Sherwin Law Firm Wins Real Estate Appeal

real estate appeal

I’m pleased to write that I won a real estate appeal before the Massachusetts Appeals Court last week. This case concerned a real estate contract dispute, concerning rescission (a request to cancel a legal agreement). I had previously won the trial and the other side appealed. The full decision is included below.

What is an Appeal?

All civil disputes begin in a trial court, where a party can file a lawsuit against another party and seek monetary damages or a court order. Most real estate disputes in Massachusetts typically begin in the Superior Court or Land Court.

If a party is not happy with the outcome of a case, they can pursue an appeal. An appeal is a legal proceeding that asks a appellate court to review the decision of a trial court. Appeals generally go before the Appeals Court or District Court Appellate Division (depending on the case). In some cases, an appeal can go directly to the Supreme Judicial Court, the highest court in Massachusetts.

Lessons for a Real Estate Appeal

In this real estate appeal, I was defending the trial court decision (known as being the “appellee”). An advantage of being the winning party in an appeal is that an appellate court can uphold a trial court decision for any reason supported by the trial record. This means that, even if the lower court got the reasons for its decision incorrect, its decision will still be affirmed if there is another basis for the decision.

For this reason, a large portion of my argument addressed the many reasons why a claim of rescission was improper in this case. The purpose was to give the Appeals Court as many reasons as possible for going my way. I’m pleased that the Court agreed with my argument and affirmed the lower court decision.

Conclusion

If you need assistance with a real estate appeal, contact me for a consultation.

Decision

Attorney Sherwin to Argue Real Estate Contract Case Before Massachusetts Appeals Court

foreclosure appeal

This Tuesday, I’ll be before the Appeals Court on a case concerning a real estate contract. I won a trial several years ago involving a contract dispute, and the other side has appealed. This is an interesting case that concerns some important topics on real estate contracts.

Appeals Process

In an appeal, a party is asking a reviewing court (known as an appellate court) to determine if the trial court made any errors in law. It is generally not enough to simply argue that the lower court made the wrong decision in the case. Rather, a successful appeal requires a showing that the lower court misapplied the law.

No new evidence is introduced in an appeal. The record is limited to the testimony and exhibits from trial. Each side is permitted to file a written argument to the court, known as a brief, and argue their side of the case to the court, known as an oral argument.

Lessons for Real Estate Contracts

This appeal concerns a couple of important topics relevant for real estate contracts.

Oral Agreements To Sell Property

Most people are familiar with the requirement that a sale of property needs to be in writing to be enforceable, known as the statute of frauds. It is a common misconception, however, that oral agreements for the sale of property can never be enforced. In certain circumstances, the law will not allow a party to avoid enforcement of an oral contract for real estate.

In this appeal, the contract was oral. However, the parties to this agreement changed their circumstances in reliance of this oral agreement, and partially performed it: a recognized exception to the statute of fraud.

This is a critical lesson for anyone involved in a real estate contract: do not assume that, because an agreement may be oral, there are no repercussions for failing to perform. As with any legal agreement, one should speak with an experienced attorney and proceed with caution.

Getting Out of a Contract

This appeal also concerns another important part of contract law: when can someone “undo” a contract? The “undoing” of a contract, known as a rescission, generally requires there to be a complete abrogation of the agreement. In other words, if a party really fails to do what they are supposed to, the other party may have the option of asking the court to cancel the contract. My appeal is primarily about this issue: whether or not one of the parties did their required obligations under the contract.

It is important to understand that the right to rescind an agreement is a high burden to meet. Courts will not allow rescission when a party has merely breached such an agreement, generally, it must be shown that an “utter failure of consideration” occurred.

This is important for anyone entering into a real estate contract agreement to know. Getting out of such an agreement is no guarantee, and the law provides powerful remedies for enforcing these agreements.

Conclusion

If you need assistance with a real estate contract matter, contact me for a consultation.

Real Estate Contract Disputes

Real Estate Contract Disputes

Real estate contract disputes can arise over the selling and purchase of property.  Given that transfers in real estate have much at stake, these disputes can often become contentious and require the assistance of an experienced property attorney.

Avoiding Real Estate Disputes in the First Place 

Avoiding a potential problem in the first place in a real estate contract should always be a central consideration in entering into such an agreement.  If you are considering selling or purchasing property, you should always seek the assistance of an experienced attorney in preparing such an agreement.  An attorney can often help identify potential problems that might arise later on, and offer advice to protect yourself if a dispute develops.

