Greer Properties, Inc. v. LaSalle Nat. Bank, No. 107486 and O
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
| Writing for the Court | Before WOOD, Jr., POSNER, and FLAUM; HARLINGTON WOOD, Jr. |
| Citation | 874 F.2d 457 |
| Parties | GREER PROPERTIES, INC., a Delaware corporation, Plaintiff-Appellant, v. LaSALLE NATIONAL BANK, a national banking corporation acting as trustee u/t/ald Orchard West Venture, an Illinois General Partnership, Defendants-Appellees. |
| Docket Number | No. 107486 and O,No. 88-2188 |
| Decision Date | 15 June 1989 |
Page 457
v.
LaSALLE NATIONAL BANK, a national banking corporation acting
as trustee u/t/a No. 107486 and Old Orchard West
Venture, an Illinois General
Partnership, Defendants-Appellees.
Seventh Circuit.
Decided May 5, 1989.
Rehearings Denied June 15, 1989.
Robert J. Trizna, Trizna & Lepri, Chicago, Ill., for plaintiff-appellant.
Louis R. Hegeman, and Jay D. Stein, Gould & Ratner, Chicago, Ill., for defendants-appellees.
Before WOOD, Jr., POSNER, and FLAUM, Circuit Judges.
HARLINGTON WOOD, Jr., Circuit Judge.
This is a contracts case arising from efforts to develop a piece of commercial real estate located near the Edens Expressway in Skokie, Illinois. Four local developers formed a partnership called Old Orchard West Venture ("Old Orchard") and acquired the real estate parcel in 1984. Legal title to the real estate is held in the name of LaSalle National Bank ("LaSalle"), as trustee. In 1987, Old Orchard and LaSalle ("Sellers") entered into a contract to sell the property to plaintiff-appellant Greer Properties, Inc. ("Greer"), a wholly-owned subsidiary of the Marriott Corporation. 1 The Sellers terminated the contract prior to the closing and Greer brought this action in federal district court, claiming the termination was improper. The district court entered summary judgment for the defendants and Greer appeals.
Plaintfff-appellant Greer is a Delaware corporation. Defendant-appellee Old Orchard is an Illinois partnership and defendant-appellee LaSalle is a national bank with its principal place of business in Illinois.
Page 458
The case involves a contract to purchase real estate for $1,250,000. The district court had jurisdiction under 28 U.S.C. Sec. 1332. We review this case under 28 U.S.C. Sec. 1291.I. FACTUAL BACKGROUND
William Hoag, Albert Scherb, Jr., Kyle Ahrberg, and Michael Klonoski are the four developers who formed Old Orchard. The affairs of the partnership were managed primarily by William Hoag. Old Orchard purchased the property in January, 1984 for $700,721.70, intending to develop the parcel by constructing, leasing, and managing a building on it. In 1986, unable to fulfill its development plan, Old Orchard commenced efforts to sell the property outright or to construct a building on it for a predetermined tenant. Two buyers expressed serious interest in the property: G.D. Searle Co. ("Searle"), which maintained its corporate headquarters on the adjoining real estate, and Marriott Corporation, which wanted to construct a motel on the property.
The Sellers agreed to sell the property to Searle and entered into a contract on February 16, 1987. Searle promised to pay approximately $1,100,000. The contract between Searle and the Sellers allowed Searle to terminate the agreement if the soil of the property was contaminated by environmental waste. Searle hired an environmental consulting firm to study the condition of the property. The firm reported that cleaning up the contamination would cost in excess of $500,000. Because of the extensive contamination, Searle requested that the Sellers reduce the contract price. The Sellers refused and Searle exercised its right to terminate the contract.
The Sellers then began negotiating with Marriott Corporation through its real estate subsidiary, Greer. The parties entered into a contract on July 31, 1987. The Sellers agreed to sell the property to Greer for $1,250,000. As part of the contract, the Sellers were required to remove the environmental contamination at their own expense. The Sellers were also allowed to terminate the contract if the cost of the clean-up became "economically impracticable." The pertinent section of the contract states:
Seller is currently having a study conducted to determine the existing soil condition ("Soils Study").... Seller further agrees to take all action recommended by the Soils Study and the Illinois Environmental Protection Agency to bring the soil into compliance with all local, state and federal ordinances, laws or regulations and shall use its best efforts to have all such work completed prior to Closing; provided, however, that if the cost of such clean-up work will, in Seller's best business judgment, be economically impracticable, then Seller, at its option, may terminate this Contract....
