In St. John’s Holdings, LLC v. Two Electronics, LLC, the Massachusetts’ Land Court concluded (in what appears to be a case of first impression) that a string of text messages can constitute a writing under the Statute of Frauds sufficient to bind the parties to sell certain property, writes Matthew DeVries on Burr & Forman LLP‘s Best Practices Construction Law blog.

DeVries explains in the article: The transaction involved included four drafts of a letter of intent from Buyer to Seller for purchase of a piece of property, none of which were signed by Buyer. Ultimately, Seller’s agent texted Buyer’s agent, asking him to sign the letter and provide a deposit. About two hours later, after Buyer signed the letter and provided a deposit, Buyer’s agent sent a text to Seller’s agent saying he had signed the letter of intent. The two agents met later that day to deliver and accept the letter and deposit, and the seller’s agent sent a text saying the Seller was unavailable and would respond the next day. But it was determined later that the Seller accepted a third party’s offer to purchase the property at the same time, and refused to execute and deliver the letter of intent from the original Buyer.

“The court concluded that the text message from Seller’s agent was a writing that, read in the context of the email exchanges between the parties, contained sufficient terms to state a binding contract between Seller and Buyer. In addition, the court found that the final text message contained a valid electronic signature to be ‘signed’ within the meaning of the law,” DeVries explains.

Read the article.

It is becoming common for more and more transactions to be created, negotiated, finalized and executed electronically, according to an alert from Arnall Golden Gregory LLP. From a real estate perspective, virtually all documents other than those that are being recorded are exchanged electronically.

The article addresses whether, and under what circumstances, contracts executed via the internet or otherwise are enforceable under applicable federal and state laws.

Topics covered include e-signatures, the applicability of general contract principles, and commercial real estate agreements.

The conclusion is that “it is clear that binding real estate transactions have been and will continue to be conducted via electronic transfer of signatures.”

Read the article.

When Beck Redden partner and appellate specialist Connie Pfeiffer led the charge to overturn a Fifth Circuit decision, the path to victory was nearly certain to be long and arduous, the firm said in a release.

The Fifth Circuit had just decided a critical question interpreting the Texas Constitution, holding that homeowners with constitutionally defective liens on their homestead must file suit to set the lien aside within four years of originating a home equity loan.  (See Priester v. JP Morgan Chase Bank, N.A., 708 F.3d 667, 674 (5th Cir. 2013).  Yet overturning Priester would prove challenging, because out-of-state lenders could usually remove Texas homeowner suits to federal court, where Priester was binding.

The release continues:

Beck Redden was first hired to handle a homeowner’s Fifth Circuit appeal immediately following Priester and to seek the Fifth Circuit’s certification of the Texas constitutional questions, even though the Fifth Circuit rarely certifies a question it has already decided.  The Fifth Circuit adhered to that policy, holding that it could not revisit Priester or seek the Texas Supreme Court’s guidance.  In the wake of Priester, nearly all homeowner suits were removed to federal court and promptly dismissed.

Beck Redden was then hired in one of the few cases remaining in state court.  It stepped in mid-way in an appeal before Houston’s Fourteenth Court of Appeals, but the court fell in step with the growing line of cases following Priester and dismissing homeowner claims as time-barred.

At last in the Texas Supreme Court, Beck Redden handled every aspect of the briefing, argument, and strategy.  Connie Pfeiffer authored the briefs and presented oral argument, working with her appellate partner Russell S. Post and trial lawyers Chip Lane and Anh Thu Dinh of The Lane Law Firm.

The Texas Supreme Court voted 6 to 3 to overturn the Fifth Circuit’s decision in Priester and five Texas appellate decisions reaching the same holdings (See Wood v. HSBC Bank USA, N.A. ___ S.W.3d ___ (Tex. May 20, 2016).   The Majority followed the Constitution’s plain text to hold “that liens securing constitutionally noncompliant home-equity loans are invalid until cured and thus not subject to any statute of limitations.”  The practical effect of the Supreme Court’s decision is that homeowners will not face foreclosure unless their lender has complied with the Texas Constitution to create a valid lien.  The decision upholds the Constitution’s careful protections for homeowners by ensuring that invalid liens do not become valid and enforceable merely with the passage of time.

Image created by Meredith Atwater for opensource.com

It is possible to be mistaken about the existence or terms of an agreement and for that mistake to thereby prove that no contract exists, writes Glenn West in Weil, Gotshal & Manges LLP’s Global Private Equity Watch.

As a general rule, being mistaken about whether you contracted, or what you contracted for, does not mean that a contract does not exist based upon the terms of the written agreement you signed. A party’s protestations that he or she did not understand the agreement, or believed it said something other than what it said, or that the words used in the agreement meant something other than what they are determined by a court to mean, will generally not be entertained by a court,” he wrote.

He discusses the case of Patterson v. CitiMortgage, Inc., which illustrates that “a unilateral mistake made by a party that is not made manifest to the other party will not be a basis for reformation because, absent knowledge of the mistaken belief, the other party is entitled to rely on the written agreement as manifesting the intentions of the otherwise mistaken party.”

Read the article.

Veteran real estate lawyer William “Bill” Ellis has joined Akerman LLP‘s Los Angeles office as a partner in the Real Estate Practice Group.

Ellis is former general counsel of global real estate conglomerate Reading International Inc. Prior to Reading, Ellis was a real estate partner at Sidley Austin, and he began his career at Morgan, Lewis and Bockius in Los Angeles.

“Bill is an industry veteran, who is known for his experience in complex real estate transactions for institutional investors and lenders,” said Richard Bezold, Real Estate Practice Group Chair. “He brings tremendous market knowledge in the hospitality and retail sectors, and adds important depth to our fast-growing practice in Los Angeles and across the region.”

In a release, the firm said Ellis has more than 30years of transactional real estate experience handling workouts and restructurings, leasing, acquisitions, dispositions, financings, joint ventures and developments across the United States. He works with private equity funds, global financial institutions, investment banks, real estate investment trusts, investment funds and private developers based both in New York and on the West Coast. He also has significant experience in corporate and securities transactions, including corporate mergers and acquisitions and initial public offerings.

Ellis previously served as general counsel and NASDAQ-listed Reading International Inc., the successor to Reading Railroad and now developer, owner and operator of retail and commercial real estate in Australia, New Zealand and the United States, including entertainment-themed retail centers, multiplex cinemas and live theater assets in Chicago and New York.