Interurban Inv. Corp. v. Resolution Trust Corp.
| Decision Date | 07 November 1995 |
| Docket Number | Civ. A. No. 93-2905. |
| Citation | 905 F. Supp. 1349 |
| Parties | INTERURBAN INVESTMENT CORPORATION v. RESOLUTION TRUST CORPORATION. |
| Court | U.S. District Court — Eastern District of Louisiana |
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Mike Donlon Pugh, Pugh & Boudreaux, Lafayette, LA, Harold B. Carter, Jr., Montgomery, Barnett, Brown, Read, Hammond & Mintz, New Orleans, LA, Michael Kellogg, Kellogg, Huber & Hansen, Washington, DC, for Interurban Inv. Corp.
David S. Rubin, Kantrow, Spaht, Weaver & Blitzer, Baton Rouge, LA, Rex M. Lamb, III, Robert P. Brown, Smith, Gambrell & Russell, Atlanta, GA, for Resolution Trust Corp.
Thomas Cloke, pro se.
Wayne Wandell, pro se.
Meyer H. Gertler, Gertler, Gertler & Vincent, New Orleans, LA, for Abatement Technologies, Inc.
ORDER AND REASONS
Pending before the Court is the Resolution Trust Corporation's "Dispositive Motion for Summary Judgment," which was taken under submission on a previous date. Having reviewed the memoranda of the parties, the record and the applicable law, the Court DENIES the motion.
Interurban Investment Corporation (hereinafter "Interurban") filed this lawsuit alleging breach of contract by the Resolution Trust Corporation (hereinafter "RTC") for its failure to sell Interurban a series of promissory notes and related security instruments secured by a building in New Orleans know as Delta Towers (hereinafter "Delta Towers asset"). The following background for the purposes of this motion is taken from the undisputed material facts as agreed by the parties.1
In 1990 the RTC through Carol Glasgow entered into negotiations with ATI Property Trust, the purpose of which was to arrive at a contract for the RTC to sell the Delta Towers asset to ATI Property Trust, which was a trade name for a corporation named Abatement Technologies, Inc. (hereinafter "ATI"). The stock of ATI was owned as follows: Thomas Corish, 30 percent; James Gray, 20 percent, Thomas Cloke, 25 percent; and Wayne Wandell, 25 percent. Prior to ATI's liquidation, which began in August 1991,2 its officers were: Corish, President; Gray, Vice-President; Cole, Treasurer; and Wandell, Secretary. Corish and Gray live in Atlanta. Cloke and Wandell lived in New orleans.
In January 1991 ATI Property Trust submitted a written offer to the RTC to purchase the Delta Towers asset for $1.5 million.3 The offer was signed by Gray as Vice-President on behalf of ATI Property Trust and by S.K. Pagna on behalf of Jerry Puckett, Field Site Manager for RTC. This agreement provided the following, in pertinent part, as to a "deposit" on the sale:
Deposit: The deposit shall be the sum of $50,000 which shall be made immediately upon completion of the inspection period.... Said deposit is nonrefundable after escrow instructions are drawn unless agreed to by both Seller and Purchaser. Escrow instructions must be completed within thirty (30) days of the end of the forty-four (44) working days sic review as explained in Item # 6. (Emphasis in original.)4
Item 6 of the agreement allowed ATI Property Trust 44 working days after receipt of information it requested to review books and other records relative to the asset and provided that purchaser could terminate the agreement "without cost or penalty" during this time by advising "Seller" in writing. Item 6 also provides:
The agreement also provided that it would be governed by the law of Georgia absent controlling federal law.
On July 24, 1991, RTC through Glasgow informed Gray, who was in Atlanta, and Cloke, who was in New Orleans, that a backup offer was to be submitted. On the same date, Corish and Gray, purporting to act on behalf of ATI, assigned ATI's rights and obligations under the January 1991 contract with RTC to a Georgia corporation named the Bristol Corporation (hereinafter "Bristol"). One of the terms of the assignment provided that Bristol would provide the $50,000 necessary for the deposit under the RTC/ATI Property Trust agreement.
