Boston Capital Funding, LLC v. BEK Winchester Winning Farm LLC

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22-P-630 Appeals Court

BOSTON CAPITAL FUNDING, LLC vs. BEK WINCHESTER WINNING FARM
LLC & another.1

No. 22-P-630.

Middlesex. September 7, 2023. – November 29, 2023.

Present: Meade, Hershfang, & D'Angelo, JJ.

Contract, Performance and breach, Offer and acceptance,
Misrepresentation. Consumer Protection Act, Unfair act or
practice. Real Property, Attachment. Bond, To dissolve
attachment. Practice, Civil, Summary judgment, Attachment.

Civil action commenced in the Boston Municipal Court
Department on October 21, 2019.

Civil action commenced in the Superior Court Department on
February 18, 2020.

After consolidation, the case was heard by Cathleen E.
Campbell, J., on motions for summary judgment, and a motion to
discharge a bond of dissolution was heard by Christopher K.
Barry-Smith, J.

Shannon F. Slaughter for the plaintiff.
Richard Joyce for the defendants.

1 Eric M. Katz.
2

D'ANGELO, J. This case arises from the efforts of

defendant BEK Winchester Winning Farm LLC (BEK) to obtain

financing to develop land in Winchester (project). In 2017, BEK

contracted with Newmark Real Estate of Massachusetts, LLC, doing

business as Newmark Grubb Knight Frank (Newmark), to procure

financing for the project. Then, in 2018, BEK signed an

agreement with the plaintiff, Boston Capital Funding, LLC (BCF),

purporting to grant BCF "exclusive authorization" to act on

BEK's behalf in procuring equity for the same project. Later in

2018, Newmark procured financing for the project, at which point

BEK informed BCF that its services were no longer needed. BCF

appeals from (1) a summary judgment dismissing its claims for

breach of contract, breach of the implied covenant of good faith

and fair dealing, and violation of G. L. c. 93A and (2) an order

discharging a surety bond. We conclude that BCF did not have a

binding, exclusive right to act on BEK's behalf in procuring

equity for the project, and that summary judgment properly

entered on BCF's contract-based claims. However, on BCF's

c. 93A claim, where there is evidence from which one could

conclude that BEK enticed BCF to work on its behalf by

intentionally misrepresenting the exclusivity of BCF's

authorization, summary judgment should not have entered. We

further conclude that there was no abuse of discretion in the

order discharging the surety bond.
3

Background.2 BEK was formed for the purpose of purchasing

and developing land in Winchester. Pursuant to an agreement

with the seller of the land, BEK had to provide proof of

financing by April 12, 2018, although that deadline was later

extended for several months. As noted, this case arises from

BEK's efforts to obtain the financing.

On April 4, 2017, BEK entered into a "Commercial Financing

Procurement Fee Agreement" with Newmark (Newmark agreement).

BEK granted Newmark "the exclusive right to arrange Commercial

Financing" for eighteen months, and Newmark agreed to "use its

commercially diligent efforts to procure Commercial Financing

from any Referral Source." BEK agreed to pay Newmark a flat fee

of $200,000 if it successfully procured financing.

By April 2018, Newmark had not acquired any financing for

the project. Thus, on April 30, 2018, before the expiration of

the Newmark agreement, BEK entered into a separate "Engagement

Agreement" with BCF (engagement agreement). BEK "grant[ed]

[BCF] exclusive authorization to act on [BEK's] behalf in the

procurement of Equity for the [project]." The "authorization

include[d] but [was] not limited to the sharing of personal and

business financial information of [BEK] with any proposed Equity

2 We take the facts, construed in the light most favorable
to BCF, from the summary judgment record. See Epstein v. Board
of Appeal of Boston, 77 Mass. App. Ct. 752, 756 (2010).
4

Participant deemed fit by [BCF]." BEK agreed to pay BCF three

percent "of the procured Equity amount," which was both "earned"

and "paid at Funding of the Equity." BEK also agreed to pay BCF

"a retainer fee in the amount of $2,500.00," which "[was to] be

credited to [BEK] . . . at the closing." In reliance on the

grant of "exclusive authorization," BCF forwent other

opportunities and exerted efforts to procure equity for the

project. On or about June 3, 2018, BEK sent BCF an "Offering

Document" stating that Newmark had been granted the right to

procure equity for the project, but Kevin Hern, the principal of

BCF, did not read the entire document and did not see the

provision about Newmark.

