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14-P-222                                               Appeals Court

 NANTASKET BEACHFRONT CONDOMINIUMS, LLC      vs.   HULL REDEVELOPMENT
                            AUTHORITY.


                             No. 14-P-222.

           Plymouth.     November 7, 2014. - June 5, 2015.

            Present:   Rapoza, C.J., Milkey, & Hanlon, JJ.


Contract, Performance and breach, Implied covenant of good faith
     and fair dealing, Damages, Provision for liquidated
     damages, Termination. Practice, Civil, Summary judgment,
     Damages, Waiver. Redevelopment Authority. Administrative
     Law, Conflict of interest. Conflict of Interest. Public
     Employment, Unethical conduct. State Ethics Commission.
     Waiver. Damages, Breach of contract, Liquidated damages.



     Civil action commenced in the Superior Court Department on
February 8, 2012.

     The case was heard by Robert C. Cosgrove, J., on motions
for summary judgment.


     Brian K. Bowen for the plaintiff.
     Denise A. Chicoine (Edward S. Englander with her) for the
defendant.


    MILKEY, J.     In 2004, plaintiff Nantasket Beachfront

Condominiums, LLC (Nantasket) and defendant Hull Redevelopment
                                                                     2


Authority (authority) entered into a contract for the purchase

and development of certain land in Hull.    Under that "LAND

DISPOSITION AGREEMENT" (LDA), Nantasket was to purchase the

land, construct seventy-two units of housing, and develop a new

public park.   Subsequently, the proposed project encountered

robust neighborhood opposition, and this in turn led to

significant delays in the anticipated closing.     Eventually, the

authority terminated the LDA and notified Nantasket that it was

retaining as liquidated damages $857,500 in deposits that

Nantasket had made.   This action ensued.

    In a comprehensive and thoughtful decision, a Superior

Court judge ruled in the authority's favor on summary judgment.

He concluded that Nantasket indisputably stood in breach of the

LDA, and that the authority was within its rights to terminate

the agreement and to retain the deposits.   On Nantasket's

appeal, we affirm, albeit on somewhat different grounds.

    Background.1    The parties execute the LDA.   In order to spur

the development of twelve acres of land that it owned, the

authority in October of 2003 issued a detailed "Request for

Proposals" (RFP).   According to the RFP, the property "provides

the transition between the [State-owned] . . . Nantasket Beach


    1
       The facts, which are largely uncontested, are drawn from
the summary judgment record. We view the facts in a light most
favorable to Nantasket, the nonmoving party. See Godfrey v.
Globe Newspaper Co., Inc., 457 Mass. 113, 118-119 (2010).
                                                                   3


Reservation and a major residential area of the Town of Hull

along Nantasket Avenue."   The RFP set forth a preferred

development scenario in which approximately three-quarters of

the land would be developed into "primarily passive public open

space," with the rest (approximately three acres) developed as

"residential dwelling units, or other uses, as may be acceptable

to the [authority]."   In a section entitled "Site Constraints

and Issues," the RFP discussed the applicability of various

environmental and land use requirements.

    Only two developers submitted proposals.    One was from

Nantasket's parent company, which emphasized that, based on its

thirty years of experience in developing residential and

commercial projects, it was "well versed in overcoming a

multitude of tough regulatory issues and environmental

concerns."   On July 9, 2004, Nantasket and the authority

executed the LDA, which spelled out their respective rights and

obligations in thirty-three single-spaced pages (not including

voluminous attachments).

    Under the LDA, Nantasket would purchase the land for three

and one-half million dollars (subject to various potential

adjustments).   Nantasket would then build seventy-two units of

housing, develop the open space, and eventually return the park

land to public ownership and control.   Nantasket's specific

development plans were subject to its completing the authority's
                                                                     4


design review process and obtaining -- at its expense -- all

necessary permits and other approvals (collectively termed

"Approvals") from other State and local agencies.    The closing

date was set for thirty days after Nantasket obtained the

Approvals, but not later than July 9, 2006 (termed the "Outside

Closing Date").   Thus, as originally executed, the LDA

contemplated that all necessary permitting and the closing would

be completed within two years.

    Deposits.     Nantasket paid a $97,000 deposit to the

authority at the execution of the LDA, in addition to a $25,500

deposit it had previously paid.    An additional deposit of

$122,500 was due on August 17, 2004, bringing the total deposit

due by that point to $245,000.    Until the closing actually took

place, additional deposit payments of $122,500 each would be due

at the six month anniversary of the date of the LDA and the one

year anniversary, and then "Extension Deposits" of $122,500 each

would be due every three months after that.    The LDA stated that

if Nantasket missed any deposit payment, this "shall constitute

a default."

