Dominion Investments v. Yasechko

• Court: U.S. District Court — Northern District of Indiana
• Writing for the Court: WILLIAM C. LEE
• Citation: Dominion Investments v. Yasechko, 767 F.Supp. 1460 (N.D. Ind. 1991)
• Decision Date: 26 June 1991
• Docket Number: Civ. No. F 90-82.
• Parties: DOMINION INVESTMENTS, An Indiana General Partnership, Plaintiff, v. Edward T. YASECHKO, Quadland Corporation, Ejjy Corporation, and Tewell Corporation, Defendants.

767 F. Supp. 1460

DOMINION INVESTMENTS, An Indiana General Partnership, Plaintiff, v. Edward T. YASECHKO, Quadland Corporation, Ejjy Corporation, and Tewell Corporation, Defendants.

Civ. No. F 90-82.

United States District Court, N.D. Indiana, Fort Wayne Division.

June 26, 1991.

COPYRIGHT MATERIAL OMITTED

Gary J. Rickner, Thomas M. Niezer, Barrett & McNagny, Fort Wayne, Ind., for plaintiff.

T. Russell Strunk, Jr., Thomas M. Gallmeyer, Hawk Haynie & Gallmeyer, Fort Wayne, Ind., for defendants.

MEMORANDUM DECISION AND ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court for a decision on the merits following a bench trial. The following Findings of Fact and Conclusions of Law are entered pursuant to Federal Rule of Civil Procedure 52(a), after having examined the entire record and after having determined the credibility of witnesses.

Findings of Fact

On February 21, 1989, after several weeks of negotiations, an Agreement to Purchase was entered into between Dominion Investments¹, as buyer, and 30/69 Corporation and Wealtha Meek, as sellers, for the purchase of the parcel of land located in Fort Wayne, Indiana, comprising Fortmeyer's Truck Stop, Meek Mack Truck Dealership and the surrounding properties. This property included the real estate which is the subject of this litigation. This Agreement to Purchase specifically recited that it was subject to a lease currently outstanding with Fortmeyers, Inc., the tenants at the truck stop. This lease had a termination option which would allow notice of termination to be given not earlier than August 10, 1989, with a provision that 75 days occupancy would be given after the notice of the termination. By virtue of this clause, Dominion would not be able to obtain possession of the real estate prior to October 25, 1989. This Agreement to Purchase specifically recited that closing was to take place on May 15, 1989.

After the above Agreement to Purchase was executed, Edward T. Yasechko, through realtor Stephen Wesner, expressed an interest in purchasing the Fortmeyer's property. Yasechko, a resident of Ohio, owns a forty percent interest in a family corporation, Quadland Corporation. The remaining sixty percent of Quadland's stock is divided equally among his four children. Edward T. Yasechko is also the Assistant Secretary of Quadland Corporation and is the dominating force in all major decisions of the corporation, such as buying real estate. Edward T. Yasechko is also President of Tewell Corporation, another family corporation which operates Yasechko's truck stops, and owns ninety percent of Tewell's stock. Edward J. Yasechko, the son of Edward T. Yasechko, is President of Quadland Corporation and is also an officer of Tewell Corporation in which he owns a ten percent interest. Edward J. Yasechko is also the majority shareholder of defendant EJJY Corporation.

On March 8, 1989, Chris Jones and Don Steininger as sellers, and Edward T. Yasechko, as buyer, entered into an Agreement to Purchase Real Estate (Purchase Agreement) for the sale of the Fortmeyer's property, commonly known as 3039 Goshen Road, Fort Wayne, Indiana. Stephen Wesner, the listing agent for the real estate, prepared the Purchase Agreement and accepted Yasechko's earnest money of $14,800.00.

The Purchase Agreement entered into by Edward T. Yasechko and Chris Jones and Don Steininger on March 8, 1989 contained the following relevant provisions (underlined portions denote hand or typewritten provisions; all other words are preprinted):

6.01. Seller shall deliver possession of the real estate to Buyer at closing subject to tenants rights.

* * * * * *

10.01. At the time Buyer's offer is made and as part of it, Buyer has deposited the sum of $14,800.00 as earnest money.

* * * * * *

11.01. The closing date shall be on or before May 15, 1989, subject to the provisions of Subsection 17.01.

* * * * * *

Section 12. OTHER PROVISIONS: Buyer indemnify Seller on EPA issues. Buyer to mound and plant common property lines. Buyer to grant a 50' easement for ingress/egress to the property to north and west as per the survey. Bldgs A & C to be torn down in a 12 month period. Bldg B to be torn down within six mo. after AGA Fleet Products lease expiration.

* * * * * *

17.01. Closing shall be held on the later of: (a) the date stated in Subsection 11.01; or (b) the date all conditions imposed by this agreement are satisfied for example, title requirements are met, financing is available (if applicable), and surveying is completed. The time and place of closing shall be agreed by the parties in good faith. Either party may, for convenience or accommodations of a closing agent or a lender, extend the closing date for not more than fifteen (15) days provided that the extension does not cause the Commitment to expire....

