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Back Bay Spas, Inc. v. 441 Stuart Marketing, LLC
688 F.3d 61
1st Cir.
2012
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Background

  • Back Bay Spas seeks specific performance of the October 2005 Letter Agreement to buy Commercial Unit B in a building slated for condo conversion.
  • Associates needed the lender Corus Bank's written consent for a sale; no consent document was obtained despite explicit limitations in the loan documents.
  • Foreclosure of the Corus Bank loan in 2009 led to the Bank’s winner’s bid and creation of Marketing, a subsidiary taking title to the property.
  • Back Bay argued Massachusetts Gen. Laws ch. 183A, § 22 (condominium development lender liability) required Marketing to honor the Letter Agreement.
  • The district court rejected § 22’s applicability and rejected consent-by-silence as a basis for enforcement; it granted Marketing summary judgment.
  • On appeal, Back Bay abandoned consent-based theories and pressed § 22; the First Circuit affirmed, ruling § 22 does not govern this case and consent could not be implied.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Does § 22 apply to require Marketing to perform the Letter Agreement? Back Bay: Marketing, as lender successor, must honor tenant obligations under § 22. Marketing/Bank: § 22 does not apply; no successor liability to enforce the Letter Agreement. No, § 22 does not govern; affirm summary judgment for Marketing.
Was consent by the Bank required and can it be inferred from conduct or silence under § 22? Back Bay contends Bank’s conduct/silence evidenced consent to the Letter Agreement. Marketing: explicit written consent is required; silence cannot substitute for consent; record shows no consent. Consent cannot be inferred; § 22 not invoked to compel performance.
Was Back Bay's new argument preserved for appellate review? Back Bay preserved the consent-based theory below and appeals it. Bank did not object; new theory raised for first time on appeal; waived. New theory not preserved; cannot be considered; affirmed.

Key Cases Cited

  • Barry v. Moran, 661 F.3d 696 (1st Cir. 2011) (de novo review of summary judgment standard)
  • Sotirion v. United States, 617 F.3d 27 (1st Cir. 2010) (leading to the rule against raising new arguments on appeal)
  • Teamsters Local No. 59 v. Superline Transp. Co., 953 F.2d 17 (1st Cir. 1992) (principle that new legal theories not raised below are typically not considered on appeal)
  • Rizika v. Donovan, 695 N.E.2d 1097 (Mass. App. Ct. 1998) (extrinsic evidence of a condition precedent may be implied from circumstances)
  • Tilo Roofing Co. v. Pellerin, 122 N.E.2d 460 (Mass. 1954) (express condition precedent may be shown by parol evidence)
  • Harrington v. Fall River Hous. Auth., 538 N.E.2d 24 (Mass. App. Ct. 1989) (parol or written integration considerations in contract interpretation)
  • Kobayashi v. Orion Ventures, Inc., 678 N.E.2d 180 (Mass. App. Ct. 1997) (parol evidence rules and contract interpretations in Massachusetts courts)
Read the full case

Case Details

Case Name: Back Bay Spas, Inc. v. 441 Stuart Marketing, LLC
Court Name: Court of Appeals for the First Circuit
Date Published: Aug 14, 2012
Citation: 688 F.3d 61
Docket Number: 11-1057
Court Abbreviation: 1st Cir.