On June 18, 2018, Newmark procured four million dollars in

financing for the project from Novaya Real Estate Ventures

(Novaya).3 The next day, BEK sent BCF an e-mail message stating

that BEK had secured financing for the project, requesting the

return of the $2,500 retainer, and suggesting that the parties

"find something else we can do together." BCF did not return

the $2,500, and no commission was ever paid to BCF.

3 The parties dispute whether the financing was in the form
of equity. BEK argues that the financing actually procured was
debt financing in the form of a loan, and that the summary
judgment on BCF's contract-based claims could be affirmed on
this alternative basis. BCF argues that the funding was
effectively equity financing. We need not, and do not, address
these arguments.
5

BCF asserted claims against BEK and BEK's principal, Eric

M. Katz, for breach of contract, breach of the implied covenant

of good faith and fair dealing, and violation of G. L. c. 93A.

The parties submitted cross motions for summary judgment, and a

Superior Court judge denied BCF's motion but allowed BEK's

motion. A summary judgment entered, and BCF appeals.4

Discussion. 1. Standard of review. "Summary judgment is

appropriate where there is no material issue of fact in dispute

and the moving party is entitled to judgment as a matter of

law." HSBC Bank USA, N.A. v. Morris, 490 Mass. 322, 326 (2022).

See Mass. R. Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002).

"Our review of a decision on a motion for summary judgment is de

novo" (citation omitted). HSBC Bank USA, N.A., supra. "In

4 We note that, prior to this proceeding, Katz filed an
action in the Boston Municipal Court (BMC) against BCF and Hern
seeking $2,500 in damages for the retainer not returned. BCF
requested that the two actions be consolidated in the Superior
Court, and that motion was allowed. The BMC case was
transferred to the Superior Court and closed. Katz's claim
against BCF and Hern, and a counterclaim originally filed in the
BMC action, appear to remain pending. In these circumstances,
under our case law, the summary judgment on BCF's claims against
BEK was not a final, appealable judgment. See Trenz v. Family
Dollar Stores of Mass., Inc., 73 Mass. App. Ct. 610, 613 (2009).
But see Hall v. Hall, 138 S. Ct. 1118, 1131 (2018) (cases
consolidated under Fed. R. Civ. P. 42 [a] "retain their separate
identities at least to the extent that a final decision in one
is immediately appealable by the losing party"). However, where
"[d]ismissal of the appeal would serve no purpose and might
require the parties to return to reargue issues already briefed
and argued" (citation omitted), Commercial Wharf E. Condominium
Ass'n v. Boston Boat Basin, LLC, 93 Mass. App. Ct. 523, 532 n.20
(2018), we exercise our discretion to turn to the merits.
6

instances of cross motions, the appellate court assesses the

factual materials in the light most favorable to the

unsuccessful opposing party." Epstein v. Board of Appeal of

Boston, 77 Mass. App. Ct. 752, 756 (2010). "The court will draw

all permissible inferences and resolve any evidentiary conflicts

in that party's favor." Id.

2. Breach of contract. BCF argues that BEK committed a

breach of contract, entitling BCF to expectation damages

equaling three percent of the amount of the financing procured

by Newmark. We conclude that the engagement agreement between

BEK and BCF was in the form of a revocable offer that BEK would

pay BCF a commission if BCF procured equity for the project.

