          United States Court of Appeals
                       For the First Circuit


No. 11-1057

                        BACK BAY SPAS, INC.,

                       Plaintiff, Appellant,

                                 v.

                     441 STUART MARKETING, LLC,

                        Defendant, Appellee,

               FEDERAL DEPOSIT INSURANCE CORPORATION,
                  as Receiver for Corus Bank, N.A.,

                     Necessary Party, Appellee,

                 441 STUART STREET ASSOCIATES, LLC;
                  441 STUART STREET -- VEF V, INC.,

                            Defendants.


          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

              [Hon. Rya W. Zobel, U.S. District Judge]



                               Before

              Lipez, Selya and Howard, Circuit Judges.




     Sander A. Rikleen, with whom Mark R. Vernazza and Edwards
Angell Palmer & Dodge LLP were on brief, for appellant.

     Lawrence M. Kraus, with whom Emily M. Kelley and Foley &
Lardner LLP were on brief, for appellee.

     J. Scott Watson, with whom Sara A. Laroche, David E. Lurie and
Lurie & Krupp, LLP were on brief, for necessary party/appellee.



                         August 14, 2012
           LIPEZ, Circuit Judge.       Appellant Back Bay Spas, Inc.

("Back Bay"), seeks specific performance of a contract -- termed

the "Letter Agreement" -- giving it the right to purchase the space

it occupies in a building slated for conversion to condominium

units.   Three factors complicate the scenario: (1) the other party

to the Letter Agreement needed the written consent of its mortgage

bank for the sale, but no such writing exists; (2) that would-be

seller no longer owns the condominium property, having lost it in

a foreclosure sale; and (3) the current owner, appellee 441 Stuart

Marketing, LLC ("Marketing"), is a subsidiary of the lender, Corus

Bank ("the Bank").

           The district court found no basis for enforcing the

Letter   Agreement   against   Marketing.     It   concluded   that   a

Massachusetts statute imposing obligations on lenders taking over

condominium developments after a foreclosure was inapplicable, see

Mass. Gen. Laws ch. 183A, § 22, and it rejected Back Bay's claim

that it was entitled to specific performance because the Bank had

consented to the deal by its conduct and silence.     On appeal, Back

Bay does not challenge the adverse ruling on consent, arguing only

that the court erred in concluding that § 22 does not require

Marketing to carry out the Letter Agreement. Thus, in effect, Back

Bay argues for the first time on appeal that the Letter Agreement

is enforceable without the Bank's consent.     This new theory is not




                                 -3-
only undeveloped, but, more importantly, it is too late. Hence, we

affirm summary judgment for Marketing.

                                       I.

           We review the district court's grant of summary judgment

de novo, taking the facts and any reasonable inferences drawn from

them in favor of the non-moving party.               Barry v. Moran, 661 F.3d

696,   702-03   (1st   Cir.   2011).         Here,   the   material   facts   are

undisputed.

A. Factual Background

           Appellant Back Bay has operated a women's health club at

441 Stuart Street in Boston since 1995, renting its space under a

long-term lease that is renewable through 2025.                In May 2004, a

developer – 441 Stuart Street Associates, LLC ("Associates") –

purchased the building and subsequently obtained a zoning variance

allowing the premises to be converted into mixed-use condominium

units.   Back Bay appealed the variance in April 2005, and, after

lengthy negotiations with Associates, agreed to drop its objections

to the redevelopment project in exchange for Associates' promise to

sell it a unit, identified as "Commercial Unit B," that essentially

consists of the space the health club occupies.                  Their "Letter

Agreement," signed in October 2005, called for the parties to enter

into a separate purchase and sale agreement within twenty-one days,

and it set a closing date for seventy-five days later, i.e., in

early January 2006.


