On August 15, 2012, Nicholas B. Carter, a partner with Todd & Weld LLP, and Carole Cooke, an associate with the firm, won summary judgment on behalf of the firm's client, a church which, several decades ago, developed an apartment building on Beacon Hill, retaining the first two floors for the church's sanctuary and offices. The building is currently valued at over $40 million.
In the Suffolk Superior Court suit, a real estate developer claimed to have an enforceable purchase and sale agreement to purchase the building allegedly signed by two senior officers of the corporation that manages the apartment building for the benefit of the church. The plaintiff also claimed to have paid close to a half million dollars to these officers toward the purchase of the building.
The Court ruled that the purchase and sale agreement was not an enforceable contract because the signers lacked actual or apparent authority to bind the corporation. The bylaws and articles of incorporation of this charitable corporation did not and could not authorize the officers to bind the corporation to an extraordinary commitment such as selling the principal asset of the corporation, a sale which was not part of the usual and necessary course of the church's business and which would have deprived the corporation of its reason to exist. The Court also ruled that the officers lacked apparent authority to convey the property because the sale would fall outside the scope of normal business dealings, and there was no genuine issue of material fact as to whether a reasonable person in the developer's position would believe that the officers had authority to enter into negotiations to sell the building on behalf of the corporation.
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