Michael J. Canning, Esq. and Christopher J. Marino, Esq. recently obtained the dismissal of a claim for specific performance of an alleged contract for the sale of real property for the amount of $45 million.
In the lawsuit GH&C represents Troy Towers, Inc. ("Troy Towers"), the owner of a commercial apartment complex in Bloomfield, New Jersey consisting of two 16-story towers housing 356 units. In 2011 Troy Towers began to market the property for sale. SDK Troy Towers, LLC ("SDK") was interested in purchasing the property and made several offers to purchase the property. Troy Towers ultimately agreed to a sales price of $45 million, contingent on a formal contract being negotiated, signed and delivered.
Over a several month period various drafts of contracts were prepared. Each draft of contract expressly stated that "there shall be no binding agreement unless and until this document is executed by and delivered to all the parties hereto." Other correspondence exchanged between the parties during the negotiation process also made clear that the parties did not intend to be bound to a binding agreement unless and until there was a fully signed and delivered contract. Several months of negotiation did not result in a fully signed and delivered contract. Ultimately, Troy Towers could not proceed with the transaction due to an unexpected circumstance. Because of this circumstance, Troy Towers notified SDK that it was not in the position to enter into a contract. No contract was ever fully signed and delivered.
Nonetheless SDK filed a complaint against Troy Towers in the Superior Court of New Jersey, Chancery Division – General Equity, Essex County, Docket No. ESX-C-69-12. In the complaint SDK sought, in part, an order of specific performance requiring Troy Towers to sell the apartment complex to it for the purchase price of $45 million. SDK alleged that the parties entered into a binding agreement, alternatively alleging that there was a signed agreement or an oral agreement. In response, a motion for partial summary judgment was filed on behalf of Troy Towers seeking a dismissal of the first count of the complaint seeking specific performance. Troy Towers argued that the claim for specific performance was barred by the statute of frauds, N.J.S.A. 25:1-13 which provides that contracts for the sale of real estate are not enforceable unless:
(a) A description of the real estate sufficient to identify it, the nature of the interest to be transferred, the existence of the agreement, and the identity of the transferor and the transferee are established in a writing signed by or on behalf of the party against whom enforcement is sought; or
Oral argument was conducted before the Honorable Donald A. Kessler, J.S.C. Judge Kessler issued a comprehensive 45-page opinion in which he accepted the arguments advanced on behalf of Troy Towers. Judge Kessler found that the parties only intended to be legally bound by a writing signed by and delivered to both parties. He found that there was no such signed and delivered contract. He further found that SDK could not prove the existence of an oral contract by clear and convincing evidence because the evidence overwhelmingly established that the parties did not intend to be legally bound until such time as there was a signed and delivered written contract. Accordingly, Judge Kessler dismissed the claim for specific performance of the alleged $45 million contract.
GH&C invites and welcomes further discussion on cases and matters involving real estate contracts and other commercial litigation matters.
Giordano, Halleran & Ciesla, P.C. is a multi-specialty law firm dedicated to providing sophisticated, complex legal services and solutions. The attorneys maintain personal relationships and gather in-depth knowledge of clients' businesses and industries to construct both sound legal advice and effective strategies to resolve business issues. With a focus on responsiveness and producing results with outstanding value to their clients' bottom line, the firm provides experienced legal representation in a wide variety of practice areas, including: Corporate and Business; Creditors' Rights and Bankruptcy; Environmental; Healthcare; Intellectual Property and Technology; Labor and Employment; Litigation; Real Estate, Land Use and Development; and Trusts and Estates. For more information, visit us at www.ghclaw.com.
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