                                       -4-
            Under    its   construction      mortgage   and    related      loan

agreement with Corus Bank, Associates was required to obtain the

Bank's written consent for a sale of any condominium unit at 441

Stuart Street.      See Mortgage, § 2; Loan Agreement, §§ 10.6, 11.6.1

The Loan Agreement also specified a minimum sales price for the

building's    retail    units   that    is   higher   than    the   price   for

Commercial Unit B stated in the Letter Agreement.             See Plaintiff's

Response to 441 Stuart Marketing, LLC's Statement of Undisputed

Material Facts ("Plaintiff's Response"), ¶¶ 30, 31. That deviation

from the Loan Agreement's terms also required written approval from

the Bank.    Id. ¶ 32; see also Loan Agreement § 15.6(a) ("No waiver

of any provision of this Agreement or any other Loan Documents

shall be effective unless set forth in writing signed by Lender

. . . .").       Despite these explicit limitations on Associates'



     1
        The mortgage document, titled Construction Mortgage,
Security Agreement, Assignment of Rents, and Fixture Filing
("Mortgage"), includes a provision, titled "Prohibition on Sale,"
stating that no sale of any portion of the building is permitted,
but that

     Lender may, in its sole discretion, consent to a sale
     . . . and expressly waive this provision in writing to
     Borrower . . . . Lender's ability to consent to any sale
     . . . implies no standard of reasonableness in
     determining whether or not such consent shall be granted
     and the same may be based upon what Lender solely deems
     to be in its best interest . . . . [A]ny sale . . . of
     . . . the Premises . . . made, created or permitted in
     violation of this provision shall be null and void
     . . . .

Mortgage, § 2.

                                       -5-
authority to carry out the deal outlined in the Letter Agreement,

that Agreement did not mention the need for consent and no document

showing the Bank's approval was obtained.

            Back Bay, however, was aware of the consent requirement.

Its president, Mark Harrington, acknowledged in an affidavit that

he had been repeatedly told during the negotiations leading to the

Letter Agreement that Associates "could not enter into the Letter

Agreement or agree to terms we were negotiating without approval of

Corus Bank."      In addition, in August 2004, more than a year before

the parties       completed   that agreement,      Back Bay    had    signed a

Subordination,       Non-Disturbance    and     Attornment   Agreement    ("the

SNDAA") with Associates and the Bank that referenced the mortgage.

The SNDAA stated that Back Bay's lease would be subordinated to the

mortgage, but it protected the health club's rights under the lease

and provided that a foreclosure on the mortgage would not terminate

the lease.     See Plaintiff's Response, ¶ 18.         Back Bay thus had at

least constructive notice of the written consent requirement, as

contained    in    the   publicly    recorded    mortgage,   well    before   it

challenged     the    variance   and    negotiated    the    settlement    with

Associates.       The Loan Agreement is specifically referenced on the

first page of the Mortgage.

            Harrington further stated in his affidavit, however, that

he had been assured by Associates that the Letter Agreement had

been approved by the Bank.          He asserted that Back Bay had "relied


                                       -6-
upon these assurances and Corus Bank's silence in agreeing to

settle the Zoning Appeal."           He continued:

            Back Bay Spas would not have executed the
            Letter Agreement and dismissed the Zoning
            Appeal if there was any doubt as to Corus
            Bank's   assent  or   as  to   conveyance of
            Commercial Unit B free and clear of the Corus
            Bank mortgage.

It is undisputed that the Bank was aware of the negotiations

leading   to   the   Letter    Agreement      and    that      the   Bank     official

responsible for the project had reviewed an unsigned version of the

contract,   but   there   is    no    evidence      in   the    record      that   Bank

officials ever directly communicated with Back Bay.                  See Defendant

441 Stuart Marketing LLC's Response to Plaintiff's Statement of

Additional Material Facts ("Marketing Response"), ¶¶ 70 (Response),

79 (Response); Affidavit of Paul Carlson, ¶ 12; Carlson Deposition,

at 25.

