Court Opinion

ID: 2962641
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:00:15.679314+00
Date Added: 2024-06-11T11:42:32.771778
License: Public Domain

USCA1 Opinion

	

                            United States Court of Appeals                            United States Court of Appeals                                For the First Circuit                                For the First Circuit                                 ____________________        No. 94-1035                                     NASCO, INC.,                                Plaintiff, Appellant,                                          v.                                PUBLIC STORAGE, INC.,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. Joseph L. Tauro, U.S. District Judge]                                            ___________________                                 ____________________                                        Before                               Torruella, Circuit Judge,                                          _____________                            Coffin, Senior Circuit Judge,                                    ____________________                              and Stahl, Circuit Judge.                                         _____________                                 ____________________            Joseph G. Abromovitz with whom Marsha  A. Morello and Abromovitz &            ____________________           __________________     ____________        Leahy, P.C. were on brief for appellant.        ___________            John P. Connelly with whom James  E. Carroll and Peabody  & Arnold            ________________           _________________     _________________        were on brief for appellee.                                 ____________________                                    July 18, 1994                                 ____________________                      STAHL, Circuit Judge.   In this appeal,  plaintiff-                             _____________            appellant NASCO, Inc., challenges the district  court's entry            of summary  judgment against  it and  in favor  of defendant-            appellee Public  Storage, Inc.  ("PSI").  NASCO  asserts that            the  court erred in concluding that a trial was not warranted            on its claims for breach of contract and unfair and deceptive            trade practices.   After conducting a  careful review of  the            record, we agree.  We therefore vacate and remand for a trial            on the merits.                                          I.                                          I.                                          __                                      BACKGROUND                                      BACKGROUND                                      __________            A.  The Facts            A.  The Facts            _____________                      In   June  1987,   NASCO,  a   closely-held  family            corporation  which had  manufactured and  distributed springs            for mattresses and  box springs, ceased business  operations.            At  the  time   NASCO  closed  down,  it  owed  Shawmut  Bank            approximately  $800,000.00.   NASCO  had been  having trouble            servicing  its debt  to Shawmut  and faced foreclosure.   Its            only  asset  of any  value  was  the Chelsea,  Massachusetts,            facility from  which  it had  operated  its business.    This            facility   was   estimated    to   be   worth   approximately            $4,000,000.00.                      In  early 1988, NASCO  retained real  estate broker            Peter  Cooney of  Coldwell  Banker to  act  as its  agent  in            marketing  the Chelsea  facility for  sale.   Soon  after the                                         -2-                                          2            property went on the  market, agents of PSI  approached NASCO            and expressed an interest in purchasing it for use as a self-            storage  facility.     In  April  1988,   PSI  offered  NASCO            approximately  $3,800,000.00 for  the  facility,  subject  to            certain  terms  and  conditions.    Negotiations  ensued  and            continued for  approximately two years.   During this period,            Shawmut  continually threatened  foreclosure,  but  held  off            because  of  the  apparent  seriousness of  the  negotiations            between NASCO and PSI.                      Throughout  the  period   of  negotiations,   other            companies,  groups,  and  individuals  expressed  interest in            purchasing the property.   PSI's interest, however,  appeared            significantly  more substantial,  as PSI  representatives (1)            repeatedly assured NASCO that PSI would purchase the property            as soon  as it acquired a permit  allowing the property to be            used  as  a  self-storage  facility;  (2)  became  personally            involved in zoning issues and land court litigation to secure            such a  permit;1 and (3) offered to meet with representatives            from Shawmut to demonstrate PSI's good  faith and interest in            acquiring the  property.   NASCO  therefore  put all  of  its            energies into finalizing a deal with PSI.                      Finally, on January 31, 1990,  following a personal            review of  the property  by certain PSI  representatives, PSI                                            ____________________            1.  