    Termination rights.     The LDA gave each party the right to

terminate the agreement in certain situations.    In the event

that Nantasket defaulted on its obligations and did not achieve

a cure of that default within thirty days of receiving written

notice from the authority, the authority could terminate the LDA
                                                                     5


and retain all deposits paid.2    For its part, Nantasket could

terminate the LDA and secure a return of its deposits in three

different types of scenarios.    First, Nantasket was given until

August 4, 2004, to inspect the property, and until August 16,

2004, to inspect the title.     If such inspections revealed a

defect in either, then it could terminate the LDA within those

respective deadlines.    Second, Nantasket could terminate the LDA

in the event that a local permitting agency prevented the

project from going forward as planned and adjustments to the

project or purchase price could not be agreed upon to

accommodate the potential loss in value (this scenario was

termed a "Local Permit Problem").     Third, if a third party

challenged the issuance of one or more of the approvals that the

project needed, Nantasket could terminate the LDA in lieu of

defending the action.

     Project delays.     Almost immediately, the project sparked

significant opposition from local residents.     In 2004,

Jacqueline Chase, a direct abutter, cofounded a group to try to

stop it.   At Chase's suggestion, the group called itself "No Way

HRA!"    The project opponents used every opportunity to attempt

to derail the project.    Chase herself attended seventy local


     2
       The thirty-day cure period could be extended if the
default could not be cured within thirty days even with the
exercise of due diligence. Nantasket has never argued that this
provision applies here.
                                                                    6


board meetings on the topic.    After the Hull zoning board of

appeal (ZBA) issued a special permit for the project on March

30, 2006, six project opponents filed an action in Superior

Court appealing the special permit pursuant to G. L. c. 40A,

§ 17.    The lead plaintiffs in that action (zoning appeal) were

Chase and Phyllis Aucoin, another leading member of No Way HRA!.

     First amendment to the LDA.    Nantasket did not use the

filing of the zoning appeal as an occasion to terminate the LDA,

but instead elected to defend it.    However, with it becoming

increasingly obvious that Nantasket could not obtain all

approvals by July 9, 2006 (the original Outside Closing Date),

Nantasket requested and secured an amendment to the LDA.     This

amendment dated May 10, 2006, set a new closing date of forty

days after Nantasket received all approvals, but in no event

later than the earlier of:     (1) ninety days after the "Appeals

Termination Date" (set as the date that the zoning appeal and

any other appeals of project approvals eventually were resolved

in Nantasket's favor),3 or (2) July 9, 2012 (the amended Outside




     3
       The "Appeals Termination Date" was defined in full as the
date "of the final disposition, in favor of the validity of the
Approvals, of all appeals challenging or appealing the issuance
of any Approval, including without limitation the Zoning Appeal,
including the exhausting of all further appeals or the
expiration of the time for bringing any further appeal."
                                                                    7


Closing Date).4   The parties also agreed that after Nantasket

paid the additional Extension Deposits due on July 9, 2006, and

October 9, 2006 (bringing the total deposits held by the

authority to $857,500), further Extension Deposits would be

waived until the Appeals Termination Date.5

     Chase and Aucoin join the authority's board.    In 2007,

Chase and Aucoin ran for, and were elected to, the authority's

board.    Even after that, they continued their active opposition

to the project in their personal capacity.    Thus, for example,

after a Superior Court judge in 2008 ruled in Nantasket's favor

on summary judgment in the zoning appeal, Chase and Aucoin

joined in appealing that decision to this court.

     Second amendment to the LDA.    With the continued delays,

Nantasket requested a further extension of the Outside Closing

Date, and also requested that Chase and Aucoin recuse themselves

from participating in matters concerning the project.      On August

3, 2009, by a vote of three to one (with one abstention), the

authority's board extended the Outside Closing Date to July 9,

2015.    Chase voted against the extension, while Aucoin

abstained.

