ENI 131 Commerce Way LLC v. T.L. Edwards, Inc.

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22-P-1139 Appeals Court

ENI 131 COMMERCE WAY LLC vs. T.L. EDWARDS, INC.

No. 22-P-1139.

Norfolk. September 13, 2023. - March 20, 2024.

Present: Green, C.J., Desmond, & Hodgens, JJ.

Declaratory Relief. Practice, Civil, Declaratory proceeding,
Motion to dismiss. Real Property, Right of first refusal,
Specific performance. Lis Pendens.

Civil action commenced in the Superior Court Department on
June 14, 2022.

A special motion to dismiss was heard by Joseph F.
Leighton, Jr., J.

Matthew S. Furman for the defendant.
James C. McGrath (Anthony J. LaPlaca also present) for the
plaintiff.

HODGENS, J. ENI 131 Commerce Way LLC (ENI) filed a

verified complaint in the Superior Court seeking declaratory

relief and specific enforcement of its right of first refusal

(ROFR) to purchase property comprising approximately fifty-seven

acres of land in the town of Plymouth from T.L. Edwards, Inc.
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(owner). ENI filed a motion for approval of a memorandum of lis

pendens; the owner filed an opposition and special cross motion

to dismiss pursuant to the procedure outlined in G. L. c. 184,

§ 15 (c). After a hearing, a judge allowed ENI's motion for

approval of a memorandum of lis pendens. After a separate

hearing, another judge (motion judge) denied the owner's special

cross motion to dismiss. The owner brings this interlocutory

appeal. We affirm.

To prevail on its special motion to dismiss, the owner had

to demonstrate by a preponderance of the evidence that ENI's

claim is "frivolous because (1) it is devoid of any reasonable

factual support; or (2) it is devoid of any arguable basis in

law; or (3) the action or claim is subject to dismissal based on

a valid legal defense such as the statute of frauds." G. L.

c. 184, § 15 (c). Accord Ferguson v. Maxim, 96 Mass. App. Ct.

385, 389 (2019). After holding a hearing and considering the

pleadings and affidavits, the motion judge concluded that the

owner did not meet that burden. On review of the record, we

discern no "abuse of discretion or error of law" by the motion

judge. Fariello v. Zhao, 101 Mass. App. Ct. 566, 569 (2022).

On appeal, the owner primarily contends that the motion

judge made an error of law in failing to dismiss a claim that is

"devoid of any arguable basis in law." G. L. c. 184, § 15 (c).

In addition, the owner claims that it never offered to sell the
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property to ENI for $20 million, that the property was not

valued at $20 million, and that ENI's offer did not meet the

ROFR requirement of being on the "same terms and conditions" as

the third-party offer. Given the narrow scope of appellate

review, we are not positioned to resolve all these issues.

Instead, we examine only the issue raised that pertains to the

governing statute -- whether ENI's complaint has "any arguable

basis in law." G. L. c. 184, § 15 (c).

The record shows a dispute over the legal effect of ENI's

attempt to exercise its ROFR. The owner executed a ROFR

agreement with ENI's predecessor in interest and duly recorded

the agreement in the Plymouth County registry of deeds.

According to the ROFR agreement, the owner agreed that it would

not sell the property to a third party unless four conditions

were satisfied: (1) the owner received a bona fide offer to

purchase the property, (2) the owner provided ENI with written

notice of the offer, (3) the owner offered to sell the property

to ENI "on the same terms and conditions as said bona fide

offer," and (4) ENI had not elected within thirty days to

purchase the property "in accordance with said offer." Twelve

years after executing this ROFR agreement, the owner received an

offer from a third party to purchase the property in exchange

for a different parcel of land. The owner then notified ENI

about the terms of the third-party offer and the thirty-day
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deadline "to elect to purchase the same in accordance with the

said offer." The notice stated that the third party and the

owner had agreed on a $20 million fair market value for the

property. In response, ENI notified the owner of its intent to

exercise its right to purchase the property in cash for the $20

million fair market value. The owner refused to sell to ENI.

