United States Court of Appeals
For the First Circuit
No. 00-1570
BLACKSTONE REALTY LLC,
Plaintiff, Appellant,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION,
IN ITS CORPORATE CAPACITY,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]
Before
Stahl, Lynch, and Lipez,
Circuit Judges.
Mark S. Foss, with whom Peters, Massad & Rodolakis was on
brief, for appellant.
Thomas C. Bahlo, Counsel, with whom Ann S. Duross, Assistant
General Counsel, and Robert D. McGillicuddy, Supervisory
Counsel, were on brief, for appellee.
April 3, 2001
STAHL, Circuit Judge. This appeal asks us to consider
whether an action to recover on an agreement for the purchase of
real property was properly dismissed on the pleadings because
the writing evidencing the agreement did not satisfy the
Massachusetts statute of frauds, Mass. Gen. Laws ch. 259, § 1.
Defendant-appellee Federal Deposit Insurance Corporation (the
“FDIC”) argued, and the district court held, that the writing
failed to identify the property being sold with “reasonable
certainty,” as is required by the statute of frauds. Plaintiff-
appellant Blackstone Realty LLC (“Blackstone”) appeals. For the
reasons discussed below, we vacate and remand.
I.
Unless otherwise indicated, we draw the factual
background from Blackstone's complaint and attached exhibits.1
In 1995, the FDIC acquired three abutting parcels of property
located in Uxbridge, Massachusetts. The street addresses of the
parcels were 80 Quaker Highway, 287 Millville Road and 307
Millville Road (collectively, the “Properties”). In September
1 Exhibit A is the written offer with handwritten
notations alleged by Blackstone to constitute a contract to sell
the subject properties. Exhibit B is a letter and attachment
sent on October 5, 1995, on FDIC's behalf, discussing various
unsold properties, including those that are the subject of this
case. Pursuant to Fed. R. Civ. P. 10(c), we treat these
exhibits as “a part [of the pleading] for all purposes,”
including Fed. R. Civ. P. 12(b)(6). McCallion v. Lane, 937 F.2d
694, 696 (1st Cir. 1991).
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1995, the FDIC conducted its “Fall Northeast Real Estate
Auction” (the “Auction”). In the brochure prepared for the
Auction, the Properties were offered for sale “as one parcel,”
identified as “Property #124." The brochure identified the
Properties by their street addresses but also noted that
“Millville Road is Route 122 South of Downtown Uxbridge” and
that “Quaker Highway is Route 146A south of Route 122.”2
Fisher Auction Co. (“Fisher”) performed the Auction for
the FDIC. Among those attending the auction, and bidding on
Property #124, was Long Beach Investment Co. (“Long Beach”).
Long Beach was interested in the Properties, in significant
part, because it knew that the U.S. Postal Service was looking
for a new location in Uxbridge. Long Beach thought that some
2 Although Blackstone's complaint relied upon certain
provisions of the Auction brochure, the brochure was not made an
exhibit to the complaint. In the absence of any dispute
regarding the authenticity of the brochure, which entered the
record as an attachment to the FDIC's motion to dismiss and was
relied upon by both parties in their appellate briefs, we
consider the document as a whole to be properly before us.
Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24,
32 (1st Cir. 2000) (holding that, in ruling on a motion to
dismiss, a court “may properly consider the relevant entirety of
a document integral to or explicitly relied upon in the
complaint, even though not attached to the complaint . . .”);
Beddal v. State St. Bank & Trust Co., 137 F.3d 12, 16-17 (1st
Cir. 1998) (concluding that, where trust agreement was
“discussed at length” in the complaint, although not attached,
and no challenge was made as to its authenticity, the agreement
“effectively merge[d] into the pleadings and the trial court
[could] review it in deciding a motion to dismiss”).
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portion of the site would be suitable for the proposed post
office, and had already queried the Postal Service about this
possibility. Although Long Beach was not the successful bidder,
Long Beach remained after the bidding to confirm whether the
successful bidder would be able to close. As it turned out, the
deal with the high bidder fell through. Long Beach was then
encouraged, by representatives of both Fisher and the FDIC, to
continue pursuing its interest in the Properties through Fisher.