     4
       As part of the first amendment, Nantasket expressly waived
its right to terminate the LDA based on the filing of the zoning
appeal.
     5
       The parties also agreed to reduce the purchase price of
the land by $125,000, because of a reduction in the scope of the
project required by the special permit.
                                                                     8


    The end of the zoning appeal.      The zoning appeal was

finally resolved on May 3, 2010, when a stipulation of dismissal

was filed in this court.    This removed a significant obstacle to

the project's moving forward, but others remained.    Indeed,

changes to the project that resulted from review by the State

Department of Environmental Protection pursuant to the Wetlands

Protection Act, G. L. c. 131, § 40, meant that Nantasket would

have to resubmit the project for various additional local

approvals.   Meanwhile, changes to the real estate market in the

interim called into question the financial viability of the

project.   In fact, as Nantasket acknowledged in a letter to the

authority dated September 10, 2010, "[t]here exists no bank

financing available for this project, and there are no equity

partners willing to invest in it."

    Nantasket's efforts to renegotiate the deal.      Under the

express terms of the LDA, Nantasket's inability to obtain

financing did not constitute a force majeure event excusing its

performance.   In light of the new circumstances it faced,

Nantasket sought to renegotiate the terms of the original deal.

In its September 10, 2010, letter, Nantasket proposed to

construct the park improvements immediately using a portion of

the deposit funds, with the remainder of the funds to be

returned to Nantasket.     Also, the housing would be developed in

phases on a more long-term basis (with the hope that the housing
                                                                   9


market would improve in the interim), with Nantasket to pay a

pro rata share of the original purchase price for each phase.

The authority flatly rejected this proposal, and stated its view

that "[g]iven that there is no longer any appeal pending, the

payment of the Extension Deposits must resume."   At the same

time, the authority indicated flexibility in three areas.

First, instead of insisting that the closing take place within

forty days of Nantasket's receiving the approvals,6 the authority

expressed a willingness to extend the closing until November 9,

2014.    Second, the authority indicated it was open to allowing

the postclosing construction to be completed in phases (so long

as Nantasket purchased all of the property at the closing).

Third, the authority indicated that if a new agreement were

reached, it would agree to have new Extension Deposits due every

six months rather than every three.

     By letter dated November 1, 2010, Nantasket countered that

it would not agree to pay any new Extension Deposits before the

closing.    As to the existing deposit monies, Nantasket stated

that it needed the return of $250,000 "plus the cost of

designing and permitting the park."    Nantasket also indicated

that it could only purchase all of the property at the closing

if market rate financing was available.


     6
       The second amendment had not modified this provision but
instead had changed only the Outside Closing Date.
                                                                  10


    The authority demands payment.    As a result of this back

and forth, the parties remained far apart.   The authority's

further response on November 19, 2010, brought them no closer.

That letter rejected Nantasket's last proposal, offered no new

proposal, and instead merely sharpened the authority's position

that Nantasket had to resume payment of the Extension Deposits.

In fact, the letter declared that Nantasket was already in

default for not making additional Extension Deposit payments of

$122,500 each on August 3, 2010, and November 3, 2010, and for

not actively pursuing the remaining approvals for the project.

According to the authority, if these problems were not cured

within thirty days, this "will leave the Authority no choice but

to declare [Nantasket] to be in default of its obligations under

the LDA [which] . . . would allow the Authority to exercise all

of its rights and remedies under Section 10.2 of the LDA,

including, without limitation, the termination of the LDA and

the retention of the deposit as liquidated damages under the

LDA."

    In its response dated December 30, 2010, Nantasket

underscored its continued unwillingness to resume payment of any

additional Extension Deposits.   Nantasket also stated its view

that there were outstanding title problems that the authority

had not cured and that this both excused Nantasket's failure to

pay additional Extension Deposits and provided Nantasket its own
                                                                   11


basis for terminating the LDA and demanding return of the

deposits paid to date.7   The authority responded on January 11,

2011, by explaining its view that the title problems had been

cured and that Nantasket had no grounds for refusing to resume

making the Extension Deposits.   It also reiterated its demand

that such sums be paid.   In a short and extremely pointed letter

dated February 14, 2011, the authority once again demanded

payment.