Greer had been advised that Searle had found contaminants on the property, but Greer was not told of the cost estimates contained in the Searle report. In September 1987, after the contract had been signed, Hoag informed Greer of his own cost estimates for the clean-up--between $60,000 and $100,000. Hoag testified that he did not believe the estimate made in the Searle study; he felt the high estimate of the clean-up cost was a negotiating tactic used by Searle to get the Sellers to lower their price.
The Sellers retained a soil consultant to study the nature and extent of the contamination. In mid-September, the consultant estimated the cost of the clean-up at between $100,000 and $200,000. The parties disagree about whether the Sellers informed Greer at that time of their conclusion that the contract had been rendered economically impracticable by the escalating cost of the clean-up. Without formally notifying Greer that they intended to terminate the contract, the Sellers entered into a new round of negotiations with Searle following the receipt of the consultant's report and a purchase price of $1,455,000 was proposed. A draft contract containing this price was sent by Searle to the Sellers on October 7, 1987. On that same date, Sellers received a final report from their soil consultant, estimating the clean-up costs at between $190,000 and $240,000. On October
Page 459
8, 1987, the Sellers formally terminated the contract with Greer by sending the required written notice. After the termination, the Sellers indicated to Greer that Greer could still buy the property if it increased the purchase price by $250,000. Greer never made the higher offer. After terminating the contract, the Sellers cleaned up the property at a cost of $251,825.On December 31, 1987,...
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Buehler Ltd. v. Home Life Ins. Co., No. 88 C 2634.
...an independent tort, but is rather simply a breach of the underlying contract. See Greer Properties, Inc. v. LaSalle Nat'l Bank, 874 F.2d 457, 460-61 (7th Cir.1989) (implied duty of good faith acts as limit on discretion of parties; if 722 F. Supp. 1565 contract vests one party with discret......
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Bank of Am., N.A. v. Shelbourne Dev. Group, Inc., No. 09 C 4963
..."to achieve a purpose contrary to that for which the contract had been made"); see also Greer Props., Inc. v. LaSalle Nat'l Bank, 874 F.2d 457, 460 (7th Cir.1989). Additionally, the duty of good faith requires parties who have entered into a contract to "bargain[ ] in good faith over terms ......
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Questar v. Cb Flooring, No. 153, September Term, 2008.
...its discretion) to "recapture" an opportunity that it lost upon entering the contract. Greer Props., Inc. v. LaSalle Nat'l Bank, 874 F.2d 457, 461 (7th Cir.1989); Piantes v. Pepperidge Farm, Inc., 875 F.Supp. 929, 938 (D.Mass. 1995). Upon entering a binding contract for a specified duration......
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Northern Crossarm Co. v. Chemical Specialties, No. 03-C-415-C.
...to this innocent motive, it is for the trier of fact to determine issues of motive. Greer Properties, Inc. v. LaSalle National Bank, 874 F.2d 457, 461 (7th Cir.1989) (summary judgment inappropriate on good faith claim where material issues of fact exist regarding motive). On summary judgmen......
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Buehler Ltd. v. Home Life Ins. Co., No. 88 C 2634.
...an independent tort, but is rather simply a breach of the underlying contract. See Greer Properties, Inc. v. LaSalle Nat'l Bank, 874 F.2d 457, 460-61 (7th Cir.1989) (implied duty of good faith acts as limit on discretion of parties; if 722 F. Supp. 1565 contract vests one party with discret......
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Bank of Am., N.A. v. Shelbourne Dev. Group, Inc., No. 09 C 4963
..."to achieve a purpose contrary to that for which the contract had been made"); see also Greer Props., Inc. v. LaSalle Nat'l Bank, 874 F.2d 457, 460 (7th Cir.1989). Additionally, the duty of good faith requires parties who have entered into a contract to "bargain[ ] in good faith over terms ......
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Questar v. Cb Flooring, No. 153, September Term, 2008.
...its discretion) to "recapture" an opportunity that it lost upon entering the contract. Greer Props., Inc. v. LaSalle Nat'l Bank, 874 F.2d 457, 461 (7th Cir.1989); Piantes v. Pepperidge Farm, Inc., 875 F.Supp. 929, 938 (D.Mass. 1995). Upon entering a binding contract for a specified duration......
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Northern Crossarm Co. v. Chemical Specialties, No. 03-C-415-C.
...to this innocent motive, it is for the trier of fact to determine issues of motive. Greer Properties, Inc. v. LaSalle National Bank, 874 F.2d 457, 461 (7th Cir.1989) (summary judgment inappropriate on good faith claim where material issues of fact exist regarding motive). On summary judgmen......