In what has become an increasingly common occurrence, in Ferguson v. Maxim, Appeals Court No. 18-P-1098 (November 6, 2019), the prospective buyer of commercial real estate sued the seller for specific performance based on imperfect negotiations which were never memorialized in a purchase and sale agreement. This is a so-called McCarthy v. Tobin claim based on the seminal case of McCarthy v. Tobin, 429 Mass. 84 (1999). In McCarthy, the Supreme Judicial Court declared that it was the law of the Commonwealth that a buyer may enforce a real estate transaction based on imperfect negotiations even though a contemplated purchase and sale agreement was never executed.

The Ferguson case is notable for two reasons. First, the Appeals Court reversed a decision by the Trial Court dismissing Plaintiff’s Complaint on the grounds that it omitted information regarding ongoing negotiations toward a purchase and sale and the fact that there were five sellers who needed to be in agreement. The Appeals Court held that all of those facts were irrelevant since the key question in assessing a McCarthy v. Tobin claim is whether the agreement among the parties was capable of being enforced by the Court notwithstanding the fact that a subsequent purchase and sale agreement was not executed.

Second, the Appeals Court did affirm the Trial Court’s decision to dissolve the lis pendens that was recorded on the subject property, based on a technicality. The Massachusetts Legislature has implemented a detailed procedure for requesting and granting lis pendens due to the powerful effect on title to real estate of recording a lis pendens. Thus, the lis pendens statute, G.L. c. 184 § 15, requires a plaintiff seeking a lis pendens to certify under penalties of perjury that the complainant has read the complaint, that the facts stated therein are true, and that no material facts have been omitted therefrom.

In Ferguson, Plaintiff failed to make such certification; however, he did file the Complaint as a Verified Complaint which, under the penalties of perjury, swears that Plaintiff read the Complaint and that the facts are true to the best of his knowledge and belief. The Appeals Court found that the certification requirement was “not one of mere form” and affirmed the dissolution of the lis pendens. It did so, notwithstanding the fact that the Court concluded that any omitted facts did not foreclose the viability of Plaintiff’s legal theory, and notwithstanding the liberal pleading rules in Massachusetts which freely allow amending pleadings when there is no showing of harm. The Court concluded that it was not an abuse of discretion for the judge to refuse to allow Plaintiff to amend his Complaint to cure the technical deficiency.