Heard: May 8, 2018.
action commenced in the Superior Court Department on August
19, 2014. The case was heard by Robert L. Ullmann, J., on
motions for summary judgment, and motions for attorney's
fees and costs were heard by him.
S. Davis for the plaintiff.
Jennifer L. Markowski (David Traniello also present) for the
Present: Sullivan, Neyman, & Englander, JJ.
case, we consider whether a contract was modified by the
parties, and whether the defendants are entitled to
attorney's fees under a "prevailing party"
provision of the contract. The plaintiff, Sea Breeze Estates,
LLC (Sea Breeze) brought an action for breach of a purchase
and sale contract (contract) in the Superior Court, alleging
that the defendants terminated the contract without
justification. The defendants, John Jarema and
Alexander Bove, acting as trustees of the Jarema Family Trust
(collectively, the trustees), filed various counterclaims
alleging, among other things, that Sea Breeze breached the
contract before termination by failing to make required
monthly payments. In response to the trustees' motion for
summary judgment, Sea Breeze contended that, prior to its
cessation of monthly payments, the parties modified the
contract and the trustees breached it as modified. A Superior
Court judge disagreed and allowed, in part, the trustees'
motion for summary judgment. Pursuant to § 18.10 of the
contract, the judge also allowed the trustees' motion for
attorney's fees and costs as the "prevailing
party." We affirm.
of 2004, the parties entered into a contract for the sale of
property at 187 Atlantic Street in Gloucester (property). Sea
Breeze's goal was to develop a multifamily residential
community on the property. Pursuant to § 2.1 of the
contract, Sea Breeze agreed to purchase the property for $3,
735, 000 "presum[ing] and anticipat[ing]" that it
would have the "opportunity for development of 44
units," and stipulating that, if it received approval to
build more than forty-four units, it would pay the trustees
$85, 000 for each additional unit. A related provision,
§ 2.3(k), established that, even if Sea Breeze received
approval to build fewer than forty-four units, it still
"maintain[ed] the right to elect to purchase the
property for the full purchase price."
2.2(b) of the contract required Sea Breeze to pay the
trustees $2, 000 per month for a period of twenty-four
months, "representing the time period anticipated for
[Sea Breeze] to obtain the necessary
Approvals" for the project. In the event that Sea
Breeze did not obtain the necessary approvals within that
allotted "Approval Period," § 2.2(c)
authorized an "Extension Period" during which
Sea Breeze could continue to make $2, 000 monthly payments as
separate consideration to keep the contract in effect.
Whereas payments made during the approval period would be
credited toward the final purchase price, any "Extension
Payments" would not.
additional provisions of the contract are relevant to this
case. Section 18.2 contains a so-called "merger" or
"integration" clause, which states, inter alia,
that the contract "represents the entire understanding
of the parties," merges "[a]11 prior
negotiations" into the written agreement, and "may
only be amended by a writing executed by the parties."
Section 18.10, captioned "Counsel Fees," entitles
the "prevailing party" to recover reasonable
counsel fees and costs stemming from "any litigation
regarding the rights and obligations of the parties under
The extension period and modification proposals.
Breeze was unable to obtain the necessary permits and
approvals within the twenty-four-month approval period, which
ended in June of 2006. However, Sea Breeze continued to make
the $2, 000 monthly extension payments. On December 3, 2008,
Michael Larkin, on behalf of Sea Breeze, wrote a letter to
Bove informing him that its engineer had determined
"that the property ha[d] a limited development
opportunity of thirty-three (33) units," which, at $85,
000 per unit, would result in a total purchase price of $2,
805, 000. The letter concluded by asking Bove to
"respond so that this matter can be resolved." The
parties communicated without progress over the next
January 31, 2012, Patrick Larkin, a manager of Sea Breeze and
brother of Michael Larkin,  sent an electronic mail
message (e-mail) to Jarema stating, "I spoke with you
last week regarding your conversation with Atty. Bove. You
indicated that we were all on the same page to move forward.
When will we have something in writing from Atty.
Bove[?]" Jarema responded to Larkin's January 31
e-mail with another e-mail stating, in relevant part,
"It should be very shortly as I am scheduled to talk or
see him this week." On February 1, 2012, Bove and Jarema
discussed the proposed terms contained in Michael's
December 3, 2008, letter. The next day, Bove sent a letter to
Jarema (the Bove letter) stating that he was "willing to
agree to a reduction to a total purchase price of $2, 550,
000" based upon thirty units at $85, 000 per unit,
subject to two specified conditions. First, the purchase
price would "increase by $85, 000 for each additional
unit above thirty units." Second, the monthly extension
payments would "increase from $2, 000 a month to $3, 000
a month, effective for the month following signing of the
Addendum to the [contract]." On or about February 23,
2012, Jarema provided a copy of the Bove letter to
Patrick. That same day, Patrick sent an e-mail
to Jarema in which he stated, in pertinent part, "John,
[w]e got your letter from Atty. Bove. . . . Can we set up a
meeting with all parties to finalize the adden[d]um to the
P&S?" No meeting materialized, and in March of 2012,
Sea Breeze, through Patrick, sent an e-mail to Jarema
proposing four "options" for the trustees to
"review to determine the next step forward with the
project." None of the options included the terms
delineated in the Bove letter. The e-mail concluded with the
following sentence: "We are requesting a meeting with
all parties so that these may be discussed and an option can
be agreed upon by all parties." The parties never agreed
upon any option.
Cessation of extension payments.
April of 2012, Sea Breeze stopped making monthly extension
payments. On August 7, 2012, Sea Breeze demanded
that the trustees sign an amendment to the contract in
accordance with the terms of the Bove letter. The trustees
declined. On August 16, 2012, Bove advised Sea Breeze in
writing that the contract "has been terminated in all
respects." On August 28, 2012, Sea Breeze responded to
Bove and denied that the contract and the "obligations
therein" were "extinct."