The language purporting to grant BCF "exclusive authorization"

did not alter the nature of the transaction. Where BEK

permissibly revoked its offer before BCF procured any equity,

summary judgment properly entered on BCF's breach of contract

claim.5

The issue presented turns on the distinction between

unilateral and bilateral contracts. "Traditionally, contract

law divides offers into one of two categories: (1) offers

5 BCF's claim is based on the idea that BEK's alleged breach
deprived BCF of the opportunity to find a ready and willing
investor, entitling BCF to expectation damages under Huang v.
Ma, 491 Mass. 235, 241-242 (2023), not that BCF actually
produced a ready and willing investor, see Tristram's Landing,
Inc. v. Wait, 367 Mass. 622, 629 (1975).
7

looking to a bilateral contract, and (2) offers looking to a

unilateral contract." H.J. Alperin, Summary of Basic Law § 5:12

(5th ed. 2014) (Alperin). "[A]n offer for a bilateral contract

requires a promise from the offeree in order to form a binding

contract," and the promise operates as a manifestation of mutual

assent and consideration. 2 R.A. Lord, Williston on Contracts

§ 6.2 (4th ed. 2023). With respect to an offer for a unilateral

contract, the offeree must perform an act to form a binding

contract, and the act operates as the manifestation of mutual

assent and consideration. See id. Until the offeree performs

the act, thereby providing mutual assent and consideration, the

offeror may revoke the offer at any time. 1 R.A. Lord,

Williston on Contracts § 5.15 (4th ed. 2022).6

An offer for a unilateral contract can work a hardship to

the offeree, who may expend resources to perform the act only to

have the offer revoked. See 1 Williston on Contracts, supra at

6 In some jurisdictions, the offeror is bound once the
offeree partially performs. See 1 Williston on Contracts, supra
at § 5.15. However, BCF does not argue that we should apply
that rule here, and the argument is therefore waived. See Mass.
R. A. P. 16 (a) (9) (A), as appearing in 481 Mass. 1628 (2019).
Regardless, the Supreme Judicial Court has held that "an
acceptance of an offer must be in accordance with its terms,
that is, by full performance by the offeree, in order that a
contract may come into existence." Northampton Inst. for Sav.
v. Putnam, 313 Mass. 1, 7 (1943). See Alperin, supra at § 5:11
("Massachusetts does not recognize [the rule that commencement
of performance makes the offer irrevocable] . . . because an
offer for a unilateral contract may be accepted only by the
offeree's full performance").
8

§ 5.15. To mitigate the possibility of hardship, offerees

sometimes seek the exclusive right to perform the act, as BCF

did here. However, the mere statement that the offeree has the

exclusive right to perform the act does not alter the

fundamental revocable nature of an offer for a unilateral

contract. See Des Rivieres v. Sullivan, 247 Mass. 443, 446-447

(1924). See also Bump v. Robbins, 24 Mass. App. Ct. 296, 303-

304 (1987). To make the exclusivity binding, the parties must

enter into a bilateral contract whereby the offeree makes a

promise. See Samuel Nichols, Inc. v. Molway, 25 Mass. App. Ct.

913, 913 (1987). See also Bump, supra.

Under our case law, the above principles have often been

discussed in the context of brokerage agreements involving

commissions for the sale of property. In Des Rivieres, 247

Mass. at 445, the parties signed an agreement stating that (1)

the broker was the "exclusive agent to sell [the owner's]

houses," (2) the owner "agree[d] to pay [the broker] a regular

broker's commission, in any event, when a sale [was]

consummated," and (3) the broker was "to do his advertising and

showing of the property at his own expense." Because the broker

did not promise to do anything in exchange for the right to be

the exclusive agent, and therefore did not provide any

consideration for that right, the owner's offer to pay the

broker a commission was construed as a revocable offer. See id.
9

at 448. See, e.g., Bartlett v. Keith, 325 Mass. 265, 267

(1950); Huang v. RE/MAX Leading Edge, 101 Mass. App. Ct. 150,

163-164 (2022), S.C., 491 Mass. 235 (2023).

In contrast, in Samuel Nichols, Inc., 25 Mass. App. Ct. at

914, the owner agreed that, "[i]n consideration of [the

broker's] listing for sale and undertaking to find a purchaser

for the real estate," the owner gave the broker "the sole and

exclusive right to sell the same." Through this language, the

broker promised to list the real estate for sale and undertake

to find a purchaser. See id. That promise served as

consideration for the right to be the exclusive agent, and the

parties successfully entered into a bilateral contract. See id.

See also, e.g., John T. Burns & Sons, Inc. v. Brasco, 327 Mass.

261, 261-263 (1951) ("in consideration of [broker's] agreement

to use all reasonable efforts," brokerage agreement was

exclusive); Upper Cape Realty Corp. v. Morris, 53 Mass. App. Ct.