On September 28, 1995, Long Beach submitted to Fisher,
via facsimile, a letter offering to pay $175,000 for the
Properties. The caption of the letter read “Property #124" on
the first line, and, on two following lines, “Property located
at Quaker Highway and Route 122, Uxbridge, Massachusetts.” The
offer contained no conditions, other than the price, and Long
Beach indicated that it was able to close within seven days of
acceptance.
On October 5, 1995, Fisher issued a form letter
soliciting written bids on various pieces of property not sold
at the Auction. Long Beach received a copy of this letter. An
attachment to the letter listed the unsold properties by Auction
brochure number, including Property #124. However, in a
departure from the Auction brochure's terminology, the column of
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the listing labeled “property location” gave the address of
Property #124 as “287 & 307 Millville Road.”
On October 24, 1995, Fisher returned a copy of Long
Beach's offer letter with several handwritten notations. These
notations indicated that the FDIC had “accepted” the offer, but
wanted the price to be $195,000. In addition, the notations set
out the address of the Properties, referencing the same roads --
Quaker Highway and Route 122 -- used by Long Beach in its
caption. Finally, the notations directed Long Beach to confirm
the proposed terms by initialing the marked-up letter and
returning it, by facsimile, to Fisher's representative.
On October 25, 1995, Long Beach accepted the
counteroffer by the method provided for in the notations. Soon
thereafter, however, the FDIC repudiated its agreement with Long
Beach. The FDIC gave two different explanations for doing so,
claiming, first, that the FDIC's acceptance had been a “mistake”
and, second, that it thought Long Beach's offer was only for a
portion of Property #124. The FDIC offered to negotiate a sale
of all three parcels to Long Beach on “very favorable terms,”
but these negotiations were unsuccessful. The FDIC and Fisher
then stopped returning Long Beach's phone calls. A few months
thereafter, the FDIC sold the entirety of Property #124 to a
third party for $400,000. As Long Beach had anticipated, the
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buyer was able to negotiate a long-term lease of a portion of
the site with the Postal Service.
Certain assets belonging to Long Beach were later
assigned to Blackstone. Among them were all of Long Beach's
rights, including claims and causes of action, deriving from the
alleged agreement with the FDIC. Blackstone brought this action
in May 1999, seeking money damages for losses suffered by Long
Beach as a result of the FDIC's repudiation of the agreement.
The FDIC moved for dismissal pursuant to Fed. R. Civ. P.
12(b)(6), arguing that any agreement allegedly formed by the
offer and the written notations was insufficient under the
Massachusetts statute of frauds because it contained no
“reasonably certain” description of the land to be sold. The
district court granted the FDIC's motion and this appeal
followed.
II.
A district court's allowance of a motion to dismiss
pursuant to Fed. R. Civ. P. 12(b)(6) is reviewed de novo.3
3 In its brief, Blackstone questions whether the FDIC's
inclusion of the auction brochure as an exhibit to its motion to
dismiss effectively converted the motion into one for summary
judgment. Nothing in our precedent requires such a result under
the circumstances of this case, see, e.g., Clorox Co. P.R., 228
F.3d at 32 (noting that a court acting on a motion to dismiss
may review documents relied upon in a complaint, even if not
attached, “without converting the motion into one for summary
judgment”), and we therefore follow the district court in
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Bessette v. Avco Fin. Servs., Inc., 230 F.3d 439, 443 (1st Cir.
2000). Like the district court, we must accept as true the
factual allegations of the complaint and draw all reasonable
inferences in favor of Blackstone. See id. We will affirm the
dismissal “only if, under the facts alleged, the plaintiff
cannot recover on any viable theory.” Id. (quoting Garita Hotel
Ltd. P'ship v. Ponce Fed. Bank, 958 F.2d 15, 17 (1st Cir. 1992)
(internal quotation marks omitted)).
