FAVRE PROP. MANAGEMENT, LLC v. Cinque Bambini

• Decision Date: 20 January 2004
• Docket Number: No. 2002-CA-00395-COA, No. 2002-CA-01092-COA.
• Parties: FAVRE PROPERTY MANAGEMENT, LLC, Appellant, v. CINQUE BAMBINI, a Mississippi Partnership, Appellee. Cinque Bambini, a Mississippi Partnership, Appellant v. Favre Property Management, LLC, Appellee.
• Court: Mississippi Court of Appeals

863 So.2d 1037

FAVRE PROPERTY MANAGEMENT, LLC, Appellant, v. CINQUE BAMBINI, a Mississippi Partnership, Appellee.

Cinque Bambini, a Mississippi Partnership, Appellant v. Favre Property Management, LLC, Appellee.

Nos. 2002-CA-00395-COA, 2002-CA-01092-COA.

Court of Appeals of Mississippi.

January 20, 2004.

William Carl Miller, Biloxi, attorney for appellant.

Harry R. Allen, David W. Crane, Gulfport, attorneys for appellee.

Before McMILLIN, C.J., IRVING, and CHANDLER, JJ.

CHANDLER, J., for the Court.

¶ 1. Favre Property Management, LLC filed a complaint against Cinque Bambini, a Mississippi Partnership, alleging breach of a contract to purchase land. The Circuit Court of Hancock County dismissed the complaint for failure to state a claim upon which relief can be granted, and Favre appeals. Cinque Bambini appeals from the circuit court's denial of its motion for sanctions pursuant to Mississippi Rule of Civil Procedure 11. We find that Favre's complaint was sufficient to withstand dismissal, and therefore, reverse and remand for further proceedings. As we find that Favre's complaint stated a claim, we affirm the trial court's refusal to sanction Favre for a frivolous pleading.

FACTS AND PROCEDURAL HISTORY

¶ 2. Favre's complaint alleged that Favre was the assignee of a contract to purchase a parcel of land from Cinque Bambini. The assignor of the contract was RMC, LLC. Favre attached several documents to the complaint, including a copy of the assignment and a copy of the contract, styled "Purchase Agreement."

¶ 3. Following are the relevant provisions of the contract. The contract identified Cinque Bambini as the seller and RMC as the buyer. The contract described the subject property as "the real property of the Seller located south of Crump Road in Hancock County, Mississippi." The purchase price was $27,000,000, payable in a series of four deposits with the balance to be paid upon closing. Specifically, the contract required the buyer to pay deposits of $25,000 on execution of the contract, $150,000 on the sixty-first day following the effective date, $200,000 on the 151st day following the effective date, and $300,000 on the 271st day following the effective date. If the buyer failed to timely make any payment, or if the closing did not occur within one year of the effective date of the contract, the buyer would have no further rights regarding the subject property, and Cinque Bambini would retain all amounts previously paid by the buyer. Cinque Bambini was to retain possession of the subject property until the closing, but the buyer could make physical inspections. The contract provided that time was of the essence.

¶ 4. The buyer was to deliver a survey of the subject property to Cinque Bambini and the title company within sixty days of the effective date of the contract. If the buyer made the second deposit payment of $150,000, Cinque Bambini was to reimburse the buyer for one-half the cost of the survey up to $20,000. If the buyer so elected, the buyer could forego obtaining a survey so long as Cinque Bambini agreed to the description of the subject property used in the deed. The contract gave the buyer an option to purchase additional acreage for $9,000 per acre if the survey revealed that the subject property contained less than 2,850 acres. The buyer could exercise the option by notifying Cinque Bambini prior to the closing of its intention to purchase the additional acreage.

¶ 5. The contract forbade Cinque Bambini from executing "any lease, license or other agreement affecting the ownership or operation of the Premises" without the buyer's prior written approval, and from amending any existing contract or entering into any new contract "with respect to the ownership and operation of the Premises" that would survive the closing or otherwise "affect the Buyer's use, operation or enjoyment of the Premises, without Buyer's prior written consent." The contract entitled Cinque Bambini to remove timber from the subject property for proper maintenance of the subject property "without Buyer's prior consent; provided that such removal does not adversely affect the value of the Land and is consistent with [Cinque Bambini's] historical practices." The contract also contained a "reasonable efforts" clause, stating that "[Cinque Bambini] and Buyer shall use their reasonable, commercial efforts and shall cooperate with and assist each other in their efforts to obtain such consents and approvals of third parties (including, but not limited to, governmental authorities) as may be required to consummate the transaction contemplated hereby, and shall otherwise perform as may be necessary to effectuate a transfer of the Premises to Buyer in accordance with this Agreement."