Following the land court  litigation, the City of Chelsea            granted PSI a use permit on December 28, 1989.                                         -3-                                          3            signed a  purchase and  sales agreement ("the  Agreement") to            buy the  property  for $3,575,000.00.2   NASCO  countersigned            the Agreement on  February 2,  1990.  One  paragraph of  this            Agreement, reproduced below, is particularly relevant to this            litigation:                           11.    Expiration.   This  Agreement                                  __________                      shall be  of no force  or effect  unless,                      within seven (7) days after the date this                      Agreement has been executed by Seller and                      Buyer's  Real  Estate Representative,  an                      Officer,   the  Secretary   or  Assistant                      Secretary   of   Buyer,   executes   this                      Agreement on behalf of Buyer and delivers                      to   Seller  an  executed  copy  of  this                      Agreement  signed on  behalf of  Buyer by                      both its Real  Estate Representative  and                      either  the  Secretary  or  an  Assistant                      Secretary  of  Buyer,  together with  the                      [$20,000.00]   Deposit  [PSI   agreed  to                      provide upon execution of the Agreement].                      Importantly,  although  a  PSI Assistant  Secretary            signed the Agreement and thereafter delivered a copy of it to            NASCO, PSI  never provided NASCO with  the $20,000.00 deposit            referenced in paragraph 11.                      Subsequent to  the signing  of  the Agreement,  the            following pertinent events took place.  On February 12, 1990,            PSI asked NASCO to reactivate electric service to the Chelsea            property.  NASCO complied with this request.  On February 21,            1990, Thomas Bennett, NASCO's  attorney, wrote to David Dunn,            PSI's attorney,  and brought to  his attention the  fact that                                            ____________________            2.  NASCO reduced  the purchase  price from  $3,800,000.00 to            $3,575,000.00 in order to offset certain expenses incurred by            PSI during the two-year negotiation period.                                         -4-                                          4            PSI had not yet  provided NASCO with the  $20,000.00 deposit.            When Peter Cooney, NASCO's real estate agent, received a copy            of this letter, he contacted PSI representatives, who assured            him  that  the  transaction  remained  viable.    These  same            representatives told him that  "the red tape of setting  up a            development plan" had occasioned  the delay in forwarding the            deposit.   Meanwhile,  Attorney  Dunn  responded to  Attorney            Bennett's letter by informing him that the deposit "was being            worked" on by  PSI.   Attorney Dunn did  not inform  Attorney            Bennett that the deal was off at this time.                      On  or about  February  22, 1990,  PSI generated  a            mortgage  update  on the  property.   On  March 2,  1990, PSI            prepared a project analysis  for the property.  On  March 19,            1990, Attorney  Dunn wrote  to Attorney Bennett  and informed            him that PSI had "decided to terminate" the Agreement.  On or            about  that same  date, PSI  produced a  "Project Abandonment            Authorization"   which  indicated  that   the  Agreement  was            cancelled as of  March 19, 1990, and which  noted that no PSI            deposits  were at risk.   Nonetheless, on April  3, 1990, PSI            generated a second project analysis.                       On  April 13,  1990, Shawmut  learned that  PSI had            cancelled the Agreement.  Soon thereafter, Shawmut sent NASCO            a formal  Notice of Intent  to Foreclose.   On May  23, 1990,            Shawmut  held a  foreclosure  sale and  itself purchased  the            property for approximately $852,000.00.                                         -5-                                          5            B.  Proceedings Below            B.  Proceedings Below            _____________________                      On  November  9,  1992,  NASCO  filed  a  two-count            complaint against PSI, alleging that PSI had (1) breached the            Agreement;  and (2)  engaged  in unfair  and deceptive  trade            practices  in  violation  of Mass.  Gen.  L.  ch.  93A.   The            complaint   sought  more   than  $8,000,000.00   in  damages.            Jurisdiction was premised upon diversity of citizenship.                      On  October  29,  1993,  following   the  close  of            discovery, PSI  filed a motion  for summary judgment  on both            counts  of the complaint.   With regard to  NASCO's breach of            contract  claim, PSI  argued  that, under  paragraph 11,  its            failure to  pay the $20,000.00  deposit within seven  days of            signing  of  the  Agreement   unambiguously  had  caused  the            Agreement  to "expire by its own terms."  