On the next day the Atlanta contingent of ATI, Corish and Gray, advised the New Orleans contingent, Cloke and Wandell, of the assignment, to which Cloke objected. Bristol learned of the objection and, in response, on July 26, Donald R. Harkelroad on behalf of Bristol sent Corish and Gray a letter, indicating that they had sought Bristol's concurrence in rescinding the agreement and that Bristol would accede to that request.5 Corish declined the offer, stating that neither he nor Gray requested the rescission, informing Bristol that ATI wanted to continue the agreement with Bristol and stating that he desired to proceed to escrow because the RTC had received another offer and wanted to continue ATI's position.6 Subsequently, RTC received notice that $50,000 in escrow funds had been delivered to an attorney named Tom Brown in Atlanta on behalf of ATI.7
In the meantime, Interurban entered into negotiations with Bristol to discuss a possible deal between those parties. At some point Corish and Gray also were involved in these negotiations.
Shortly thereafter, the RTC first learned of the assignment to Bristol, and a few days later RTC learned that the New Orleans contingent of ATI objected to the assignment to Bristol as an unauthorized corporate act.
The negotiations continued, this time between ATI's New Orleans group and Interurban. Then ATI's New Orleans contingent decided to liquidate ATI. Wandell and Cloke filed a Petition for Voluntary Liquidation on August 5, 1991, and on that same day the district judge appointed Cloke and Wandell temporary liquidators of ATI. ATI in liquidation next signed an agreement with Interurban to sell to Interurban ATI's rights under the January 1991 agreement with RTC.8 Interurban acknowledged in this agreement that the "thirty (30) day due diligence period may not be available by virtue of the contract with RTC" and that "RTC has been notified by letter that the deposit required under its CONTRACT has been tendered, thereby requiring a thirty (30) day closing from that time."9
Cloke and Wandell also wrote to Corish and Gray and Bristol, repudiating any previous agreement between ATI and Bristol, and also to Brown and RTC, indicating Brown was not authorized to act as escrow agent for ATI.10
In response RTC advised Cloke in New Orleans that the $50,000 in escrow previously deposited by Atlanta ATI Group/Bristol was deemed improper because the escrow agent was contested by the New Orleans ATI contingent.11 RTC further advised Cloke to deposit the $50,000 with its own lawyer in New Orleans, Sidney Cotlar.12 Cloke than sent a $50,000 cashier's check to Cotlar.13
In mid-August Bristol filed suit against ATI in Cobb County, Georgia, and received a temporary restraining order enjoining ATI from selling the Delta Towers asset or from interfering with contractual relations with Bristol as to its assignment, and Bristol sent a copy of ATI's assignment to Bristol and the temporary restraining order to Cotlar, RTC's attorney.14 He responded by noting that the New Orleans contingent claimed it had already transferred the Delta Towers asset to Interurban, that the two different ATI contingents had a dispute and that he hoped the dispute could be resolved before the closing deadline of September 5, 1991.15
Interurban wrote to RTC indicating that it held a valid assignment, that it was prepared to go forward with closing but that it was willing to offer the RTC an extension for it to perform its obligations under the contract "so as to give RTC ample time to satisfy itself" that Interurban held the valid rights to acquire the Delta Towers asset.16 Cotlar responded by writing to Interurban's counsel, indicating that the RTC "may" be willing to go forward with the closing with Interurban if Interurban and its principals individually would hold harmless, indemnify and defend RTC against any claims by Bristol, its officers, directors, shareholders or assigns.17 Interurban declined.
On September 5 the Interurban principals and its attorney appeared at Cotlar's office. Following negotiations with Bristol's attorney, a 24-hour extension was granted on the closing. RTC then proposed that the closing be in escrow, but Interurban declined. On September 6, 1991, Bristol decided that it would pursue its claim at law in the form of damages against ATI, RTC and "others" and dissolved its temporary restraining order and claim for equitable relief.
At the meeting on September 6, 1991, between Cotlar and Interurban and its attorney, Cotlar presented a "Release, Hold Harmless and Indemnity Agreement" in favor of RTC, which Interurban refused to sign. RTC then granted an additional extension until close of business September 9 and then another extension until September 16 while the RTC investigated whether Interurban or Bristol held a valid assignment of the contract between ATI d/b/a ATI Property Trust and RTC. The deadline was then extended until September 20 to allow for Interurban to consider a new RTC proposal in light of RTC's decision that it could not close with either Bristol or Interurban without a hold harmless agreement. The new proposal extended the closing for 60 days or until a court determined the rights of the parties, whichever occurred first, if Interurban made an additional deposit, agreed to pay interest on the purchase price while the judicial determination was pending and if ATI, Interurban and the Interurban principals gave RTC an indemnity against any claims...
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