53, 55, 58 (2001) (similar); Julius Tofias & Co. v. John B.

Stetson Co., 19 Mass. App. Ct. 392, 392 & n.1 (1985) (similar).

Cf. Coan v. Holbrook, 327 Mass. 221, 223 & n.1 (1951) (bilateral

contract formed where broker paid one dollar and promised to use

"efforts").7

7 In other States, similar language has been held sufficient
to form a bilateral contract. See, e.g., Charles B. Webster
Real Estate v. Rickard, 21 Cal. App. 3d 612, 615 (1971)
(consideration consisted of promise to use "diligence" in
10

The difference between the language used in Des Rivieres

and Samuel Nichols, Inc., may appear subtle but turns on whether

the offeree was a passive recipient or whether the offeree made

an affirmative promise. See Samuel Nichols, Inc., 25 Mass. App.

Ct. at 913 (to form exclusive agency, "broker must be more than

a passive recipient of the grant of exclusive agency; the broker

must agree to do something"). In Des Rivieres, 247 Mass. at

445, while the broker agreed that any of his "advertising and

showing of the property" would be at his own expense, he did not

actually promise to advertise or show the property. He could

have entirely forgone the opportunity to find a buyer and secure

the commission. In Samuel Nichols, Inc., supra at 914, the

language that the broker had the exclusive right to sell the

property "in consideration" of the broker's listing the real

estate and undertaking to find a buyer required the broker to

perform those acts.

Applying the above principles to the facts of this case,

the engagement agreement between BEK and BCF was in the form of

procuring buyer); Century 21 Associated Realty v. Hoffman, 503
N.W.2d 861, 866 (S.D. 1993) (consideration consisted of promise
to use "best efforts" to sell property); McDonald v. Davis, 389
S.W.2d 494, 496 (Tex. Civ. App. 1965) (consideration given where
broker "agreed as a part of the consideration for [principals]'
giving him the exclusive right to sell . . . that he would list
the property"). See also, e.g., Dixie Mill Supply Co. v. H.B.
Smith Mach. Co., 128 N.J.L. 242, 245 (1942) (where plaintiff
disclosed name of prospective customer in exchange for exclusive
agency, bilateral contract was formed).
11

a revocable offer. Only BEK made a promise, viz., that BCF's

commission would be "earned" and "paid at Funding of the

Equity." In exchange, BCF did not make any promises regarding

what it would do to procure the equity, and it could have

entirely forgone the opportunity to procure the equity and

secure the commission.8 It is true, as BCF notes, that the

agreement specified that BCF's "authorization include[d] but

[was] not limited to the sharing of personal and business

financial information of [BEK] with any proposed Equity

Participant deemed fit by [BCF]." However, BCF was a passive

recipient of that authorization; BCF did not affirmatively

promise that it would share BEK's personal and business

financial information with a proposed equity participant.9 In

these circumstances, BCF had to perform the act (i.e., procure

the equity) to form a binding contract. Where BCF never

8 Construing the facts in the light most favorable to BCF,
it did not sit on the opportunity to procure equity for the
project. There is evidence that BCF produced six potential
investors, and that BEK was aware of BCF's efforts. We do not
opine on whether these facts would support a claim for quantum
meruit, as that issue is not before us.

9 To the extent BCF relies on the fact that BEK paid a
$2,500 retainer, the argument is unavailing because, again, BCF
did not promise to do anything in exchange for receipt of the
retainer.
12

procured any equity, summary judgment properly entered on BCF's

breach of contract claim.10

3. General Laws c. 93A. The summary judgment on BCF's

breach of contract claim is not determinative of whether BCF has

a viable claim for violation of G. L. c. 93A. It is true that,

even had there been a breach of contract, that alone would not

have amounted to a violation of c. 93A. See Brewster

Wallcovering Co. v. Blue Mountain Wallcoverings, Inc., 68 Mass.

App. Ct. 582, 605 (2007). However, BCF's c. 93A claim is based

on other conduct: namely, that BEK intentionally misrepresented

that BCF had "exclusive authorization" to act on BEK's behalf in

procuring equity for the project. See, e.g., Kitner v. CTW

Transp., Inc., 53 Mass. App. Ct. 741, 742, 748 (2002) (defendant

liable for violation of c. 93 but not breach of contract).