In the alternative,            PSI  asserted  that the  deposit  provision  was a  condition            precedent, and  that  its  failure to  pay  the  deposit  had            prevented  the Agreement  from coming  into existence.   With            regard to NASCO's unfair trade practices claim, PSI contended            that its conduct, even if objectionable,  would not "raise an            eyebrow  of someone  inured to  the rough  and tumble  of the            world  of commerce," and therefore did not attain "a level of            rascality" which could give rise to liability under ch.  93A.            See  Levings v. Forbes &  Wallace, Inc., 396  N.E.2d 149, 153            ___  _______    _______________________            (Mass. App. Ct. 1979)  (interpreting reach of ch. 93A,    11,            which governs unfair trade  practices claims brought by those                                         -6-                                          6            "engaged in  trade or commerce in  business transactions with            others similarly engaged").                       In  response,   NASCO  argued,  inter   alia,  that                                                      _____   ____            paragraph  11 is ambiguous as to whether PSI's failure to pay            the  deposit  either  caused   the  Agreement  to  expire  or            constituted a  failure to satisfy a  condition precedent, and            that extrinsic  evidence is  admissible to help  resolve this            ambiguity.  It then contended that the  extrinsic evidence in            this  case  demonstrates that  the  Agreement  did come  into            existence  and  did  not expire  when  PSI  did  not pay  the            deposit.    NASCO next  maintained  that  this same  evidence            created  a triable  issue  as to  whether  PSI's conduct  was            beyond the toleration  of even those  persons "inured to  the            rough  and  tumble  of  the  world  of  commerce,"  id.,  and                                                                ___            precluded summary  judgment on its  ch. 93A claim.   Finally,            NASCO  asserted that  PSI's conduct  and its  own detrimental            reliance  on  that  conduct  gave rise  to  viable  claims of            estoppel and breach of the implied covenant of good faith and            fair  dealing, and  that these  claims, while  not explicitly            pleaded in  its complaint,  were implicit in  the allegations            underlying its ch. 93A count.                          On  December  8, 1993,  the district  court granted            PSI's  summary  judgment motion.    With  respect to  NASCO's            breach  of contract  claim,  the court  declined  to look  at            NASCO's  extrinsic  evidence,  reasoning  that  paragraph  11                                         -7-                                          7            clearly and unambiguously required  payment of the deposit by            PSI for  the  Agreement to  have  continuing effect.3    With            respect to NASCO's ch. 93A claim, the court stated:  "For the            same reasons  [that NASCO's breach of  contract claim fails],            Count II of  the complaint  (the 93A claim),  which does  not            specifically allege  any misrepresentations made by  PSI, but            merely a  failure  to  comply with  the  Agreement,  is  also            without merit."    The court  did not  explicitly respond  to            NASCO's  contention that its  complaint adequately  set forth            causes  of  action for  estoppel  and breach  of  the implied            covenant of  good  faith  and  fair  dealing.    This  appeal            followed.                                         II.                                         II.                                         ___                                      DISCUSSION                                      DISCUSSION                                      __________                      NASCO's  appellate  arguments  largely  mirror  the            relevant ones made in its memorandum of law in support of its            opposition  to   PSI's  summary  judgment   motion.4    NASCO                                            ____________________            3.  It is not clear  from its memorandum of decision  whether            the court viewed the Agreement as having never been in effect            or as having expired seven days after its execution.            4.  In  its  brief,  NASCO  raises  for  the  first  time  an            alternative argument that the extrinsic evidence proves that,            subsequent to concluding the Agreement, the parties  modified            the deposit provision of paragraph  11.  Because NASCO  never            made this argument to  the district court, we will  regard it            as waived.   See FDIC  v. World Univ.  Inc., 978 F.2d  10, 13                         ___ ____     _________________            (1st  Cir. 1992)  (arguments  raised for  the  first time  on            appeal  ordinarily are deemed waived).   Of course,  if it so            desires, NASCO  may file a  post-remand motion  to amend  its            complaint   so  as   to  state   an  alternative   claim  for            modification.                                         -8-                                          8            contends that (1)  the district court  erred in granting  PSI            summary judgment  on its  breach of contract  claim; (2)  the            court erred in granting  PSI summary judgment on its  ch. 93A            claim; and (3)  the court erred  in overlooking the  estoppel            and breach of  the implied  warranty of good  faith and  fair            dealing  claims  that  inhered  in  the  allegations  in  its            complaint.  After reciting  the summary judgment standard, we            discuss each argument in turn.            A.  Summary Judgment Standard            A.  Summary Judgment Standard            _____________________________                      When presented with a motion for summary  judgment,            courts should  "pierce the  boilerplate of the  pleadings and            assay the parties' proof in  order to determine whether trial            is  actually  required."    Wynne  v.  Tufts  Univ.  Sch.  of                                        _____      ______________________            Medicine, 976  F.2d 791, 794  (1st Cir. 1992),  cert. denied,            ________                                        _____ ______            113 S. Ct. 1845 (1993).  A summary judgment motion  should be            granted   when  "the   pleadings,  depositions,   answers  to            interrogatories, and  admissions on file,  together with  the            affidavits, if any, show that there is no genuine issue as to            any  material fact and that  the moving party  is entitled to            judgment as a matter of law."  Fed. R. Civ. P. 56(c).                      "In this context, `genuine' means that the evidence            is such that  a reasonable  jury could resolve  the point  in                                             _____            favor of  the  nonmoving party,"  Rodriguez-Pinto v.  Tirado-                                              _______________     _______            Delgado, 982 F.2d 34, 38 (1st Cir. 1993)  (internal quotation            _______            marks  and  citations  omitted)  (emphasis  supplied),  while                                         -9-                                          9            "material" means that the  fact has "the potential  to affect            the outcome of  the suit under the applicable  law," Nereida-                                                                 ________            Gonzalez  v.  Tirado-Delgado, 990  F.2d  701,  703 (1st  Cir.            ________      ______________            1993).  One  should note,  however, that we  always read  the            record "in  the light  most flattering  to the  nonmovant and            indulg[e] all  reasonable inferences in that  party's favor."            Maldonado-Denis  v. Castillo-Rodriguez, No. 93-2012, slip op.            _______________     __________________            at 7, (1st Cir. May 6, 1994).  Our recitation of the facts in            this case, see supra section I-A, reflects this tenet.                       ___ _____                      Finally, our review of a summary judgment ruling is            plenary.   Garside v. Osco Drug,  Inc., 895 F.2d 46,  48 (1st                       _______    ________________            Cir. 1990).            B.  The Breach of Contract Claim            B.  The Breach of Contract Claim            ________________________________                      As  noted above,  the  district  court granted  PSI            summary  judgment on NASCO's breach of contract claim.  In so            doing, the court declined to consider any evidence beyond the            four corners of the Agreement, ruling that,  under "the clear            and unambiguous" provisions  of paragraph 11,  "PSI's failure            to  pay  the deposit  made  the Agreement  without  force and            effect."     NASCO  challenges  this  ruling,   arguing  that            paragraph 11  is ambiguous on  the question of  whether PSI's            failure to  pay the  deposit somehow precluded  the Agreement            from taking effect, that  extrinsic evidence is admissible to            clarify this  ambiguity, and  that the extrinsic  evidence in            this case creates a triable issue as to whether PSI's failure                                         -10-                                          10            to  pay  the  deposit  had  any bearing  on  the  Agreement's            efficacy.  We are persuaded by NASCO's argument.                      Under Massachusetts law, "the question of whether a            contract  term is  ambiguous is  one of  law for  the judge."            FDIC  v. Singh,  977 F.2d  18, 22  (1st Cir.  1992) (citation            ____     _____            omitted).  When the  judge finds that a contract term  is, in            some  material respect,  uncertain or  equivocal in  meaning,            then  "`all the circumstances  of the parties  leading to its            execution may  be shown for  the purpose of  elucidating, but            not contradicting or changing its terms.'"  Boston Edison Co.                                                        _________________            v.  F.E.R.C., 856  F.2d 361,  365  (1st Cir.  1988) (applying                ________            Massachusetts  law)  (quoting   Robert  Industries,  Inc.  v.                                            _________________________            Spence,  291   N.E.2d  407,  409  (Mass.   1973));  see  also            ______                                              ___  ____            Massachusetts Mun.  