Ways to Protect Real Estate When a Dispute Arises

A primary, immediate concern for real estate contract disputes is protecting the underlining property.  For example, if you entered into a contract to purchase property, and the seller intends to sell the property to someone else, your immediate goal is to do something to stop the sale.  Similarly, if the subject property is being damaged or neglected, you would want something done immediately to cure the problem.  Fortunately, the law offers some safeguards when these problems arise.

One common device used in real estate contract disputes is a lis pendens.  A lis pendens is a notice of a lawsuit involving an interest in real property, which is recorded in the land records.  This is a simple notice stating the name and case number of the underlining lawsuit, which must be endorsed by the  court.  A lis pendens is effective in real estate contract disputes because, as a public document, it puts any potential buyers of the property on notice about the underlining lawsuit.  Few buyers would be willing to purchase real estate if the property is subject to ongoing legal action.

Another effective tool for protecting real estate is an injunction.  An injunction is a court order restraining or compelling a party to do a particular act.  A court, for example, could issue an injunction stopping a party from damaging property is there is reason to believe such damage is occurring.  An essential requirement of an injunction is irreparable harm.   A court will not issue an injunction is money is the only thing that may be lost; a court will need to be convinced that a loss will occur that money alone cannot solve.

What Can You Get in a Real Estate Contract Dispute?

Contract disputes are generally about money, and determining the proper amount to give to someone for damages.  However, for contract disputes where money alone will not help an injured party, the law provides for the remedy of specific performance.  Specific performance allows a party to get exactly what they contracted for, and is generally allowed when this relief involves something distinctly unique.

Specific performance is usually allowed for real estate contract cases.  The rationale is that a particular property cannot be “replaced” by another, and a damaged party is entitled to the exact real estate they contracted for.  For real estate contract disputes, this is often the preferred outcome by parties in these cases.

If you find yourself involved in such a matter, contact me for a consultation.

Sherwin Law Firm Succeeds in Rescission of Contract Case

I’m pleased to announce that I prevailed last month in a rescission of contract case in Essex Superior Court.  The case involved many important issues involving real estate contracts and the relief that a party to such a contract can obtain from a court if the agreement runs into problems.

Overview of Case

This case involved an oral agreement between two parties for the purchase of a residential home.  The deal involved the payment of cash and a promise by one of the parties to assume the mortgage loan.  This required the buyer to apply for the mortgage loan to be put in his name, so that the seller was no longer responsible for the debt.  This deal was done by a “handshake”-the parties never put the terms of the agreement in writing.

Several years after this deal was made, the seller believed that the buyer had not fulfilled the terms of the deal, and brought a lawsuit seeking a rescission of the contract.  A rescission of contract is an action seeking to “undo” a contract.  This asks the court to unmake the agreement and put the parties back in the position they were in before the deal was made.

What is a Rescission of Contract?

A rescission of contract is not readily allowed by courts; only certain circumstances will justify this relief.  Rescission is generally only allowed in cases of fraud or when a party has committed a material breach of contract: one that defeats its purpose.  Here, the seller in this case was alleging this latter reason for seeking a rescission of contract, by arguing that the buyer (my client) failed to comply with important terms of the deal.

Outcome of Case

My strategy in this case was to convince the court that my client had done what was required of him per this agreement.  Because this was an oral agreement, this required me to attack the other side’s credibility and build a case that the seller’s story was not believable.  In the end, the Court agreed with my client, finding that he had done his end of the deal.

Such a case required an enormous amount of preparation and research.  As it came down to a decision by the court on who was more believable, it was essential that my client correctly told his story, and for me to highlight the inconsistencies in the other side’s version of the facts.

Conclusion 

This case highlights an essential lesson in entering into a contract (especially one involving real estate): put the deal in writing, and get the assistance of an attorney.  If the deal “goes bad”, as this one did, having a written agreement can spar you enormous time and money if a problem arises later on.   If you find yourself in a dispute over a real estate contract, contact me for a consultation.  Having an experienced attorney on your side is essential in a matter like this.

On a side note, one of the benefits of this case was having the opportunity to do a trial in the Newburyport branch of the Essex Superior Court.  This building, hands down, is the most beautiful courthouse in Massachusetts, and is setup in the style of a New England town meeting hall.  The picture above was taken by me with my drone, across the pond where the courthouse sits.