A and B entered into a purchase and sale agreement for A to sell a commercial property (let's call it "Blackacre") to B, a commercial real estate developer.
A knew that the city planned to redevelop the area for a roundabout, "that would require the City to take over a portion of the property by eminent domain." A did not disclose either the planned redevelopment or the likelihood of taking of Blackacre to B. Some time before the deal closed, B "learned of the redevelopment for the first time," and soon issued notice of termination and requested return of the deposit under the terms of the sale agreement.
A refused and when mediation failed, B sued for breach of contract (the sale agreement provided that in the event of a taking by eminent domain, the deposit would be refunded). Count II alleged fraud for A's failure to disclose knowledge of the city's redevelopment and plans to take a part of Blackacre.
The trial court granted A's motion to dismiss, and in Alrig USA Acquisitions LLC v. MDB Realty LLC, No. 2025 ME 11 (Feb. 6, 2025), the Supreme Judicial Court of Maine affirmed.
The court rejected the breach of contract claim by reviewing the four provisions in the sale agreement alleged to require A to return the deposit under certain circumstances. Check out pages 8-9 of the opinion for the reasons why (and keep this one in your "saved" folder for the next time you draft a sale agreement, dirt lawyers).
We, of course, are writing up this decision because of the next part, where the court deals with the claim that A knowing of the city's plans to take the property but failing to disclose it to B, is common law fraud. The court held no, first focusing on the heightened pleading requirement for fraud claims, especially where the fraud is alleged to be remaining silent when there's an alleged duty to disclose. The sale contract provided that each party "forward promptly to the other any notice of intent received pertaining to a taking of all or a portion of the property." Slip op. at 10. The complaint did not contain any allegation that A had received such notice, merely that it knew that the city was planning on acquisition of Blackacre. And knowledge alone isn't enough.
What about "active concealment?" Did A take affirmative steps to hide the true state of affairs? No allegation there either, and the claim that A merely "failed to tell" doesn't cut it:
Concealment does not include mere silence; it occurs only when the defendant takes an affirmative action to prevent the plaintiff from learning a material fact. See, e.g., Stevens v. Bouchard, 532 A.2d 1028, 1030 (Me. 1987); H.E.P. Dev. Grp., Inc.., 606 A.2d at 775; Restatement (Second) of Torts § 550 cmts. a, b (Am. L. Inst. 1977) (noting that concealment most commonly occurs “when the defendant actively conceals a defect or other disadvantage” or “successfully prevents the plaintiff from making an investigation that he would otherwise have made, and which, if made, would have disclosed the facts; or when the defendant frustrates an investigation”); Restatement (Second) of Contracts § 160 cmt. a (Am. L. Inst. 1981) (“Concealment is an affirmative act intended or known to be likely to keep another from learning of a fact of which he would otherwise have learned.”); 92 C.J.S. Vendor and Purchaser § 104 (2024) (“Silence or nondisclosure, even as to material facts, does not . . . suffice in every circumstance to constitute or establish fraud. In the absence of any duty of disclosure, it does not. However, it is only silence that is permitted, and, if in addition to a party’s silence, the party makes any statement tending affirmatively to suppress the truth, or to withdraw or distract the other party’s attention from the facts, the concealment becomes fraudulent.” (footnotes omitted)).
Slip op. at 11.
In sum, it's on you, buyer, to find out the state of play, and not on the seller to tell you about what the city might be up to. You have no duty to help a friend out:
Here, Alrig has not alleged any affirmative action taken by MBD to conceal the City’s planned Libbytown redevelopment. Indeed, it is difficult to conceive how MBD could have concealed a public authority’s community development plan.
Slip op. at 14.
Google is your friend. The seller, not so much.
Alrig USA Acquisitions LLC v. MBD Realty LLC, No. 2025 ME 11 (Maine Feb. 6, 2025)