Wholesale Elec.  Co. v. Town  of Danvers,            ________________________________________    ________________            577 N.E.2d  283, 289 (Mass. 1991)  (courts consider extrinsic            evidence  to discern  intent  of contracting  parties when  a            contract term is ambiguous).                      As an  initial matter, we do not share the district            court's conviction that the intended operation and meaning of            paragraph  11's provisions are clear and unambiguous.  On the            one  hand,  Paragraph  11  is entitled  "Expiration."    This            suggests that the Agreement  would, upon execution, come into            and remain in effect  unless and until some specified  act or            omission caused it to cease existing.  On the other hand, the            text of paragraph 11  states that the Agreement would  "be of                                         -11-                                          11            no  force or effect unless," within seven days of its signing            by NASCO  and PSI's real estate  representative, "an Officer,            the Secretary  or Assistant Secretary of  [PSI] executes this            Agreement . .  . and delivers  to Seller an executed  copy of            this Agreement signed  on behalf  of Buyer by  both its  Real            Estate  Representative   and  either  the  Secretary   or  an            Assistant  Secretary of  Buyer, together  with the  Deposit."            This suggests that the Agreement  would not come into  effect            at all  unless and until some certain condition or conditions            precedent  had transpired.  Thus,  even if PSI  is correct in            asserting that  the viability of the  Agreement depended upon            its payment  of the deposit,  it is not at  all clear whether            the Agreement ever went into effect.5                      Of course, if  payment of the deposit  by PSI were,            under  either  of  PSI's  theories,  see  supra  note   5,  a                                                 ___  _____            requirement  for the  Agreement to  be in  effect  beyond the            seven-day  window  set  forth   in  paragraph  11,  then  the            ambiguity on the question  of whether the Agreement had  ever            come  into effect would be immaterial.  In our view, however,            paragraph 11 does not  clearly and unambiguously make payment            of   the  deposit   within  the   seven-day  window   such  a            requirement.    We  do  think  that  one  plausibly  can read            paragraph  11  as mandating  that  the  deposit be  delivered                                            ____________________            5.  PSI's  alternative  arguments   that  the  Agreement  (1)            expired  by its own terms;  or (2) never  came into existence            underscore this point.                                         -12-                                          12            "together  with"  a copy  of the  executed Agreement  for the            Agreement to be viable.  Nonetheless, we think it at least as            plausible  to view  the  delivery of  a  signed copy  of  the            Agreement  itself  as the  viability-triggering  act, and  to                       ______            construe  the  deposit  provision  as  merely  confirming  an            earlier provision6 which provided  that PSI would deliver the                                                        _____            $20,000.00 when it  delivered to  NASCO a copy  of the  fully                       ____            executed  Agreement.  Therefore,  we are of  the opinion that            the deposit provision is  ambiguous.  See Singh, 977  F.2d at                                                  ___ _____            22 ("[C]ontract  language which is  susceptible to differing,            but  nonetheless  plausible  constructions   is  ambiguous.")            (citation and  ellipsis omitted).  This  ruling finds support            in  the  fact that,  under  an extremely  strict  and literal            reading of paragraph 11, PSI's  undisputed delivery of a copy            of  the fully  executed Agreement  without the  deposit would            have been meaningless.7                                            ____________________            6.  Paragraph  3 of  the  Agreement states:    "Of the  [full            $350,000.00]  deposit referenced  in paragraph  1.(a) hereof,            $20,000.00  shall  be paid  upon execution  hereof  . .  . ."                        _____  __ ____  ____ _________  ______            (Emphasis supplied).            7.  One  should note that PSI does not argue that the deposit            had to be  paid at the  very same time  as its delivery of  a                            __ ___  ____ ____ ____            signed copy of the Agreement to NASCO.  Instead, PSI contends            that  paragraph  11  clearly  and  unambiguously  called  for            payment  of the  deposit at  some point within  the seven-day            window.  A  highly-literal reading of paragraph  11 (the only            type of reading that could entitle  PSI to summary judgment),            however, cannot  support this argument; the  Agreement called            for the deposit to be paid "together with" the delivery of an            executed copy of the Agreement.                                         -13-                                          13                      Having determined that  the relevant provisions  of            paragraph 11  are  ambiguous, we  turn  now to  the  parties'            extrinsic evidence.   And, we  believe it apparent  that this            evidence undermines  the district  court's ruling that,  as a            matter of law,  "PSI's failure  to pay the  Deposit made  the            Agreement  without force and effect."   We think a reasonable            jury  could conclude, on the  basis of the evidence regarding            the  parties'  actions subsequent  to  the  February 9,  1990            expiration of the seven-day  window provided for in paragraph            11, that the parties did not intend payment of the deposit to            be a  sine qua non for the Agreement to be viable beyond this                  ____ ___ ___            date.  This  evidence includes,  but is not  limited to,  (1)            PSI's  February  12,  1990   request  that  NASCO  reactivate            electric  service   to  the   Chelsea  property;   (2)  PSI's            assurances  to  NASCO's real  estate representative,  made in            late February 1990, that the transaction would go through and            that the delay in paying the deposit was due to "the red tape            of  setting  up a  development  plan";  (3) PSI's  attorney's            representation  to NASCO's  attorney, made  in  late February            1990, that the  deposit "was  being worked on";  and (4)  the            mortgage update  and project analyses involving  the property            prepared by PSI between February 22, 1990 and April 3, 1990.                      Accordingly,  we vacate the  district court's entry            of  summary judgment against NASCO on  its breach of contract            claim, and remand for a trial on the merits.                                         -14-                                          14            C.  The ch. 93A Claim            C.  The ch. 93A Claim            _____________________                      As noted  above,  the district  court premised  its            entry  of summary judgment against NASCO on the ch. 93A claim            on its  conclusion that  PSI  did not  breach the  Agreement.            Because the  court erred in  reaching this conclusion  at the            summary judgment stage, we cannot rely upon its  reasoning to            affirm the summary judgment ruling on the ch. 93A claim.                      PSI  nonetheless  argues,  as  it  did  before  the            district court,  that we should  affirm the entry  of summary            judgment  in its favor on  NASCO's ch. 93A  claim because (1)            the claim is governed by ch. 93A,   11; and (2) ch. 93A,   11            requires  that   objectionable  conduct  reach  "a  level  of            rascality" not present here.  More particularly, PSI contends            that, in a  breach of contract situation,  liability does not            attach  under ch.  93A,    11  unless  a defendant  knowingly            breached a contract in order to secure additional benefits to            itself  to the  detriment of  a plaintiff.   See  Atkinson v.                                                         ___  ________            Rosenthal, 598  N.E.2d 666, 670 (Mass. App. Ct. 1992) ("There            _________            is in those  decisions [imposing liability  under ch. 93A,               11] a consistent pattern of  the use of a breach of  contract            as a lever to  obtain advantage for the party  committing the            breach  in relation to the  other party; i.e.,  the breach of            contract has an extortionate quality that gives it the rancid            element of unfairness.  In the absence of conduct having that            quality, a failure to perform obligations [under a contract],                                         -15-                                          15            even though deliberate and for reasons of self-interest, does            not present an occasion for invocation of ch. 93A remedies.")            (citation omitted).                      The difficulty with PSI's argument is that, even if            we credit all of  its premises, we believe that  a reasonable            jury could conclude from  the evidence in this case  that PSI            breached  the  Agreement  in   order  to  obtain  for  itself            unbargained-for  benefits to  the detriment  of NASCO.   Four            facts  in particular  inform  this decision.    First, as  we            stated in the preceding section of this opinion, a reasonable            jury could find that, irrespective of whether or not PSI paid            the  $20,000.00 deposit,  the  Agreement  became  viable  and            enforceable  when PSI's  Assistant  Secretary  signed it  and            delivered  it to  NASCO.   Second,  a  reasonable jury  could            conclude that  PSI was  contractually obligated to  hand over            the $20,000.00 deposit at the same time it delivered to NASCO            a  copy of the fully executed Agreement.  Third, a reasonable            jury could  find that NASCO desperately  needed the Agreement            to  go forward  in order  to extricate  itself from  its dire            financial  straits.  And fourth, a reasonable jury could find            that PSI  was fully cognizant of  NASCO's desperate financial            situation.  