"[T]he finding of intentional misrepresentation . . . is

sufficient foundation for a finding of a c. 93A violation in a

business context." Brewster Wallcovering Co., supra.

10Likewise, there was no breach of the implied covenant of
good faith and fair dealing. The covenant of good faith and
fair dealing requires "that neither party shall do anything that
will have the effect of destroying or injuring the right of the
other party to the fruits of the contract" (citation omitted).
Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 471
(1991). Here, BEK had the right to revoke its offer, and that
revocation therefore did not "destroy[] or injur[e] the right of
[BCF] to the fruits of the contract." Id.
13

BCF made a sufficient showing of an intentional

misrepresentation to survive summary judgment. Construing the

facts in the light most favorable to BCF, as we must, BEK was

under a deadline to obtain financing. As that deadline

approached -- and Newmark still had not procured the financing -

- BEK reached out to BCF. However, instead of being upfront

about the circumstances and disclosing that BCF was in a race

with Newmark, BEK enticed BCF to work on BEK's behalf by signing

an agreement misrepresenting that BCF had "exclusive

authorization" to act on BEK's behalf in procuring equity for

the project.11 Relying on BEK's misrepresentation, BCF forwent

other opportunities and exerted efforts to procure equity for

the project.12 These facts, if proven at trial, could support a

judgment of liability on BCF's c. 93A claim. See Brewster

Wallcovering Co., 68 Mass. App. Ct. at 604-605.

11While it is true that BEK later sent BCF an offering
document stating that Newmark had been granted the right to
procure equity for the project, which may support the idea that
BEK was not trying to hide anything from BCF, the timing and
circumstances of this disclosure present an issue of fact that
we do not resolve on summary judgment. See Bulwer v. Mount
Auburn Hosp., 473 Mass. 672, 689 (2016) ("at the summary
judgment stage a court does not resolve issues of material fact,
assess credibility, or weigh evidence" [quotation and citation
omitted]).

12At oral argument, BEK suggested that there are no damages
on BCF's c. 93A claim but did not address whether BCF forwent
other opportunities or exerted efforts to procure equity for the
project, either of which could serve as a basis for damages.
14

4. Real estate attachment. The final issue pertains to a

real estate attachment that BCF obtained against property owned

by BEK. BEK dissolved the attachment by filing a surety bond

pursuant to G. L. c. 223, § 120 (bond of dissolution). Then,

after prevailing on summary judgment, BEK moved for an order

discharging the bond of dissolution. A Superior Court judge

allowed the motion, citing G. L. c. 223, § 114, which provides

that a judge may "reduce or dissolve" an "excessive or

unreasonable" attachment.

BCF's sole argument is that, as a matter of law, a judge

may not order the discharge a bond of dissolution during the

pendency of an appeal. BCF points to G. L. c. 223, § 120, which

provides that a bond of dissolution must be "conditioned to pay

the plaintiff, within thirty days from the expiration of the

time to appeal such final judgment, or within thirty days of the

entry of an order of the supreme judicial court or the appeals

court affirming such final judgment." This language goes to the

required terms of a bond of dissolution and does not address

whether a judge may decide that the underlying real estate

attachment is excessive or unreasonable pursuant to G. L.

c. 223, § 114. The judge's decision on this point was

discretionary, see Foster v. Evans, 384 Mass. 687, 695 (1981),

and nothing before us demonstrates that the judge abused his

discretion in deciding that the underlying real estate
15

attachment was excessive or unreasonable, and that the resulting

bond therefore should have been discharged.13

Conclusion. Based on the foregoing, we vacate the summary

judgment on BCF's claim for violation of G. L. c. 93A and remand

for further proceedings on that claim. In all other respects,

the summary judgment is affirmed. The order discharging the

surety bond is affirmed.

So ordered.

13Where we vacate the summary judgment on BCF's c. 93A
claim and remand for further proceedings on that claim, nothing
herein should be interpreted to preclude BCF, on remand, from
moving for a new real estate attachment.