     The termination of the LDA.   After the demanded additional

Extension Deposit payments were not made, the authority's board

on April 19, 2011, voted to send Nantasket a letter terminating

the LDA.   Four of the five board members were present (including

Chase and Aucoin), and the vote apparently was unanimous.    The

record reflects that before the vote was taken, the board's

chairman, Bartley Kelly, purported to invoke the "rule of

necessity" and that Chase and Aucoin "follow[ed]."8   No further


     7
       Nantasket had raised some of these title issues in a 2004
letter that was sent to the authority prior to the relevant
deadline set forth in the LDA. The letter stated a view that
the problems could be resolved and requested "an extension of
the 'Title Inspection Period' for the period of time necessary
for the parties to address these issues." It further stated
that "[i]n the event that the Authority is unable or unwilling
to address these issues then, most reluctantly, kindly consider
this written notice of termination pursuant to [the relevant
provision in the LDA]." Other of the title issues arose only
later.
     8
       The "rule of necessity" is a doctrine that recognizes that
in some circumstances, public officials who otherwise have an
                                                                     12


explanation was given.       The authority sent Nantasket a letter

formally terminating the LDA that same day.

    Discussion.    Nantasket's five-count complaint relies on

various overlapping contract-related theories.      However,

permeating Nantasket's legal claims is its overarching

contention that the authority's actions were tainted by serious

conflicts of interests among two or three of its five board

members.   In addition, Nantasket argues that the authority's

proceeding to terminate the LDA in the face of those issues

violated the covenant of good faith and fair dealing implied in

every Massachusetts contract.      See Uno Restaurants, Inc. v.

Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004).        We

begin with addressing these ethical considerations.

    1.     Ethical issues.    As noted, Chase and Aucoin led the

opposition to the project, and they continued that opposition

after they joined the authority's board.      Based on the

allegations they raised in the zoning appeal and the deposition



ethical duty to recuse themselves from participating in a
particular matter nevertheless may do so if necessary for the
public entity to act. See Boston Retirement Bd. v. Contributory
Retirement Appeal Bd., 441 Mass. 78, 85 (2004), citing Moran v.
School Comm. of Littleton, 317 Mass. 591, 593 (1945), and cases
cited. By letter dated July 26, 2010, town counsel had sent a
letter to the authority's board that generally explained how the
rule of necessity worked, and that cautioned that the rule
should be invoked only as a "last resort" (and then only in
accordance with certain specified procedures). The letter did
not analyze whether any members of the authority's board in fact
had a disqualifying conflict of interest.
                                                                  13


of Chase taken in that case, Nantasket argues -- with

significant force -- that Chase and Aucoin had a direct and

substantial economic stake in whether this particular project

succeeded or failed.   If so, then Chase and Aucoin had a

"financial interest" in the authority's consideration of the

project.9   This means that unless one of the recognized

exceptions applied, they could not participate as board members

in matters concerning the project.   See G. L. c. 268A, § 19.

     The judge noted that Chase and Aucoin had an "undisputed

conflict of interest."   Nevertheless, he seems to have concluded

that they satisfied their ethical obligations and that they, in

any event, did not act in bad faith.   With regard to their

failure to follow the procedures for invoking the rule of

necessity outlined in town counsel's letter (see note 8, supra),

the judge concluded that this did "not evidence bad faith, where

their participation in the abutter litigation and opposition to

the Project was [already] well known."   Finally, he ruled that

even if the vote to terminate was taken in bad faith, this was

immaterial, because Nantasket itself was in breach of the

contract before the vote was taken and the authority therefore

had an express contractual right to terminate.



     9
       Whether Kelly also had a disqualifying financial interest
is less clear because the record reveals little about his
situation.
                                                                      14


    Although we agree with the motion judge that the ethical

issues Nantasket sought to raise ultimately do not aid its

cause, we arrive at that conclusion by a somewhat different

path.     Without resolving whether his analysis of the rule of

necessity was correct, we note that the issues do not appear to

be as straightforward as he suggested.      As the State Ethics

Commission (commission) has emphasized, and the authority

acknowledges, the rule of necessity is to be invoked only "as a

last resort."     State Ethics Commission Advisory 05-05, at 841

(2005).    Under the commission's interpretation of that rule, if

in fact there was no need for Kelly to recuse himself, then

Chase and Aucoin could not have invoked the rule because their

participation would not have been necessary to achieve a quorum

(assuming the absent member could have attended a subsequent

meeting).     See Ibid.10   Thus, any premise that Chase and Aucoin

satisfied their G. L. c. 268A, obligations lies in at least some

doubt.

