Mahmoud Chatila v. Charles Smith, III & a.

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2024-0019, Mahmoud Chatila v. Charles Smith,
III & a., the court on March 14, 2025, issued the following order:

The court has reviewed the written arguments and the record submitted
on appeal, and has determined to resolve the case by way of this order. See
Sup. Ct. R. 20(3). The defendant1, Charles Smith, III, appeals an order of the
Superior Court (Ruoff, J.) granting the plaintiff’s, Mahmoud Chatila, motion for
summary judgment seeking specific performance of an option to purchase
clause in a commercial lease. We affirm.

I. Factual Background

The following facts are supported by the summary judgment record or
were otherwise found by the trial court. On February 20, 2017, the parties
entered into a commercial lease agreement (Agreement) by which the plaintiff
leased the defendant’s property in Derry (the Property). The Agreement
provided for a term of four years ending on March 1, 2021 and a monthly
rental payment of $3,750. Paragraph 18 of the Agreement contained a
purchase option, which provided, in relevant part:

The LESSEE may exercise the option to buy the property at any
time during this term of the lease or immediately upon the
termination of the lease. The agreed upon price of the option is
$350,000 less the 50% taxes paid during the first year and any
extra payments made during the four year term of the lease.

On November 10, 2020, plaintiff’s counsel contacted then-counsel for the
defendant by email informing her of the plaintiff’s intention to exercise the
option to purchase the Property. That same day, plaintiff’s prospective lender
contacted plaintiff’s counsel and indicated that an executed purchase and sales
agreement (P&S) would be required to obtain financing for the purchase. On
November 16, counsel for the defendant contacted plaintiff’s counsel indicating
that the defendant had “no problem proceeding with [the purchase option]” and
asking for a draft P&S. Plaintiff’s counsel emailed a draft P&S to defendant’s
counsel on December 22. On January 14, February 3, and February 9, 2021,
he contacted her inquiring about the status of the contract.

1 Originally, the plaintiff named the defendant’s former spouse, Maxine Smith, as a defendant.

However, the parties agreed to dismiss her from the case after learning that she no longer
maintained an interest in the Property following her divorce.
 Throughout February and March, plaintiff’s counsel emailed defendant’s
counsel repeatedly asking about the status of the P&S without a substantive
response other than apologizing and indicating that she had not heard from the
defendant.2 In April, defendant’s counsel provided a revised P&S to plaintiff’s
counsel who promptly responded with proposed revisions to the agreement.
The defendant did not respond until June, when his counsel initially indicated
that the defendant would sign the agreement. Five days later, defendant’s
counsel informed plaintiff’s counsel that she had not received the defendant’s
approval of the revised P&S.

In July and August, plaintiff’s counsel repeatedly contacted defendant’s
counsel seeking information regarding the status of the P&S and actions
necessary to complete the transaction. In August, defendant’s counsel emailed
plaintiff’s counsel that the plaintiff had informed the defendant that “he is no
longer able to purchase the property due to a large payment to Harvard for his
child;” and she asked that he “confirm with [the plaintiff] that the sale is off
and let me know.” The next day, plaintiff’s counsel emailed defendant’s
counsel informing her that her information was inaccurate, that the plaintiff
intended to “go forward with the sale,” and asking for a response by the end of
the week. The plaintiff received no further response from the defendant or his
counsel until January 3, 2022, when a new attorney representing the
defendant contacted plaintiff’s counsel’s firm regarding the sale of the Property.

From January to August, the parties engaged in further negotiations
concerning the P&S and the defendant’s removal of personal property,
including a significant number of motor vehicles, from the Property prior to the
closing on the purchase. Frequently, the defendant did not respond to the
plaintiff’s inquiries for weeks or months. On July 15, plaintiff’s counsel
informed defendant’s new attorney that the plaintiff had sufficient funds to
purchase the Property and wished “to proceed with a cash sale.” Nevertheless,
the defendant refused or failed to respond to the plaintiff’s inquiries regarding
the removal of the defendant’s property, the precise terms of the P&S that
would regulate any post-closing removal of the personal property, or a closing
date. The record is devoid of information indicating that, during the November
2020 to September 2022 timeframe, the defendant asked for the immediate
tender of the purchase price, or that he claimed either that the purchase option
had expired or that the plaintiff was in default of the terms of the Agreement.