* * * * * *

17.05. If this transaction is not closed for failure of title to meet legal requirements, or for failure of Seller to convey by Deed as required, or to execute and deliver a contract, or other document as required, in each case as of the time of closing, buyer may terminate this Agreement (all earnest money to be returned without delay), and also pursue appropriate remedies available under Subsection 19.03.

* * * * * *

19.02. If Buyer breaches any of his obligations in this Agreement, Seller shall be entitled to recover, in addition to any remedies available under this Agreement, all reasonable costs and expenses, including attorney fees, incurred by Seller in enforcing Buyer's obligation.

* * * * * *

22.02. Time is of the essence of this Agreement.

Section 6.01 of the Purchase Agreement initially recited that possession would be given by October 31, 1989. However, at Edward T. Yasechko's suggestion, Wesner changed it to provide that Seller would deliver possession "at closing subject to tenant's rights." Wesner represented to Yasechko that Fortmeyers had the right to occupy the premises until October 25, 1989, but that Wesner would attempt to negotiate an early termination of that lease.

In the section of the Purchase Agreement entitled "Conditional Acceptance by Seller Counteroffer," the following provision was stated:

The Seller accepts the offer made by Buyer, SUBJECT, HOWEVER, TO THE FOLLOWING PROVISIONS: Buyer's acknowledging that Seller has fully executed Agreement to Purchase Real Estate and this transaction is contingent upon said purchase being completed. Purchase price to be $1,525,000.00.

Under the section entitled "Buyer's Acceptance of Seller's Counteroffer" was the following provision:

Buyer accepts and agrees to the provisions set forth above and Seller's counteroffer except purchase price of $1,500,000.00.

At the bottom of the Purchase Agreement was typed the following provision:

Seller's accept Buyer's purchase price of 1,500,000.00.

On May 8, 1989, Attorney Robert York, Edward J. Yasechko and Edward T. Yasechko were present at a meeting in Fort Wayne with the partners of Dominion Investments, Chris Jones and Donald Steininger, to discuss the closing to be held on May 15, 1989. At that meeting, Dominion presented York with original drafts of the following documents referenced in the "Other Provisions" of Section 12 of the Purchase Agreement:

a. Grant of Easement;

b. Easement Improvement Agreement;

c. Agreement regarding destruction of improvements on the Real Estate and rental payments therefrom;

d. Indemnity and Hold Harmless Agreement;

e. Waiver of Building Lien Violation;

f. Bill of Sale and Agreement to Indemnify.

However, much of the meeting was devoted to discussion of the possibility of the early termination of the lease agreement with the tenant on the Fortmeyer's property. At no time during this meeting did Robert York, Edward J. Yasechko, or Edward T. Yasechko indicate an unwillingness to execute the above-described documents.

Unable to get Jones and Steininger to agree to a modification of Section 6.01 of the Purchase Agreement, which concerned the subject of the tenant's rights, at the May 8, 1989 meeting, Edward T. Yasechko decided he did not want to close on the subject real estate in accordance with the terms of the Purchase Agreement. In fact, Yasechko had been displeased with the terms of the Purchase Agreement practically since the date he signed it. Yasechko's displeasure is evidenced by the fact that in mid-March 1989, when Chris Jones visited Yasechko's North Baltimore, Ohio truck stop, York introduced himself to Jones and informed Jones that he was going to "undo" the March 8, 1989 Purchase Agreement. At the time Jones did not give much thought to York's remark, which was made during a cocktail party. Even after the May 8 meeting, Yasechko and York, on behalf of Quadland, continued to negotiate over the terms of the instruments to be given pursuant to Section 12 with Jones and Steininger and did not inform them of Yasechko's intention to withdraw from the deal.

As part of the scheme to "undo" the Purchase Agreement, York advised Yasechko that if Quadland, as opposed to Yasechko, took title to the real estate, Yasechko could avoid the obligations imposed under the Purchase Agreement. York advised Yasechko that the Purchase Agreement lapsed on May 15, 1989 if the deal was not closed on that date, and if the closing date was not extended for any of the reasons set forth in Section 17.01. Thus, in a letter dated May 10, 1989, York advised Steininger that Quadland, rather than Yasechko, would be taking title to the real estate. On this same date York sent a letter to Kathy Hanley of Three Rivers Title requesting that she provide "information to Quadland Corporation, the assignee of the interest of Edward T. Yasechko as Purchaser in the Agreement to Purchase 10.19 acres from Chris Jones and Don Steininger." However, Dominion was not informed of the motive underlying Yasechko's desire to have Quadland take title to the real estate.

On May 10, 1989, Robert York, on behalf of Quadland Corporation, faxed a letter to Don...