## Facts

- Robert V. Sparks, a real-estate broker doing business as Watermark Properties, was retained to market and sell lots in a 235-acre residential subdivision in Edgartown, Massachusetts.
- The subdivision was permitted for 148 lots; Nations Title Insurance Co. of New York owned 99 lots (later succeeded by Fidelity National Title Insurance Co.), with remaining lots owned by other parties.
- A prior developer retained a contractual right to approve minimum sale prices for defendants’ lot sales, subject to a reasonableness limit, and had asserted an ownership claim in earlier litigation that was rejected.
- Sparks and Nations executed two yearly listing agreements (1995 and 1996) requiring Sparks to use reasonable efforts to procure buyers “ready, willing, and able” on specified or agreed terms, with commissions tied to sales of homesites or homes.
- A third listing agreement with Fidelity was similar but (i) expanded the priced-lot schedule, (ii) allowed Fidelity to change listed prices with ten days’ notice, and (iii) excluded commissions if Fidelity obtained a single buyer for more than 10% of the entire property during the agreement term.
- Sparks lived in a model home on-site and worked full-time on marketing, but none of the offers he brought was accepted and consummated.
- In 1996, a couple offered to buy an individual lot on terms they viewed as acceptable, but Fidelity required additional terms (including a buy-back right and acceptance of future restrictive covenants); no binding purchase-and-sale agreement was executed.
- In 1997, Sparks located a buyer interested in purchasing the entire subdivision for about $15 million, but the buyer failed to obtain financing and withdrew before signing.
- After the listing agreements expired, Fidelity sold the subdivision to a different golf-course developer not introduced by Sparks for approximately $15.93–$16 million.
- Sparks sued for breach of contract (commission), misrepresentation about ownership/title, breach of the implied covenant of good faith and fair dealing, and violations of Mass. Gen. Laws ch. 93A, §§ 2 and 11.

## Issues

1. Whether the broker earned a commission under the listing agreements despite failing to close a transaction or obtain a signed purchase-and-sale agreement.
2. Whether the broker was entitled to a commission based on a later owner-procured sale occurring after expiration of the listing agreements.
3. Whether evidence of alleged ownership/title misstatements supported liability for misrepresentation, breach of contract, breach of the implied covenant of good faith and fair dealing, or Mass. Gen. Laws ch. 93A.

## Decision

- The First Circuit affirmed summary judgment for Fidelity and Nations on all claims.
- Sparks was not entitled to a commission because he did not produce a buyer ready, willing, and able to purchase on the required terms, and no binding agreement or sale resulted from his efforts.
- The contracts did not provide a continuing right to commissions for sales occurring after the listing period, and the later sale was to a purchaser not procured by Sparks.
- The misrepresentation claim failed for lack of a material false statement and lack of detrimental reliance on the summary judgment record.
- The implied covenant claim failed because defendants did not interfere with Sparks’s contractual performance and the covenant could not be used to create commission rights not found in the agreements.
- The ch. 93A claim failed because the alleged conduct did not rise beyond an unsuccessful commercial contract dispute or negotiations into independently unfair or deceptive practices.

## Legal Principles

- Under Massachusetts law, absent clear contractual language to the contrary, a real-estate broker earns a commission by producing a purchaser who is ready, willing, and able to buy on the owner’s stated terms.
- Failure to secure a binding purchase-and-sale agreement or consummated transaction generally defeats a commission claim when the agreement ties compensation to such outcomes or to satisfaction of stated purchase conditions.
- The implied covenant of good faith and fair dealing enforces the parties’ reasonable contractual expectations but does not add commission triggers or extend a broker’s rights beyond the contract’s temporal and substantive limits.
- Misrepresentation requires proof of a material false statement (or omission where legally required), reasonable reliance, and resulting detriment.
- In business-to-business disputes under Mass. Gen. Laws ch. 93A, conduct that amounts only to a failed contract claim or hard bargaining, without deceptive acts or commercial coercion, is insufficient to impose liability.

## Conclusion

The court held that the broker was not owed a commission because he never produced a financially able buyer who agreed to purchase on the required terms and the later sale was an owner-procured transaction outside the listing period. It also rejected misrepresentation, implied covenant, and chapter 93A claims due to insufficient evidence of material deception, bad-faith interference, or independently unfair or deceptive conduct.


Sparks v. Fid. Nat’l Title Ins. Co., 294 F.3d 259 (1st Cir. 2002)