It is well established that affirmative defenses, such
as the failure of a contract sued upon to satisfy the statute of
frauds, may be raised in a motion to dismiss an action for
failure to state a claim. See Keene Lumber Co. v. Leventhal,
165 F.2d 815, 820 (1st Cir. 1948) (finding statute of frauds
defense to be properly raised in a motion to dismiss); see also
LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507, 508 (1st
Cir. 1998) (acknowledging the appropriateness of a motion to
dismiss raising a statute of limitations defense); 5A Charles
Alan Wright & Arthur R. Miller, Federal Practice and Procedure
§ 1357, at 354-56 (2d ed. 1990) (citing numerous cases
considering affirmative defenses, including statute of frauds,
on motions to dismiss). However, it is equally well settled
construing the motion as one for dismissal pursuant to Fed. R.
Civ. P. 12(b)(6).
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that, for dismissal to be allowed on the basis of an affirmative
defense, the facts establishing the defense must be clear “on
the face of the plaintiff's pleadings.” Aldahonda-Rivera v.
Parke Davis & Co., 882 F.2d 590, 591 (1st Cir. 1989) (discussing
the issue with respect to a statute of limitations defense);
accord Wright & Miller, supra, at 348-49 (collecting cases
adopting this view); see also Keene, 165 F.2d at 820 (finding
dismissal on statute of frauds grounds appropriate where the
fact that the agreement was oral was apparent “from the face of
the complaint”). Furthermore, review of the complaint, together
with any other documents appropriately considered under Fed. R.
Civ. P. 12(b)(6), must “leave no doubt” that the plaintiff's
action is barred by the asserted defense. LaChapelle, 142 F.3d
at 508 (affirming dismissal based on statute of limitations
defense where dates included in complaint showed limitations
period was exceeded and complaint “failed to sketch a factual
predicate that would warrant the application of equitable
estoppel” to toll the running of the statute); compare Cervantes
v. City of San Diego, 5 F.3d 1273, 1277 (9th Cir. 1993) (finding
dismissal based on statute of limitations defense inappropriate
where the complaint “adequately allege[d] facts showing the
potential applicability of the equitable tolling doctrine”
(emphasis in original)).
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Having reviewed the documents properly before us --
Blackstone's complaint, the alleged agreement to sell the
property, the October 5 form letter (with attachment), and the
Auction brochure -- as well as the applicable substantive law,
we do not agree with the district court that dismissal of
Blackstone's action was warranted. The district court's ruling
was premised on its view that the description of the Properties
provided in Long Beach's offer letter was ambiguous, and that
the resulting agreement therefore failed adequately to identify
the land Long Beach sought to purchase. See Michaelson v.
Sherman, 39 N.E.2d 633, 634-35 (Mass. 1942) (discussing
requirement under the Massachusetts statute of frauds that a
contract for the sale of real property be evidenced by a writing
“recit[ing] the essential elements of the contract” including
the identity of the property “with reasonable certainty”); see
also id. at 635 (stating that identifying language in an
agreement is adequate if “the estate intended [is] the only one
which would satisfy the description.”) (quoting Doherty v. Hill,
11 N.E. 581, 583 (Mass. 1887) (Holmes, J.)). The court
suggested two ways in which the description was ambiguous.
First, although the offer letter referred to Property #124, the
court thought it unclear whether this reference was to Property
#124 as described in the Auction brochure, which listed three
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addresses (one on Quaker Highway and two on Millville Road) or
to Property #124 as described in the attachment to the October
5 form letter, which listed only two (the Millville Road
addresses).4 Second, the court postulated that, even if the
reference to “Property #124" was intended to mean all three
parcels, the letter was ambiguous because the further reference
to the “Property located at Quaker Highway and Route 122” could
be read to suggest that Long Beach was bidding only on the
single parcel known as 80 Quaker Highway rather than the whole
of Property #124.
While the documents comprising the alleged agreement
are not a model of clarity, we do not believe that they
inadequately identify the Properties as a matter of law.
Massachusetts precedent entitles Blackstone to introduce
evidence regarding the circumstances of its dealings with the
FDIC in order to dispel the kinds of ambiguities identified by
4 It is undisputed that, under Massachusetts law,
multiple documents pertinent to a transaction may be read
together in determining whether the statute of frauds has been
satisfied. See Tzitzon Realty Co. v. Mustonen, 227 N.E.2d 493,
496 (Mass. 1967) (holding that descriptive language in the
signed contract was appropriately considered a “shorthand
description of the land more fully described in [a separately
prepared] abstract”); see also id. (noting the general
principle that multiple documents may be read together for
statute of frauds purposes if it is shown that “[the] papers
were so connected in the minds of the parties that they adopted
all of them as indicating their purpose”) (citing Clark v.
