U.S. District Court
Where a plaintiff has requested specific performance of its option to purchase land in Franklin, that request should be allowed, as the plaintiff acquired a valid option in a bankruptcy proceeding.
“This case involves the validity of an option to purchase land in Franklin, Massachusetts that is home to the Garelick Farms milk processing plant. The plaintiff, Dairy Farmers of America, Inc., acquired the milk processing plant in 2020 after it successfully bid for certain assets of Dean Foods Company in bankruptcy proceedings. With those assets, Dairy Farmers contends, came an option to purchase the approximately 175 acres of land in Franklin (the ‘Franklin Premises’) on which the processing plant sits. The owner of the Franklin Premises, defendant Bernon Land Trust, LLC (‘BLT’), currently leases the land to Dairy Farmers. BLT disputes that Dairy Farmers acquired a valid option to purchase the Franklin Premises through the Dean Foods bankruptcy. Consistent with that position, BLT declined to appear at the March 2022 closing after Dairy Farmers gave notice of its intent to exercise the purchase option.
“Dairy Farmers asserts two breach of contract claims against BLT. The first claim requests specific performance of the option to purchase, permitting Dairy Farmers to acquire the Franklin Premises for ten times the fixed annual rent in effect at the time of the option’s exercise. In the second claim, Dairy Farmers contends that BLT’s most recent calculation of the fixed annual rent incorrectly diverged from decades of practice and, having paid BLT’s requested rent under protest, it is owed damages. BLT has brought corresponding counterclaims for declaratory judgment. It contends that the option to purchase is invalid or, in the alternative, that ordering specific performance of the option would be inequitable and amount to an unreasonable restraint on alienation. BLT separately seeks a declaration that the new rent calculation better reflects the original intent of the parties to the lease.
“The Court held a four-day bench trial on all of the parties’ claims. For the reasons below, the Court concludes that Dairy Farmers acquired a valid option to purchase the Franklin Premises in the Dean Foods bankruptcy. Finding BLT’s equitable arguments unconvincing, the Court will grant Dairy Farmers’ request for specific performance. The Court further concludes that BLT’s most recent rent calculation amounted to a breach of contract and that Dairy Farmers is accordingly entitled to damages.”
Dairy Farmers of America, Inc. v. Bernon Land Trust, LLC (Lawyers Weekly No. 02-033-25) (113 pages) (Kobick, J.) (Docket No. 1:22-cv-10422-JEK) (Jan. 28, 2025).
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