            Beginning with Back Bay's challenge to the variance,

Associates encountered serious difficulties in moving forward with

the condominium      project.        See   Marketing      Response,      ¶¶    68,   73

(Response); Plaintiff's Response, ¶ 43. Associates' loan agreement

originally required it to obtain the necessary permits and begin

construction by March 31, 2005, but the developer's inability to

obtain a variance until Back Bay withdrew its appeal delayed

issuance of a building permit and, consequently, there was neither

a permit nor a construction contract at the time the Letter

Agreement was signed in October 2005.               See Plaintiff's Response,

                                        -7-
¶¶ 10, 43; Marketing Response, ¶ 68.           In addition, because of the

project delays, the Bank had stopped advancing funds on the loan in

the summer of 2005.      Plaintiff's Response, ¶ 24.

            The building permit eventually issued in March 2006, and

Associates recorded the condominium master deed in June 2006. Both

events occurred well after the January closing date specified in

the Letter Agreement for Back Bay's purchase of Commercial Unit B.

As   time passed,      various   disputes     arose between Back          Bay   and

Associates about terms of the Letter Agreement, including the delay

in   the   closing.      See    Plaintiff's    Response,     ¶   52;   Marketing

Response, ¶ 96.

B. Litigation Background

            In September 2006, Back Bay filed this action in a

Massachusetts state court seeking specific performance of the

Letter Agreement and breach of contract damages against Associates;

Associates filed a counterclaim seeking rescission of the Letter

Agreement.      Back    Bay's    complaint    also    alleged    violation       of

Massachusetts' deceptive business practices act, Mass. Gen. Laws

ch. 93A, against Associates and a related entity.2                The Bank was

named as a necessary party for the specific performance claim.

            Meanwhile,    Associates'       plans    for   441   Stuart    Street

remained unrealized.       Although the maturity date for Associates'



      2
      Defendant 441 Stuart Street – VEF V, Inc. is a part owner of
Associates.

                                      -8-
loan was extended three times, the Bank declared the developer in

default in early 2009 and foreclosed on the mortgage in April 2009.

After the Bank was the winning bidder at a public auction, it

created a subsidiary, 441 Stuart Marketing, LLC ("Marketing"), to

take title to the property.    Back Bay then amended its complaint to

add a count of specific performance against Marketing.        The Bank

subsequently failed, and the Federal Deposit Insurance Corporation

("FDIC") was appointed receiver.        After the FDIC was substituted

for the Bank as a necessary party in the litigation, the agency

removed the lawsuit to federal court.

          Shortly thereafter, Marketing moved for summary judgment

on the ground that the foreclosure sale had extinguished any rights

Back Bay held under the Letter Agreement with Associates.       In its

response, Back Bay argued, inter alia, that Marketing was required

to honor the Letter Agreement based on a Massachusetts statute

providing that a lender taking over a condominium development must

assume "any obligations the developer has with the unit owners and

to the tenants."   See Mass. Gen. Laws ch. 183A, § 22.       Back Bay

contended that summary judgment was improper "because genuine

issues of material fact exist as to whether Stuart Marketing and

Corus Bank are the lender taking over the project" within the

meaning of section 22.        Plaintiff's Opposition to 441 Stuart

Marketing, LLC's Motion for Summary Judgment, at 8.




                                  -9-
            The district court rejected the applicability of section

22 and granted judgment for Marketing.                 It held that Back Bay's

interest in Commercial Unit B was junior to the Corus mortgage and,

under ordinary real estate principles, the commitment to sell the

unit did not survive the foreclosure.                 Section 22 did not modify

the generally applicable principles in the circumstances of this

case, the court concluded, because Back Bay's allegations did not

arise from its tenancy and it was not a unit owner.                   See Opinion at

6 ("Back Bay does not allege any breach of its rights as a tenant,

and the company brings this lawsuit because it is not a unit

owner.").

