Chandler Homes LLC v. Toll Bros Inc

CourtDistrict Court, W.D. Washington
DecidedJanuary 12, 2023
Docket2:21-cv-00382
StatusUnknown

This text of Chandler Homes LLC v. Toll Bros Inc (Chandler Homes LLC v. Toll Bros Inc) is published on Counsel Stack Legal Research, covering District Court, W.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chandler Homes LLC v. Toll Bros Inc, (W.D. Wash. 2023).

Opinion

6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE

9 CHANDLER HOMES, L.L.C., a Case No. C21-382-RSM 10 Washington limited liability company, 11 ORDER Plaintiff, 12 13 v.

14 TOLL BROS., INC., a Pennsylvania company, 15 16 Defendant.

17 I. INTRODUCTION 18 19 This matter comes before the Court on Plaintiff’s Motion for Summary Judgment (Dkt. 20 #16) and Defendant’s Cross-Motion for Summary Judgment and Motion to Strike Portion of 21 Inadmissible Testimony (Dkt. #23). Defendant opposes Plaintiff’s Motion (Dkt. #23) and 22 Plaintiff opposes Defendant’s Motions (Dkt. #29). The Court has reviewed the Motions, the 23 submissions filed in support of and in opposition thereof, the relevant portions of the record, and 24 25 the applicable law. Being fully advised, the Court DENIES Plaintiff’s Motion for Summary 26 Judgment, GRANTS Defendant’s Motion for Summary Judgment, and GRANTS IN PART 27 Defendant’s Motion to Strike. 28 II. BACKGROUND 1 2 Plaintiff Chandler Homes, L.L.C. (“Chandler”) and Defendant Toll Bros., Inc. (“Toll”) 3 are real estate development companies, the former a Washington limited liability company and 4 the latter a Pennsylvania corporation. Dkt. #1-1 ¶¶ 1–2; Dkt. #16 at 1. On January 4, 2018, 5 Chandler purchased property in Kirkland, Washington to develop a condominium project. Dkt. 6 #16 at 3 (citing Dkt. #17 at 1–2). At or around the same time, Toll was under contract to 7 8 purchase an adjacent property on which it intended to develop a 16-townhome community 9 marketed and referred to in the pleadings as “Crosswater.” Dkt. #23 at 3. On February 13, 10 2018, Chandler and Toll entered into an Agreement for Easement and Utilities (hereinafter, the 11 “Agreement”). Dkt. # 17, Ex. A. Per the Agreement, the parties would grant each other 12 13 easements benefiting each other and construct utilities at locations benefiting both parties’ 14 properties. Id. at 1 (Recitals). In exchange, Toll was to “compensate Chandler and share in the 15 cost of utility construction.” Id. 16 Under the Agreement, Toll paid Chandler an initial cash payment of $40,000, plus 17 $290,000 after Toll closed on Crosswater. Id. §§ 1–2. Toll also agreed to make Chandler 18 19 principal Sheri Putzke (also a real estate agent) the listing agent for the homes at Crosswater at 20 a 4.5% overall commission. Id. § 12. Section 3 of the Agreement provided for a final payment 21 as follows: 22 Final Payment to Chandler. If Toll closes on the purchase of the Toll Property and 23 constructs homes thereon, Toll shall make a final payment to Chandler within sixty (60) days after the closing of the sale of the last home in the Toll development (“Final 24 Payment”). The Final Payment shall be computed based upon the following formula: 25 50% of the positive difference (if any) of [x - $13,200,000.00] 26 X = The aggregate of the base sales price for all 16 homes sold by Toll plus all lot 27 premiums. 28 The base sales price is the price for a basic spec level home charged by Toll. The base 1 sales price does not include lot premiums, options, upgrades or cash and noncash 2 incentives. Toll shall have sole and absolute discretion over the setting and adjusting of the base sales prices and lot premiums. However, the base sales price for the homes 3 constructed on the Toll Property shall be no less than the base sales price for the same model home located at similar Toll projects in King County at the time the 4 condominium on the Toll Property opens for sale. In the event that Toll (i) does not 5 construct homes on the Toll Property, and (ii) conveys the Toll Property to a third-party residential developer/builder, Toll shall pay Chandler the sum of five-hundred thousand 6 dollars ($500,000.00) (“Conveyance Fee”) within fifteen (15) business days after closing on such third-party sale. Chandler and Toll agreed to grant each other certain 7 easements to facilitate the development and construction of condominiums on their 8 adjacent properties in Kirkland, Washington.