II. Procedural Background

The plaintiff filed a complaint in the superior court on September 27,
2022 claiming a breach of contract and seeking specific performance of the sale
of the Property and damages associated with having to continue paying rent to
the defendant after attempting to exercise his right to purchase the Property.

2 As previously noted, the original lease term expired on March 1, 2021.

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The complaint also alleged that the plaintiff had continued to pay the monthly
rent pursuant to the Agreement after it expired in March 2021.

In April 2023, the plaintiff moved for summary judgment, arguing that
there were no genuine issues of material fact as to whether the defendant
breached the Agreement. More specifically, the plaintiff alleged that “[a]fter
more than two years of intentional delay and willful breach of contract, it has
become clear that [the defendant] has acted in bad faith” and that the
defendant had “failed to offer any adequate denials or evidence to the contrary
of [his] breaches.” These circumstances, the plaintiff argued, supported his
claim for specific performance, restitution damages associated with his
continued payment of rent after he attempted to exercise the purchase option,
and attorney’s fees.

The defendant objected to the summary judgment motion, arguing that
the plaintiff “failed to certify that he was ready, willing and able to purchase the
property” under the terms of the Agreement, because the plaintiff required
financing that was contingent upon “additional items, such as an appraisal, an
environmental study and Plaintiff’s financials.” The defendant further argued
that issues of material fact remained in dispute, such as the plaintiff’s ability
and willingness to purchase the Property without contingencies, whether the
parties “came to a meeting of the minds concerning the terms and conditions of
the purchase option,” and whether the plaintiff “should be precluded from
obtaining the equitable remedy of specific performance while [the plaintiff] was
in breach of the lease.”

After a hearing on the summary judgment motion, the trial court issued
an order granting the plaintiff summary judgment, ordering specific
performance, and awarding restitution. As to liability, the court found that
“[t]he uncontroverted record overwhelmingly supports the conclusion that there
was a valid lease and contract for the sale of the [P]roperty.” With respect to
the defendant’s contention that material facts remained in dispute, the court
found that “whether the plaintiff was ‘ready, willing, and able’ to purchase the
[P]roperty” was not a “genuine issue of material fact” and whether the plaintiff
defaulted on certain terms of the Agreement was immaterial because the
“undisputed material fact remains that the lease was still valid, and the
plaintiff’s right to purchase the [P]roperty [was] never removed or rescinded,
during his tenancy.”

Based on these summary judgment findings, the court granted equitable
relief by ordering the defendant to convey the Property to the plaintiff within 30
days at a purchase price of $344,150 ($350,000 purchase price less the 50%
taxes paid during the first year of the lease and any extra payments made
during the four-year term). As to the plaintiff’s demand for restitution for the
rent he paid during the pendency of the suit, the trial court found that the
record supported that theory of recovery. The court reasoned that the

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undisputed terms of the Agreement provided the plaintiff with the right to
purchase the Property “at any time” during the lease term and he announced
his intention to exercise that right five months prior to the expiration of the
Agreement. The court found that the defendant delayed negotiations until the
plaintiff initiated this action in September 2022, nineteen months after the
lease term expired and, as a result, the defendant obtained $90,000 in rental
income after the plaintiff attempted to exercise the purchase option. The court
declined to award restitution for the fourteen months the case was pending and
deducted three months of rent, concluding that three months was a reasonable
time for the parties to meet the contingencies required to finance the purchase
and schedule a closing. Finally, the court declined to award attorney’s fees.3

The defendant filed a motion to reconsider, which the trial court denied.
This appeal followed.

III. Analysis

We review a trial court’s grant of summary judgment de novo. Szewczyk
v. Continental Paving, 176 N.H. 148, 163 (2023). When reviewing a trial
court’s grant of summary judgment, we consider the affidavits and other
evidence, and all inferences properly drawn from them, in the light most
favorable to the non-moving party. Id. If our review of the record does not
reveal any genuine issue of material fact, and if the moving party is entitled to
judgment as a matter of law, we will affirm the trial court’s decision. Id. An
issue of fact is “material” for the purposes of summary judgment if it affects the
outcome of the litigation under the applicable substantive law. Id. We have
observed that trial courts must be wary of the application of summary
judgment, but “[i]ts most effective use is in breach of written contract or debt
cases.” Id. (quotation omitted).