¶ 6. On December 11, 2000, RMC assigned its right, title and interest in the contract to Favre. The assignment stated that Favre, the assignee, had paid $175,000 to Cinque Bambini, as well as paid overhead and engineering costs sustained in effecting the purchase of the subject property. The assignment stated that Favre would assign one half of its interest in the contract back to RMC upon RMC's repayment of all the money advanced by Favre.

¶ 7. In the complaint, Favre alleged that, though Favre had timely paid $175,000 in earnest money due under the contract, Cinque Bambini had continually refused to provide Favre with a legal description of the property. Favre stated that the legal description was "necessary to complete the title work." Favre stated that, on December 27, 2000, Cinque Bambini demanded $200,000 "as an additional deposit" before it would perform its contractual obligations. Favre accused Cinque Bambini of misrepresenting the acreage amount and of failing to perform a subsequent oral agreement that Cinque Bambini would provide the survey instead of Favre.

¶ 8. Favre further alleged that, prior to Cinque Bambini's demand for the $200,000, Cinque Bambini "cut and removed timber from the property, entered into contracts for billboards and/or telephone towers and began negotiations for the sale of the property with third parties" without Favre's permission and in violation of the contract. Favre referenced a subsequent written proposal by Cinque Bambini. The proposal was attached to the complaint, and provided that Cinque Bambini's timber harvesting and telephone tower leases did not breach the original contract. The complaint indicates that Favre never agreed to Cinque Bambini's proposal. The complaint alleged that Cinque Bambini failed to negotiate in good faith and intentionally breached the contract, and requested specific performance, as well as actual and punitive damages.

¶ 9. Cinque Bambini moved for dismissal for failure to state a claim and for sanctions. As the contract did not state its effective date, Cinque Bambini attached to the motion an affidavit of its general partner averring that the effective date of the contract was July 28, 2000, and a copy of a letter to that effect. In its motion, Cinque Bambini stated that Favre paid $175,000 in earnest money, but failed to make the $200,000 payment due on the 151st day following the effective date of the contract. Cinque Bambini contended that it had no duty to provide a survey because the contract placed the duty to obtain a survey upon Favre. Cinque Bambini contended that any oral agreement otherwise was barred by the statute of frauds and by the parol evidence rule. Cinque Bambini averred that, because Favre failed to make the $200,000 scheduled earnest money payment, by the terms of the contract, Favre had no standing to maintain an action for breach.

¶ 10. Favre's response to the motion to dismiss reiterated its arguments, but also introduced new information supported by attached affidavits. Favre stated that the reason it needed a legal description was that the survey was impossible to perform without one. In an attached affidavit, the surveyor stated that he "expended numerous weeks attempting to complete a survey without benefit of a legal description," and that a legal description was necessary to finish the survey. Favre stated that Cinque Bambini had the legal description in its possession, and, after January 1, 2000, had given a copy of it to an attorney with instructions not to distribute it without permission. An affidavit of the attorney to that effect was attached. In another affidavit, the manager of RMC averred that he made numerous requests for a legal description, which were refused by Cinque Bambini. Favre stated that it declined to make the $200,000 scheduled earnest money payment because Cinque Bambini had breached the contract. Favre claimed that Cinque Bambini's refusal to give Favre the legal description breached its contractual duty to make reasonable efforts to effectuate the transfer of the property and violated the implied covenant of good faith and fair dealing.

¶ 11. At a hearing on the motion, Favre stated that it needed the survey in order to decide whether to exercise its option to purchase additional acreage. Favre averred that it could not procure the necessary legal description from courthouse records because of gaps in the chain of title. Cinque Bambini argued that, because the contract placed the duty to obtain a survey upon Favre, Cinque Bambini had no duty to facilitate the surveying process by providing the legal description. Cinque Bambini moved to strike Favre's affidavits because they constituted matters outside the pleadings.

¶ 12. On February 27, 2002, the trial court entered a corrected order dismissing Favre's complaint under Mississippi Rule of Civil Procedure 12(b)(6). The court held that the legal description provided in the contract was a sufficient legal description to convey title to the subject property. The court found that Cinque Bambini had no duty to provide a survey under the clear terms of the contract. The court held that the statute of frauds and the parol evidence rule barred Favre's...