            The court also rejected Back Bay's argument, based on the

principle of equitable estoppel, that the Letter Agreement was

enforceable    because       the   Bank     had    consented     to   the     sale   of

Commercial Unit B by its silence.                 The court pointed to multiple

factors undermining the assertion of consent-by-silence: (1) the

explicit requirements for written consent in the Loan Agreement and

Mortgage,    (2)    Associates'      verbal        disclosure    of     the   consent

requirement,       (3)   a     purchase     price    for   the    unit      that     was

"substantially below the minimum price specified in the Loan

Agreement,"3    (4)      the     absence     of     evidence     that    "the      Bank



     3
       It is undisputed that the price was "approximately 30% below
the lower threshold price at which the Bank could not unreasonably
withhold consent." Plaintiff's Response to 441 Stuart Marketing,
LLC's Statement of Undisputed Material Facts, at ¶ 31.

                                          -10-
affirmatively communicated its consent, in writing or otherwise,"

and (5) Associates' acknowledgment of the lack of consent in

correspondence with the Bank in July 2006 – nine months after the

Letter   Agreement    was   signed.4      The   court   further   cited   the

"significant,   and     ultimately     insurmountable,      obstacles"     to

completion of the condominium project, including the Bank's cutoff

of loan funds and the lack of a building permit or construction

contract, which made it "unreasonable for plaintiff to infer

consent from silence."

           The district court's order also addressed a motion to

dismiss filed by the FDIC.         In granting the motion, the court


     4
       The July 2006 letter, signed by attorney Jonathan Gold for
Associates, stated that the Master Deed for the condominium project
had been filed without the Bank's consent, "on an emergency basis,"
because of ongoing negotiations with Back Bay about the parties'
mutual obligations under the Letter Agreement and Back Bay had been
pressing for a firm closing date. Gold also stated:

     Obviously, the sale of Commercial Unit B also requires
     the Lender's consent.    You have our assurances that
     Commercial Unit B will not be sold without first
     obtaining the Lender's consent to the transaction.

The record contains an affidavit from the Bank official primarily
responsible for the project, Paul Carlson, acknowledging awareness
of the negotiations leading to the Letter Agreement and stating his
belief that Associates "would, in advance of executing the purchase
and sale agreement described in the Letter Agreement, make a formal
request to the Bank for approval of the transaction described in
the Letter Agreement." Carlson Affidavit, ¶¶ 12, 13. Carlson also
testified in deposition that the Bank was never asked to approve or
reject the Letter Agreement. He did, however, acknowledge that he
had seen an unsigned draft of the Agreement, but that the Bank had
neither objected to it nor given approval, and he stated that the
Bank "did not dissent or approve or object [to]" any of the terms
in the final version of the document.

                                   -11-
explained that the government agency was no longer a necessary

party in light of the judgment in favor of the current property

owner, Marketing.   The court subsequently denied Back Bay's motion

for reconsideration, as well as its request that the court certify

to the Massachusetts Supreme Judicial Court a question concerning

the application of section 22.    After the district court entered

final judgments in favor of Marketing and the FDIC, see Fed. R.

Civ. P. 54(b),5 Back Bay filed this appeal challenging the judgment

for Marketing.6

                                 II.

          On   appeal,   Back   Bay    focuses   on   section   22,   the

Massachusetts statute imposing successor liability on lenders who

foreclose on, and take over, condominium developments.          In full,

the provision states:

          § 22. Foreclosure of condominium development;
          liability of lender and developer

          In the event of a foreclosure upon a
          condominium development, the lender taking
          over the project shall succeed to any
          obligations the developer has with the unit


     5
       In granting those judgments before the entire case was
resolved, the district court noted that the remaining claims
against Associates for breach of contract and violation of chapter
93A were "different in kind and scope from those against the other
parties."
     6
       Back Bay has not appealed the FDIC's dismissal from the
case, but such a challenge would in any event have been unavailing
given our disposition. We note that the FDIC's departure from the
action does not divest the federal court of jurisdiction.      See
Destfino v. Reiswig, 630 F.3d 952, 958 (9th Cir. 2011).