    We also question the judge's conclusion that Nantasket's

being in default necessarily rendered any bad faith by authority

officials beside the point.      To be sure, we agree that the


    10
       Compare Attorney Gen. v. Department of Pub. Util., 390
Mass. 208, 215-216 (1983) (approving use of rule to avoid
deadlock even where presence of a quorum was not an issue);
Boston Retirement Bd., 441 Mass. at 85 (approving use of rule
even though filling vacant board seat by the governor could have
provided a quorum).
                                                                    15


authority had no obligation to renegotiate the terms of the

contract or to sit idly by once Nantasket defaulted (especially

where Nantasket conceded that it could not bring itself in

compliance due to the collapse of the housing market).     At the

same time, the authority's decision to terminate the LDA was a

discretionary one, and parties to a contract cannot exercise

such discretion based on improper motives.11   See Anthony's Pier

Four, Inc. v. HBC Assocs., 411 Mass. 451, 473 (1991).     It is of

course axiomatic that public officials should not be exercising

their authority to promote their own financial interests.

     Our recognition of these principles creates a potential

conundrum about how to proceed.    On one hand, the case law

teaches that courts are to apply a markedly strong presumption

that public officials act in good faith, and it casts a

jaundiced eye toward judicial inquiries into what really

motivated the official action.12   See, e.g., LaPointe v. License


     11
       Put differently, the authority's right to terminate the
LDA (based on Nantasket's breach) does not necessarily immunize
its exercise of that right from any scrutiny.
     12
       This is a case where the plaintiff is challenging the
motives behind otherwise valid government action; it is not one
where the government actions themselves were improper. Compare
Judge Rotenberg Educ. Center, Inc. v. Commissioner of the Dept.
of Mental Retardation (No. 1), 424 Mass. 430, 451-459 (1997).
In that vein, it cannot be said that the authority unfairly
terminated the LDA in order to put itself in a better position
than had both parties performed. Instead of receiving a total
purchase price of $3,375,000 and the housing and park
development that it desired, the authority was left with only
                                                                     16


Bd. of Worcester, 389 Mass. 454, 459 (1983); Brennan v. The

Governor, 405 Mass. 390, 397-398 (1989).   Such presumptions

serve to avoid interference with the democratic process.13      In

this regard, we note that the voters of Hull may have elected

Chase and Aucoin to the authority's board precisely because of

their opposition to the project.   On the other hand, the

presumption that public officials act in good faith is not

irrebuttable, and there are exceptional cases where courts have

invalidated an otherwise valid public action based on proof that

the "dominant reason" the action was undertaken was an improper

one.    See, e.g., Pheasant Ridge Assocs. Ltd. Partnership v.

Burlington, 399 Mass. 771, 777-780 (1987) (invalidating the

taking of land for a public park, done pursuant to a town

meeting vote, where the manifest purpose behind this was to

block low or moderate housing at the site).   Nantasket argues

that because the summary judgment record allows the inference

that the board members made their decision to terminate the LDA



$857,000 as liquidated damages while having to restart the
development process from scratch in the midst of an anemic
housing market.
       13
        In one case, we commented that a court would not set
aside a legislative act even upon proof that all of the
affirmative votes were induced by bribery. See Knowles v. Codex
Corp., 12 Mass. App. Ct. 493, 498 (1981). The Supreme Judicial
Court has cited this dicta, although in a manner that leaves in
some doubt its own views of the principle. See Pheasant Ridge
Assocs. Ltd. Partnership v. Burlington, 399 Mass. 771, 776-778
(1987).
                                                                    17


for an improper reason, the ethical issues could not be resolved

as a matter of law.

       For purposes of resolving Nantasket's contract-based

claims, it is important to keep in mind that it is the authority

that was the party to the LDA, not individual board members.

Municipal redevelopment authorities are liable in contract and

tort "in the same manner as . . . private corporation[s]," and

their officers and agents are, in the same fashion as those of

private corporations, generally not personally liable in tort or

contract.    G. L. c. 121B, § 13, inserted by St. 1969, c. 751,

§ 1.   As the Supreme Judicial Court has held in the context of a

private corporation, individual board members' conflicts of

interest are not imputed to actions taken pursuant to a valid

vote of the board.    See Estate of Moulton v. Puopolo, 467 Mass.

478, 482, 488-489 (2014) (noting that the acts of the

corporation's board by valid vote and those of the corporation

are "one and the same" even where individual board members face

conflicts of interest).    Absent evidence of bad faith on the

part of the authority as a contracting entity, Nantasket cannot

be heard to claim that the termination amounted to a bad faith

breach warranting damages.

       This did not leave Nantasket without a potential remedy for

any ethical breaches by individual board members.   However, to

follow such remedies, Nantasket would have had to file a
                                                                   18


complaint with the commission alleging violations of G. L.

c. 268A.   See G. L. c. 268B, § 4(a) (governing the filing of

verified administrative complaints with the commission).

