Majestic Golf, LLC v. Lake Walden Country Club, Inc.

823 N.W.2d 610, 297 Mich. App. 305
CourtMichigan Court of Appeals
DecidedJuly 10, 2012
DocketDocket No. 300140
StatusPublished
Cited by3 cases

This text of 823 N.W.2d 610 (Majestic Golf, LLC v. Lake Walden Country Club, Inc.) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Majestic Golf, LLC v. Lake Walden Country Club, Inc., 823 N.W.2d 610, 297 Mich. App. 305 (Mich. Ct. App. 2012).

Opinion

Wilder, P.J.

In this case involving a commercial real-estate contractual relationship, plaintiff, Majestic Golf LLC, appeals as of right from an opinion and order granting it summary disposition in part and denying it summary disposition in part. Defendant, Lake Walden Country Club, Inc., cross-appeals as of right from the same order. We affirm in part, reverse in part, and remand.

I. BASIC FACTS

In 1991, Waldenwoods Properties, L.L.C. (WPL) started planning for a “golf course-real estate development” on approximately 1,400 acres of land it owned. As planned, the golf course was to be constructed on approximately 400 acres, and residential properties [309]*309were going to surround the golf course. WPL planned to lease the land for the golf course (“the Golf Property” or “the Premises”) to a different entity that would be responsible for constructing and operating the golf course.

On December 8, 1992, WPL (as landlord) and defendant (as tenant) entered into a lease agreement (the Lease) for a period of 25 years. The Lease contained the following relevant paragraphs:

17. OPTION TO PURCHASE. Tenant is hereby granted an exclusive option to purchase the Premises on the following terms and conditions:
A. The option shall be exercisable at any time during the final ten (10) years of the Lease term, excluding however the final six (6) months.
B. Exercise of the option shall be in writing, delivered to Landlord.
C. The option may be exercised only if Tenant is not in default of this Lease at the time of exercise.
D. The price shall be determined by appraisal of the fair market value of the Premises as of the date of exercise of the option, but in the condition and state they are in as of the date of executing this Lease, with the assumption they are not subject to this Lease and are restricted to golf course use.
H. Each party at its own expense shall retain an appraiser within thirty (30) days after the option is exercised. Within ninety (90) days after the option is exercised, the parties shall exchange appraisals. If the higher is no more than Ten Percent (10%) higher than the lower, the average of the two (2) shall be the purchase price. If the higher is more than Ten Percent (10%) higher than the lower, the two appraisers within thirty (30) days shall select a third appraiser who shall review the two (2) [310]*310appraisals and within an additional (30) days determine the purchase price, which shall be no less than the lower appraisal and no higher than the higher appraisal. The cost of the third appraiser shall be borne equally by the parties.
K. If this Lease terminates for any reason prior to Tenant exercising its option to purchase, the option shall automatically terminate on termination of the Lease.
22. LANDLORD’S EASEMENTS AND ROAD CROSSINGS. Tenant shall permit drainage and utility easements and road crossings to be developed by Landlord on the Premises as required to permit development to occur on Landlord’s Other Real Estate. The easements and crossings shall be installed by Landlord at its expense but located in areas mutually agreeable. The utilities and roads shall be installed in such a manner as to ensure that the integrity of the golf course in [sic] preserved, leaving the golf course in equal or better condition. ■
26. DEFAULT. Each of the following events shall be a default hereunder by Tenant and a breach of this Lease.
D. If Tenant shall fail to perform any of the agreements, terms, covenants, or conditions hereof on Tenant’s part to be performed (other than payment of rent) and such non-performance shall continue for a period within which performance is required to be made by specific provision of this Lease, or if no such period is so provided for, a period of thirty (30) days after notice thereof by Landlord to Tenant, or if such performance cannot be reasonably had within such thirty (30) day period, