Butler Block, LLC v. Tri-County Metropolitan Transportation District

255 P.3d 665, 242 Or. App. 395, 2011 Ore. App. LEXIS 612
CourtCourt of Appeals of Oregon
DecidedApril 27, 2011
Docket080404925; A142060
StatusPublished
Cited by5 cases

This text of 255 P.3d 665 (Butler Block, LLC v. Tri-County Metropolitan Transportation District) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Butler Block, LLC v. Tri-County Metropolitan Transportation District, 255 P.3d 665, 242 Or. App. 395, 2011 Ore. App. LEXIS 612 (Or. Ct. App. 2011).

Opinion

*397 HASELTON, P. J.

Plaintiff Butler Block, LLC (Butler Block) appeals, assigning error to the trial court’s allowance of summary judgment in favor of defendant Tri-County Metropolitan Transportation District of Oregon (TriMet). On appeal, Butler Block raises a single assignment of error, contending that the trial court erred in granting summary judgment to TriMet because there are issues of material fact as to whether TriMet anticipatorily breached the parties’ development agreement by refusing to grant Butler Block an extension of time to perform when it was unable to obtain “construction financing” in late 2007 “due to the unexpected collapse” of the “global credit” and Portland “real estate markets.” As amplified below, we conclude that, as a matter of law, TriMet’s failure to grant an extension was not an anticipatory repudiation of the parties’ agreement. Accordingly, we affirm.

The operative facts that are ultimately material to our analysis and disposition are uncontroverted. In November 2004, the parties entered into a lengthy and detailed “Disposition and Development Agreement” (the agreement). In general terms, TriMet agreed to convey a parcel of land in Portland — that is, “the site” — to Butler Block 1 in exchange for Butler Block’s commitment to develop “a transit-oriented, mixed-use residential/retail/commercial development” with “parking” on the site.

Three aspects of the agreement are especially pertinent to the issues on appeal.

First, the agreement contains conditions precedent to Butler Block’s obligation to purchase the site and TriMet’s obligation to convey it. Specifically, section 2.03(3) provides that Butler Block’s obligation to purchase the site is subject to “obtaining financing (which may be through debt and/or equity sources) for the construction of the Developer *398 Improvements on a basis and on terms that are satisfactory to [Butler Block].” Relatedly, section 2.04(3) provides that TriMet’s obligation to convey the site is subject to its receipt of financial information from Butler Block that is “reasonably satisfactory to demonstrate to TriMet that the financial capacity of the participants in the development entity is sufficient to carry out the financial obligations of [Butler Block] and to construct the Developer Improvements and the Project.” 2 Further, section 2.04(4) provides that TriMet’s obligation to convey the site is subject to Butler Block’s “providing to TriMet evidence, reasonably satisfactory to TriMet, that construction financing for the Developer Improvements has been or can be obtained by [Butler Block], and closing of such construction financing and equity contribution concurrently with conveyance of the Site.”

Second, the agreement provides that, under certain circumstances, each party has the right to terminate the agreement due to concerns related to financing. Section 5.07 provides, in part, that Butler Block may terminate the agreement “in the event that prior to the conveyance of title to the Site, the conditions precedent as set forth in Section 2.03 shall not have been satisfied or waived to the satisfaction of [Butler Block.]” In other words, if, before the site is conveyed, Butler Block cannot obtain debt or equity financing on terms that it finds satisfactory, it may terminate the agreement. Relatedly, under section 5.08(4), TriMet may terminate the agreement “[i]n the event that prior to the conveyance of title to the Site,” Butler Block “does not submit evidence that it has the necessary equity capital and mortgage financing, in a satisfactory form to undertake and complete the obligations *399 of [Butler Block] under this Agreement and such failure is not cured within the applicable period for cure under this Agreement^]”

Third, the agreement contains a broadly worded provision concerning extensions of time for the parties’ performance due to causes beyond the control of the party seeking the extension — viz., section 6.04. Specifically, that section, which is at the heart of the parties’ dispute, provides:

“In addition to specific provisions of this Agreement, performance by either party hereunder will not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lockouts; labor disputes; riots; volcanoes; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemic; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priorities; litigation, including but not limited to litigation challenging the validity of this transaction or any element thereof; severe weather; inability to secure necessary labor, materials or tools; delays of any contractor or subcontractor or supplier; acts of the other party; acts or failures to act of any public or governmental agency or entities (except that TriMet’s own acts or failure to act will not excuse performance by TriMet); or any other cause beyond the control or without default of the party claiming an extension of time to perform. In the event of such delay, the party delayed will give written notice of the delay and the reason therefor to the other party within 30 days after the delayed party learns of the delaying event. An extension of time for any such cause will be for the period of duration of the cause. Times of performance under this Agreement may also be extended for any reason in writing signed by TriMet’s Director and [Butler Block].”

(Emphasis added.)

After its execution, the parties amended the agreement three times. Only the third amendment, which was executed in January 2007, is pertinent to the issues on appeal. That amendment extended the closing date by nine months to February 10, 2008. TriMet granted that extension under *400 section 6.04 of the agreement because of the delay caused by a neighborhood association’s appeal of the project’s design. 3

Then, on November 1, 2007, Butler Block sent a letter to TriMet, which precipitated the chain of events culminating in this litigation. In that letter, Butler Block reaffirmed its commitment to complete the project but requested an 18-month extension under section 6.04 because, it asserted, due to circumstances beyond its control, it was unable to obtain reasonable construction financing. Specifically, the letter stated, in part:

“As you are aware, within the last thirty (30) days, several circumstances beyond our control have arisen which [make it] both impossible and imprudent to proceed with the development at this time. Principal among these is the condition of the financial market generally, which makes it impossible to obtain reasonable financing on this type of development. Second, and detrimental to the current success of the project, is the combination of the escalating cost of construction and the surplus of high rise condominium units in the Portland marketplace.
“Make no mistake, we are firmly committed to this project.

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Bluebook (online)
255 P.3d 665, 242 Or. App. 395, 2011 Ore. App. LEXIS 612, Counsel Stack Legal Research, https://law.counselstack.com/opinion/butler-block-llc-v-tri-county-metropolitan-transportation-district-orctapp-2011.