9 Id. § 3. The parties executed the Agreement without addressing the City of Kirkland’s 10 11 requirement to include Affordable Housing Units (“AHUs”) in certain developments. Chandler 12 began development on its property and obtained required permits in 2017. See Dkt. #17 at 2. 13 At the time, a Kirkland ordinance mandated construction of a certain number of AHUs or 14 payment of a fee in lieu of building an AHU. Id. Chandler decided to pay the fee and executed 15 16 an agreement with the city accordingly. Id. Toll began the permitting process for its 17 development in 2018. See Dkt. #1-1 at 4. Toll built and sold 16 homes. Id. At this time, the 18 option to pay a fee in lieu of building an AHU, previously allowed by the Kirkland ordinance, 19 had expired. Dkt #16 at 7; Dkt. #23 at 6. As required by the ordinance, Toll designated and 20 sold one of the 16 units as an AHU for $439,129. See Dkt. #23 at 9. The remaining 15 units 21 22 were sold at prices (minus lot premiums) between $824,995 to $1,099,995. Id. Subsequently, 23 the parties amended the Agreement twice to incorporate certain provisions, none of which were 24 related to the issue in dispute. See Dkt. #16 at 8. Chandler argues that the parties’ negotiation 25 assumed a minimum “base sale price” of $825,000, which explains the $13,200,000 figure used 26 in the parties’ agreed upon profit sharing formula. Id. at 2. Thus, Chandler argues, Toll 27 28 breached their Agreement when it used the AHU’s sale price (approximately half of the agreed upon minimum) in its calculations and owes Chandler an additional $192,935.50. Id. at 3. Toll 1 2 argues that the plain terms of the Agreement set no such minimum “base sales price” and that it 3 complied with the Agreement in using the AHU’s sales price in its calculations. Dkt. #23 at 2– 4 3. 5 On February 19, 2021, Chandler filed the present litigation in King County Superior 6 Court, and Toll subsequently removed the case to this Court. Dkt. #1. On September 23, 7 8 2021, Chandler moved for summary judgment. Dkt. #16. On October 7, 2021, the parties filed 9 a stipulated motion regarding a briefing schedule for cross-motions for summary judgment, 10 which was granted. Dkts. #21–22. Toll subsequently filed its cross-motion for summary 11 judgment and response on October 25, 2021, and included a motion to strike. 12 13 III. ANALYSIS 14 IV. Motion to Strike 15 Pursuant to Fed. R. Civ. P. 56(c)(2), Toll argues that the Court should strike paragraph 16 16 of the Declaration of Mark Putzke (“Putzke Decl.”) (Dkt. #17) and paragraphs 3 and 4 of the 17 Second Declaration of Mark Putzke (“Second Putzke Decl.”) (Dkt. #27). See Dkt. #23 at 11– 18 19 12; Dkt. #29 at 11–12. When ruling on a motion for summary judgment, “a trial court can only 20 consider admissible evidence.” Orr v. Bank of America, NT & SA, 285 F.3d 764, 773 (9th 21 Cir.2002). Toll claims that this evidence is inadmissible hearsay, lacks foundation, and lack 22 personal knowledge of the facts set forth. 23 In paragraph 16 of the Putzke Decl., Mr. Putzke states that “At the time of the 24 25 Agreement, the base sales price for a spec level home charged by Toll was $895,000.” Dkt. 26 #17 ¶ 16. Mr. Putzke then states that the $13.2 million used to calculate Chandler’s share of 27 profits “was negotiated and agreed to by the parties to represent a base sales price of at least 28 $825,000, times 16, the number of units that were to be built.” Id. Toll argues that the 1 2 statement “the base price of a spec level home charged by Toll was $895,00” is absent any 3 indicia of personal knowledge and is instead Mr. Putzke’s own subjective interpretation of the 4 term “base sales price” in the Agreement. Dkt. #23 at 12.

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Chandler Homes LLC v. Toll Bros Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chandler-homes-llc-v-toll-bros-inc-wawd-2023.