Compliance with State ethical rules is now overseen by the

commission.   See Doe v. State Ethics Commn., 444 Mass. 269, 271

(2005) (referring to the commission as "the primary civil

enforcement agency for violations of the conflict of interest

law, G. L. c. 268A," and noting that the commission is

authorized "to identify and seek redress for ethics violations

by public officials in the Commonwealth").   Thus, the commission

regulates the conduct of municipal officials, provides guidance

to them, and investigates whether they have violated their

obligations under G. L. c. 268A.   Doe, supra.   If the commission

determines that ethical breaches "substantially influenced the

action taken by any municipality in any particular matter," the

commission may order that the municipal action be "avoid[ed],

rescind[ed] or cancel[ed]. . . upon request by said municipal

agency."   Leder v. Superintendent of Schs. of Concord & Concord-

Carlisle Regional Sch. Dist., 465 Mass. 305, 311 (2013), quoting

from G. L. c. 268A, § 21(a).14   Nantasket could have raised its


     14
       Granted, invalidation of the municipal action is
available only when the municipal entity requests such relief.
However, the statute also authorizes alternative relief for a
party who has suffered damages from an ethical breach. If the
commission determines that a municipal official has "acted to
his economic advantage in violation of" certain sections under
                                                                    19


ethical concerns with the commission,15 but did not do so.16   In

the circumstances of this case, Nantasket's failure to follow

the statutorily prescribed procedures prevents it from now

asking a court to invalidate the LDA termination vote (or to

seek damages from individual board members).   See Leder, supra

at 313.   Although the remedies provided for in G. L. c. 268A,

are not exclusive, the statute "contemplates a primary role for



G. L. c. 268A, it may award damages to the municipality and
restitution to injured third parties (subject to various
conditions and limitations). Leder, supra at 311 & n.10. In
the event that the commission determines that damages exceed the
amount it is authorized to order through administrative action
($25,000), the commission "may bring a civil action against the
violator to recover such damages." G. L. c. 268A, § 21(b),
inserted by St. 2009, c. 28, § 80. Municipal officials are
protected from enforcement by the commission if they rely upon a
formal opinion from municipal counsel issued pursuant to G. L.
c. 268A, § 22, so long as certain procedures are followed. See
930 Code Mass. Regs. 1.03(3) (2012).
     15
       The filing of a verified complaint triggers a
"preliminary inquiry" into any alleged violations. G. L.
c. 268B, § 4(a), inserted by St. 1978, c. 210, § 20. If there
is "reasonable cause for belief" that a violation has occurred,
the commission may, upon a majority vote, initiate an
adjudicatory proceeding. G. L. c. 268B, § 4(c), inserted by St.
1978, c. 210, § 20.
     16
       Nantasket did not raise its ethical concerns with the
commission after the 2011 termination vote. Nor did Nantasket
prior to that vote ever seek any judicial or administrative
adjudication whether the potentially conflicted board members
could participate in matters related to the project. Compare
Graham v. McGrail, 370 Mass. 133, 136-137 (1976) (concluding --
in a case that arose before the commission was created -- that a
declaratory judgment action was available for one member of a
school committee to address the application of G. L. c. 268A,
§ 19). The extent to which Nantasket could have obtained such
relief here is not before us.
                                                                  20


the commission."   Leahy v. Local 1526, Am. Fedn. of State,

County, & Mun. Employees, 399 Mass. 341, 378 (1987).   In the

case before us, there are numerous unresolved issues surrounding

whether, and to what extent, individual board members violated

the governing statute by participating in the board's vote.

Resolution of those issues "requires the application of the

[commission's] expertise."   Id. at 350.   To the extent Nantasket

wanted to rely on the alleged ethical breaches to make out its

contract claim, it should have brought the issues to the

commission in the first instance.