                                 -12-
           owners and to the tenants, except       that the
           developers shall remain liable          for any
           misrepresentation   already   made     and   for
           warranties on work done prior to the   transfer.

Mass. Gen. Laws ch. 183A, § 22.      Back Bay argues that Marketing

must provide specific performance of the Letter Agreement because

the circumstances here plainly fit within the language of the

statute:   Marketing (1) is effectively a lender, as it stands in

the shoes of its parent, Corus Bank; (2) it has taken over the

condominium project; and (3) the Letter Agreement is an obligation

to a tenant, i.e., Back Bay.      The district court took issue with

Back Bay's showing on the third of these elements, observing that

the statute did not apply because Back Bay had failed to "allege

any breach of its rights as a tenant."

           Even if the district court were wrong about the statute's

scope, Back Bay's claim for specific performance would founder. It

is undisputed that the Bank's written consent was a prerequisite

for the conveyance of Commercial Unit B to Back Bay.         Back Bay's

response to Marketing's motion for summary judgment acknowledged

that requirement, and Back Bay forcefully argued that the Bank

manifested consent through its actions and silence.7       Back Bay lost


     7
        In its Opposition    to    Marketing's    Motion   for   Summary
Judgment, Back Bay stated:

     Corus Bank had the right to approve or reject the
     proposed sale of Commercial Unit B contained in the
     Letter Agreement . . . , and as Corus Bank acknowledged,
     the price of Commercial Unit B was material to the Bank
     since it constituted part of the Bank's collateral

                                  -13-
that argument, however, and it does not appeal the adverse ruling.

Indeed, its opening brief entirely ignores the issue of consent and

focuses solely on whether the Letter Agreement is an obligation to

a tenant covered by § 22.        For the first time in its reply brief,

Back Bay asserts that Marketing can be ordered to abide by the

Letter Agreement in the absence of the Bank's consent because the

Agreement does not itself record the consent requirement.

              But having chosen its theory of the case below, and

failed, Back Bay cannot start over. See Sotirion v. United States,

617 F.3d 27, 39 n.10 (1st Cir. 2010) ("It is a bedrock rule that

when a party has not presented an argument to the district court,

she may not unveil it in the court of appeals." (quoting United

States   v.    Slade,   980   F.2d   27,   30   (1st   Cir.   1992)   (internal



     . . . . Nevertheless, Corus Bank never objected while
     the parties changed their positions and Back Bay Spas
     began to spend considerable sums in anticipation of its
     purchase of Commercial Unit B . . . .      These actions
     evidence Corus Bank's consent to settlement of the Zoning
     Appeal, the Letter Agreement and the parties' performance
     thereunder, and the condominium master deed. . . . By
     its conduct, Corus Bank provided its consent to all terms
     of the Letter Agreement, including the sale price and any
     requirement associated with it.

Opposition, at 9-10. In a separate section of the Opposition, Back
Bay argued that the Bank "[r]epresented its [c]onsent to the Letter
Agreement by its [c]onduct and [s]ilence." Id. at 12. Back Bay
further stated that it "would not have executed the Letter
Agreement and dismissed the Zoning Appeal if it had any doubt as to
Corus Bank's assent" and argued that "Corus Bank's own conduct and
its silence amount to misrepresentations concerning its intent to
forgo some of its contractual and property rights in order to
facilitate the development of the Premises." Id. at 13.

                                      -14-
quotation marks omitted)); Teamsters, Local No. 59 v. Superline

Transp. Co., 953 F.2d 17, 21 (1st Cir. 1992) ("If any principle is

settled in this circuit, it is that, absent the most extraordinary

circumstances, legal theories not raised squarely in the lower

court    cannot   be       broached    for   the    first      time       on   appeal.").

