A New Jersey company is being sued over a Scarborough land sale that fell apart.
The federal suit alleges that SPC Acquisition agreed to buy the Spring Street property from Ira Hyundai of Marblehead, Massachusetts, last June. But as the September closing date neared, the suit alleges, SPC stopped communicating and then tried to renegotiate the price, which is not specified in the suit.
The suit claims breach of contract, intentional misrepresentation, negligent misrepresentation and interference with contractual rights. Ira Hyundai is asking the court to give it the $500,000 earnest money that SPC had put down on the property, along with damages and attorney’s fees.
According to the suit, after the two sides struck the deal in June, lawyers for both sides “communicated frequently and diligently to prepare for the closing.” But in late August, the suit states, SPC asked for a 30-day delay in the closing so it could coordinate the purchase of the Scarborough property with the sale of another property it owned.
Ira Hyundai’s lawyer agreed, but insisted that SPC increase its earnest money by $200,000 and also pay Ira Hyundai’s legal fees to change the dates on the documents. SPC countered with an offer to increase its earnest money by $100,000, but Ira Hyundai refused to budge on its request for another $200,000.
Then, the suit alleges, the lawyer for SPC stopped communicating with Ira Hyundai’s lawyer until the closing date of Sept. 7, when SPC’s lawyer agreed to increase the earnest money by $200,000, but for an extension of 60 days on the closing date instead of the original 30-day extension.
Ira Hyundai turned down the offer and went ahead with its end of the closing, the suit states, sending its signed documents to the closing agent and giving SPC an additional day to send its documents. After that failed to occur, Ira Hyundai sought the release of the earnest money, which SPC objected to while claiming that Ira Hyundai was actually in default, an allegation that the suit calls “desperate and unconvincing.”
On Sept. 21, the suit states, Ira Hyundai heard from a lawyer for SPC who said the original deal “just didn’t work” for his clients and, in a subsequent email said his clients were willing to consider “a new deal with your client on new terms” and gave Ira Hyundai two days to respond. Ira Hyundai declined to put forward a new offer and the lawyer for SPC forwarded a new proposal, which Ira Hyundai dismissed as “entirely one-sided.”
The suit alleges that SPC knew when it negotiated the original deal that a shift in interest rates could affect the value of the property and that SPC was seeking to delay the closing to put itself in a better position to renegotiate the deal.
Ira Hyundai said it planned to use the proceeds from the sale to buy property in Peabody, Massachusetts, but was forced to scuttle the deal it had there because the sale in Maine failed to go through.
The two sides unsuccessfully attempted to mediate the dispute in December, the suit states.
Messages left for lawyers for SPC and Ira Hyundai weren’t returned Wednesday.
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