     2.   Merits of Nantasket's other contract-related claims.

Stripped of this ethical overlay, resolution of Nantasket's

underlying contract claims is relatively straightforward, at

least based on the arguments that Nantasket raised.

     a.   Nantasket's obligation to renew the Extension Deposit

payments.17   Once the zoning appeal was dismissed, the authority

took the position that the Appeals Termination Date had been

reached (there being at that moment no pending appeals) and that

Nantasket's duty to pay additional Extension Deposits resumed


     17
       As noted, the authority also terminated the LDA on the
grounds that Nantasket was not diligently pursuing remaining
permit approvals. The motion judge correctly concluded that
there was a dispute of material fact regarding that issue.
Therefore, like the motion judge, we will focus on Nantasket's
compliance with the obligation to resume paying the Extension
Deposits.
                                                                   21


ninety days later (August 3, 2010).18   Nantasket never argued in

the trial court, nor does it argue on appeal, that this

interpretation was incorrect.19   To the contrary, Nantasket

itself stated in its appellate brief that "[u]nder the LDA, as

then amended, additional $122,500 deposits were due every three

months beginning on August 3, 2010."    Therefore, any argument

that the Appeals Termination Date did not run when the zoning

appeal was dismissed has been waived.

     b.   Whether Nantasket's failure to pay the Extension

Deposits was excused.   It is undisputed that Nantasket did not

make the Extension Deposit payments due on August 3, 2010,

November 3, 2010, and February 3, 2011.   Nantasket nevertheless

maintains that it was not in breach, because its conduct was

excused by the authority's own material breach of the contract.

See Prozinski v. Northeast Real Estate Servs., LLC, 59 Mass.

App. Ct. 599, 610 (2003).   Specifically, Nantasket points to the

fact that although the authority's board approved a second


     18
       Strictly speaking, ninety days after the dismissal of the
zoning appeal on May 3, 2010, would have been August 1, 2010,
but the record reflects that both parties consistently treated
"ninety days" as meaning three months.
     19
       As noted, the term Appeals Termination Date was defined
by reference to "the final disposition . . . of all appeals
challenging or appealing the issuance of any Approval." See
note 3, supra, for full text. Even after the zoning appeal was
dismissed, various approvals remained outstanding, thus allowing
opportunities for additional appeals to be filed.
                                                                   22


amendment to the LDA on August 3, 2009, it subsequently failed

to execute a formal amendment to the LDA memorializing that

vote.20   To be sure, the authority's actions in this regard lie

unexplained in the summary judgment record.21   However, also

missing is any proof that the authority's failure to execute the

second amendment played any material role in Nantasket's

unwillingness or inability to resume making the required

Extension Deposits.   In fact, nowhere in the pointed exchanges

between the parties leading up to the termination of the LDA is

there any reference whatsoever to the authority's refusal to

execute a formal second amendment; the parties' discussion

instead had turned to a potential third amendment to overhaul

the original agreement.   Under these circumstances, Nantasket




     20
       Nantasket also argues that that the authority directly
repudiated the second amendment to the LDA. Its evidence of
this is that in its letter of October 4, 2010, the authority
offered to extend the closing until November 9, 2014 (which fell
eight months before the July 9, 2015, Outside Closing Date
already approved by the board in its vote on the second
amendment). However, there is no direct conflict between the
authority's offer and the second amendment, which modified only
the Outside Closing Date, not the actual date that the closing
was supposed to take place.
     21
       Because Nantasket did not conduct any discovery before
the discovery deadline lapsed, it largely has itself to blame
for the relatively thin state of the summary judgment record.
The judge did not abuse his discretion in declining Nantasket's
request to extend the discovery deadline.
                                                                  23


has failed to offer sufficient proof -- even for purposes of

summary judgment -- that its nonperformance was excused.22

     c.   Whether the parties suspended their termination rights.

Nantasket also argues that even if its own breach allowed the

authority to terminate the LDA and retain the deposit, the

authority implicitly suspended its right to do so while it was

negotiating a third amendment to the LDA.   Once the authority

engaged in such negotiations, Nantasket maintains, it owed

unequivocal notice that negotiations had ended and a reasonable

time to cure any deficiencies before terminating the LDA.     See,

e.g., Church of God in Christ, Inc. v. Congregation Kehillath

Jacob, 370 Mass. 828, 833-834 (1976).   According to Nantasket,

such notice was critical because at the time, it had its own

right to terminate the LDA and to have all its deposits

returned.