Moreover, Back Bay does not explain why the consent requirement

should suddenly be deemed unenforceable despite both parties'

previously undisputed understanding that it was a necessary element

of the transaction.           Contrary to Back Bay's assertion, the mere

fact that the Letter Agreement does not contain an explicit consent

provision is an insufficient basis for cancelling the requirement.

Massachusetts law allows such prerequisites to be implied from the

circumstances. See Rizika v. Donovan, 695 N.E.2d 1097, 1101 (Mass.

App.    Ct.   1998)    ("In       order   for   performance          to    depend    on   the

occurrence of a condition, the condition must be expressed, unless

a   court     implies       the    existence       of   the    condition          from    the

circumstances         of     the    contract.").              Back        Bay's     repeated

acknowledgment that the Bank's consent was a condition for the

conveyance of Commercial Unit B is reason enough to imply such a

requirement in the Letter Agreement.                    See Mass. Mun. Wholesale

Elec. Co. v. Town of Danvers, 577 N.E.2d 283, 289 n.5 (Mass. 1991)

("Extrinsic evidence of a condition precedent must indicate a clear

intent which is expressly stated." (citing Tilo Roofing Co. v.

Pellerin, 122 N.E.2d 460, 462 (Mass. 1954), and noting in a


                                           -15-
parenthetical describing Tilo Roofing that an "express condition

[was] created orally at the time of agreement").

             Back Bay's concession also eliminates any parol evidence

or statute of fraud concerns.       Neither party is seeking to vary or

modify the terms of the deal outlined in the Letter Agreement, see,

e.g., Kobayashi v. Orion Ventures, Inc., 678 N.E.2d 180, 184 (Mass.

App. Ct. 1997) ("The parol evidence rule only bars the introduction

of   prior   or   contemporaneous   written   or   oral   agreements   that

contradict, vary, or broaden an integrated writing."), or to

enforce a promise that is not memorialized in the Letter Agreement,

see, e.g., Harrington v. Fall River Hous. Auth., 538 N.E.2d 24, 29

(Mass. App. Ct. 1989) ("In order to satisfy the Statute of Frauds,

the writing must incorporate the promise that the plaintiff seeks

to enforce.").      In short, in the circumstances here, the consent

requirement did not need to be in writing to be enforceable.           See

Tilo Roofing, 122 N.E.2d at 462 ("It is settled that a condition

precedent to the taking effect of a written instrument may be shown

by parol [evidence].").8


      8
       We reject Back Bay's attempt in its reply brief to equate
the situation here to those in which courts, in the absence of
contingency provisions, have enforced contracts despite later
events that frustrated one party's expectations. Back Bay argues
that, because Associates unconditionally promised to sell
Commercial Unit B to Back Bay, Associates' failure to obtain the
Bank's consent does not relieve Associates from its promise. This
contention is a variation on its new argument that the Bank's
consent was not an element of the Letter Agreement because it was
not included in the document. As we have explained, Back Bay must
live with the view of consent presented to the district court,

                                    -16-
            Back Bay's failure on appeal with regard to Marketing

does not mean that it is inevitably without a remedy if it proves

it   was   wronged.   Back   Bay's   claims   remain   pending   against

Associates, but we take no view about their viability.           We thus

affirm the district court's grant of summary judgment for Marketing

and the FDIC.     Appellant's motion to certify a question to the

Massachusetts Supreme Judicial Court is denied.9

            So ordered.




i.e., that the Bank's consent was a known and necessary element of
the deal outlined in the Letter Agreement.
      9
       Given our conclusion that § 22 does not govern the outcome
of this case, there is no basis for certifying a question
concerning the statute's scope to the Massachusetts Supreme
Judicial Court. See Mass. S.J.C. Rule 1:03(1) (providing authority
to answer certified questions where, inter alia, "questions of law
of this state . . . may be determinative of the cause then pending
in the certifying court").

                                 -17-