On  the basis  of these facts,  and others  noted            above, we think that  a reasonable jury could infer  that PSI            (1) signed  the  Agreement  in  order to  obligate  NASCO  to                                         -16-                                          16            deliver  the  property to  it  for $3,575,000.00,  if  PSI so            chose;8 (2) intentionally breached  its obligation to pay the            $20,000.00 deposit,  knowing full well  that NASCO was  in no            position  to repudiate  the Agreement on  the basis  of PSI's            non-payment of the deposit; (3) used the period of time after            the  signing of  the  Agreement to  investigate the  property            further  and  to  determine   whether  it  should  honor  the            Agreement; and (4) then used its wrongful  non-payment of the            deposit  in   order  to  avoid  its   obligations  under  the            Agreement.  In other words, we believe that a reasonable jury            could find that PSI manipulated the situation so as to create            for  itself, at no cost,  both a fully  enforceable option to                         __ __ ____            buy the  property and  a  textual basis  for repudiating  the            agreement  at  its  discretion.    This  was  more  than  PSI            bargained for; moreover, it deprived NASCO, at the  least, of            $20,000.00 to which NASCO was contractually entitled.9                      Accordingly,  we vacate the  district court's entry            of  summary judgment on NASCO's ch. 93A claim, and remand for            a trial on the merits.                                            ____________________            8.  In  so stating, we note  paragraph 7(b) of the Agreement:            "If Seller  shall fail to  consummate this Agreement  for any            reason except Buyer's default, Buyer may, in  addition to any            other remedy,  enforce specific  performance of the  terms of            this Agreement."            9.  Paragraph  7(c) of  the  Agreement provides:   "If  Buyer            shall fail to consummate this Agreement for any reason except            Seller's default, then Seller shall be entitled to retain the                                          _____ __ ________            deposit paid hereunder . . . ."                                         -17-                                          17            D.  The Pleading Issue               D.  The Pleading Issue            ______________________                      Finally,  NASCO  asserts  that  the  district court            erred in failing to infer from the allegations underlying its            ch. 93A claim  independent claims of  estoppel and breach  of            the implied warranty  of good  faith and fair  dealing.   The            issue is a close one.   On the one hand, it  is impossible to            fault the district court  for taking NASCO's complaint, which            makes absolutely no mention of either estoppel or any implied            warranties,  at face  value.   On  the  other hand,  we  have            construed  Fed. R.  Civ.  P. 8  to  allow recovery  under  an            unpleaded  legal theory so long as related legal theories and            essential  allegations have  been pleaded.    See Connecticut                                                          ___ ___________            Gen. Life Ins. Co. v.  Universal Ins. Co., 838 F.2d  612, 622            __________________     __________________            (1st Cir. 1988).                      It is,  however, unnecessary  for us to  reach this            question at this time.   After remand, NASCO will  have ample            opportunity to file a  Fed. R. Civ. P. 15(a) motion  to amend            its complaint  so as to  state explicitly claims  of estoppel            and breach of  the implied  warranty of good  faith and  fair            dealing.    And,   if  NASCO  is  correct  in   arguing  that            allegations  already made  and evidence  already obtained  in            this case  are sufficient  to  support these  claims, we  are            confident  that its  motion will  be granted.   See  Foman v.                                                            ___  _____            Davis, 371 U.S. 178, 182 (1962) (where there is no compelling            _____            reason  for disallowing an amendment, Rule 15(a)'s admonition                                         -18-                                          18            that leave to amend shall be "freely given" is to be heeded).                                                                    III.                                         III.                                         ____                                      CONCLUSION                                      CONCLUSION                                      __________                      For  the   reasons  stated  above,  we  vacate  the            district court's entry of summary judgment in favor of PSI on            NASCO's  claims  for  breach   of  contract  and  unfair  and            deceptive trade practices, and remand this matter for a trial            on the merits.                      Vacated and remanded.                      Vacated and remanded                      ____________________                                         -19-                                          19