Olejnik, 133 N.E. 197, 198 (Mass. 1921)).
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the district court. Cohen v. Garelick, 184 N.E.2d 56, 58 (Mass.
1962) (noting, in the context of a dispute over which parcels
were covered by an agreement, that “if there was an ambiguity,
the statute [of frauds] did not bar reference to the
circumstances to resolve it”); Tzitzon, 227 N.E.2d at 596
(stating that, when the statute of frauds is pled, “attendant
circumstances may be shown outside the writing and by parol for
the purpose of interpreting and applying the [agreement]”)
(quoting Harrigan v. Dodge, 86 N.E. 780 (Mass. 1909)). So too,
Massachusetts cases suggest that the adequacy of descriptive
language in an agreement is to be determined “as between the
parties” actually involved in the transaction. See Tzitzon, 277
N.E.2d at 495-96. Reading the language of the writing in light
of the account of the transaction provided in Blackstone's
complaint, as we must, we think that Blackstone has plausible
arguments that the meaning of the agreement was sufficiently
clear as between the FDIC and Long Beach.
For example, while the district court is correct that
the attachment to the October 5 form letter listed two street
addresses in its entry for Property #124 -- rendering the
attachment inconsistent with the Auction brochure -- the
circumstances recited in the complaint are far from conclusive
as to whether either party had reason to believe that Long
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Beach’s offer referred to the attachment. Given that the
October 5 letter was apparently sent to Long Beach after Long
Beach's offer had been submitted, it appears that, in fact, Long
Beach could not have intended the offer to incorporate the
attachment's description. And, while the pleadings may not
preclude the possibility of the FDIC construing the offer as
incorporating the two-parcel description, they do not support it
either. The caption of Long Beach's offer letter specifically
refers to Property #124 as the property “at” Quaker Highway and
Route 122 (which, as both parties knew, was also Millville
Road), and someone at either Fisher or the FDIC recopied the
same address. If Fisher or the FDIC thought that Long Beach was
incorporating a description that only contained properties on
Millville Road (Route 122), the references to Quaker Highway
would have made little sense.5
We have similar qualms with respect to the second
ambiguity identified by the district court. While the court
suggests that Long Beach's bid (and the FDIC's notation) might
have been viewed as referring only to the single parcel located
5 Blackstone argues that the district court mistakenly
accepted as truthful the FDIC's contention that it was in fact
confused about the property reference. We do not think it clear
that the district court did so, although we agree with
Blackstone that the present record, read in Blackstone's favor,
would not support such an inference.
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on Quaker Highway, this interpretation appears unlikely in light
of the caption's reference to both Quaker Highway and Route 122
(Millville Road). Why would Route 122 even be mentioned if Long
Beach only meant to bid for the Quaker Highway parcel? We can
imagine circumstances under which the ambiguity referred to by
the district court would arise -- for example, if the Quaker
Highway parcel also had frontage on Route 122/Millville Road,
and thus could, by itself, meet the captioned description.
However, nothing in any of the documents before us establishes
that this was the case.
None of the above, of course, is intended to prejudge
whether the FDIC's statute of frauds defense might be successful
either in a motion for summary judgment filed after the close of
discovery, or at trial. Discovery may produce evidence
supporting the district court's view that the language of the
writing was insufficient, even in context, to establish the
identity of the land Long Beach sought to purchase. However, we
think it apparent that, “under some set of facts within the
bounds of the allegations and non-conclusory facts in the
complaint, [Blackstone] may be able to prove a claim,” which is
all that is required to survive a motion to dismiss. Rosa v.
Park West Bank & Trust Co., 214 F.3d 213, 216 (1st Cir. 2000).
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We therefore vacate and remand for further proceedings
consistent with this opinion.
It is so ordered.
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