to Martha's Vineyard Golf Partners ("MVGP"), a buyer not introduced by Sparks. Negotiations between Fidelity and MVGP began in November 1997, and after several extensions of the closing date, the sale was concluded in July 2000.

II. Proceedings Below

Sparks filed this action in the Massachusetts Superior Court, and the defendants removed it to the district court on the basis of the parties' diversity of citizenship. See 28 U.S.C. § 1332. The complaint set forth four claims under Massachusetts law. After discovery, the defendants moved for summary judgment on all claims, and the district court granted the motion. The court also denied a cross-motion by Sparks for partial summary judgment of liability on his theory that the defendants had breached a warranty of ownership. The district court determined that under the applicable law of Massachusetts regarding brokers' fees, Sparks had not earned the right to a commission under the listing agreements and therefore the defendants had not breached any of those agreements by failing to compensate him. Similarly, the district court concluded that Sparks could not prove that any alleged misrepresentations or other wrongful conduct by the defendants had caused him any damage, and it ordered judgment for the defendants on all counts.

III. Standard of Review

We review the district court's grant of a summary judgment motion de novo. See MacDonald v. Cohen, 233 F.3d 648, 651 (1st Cir.2000). Summary judgment is appropriate only when "there is no genuine issue as to any material fact" and ...