Mill Run Associates v. Locke Property Co., Inc.
| Decision Date | 07 July 2003 |
| Docket Number | No. Civ.A. 02-8042.,Civ.A. 02-8042. |
| Citation | 282 F.Supp.2d 278 |
| Parties | MILL RUN ASSOCIATES, Plaintiff v. LOCKE PROPERTY COMPANY, INC. and William E. Locke, Jr., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Malcolm J. Gross, Gross, McGinley, Labarre & Eaton, LLP, Allentown, PA, for Plaintiff.
Alexander D. Bono, Blank Rome Comisky & McCauley, LLP, William H. Platt, II, Blank Rome Comisky & McCauley LLP, Philadelphia, PA, for Defendants.
This is an action commenced on September 9, 2002, by Plaintiff, Mill Run Associates ("Mill Run" or "Plaintiff") against Defendants, Locke Property Company, Inc. ("Locke Property") and William E. Locke, Jr. ("Locke") (collectively, "Defendants"), arising out of disputes related to the sale of real property. On November 21, 2002, Plaintiff filed an Amended Complaint. On December 17, 2002, Defendants filed an Answer with Affirmative Defenses, and Defendant Locke Property simultaneously filed a Counterclaim. Presently before the court are Defendants' Motion to Dismiss Counts I and III of Plaintiff's Amended Complaint, and all three (3) counts as to Defendant Locke, individually; and Plaintiff's Motion to Dismiss all thirteen (13) counts of the Counterclaim.
On January 31, 2001, Mill Run and Locke Property entered into an Agreement of Sale (the "Agreement"), by which Mill Run agreed to sell, and Locke Property agreed to purchase, Lot 11 of a Subdivision owned by Mill Run in Upper Macungie Township, Lehigh County, Pennsylvania (the "Township"), for the sum of $2,786,000. The Agreement provided that Locke Property would deposit $150,000 as down payment (the "Deposit") with an escrow agent. The Agreement also provided that Locke Property had a period of sixty (60) days (the "Review Period") in which to perform the buyer's "due diligence," which included the performance of various tests, studies and inspections of Lot 11, and a determination of the "suitability and feasibility" of Lot 11 for Locke Property's intended development and use. In addition, in order to purchase Lot 11, Locke Property had to obtain a permit from the Township (the "Permit"). The Agreement further provided that Locke Property had the right to terminate the Agreement at any time prior to the expiration of the Review Period, in which event the Deposit would be refunded, the Agreement would become null and void, and the parties would be relieved of further liability under the Agreement. According to Defendants, Locke Property made the Agreement based upon negotiations and course of dealings with Summit Management, which the Agreement denominated as Mill Run's broker, and with John Crampsie of Summit Management ("Crampsie"), who was denominated as Mill Run's individual agent.
On May 7, 2001, the parties entered into a First Amendment to Agreement of Sale, which extended the Review Period to May 31, 2001. The parties subsequently entered into Second, Third and Fourth Amendments to Agreement of Sale, which further extended the Review Period to July 31, 2001, August 31, 2001, and September 30, 2001, respectively. Plaintiff avers that all four (4) Review Period extensions were requested by Locke Property. Locke Property counters that, although it repeatedly notified Mill Run, through Summit Management, that it sought to terminate the Agreement, Mill Run represented to Lock Property that Lot 11 was readily permittable and assisted Locke Property with the permitting process.
By letter dated September 28, 2001, counsel for Locke Property gave written notice to Mill Run that it was exercising its right to terminate the Agreement (the "Termination Notice"). The Termination Notice stated the following:
Pursuant to the applicable provisions of the [Agreement of Sale], as amended, including, without limitation, Paragraph 5 entitled "Review Period," notice is hereby given that Locke Property Company, Inc. does hereby elect to terminate the above-referenced Agreement. By copy of this letter to the Escrow Agent, I am directing them to return the Deposit together with interest directly to me for return to Locke Property Company, Inc.
See Amended Complaint, attached as Ex. "F." Mill Run returned the deposit money. However, Locke Property avers that Mill Run, through Summit Management and Crampsie, continued to encourage Locke Property to obtain the Permit and represented that the Agreement would be reinstated when the Permit was obtained. As a result, Defendants aver that they continued to expend thousands of dollars to acquire the Permit.
Meanwhile, Mill Run placed Lot 11 back on the market for sale sometime after September 2001, and subsequently entered into negotiations to sell Lot 11 to First Industrial Acquisitions, Inc. ("First Industrial"). On June 5, 2002, First Industrial issued a Letter of Intent to Mill Run to purchase Lot 11, after which First Industrial and Mill Run began drafting an agreement of sale.
Also on June 5, 2002, the Township issued the Permit to Locke Property for Lot 11, after which Locke Property again sought to purchase the property from Mill Run. Thereafter, First Industrial notified Mill Run that both it and its prospective tenant had received information from Locke Property and Defendant Locke that they were asserting ownership of, an equitable interest in, or "control" of, Lot 11. As a result, First Industrial questioned Mill Run's ability to perform on the anticipated agreement of sale, and requested additional warranties and assurances from Mill Run concerning Lot 11.
On September 9, 2002, Mill Run commenced the instant action by filing a Complaint with the Court of Common Pleas of Lehigh County, Pennsylvania. On October 24, 2002, Defendants removed the action to the United States District Court for the Eastern District of Pennsylvania. On November 7, 2002, Defendants filed a Motion to Dismiss Plaintiff's Complaint, as well as an Answer, Affirmative Defenses and Counterclaim to Plaintiff's Complaint.
Meanwhile, on November 13, 2002, Defendants filed a Praecipe for Lis Pendens, which further encumbered the title to Lot 11.
On November 21, 2002, Mill Run filed an Amended Complaint asserting three (3) counts: (1) preliminary and permanent injunctive relief enjoining Defendants from interfering with Mill Run's negotiations with First Industrial or any other prospective buyer of Lot 11, and striking or withdrawing the Praecipe for Lis Pendens which Defendants filed in this action; (2) declaratory judgment that Defendants have no right, title, interest or claim to Lot 11, and that Mill Run's title is free and clear; and (3) intentional interference with prospective contractual relations. On December 17, 2002, Defendants filed a Motion to Dismiss Counts I and III of Plaintiff's Amended Complaint, and to dismiss Counts I, II and III as to Defendant Locke, individually. Defendants simultaneously filed an Amended Answer, Affirmative Defenses and Counterclaim to the Amended Complaint, asserting thirteen (13) counts: (1) breach of contract—specific performance; (2) anticipatory breach of contract—specific performance; (3) breach of contract; (4) fraudulent inducement; (5) negligent misrepresentation; (6) breach of covenant of good faith and fair dealing; (7) quantum meruit; (8) promissory estoppel; (9) unjust enrichment; (10) civil conspiracy; (11) failure of essential purpose; (12) novation of contract; and (13) declaratory judgment as to rights and liabilities under the Agreement, and reimbursement of costs and expenses in reliance on Mill Run's alleged promise to reinstate the Agreement once the Permit was obtained. On January 6, 2003, Plaintiff filed a cross-Motion to Dismiss all thirteen (13) counts of the Counterclaim.
The applicable inquiry under Rule 12(b)(6) is well-settled. Courts are required to accept all well-pleaded allegations in the Complaint as true and to draw all reasonable inferences in favor of the non-moving party. See In re Rockefeller Center Properties, Inc., 311 F.3d 198, 215 (3d Cir.2002) (). The inquiry is not whether the parties will ultimately prevail in a trial on the merits, but whether they should be afforded an opportunity to offer evidence in support of their claims. See Scheuer, 416 U.S. at 236, 94 S.Ct. 1683. Dismissal under Rule 12(b)(6) is not appropriate unless "it appears beyond doubt that the [non-movant] can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Rockefeller, 311 F.3d at 215. In determining whether dismissal is appropriate, the Court is required to apply Pennsylvania law. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) ().
Defendants seek dismissal of Count I of the Amended Complaint, in which Plaintiff seeks preliminary and permanent injunctive relief enjoining Defendants from interfering with Mill Run's negotiations with First Industrial or any other prospective buyer of Lot 11, and striking or withdrawing the Praecipe for Lis Pendens which Defendants filed in this action.
"[T]he grant of injunctive relief is an extraordinary remedy ... which should be granted only in limited circumstances." Frank's GMC Truck...
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...claim as duplicative of a contract claim when the contours of the agreement at issue are not clear. In Mill Run Assocs. v. Locke Prop. Co., Inc., 282 F.Supp.2d 278, 291 (E.D.Pa.2003), "one of the primary issues between the parties [was] whether the Agreement, the Agreement with oral modific......
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