On appeal, the defendant maintains that the trial court erred in granting
summary judgment and ordering equitable relief because: (1) the plaintiff failed
to demonstrate that he was “ready, willing, and able” to pay the purchase price,
and the plaintiff was in material breach of the Agreement when he exercised
his purchase option and when the lease expired; (2) the plaintiff was not
entitled to a specific performance remedy because he failed to complete the
purchase immediately after the lease expired; (3) the record does not support
the trial court’s conclusion that the defendant had an incentive or intention to
delay negotiation of the P&S in order to continue receiving rental income; and
(4) the evidence did not support the trial court’s conclusion that the Agreement
and its purchase option constituted a valid contract for the sale of the Property,
and the trial court imposed additional terms upon the defendant that were not
included in the parties’ Agreement. We disagree.

3 We note that the plaintiff has not cross-appealed the trial court’s decision.

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 We first address the defendant’s claim that the plaintiff materially
breached the Agreement, first, when he attempted to exercise the purchase
option and, second, when the lease term expired. The Agreement includes a
provision relating to “Default and Bankruptcy” at paragraph 15, which provides
that the lessee is entitled to notice of any default with an opportunity to cure
any circumstance leading to a default. Our review of the summary judgment
record does not reveal any evidence that the plaintiff received any such notice
prior to the filing of this action. Moreover, as the trial court observed, the
plaintiff’s purchase option was never formally rescinded during the tenancy
based upon an alleged default. Accordingly, the defendant’s default claims do
not constitute a fact, much less a material fact, in dispute.

Nevertheless, the defendant maintains that the plaintiff failed to
demonstrate that he was ready, willing, and able to pay the purchase price.
However, the plaintiff, through his counsel, represented on multiple occasions
that he was prepared to pay the purchase price. In fact, the plaintiff informed
defendant’s counsel that he was prepared to pay the purchase price in cash in
July 2022. In response to these representations, the defendant repeatedly
engaged in dilatory tactics by not responding to the plaintiff and his counsel for
weeks or months at a time and by refusing to negotiate a P&S that would
enable the plaintiff to obtain financing for the purchase. Under these
circumstances, a party seeking to exercise a purchase option must simply
represent that he is ready, willing, and able to purchase the property. See
Lowell v. First Church of Christ, 101 N.H. 363, 366 (1958); see also Shallow
Brook Assoc’s v. Dube, 135 N.H. 40, 44 (1991) (rejecting challenge to a petition
for specific performance based upon plaintiff’s representation that it was ready,
willing, and able to close on the sale).4 On multiple occasions the plaintiff,
through his counsel, made such representations. Therefore, the defendant’s
argument is factually and legally flawed.

With respect to the defendant’s remaining arguments, our review of the
record supports the trial court’s finding that “[t]he uncontroverted record
overwhelmingly supports the conclusion that there was a valid lease and
contract for the sale of the property” and that “[t]he defendant delayed
negotiations until the suit was filed . . . 19 months after the 4-year lease term
would have expired.” The communications between the parties from November
2020 to September 2022 overwhelmingly support this finding.

To the extent that the defendant argues that, having found a breach of
the Agreement, the trial court erred by ordering specific performance, we
4 In addition, to the extent the defendant maintains that the alleged August 2021 communication

(approximately ten months after the plaintiff initially attempted to exercise the purchase option)
regarding the plaintiff’s inability to purchase the Property calls into dispute whether he was ready,
willing and able to purchase the Property, the record supports the trial court’s conclusion that
this “fact” is not material to the dispute, nor does it create a genuine issue of material fact given
that plaintiff’s counsel immediately refuted this claim the very next day.

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disagree. The propriety of affording equitable relief rests in the sound
discretion of the trial court to be exercised according to the circumstances and
exigencies of the case. See Livingston v. 18 Mile Point Drive, 158 N.H. 619,
626 (2009). We will uphold a trial court’s equitable order unless its decision
constitutes an unsustainable exercise of discretion. Id.

We cannot conclude that the trial court unsustainably exercised its
discretion by ordering specific performance and restitution. The trial court’s
equitable decree provided the parties with precisely what they bargained for
had the purchase option been consummated in a reasonably timely manner
after the plaintiff expressed his intention to do so. Accordingly, we affirm the
trial court’s summary judgment order, its grant of specific performance to the
plaintiff, and its award of restitution.

Affirmed.

MACDONALD, C.J., and BASSETT, DONOVAN, and COUNTWAY, JJ.,
concurred.

Timothy A. Gudas,
Clerk

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