     Nantasket's arguments are not without some force.    Once the

zoning appeal was dismissed, the parties did engage in some

substantive negotiations about remaking their original


     22
       Nantasket also argues that because Chase and Aucoin
should have recused themselves from participation, the authority
violated the contractual requirement that its execution of all
documents related to the LDA be duly authorized, valid, and
enforceable. However, on their face, the relevant documents
executed by the authority in relation to the termination of the
LDA were authorized, valid, and enforceable, and, as noted,
Nantasket has forsworn seeking to invalidate the authority's
actions based on any alleged ethical breaches by its board
members.
                                                                   24


agreement, and in that context, the authority specifically

showed some flexibility about the frequency with which further

Extension Deposits would be due.    In addition, Nantasket has

some argument that -- at least at the beginning of the

negotiations over a third amendment to the LDA -- it possessed

its own right to terminate the LDA, even if that argument could

not be characterized as strong.23

     However, the authority's position on the resumption of the

Extension Deposits hardened over time, with the authority making

it increasingly clear that it would terminate the LDA if the

Extension Deposits were not paid as previously agreed.     At least

by the authority's January 11, 2011, letter, it had taken that

issue off the table.   To the extent that the authority had an

obligation to provide unequivocal notice that Nantasket was in

default and faced forfeiture of its deposit, the authority

satisfied that obligation.   If Nantasket felt it still retained

its own right to terminate the LDA, this was the time to


     23
       In the relevant time period, no permit appeals were
pending (Nantasket having elected to defend and having
successfully defended the zoning appeal), and there does not
appear to have been a pending "Local Permit Problem" (as that
term was defined in the LDA) even though Nantasket still had to
secure some additional local approvals. Nantasket's strongest
argument appears to be that the title issues it identified had
not fully been cured. Because Nantasket did not terminate the
LDA within the relevant Title Inspection Period, its ability to
make such an argument depends on its related contention that the
authority, by its conduct, had implicitly agreed to extend that
period. Compare McCarthy v. Tobin, 429 Mass. 84, 88-89 (1999).
                                                                  25


exercise it.   Alternatively, Nantasket could have tried to

negotiate a standstill agreement to let negotiations continue.

It chose to pursue neither option, and cannot now be heard to

claim that the authority's actions were procedurally unfair.

     d.   Liquidated damages.   Finally, Nantasket argues that the

authority's retaining the $857,500 as liquidated damages cannot

stand because the sum is so disproportionate to the authority's

actual damages that it amounts to an unenforceable penalty.      See

NPS, LLC v. Minihane, 451 Mass. 417, 419-420 (2008).   A

contractual liquidated damages provision is entitled to a

presumption of validity, especially where, as here, it was

negotiated between two sophisticated parties.   The party seeking

to invalidate a liquidated damages provision bears the burden of

proving that it is unenforceable, and "we resolve reasonable

doubts in favor of the aggrieved party" (here, the authority).

Ibid.   "A liquidated damages provision will usually be enforced,

provided two criteria are satisfied:   first, that at the time of

contracting the actual damages flowing from a breach were

difficult to ascertain; and second, that the sum agreed on as

liquidated damages represents a 'reasonable forecast of damages

expected to occur in the event of a breach.'"   Ibid., quoting

from Cummings Properties, LLC v. National Communications Corp.,

449 Mass. 490, 494 (2007).
                                                                   26


    At the time the parties executed the LDA, trying to

calculate the amount of damages that the authority would suffer

from a breach by Nantasket was inherently difficult, as a matter

of both theory and practice.   Therefore, the first criterion of

the two-part test is easily satisfied.   The difficulty in

predicting such damages makes the second prong challenging to

apply.   Without attempting to demarcate the boundaries of what

forecast would be reasonable in these circumstances, we agree

with the motion judge that Nantasket has not met its burden of

showing that the liquidated damages due here (which in this

case, amounted to some twenty-five percent of the purchase price

of the land) were so disproportionate to predictable actual

damages as to amount to an illegal penalty.

    Nantasket emphasizes that under the LDA, additional

Extension Deposits of $122,500 were to accrue every three

months, which allowed rapid escalation of potential liquidated

damages as any delays mounted.   However, passing over the

foreseeability of such delays (especially by a developer that

sold itself as being experienced in overcoming regulatory

hurdles), we note that the authority reasonably agreed to

suspend the payment of additional Extension Deposits for over

three-and-one-half years while the zoning appeal was pending.

In fact, the last deposit payment that Nantasket ever made came

on October 9, 2006 (just three months after the originally
                                                                   27


contemplated closing date).   Moreover, the record makes plain

that the dominant problem that caused Nantasket to default on

its obligations was not the delay per se, but the intervening

collapse of the real estate market.     In sum, Nantasket cannot

claim any substantive unfairness in the enforcement of the

liquidated damages provision to which it freely agreed.

    Conclusion.   For the reasons set forth above, we affirm the

judgment.

                                      So ordered.