In its verified complaint, ENI claimed that it had properly

exercised its ROFR. The owner countered in its special cross

motion to dismiss that the ROFR agreement did not contemplate a

cash equivalent for a "unique no-cash, land swap."

Based on this record, we cannot say that ENI's complaint is

"devoid of any arguable basis in law." G. L. c. 184, § 15 (c).

A ROFR "provision is designed to afford the holder protection

against a sale to others." Roy v. George W. Greene, Inc., 404

Mass. 67, 71 (1989), S.C., 408 Mass. 721 (1990). That

protection is effective only if the holder of the ROFR "has a

realistic opportunity to meet the offer." Id. Here, the record

shows that the owner proposed to sell the property, albeit

through the mechanism of a land swap. In accordance with the

ROFR agreement, the owner provided ENI with an opportunity to

meet the offer made by the third party: the notice sent by the

owner to ENI expressly referenced the ROFR agreement; the notice

provided the information required by the terms of the ROFR

agreement; the notice included a reference to the thirty-day
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deadline to exercise the ROFR; and the notice included a fair

market valuation for the property of $20 million, as agreed on

by the owner and the third party. These facts arguably

suggested an offer by the owner, in accordance with the ROFR

agreement, to sell to ENI "on the same terms and conditions" as

the third-party offer. See Uno Restaurants, Inc. v. Boston

Kenmore Realty Corp., 441 Mass. 376, 384 (2004) ("[i]nherent in

a [ROFR] is the fact that a third party, not the holder of the

right, will dictate the price").

Whether ENI will ultimately prove its case remains to be

seen. See, e.g., Fienberg v. Hassan, 77 Mass. App. Ct. 901, 901

(2010) (invalid exercise of ROFR where offer included different

closing date that "materially deviated" from third-party offer);

Christian v. Edelin, 65 Mass. App. Ct. 776, 779 (2006) (invalid

exercise of ROFR where offer included mortgage contingency that

deviated from third-party cash offer); Franklin v. Wyllie, 443

Mass. 187, 195-196 (2005) (exercise of ROFR involves purchasing

on "substantially the same terms and conditions" as third-party

offer). On the special cross motion to dismiss, however, the

inquiry was limited to whether the owner had proven by a

preponderance of the evidence that ENI's claim was "frivolous."

G. L. c. 184, § 15 (c). The motion judge concluded that it was

not frivolous, and on a review of the record, we discern no

abuse of discretion or error of law in this determination.
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In support of its argument that the claim is frivolous, the

owner contends that "this appeal undoubtedly presents an open

question under Massachusetts law." Indeed, the motion judge

agreed to the absence of reported decisions on the precise facts

presented: "There does not appear to be any Massachusetts

authority squarely addressing whether the holder of a [ROFR] can

meet the terms of an offer proposing a land swap for the

burdened property by offering the burdened property's fair

market value." The motion judge noted cases from Alaska that

state the holder of a ROFR "may propose comparable terms to the

original offer." Castle Props., Inc. v. Wasilla Lake Church of

the Nazarene, 347 P.3d 990, 995 (Alaska 2015), quoting Roeland

v. Trucano, 214 P.3d 343, 349 (Alaska 2009). The owner further

argues that the motion judge erred by referencing these cases.

In our view, neither the perceived open question under

Massachusetts law nor the reference to persuasive authority from

a sister State evinces a frivolous claim under G. L. c. 184,

§ 15 (c), or any error by the motion judge. Cf. Dacey v.

Burgess, 491 Mass. 311, 319 (2023) (appeal not frivolous where

it "involved a question of law that this court previously had

not addressed directly"); Abuzahra v. Cambridge, 486 Mass. 818,

829 (2021) (appeal not frivolous where it "involved a novel

question of law"); McMillen v. McMillen, 57 Mass. App. Ct. 568,
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574 (2003) ("analogous cases from other jurisdictions can be

instructive when there is no controlling local authority").

Both parties' requests for attorney's fees are denied. The

order denying the special motion to dismiss is affirmed.

So ordered.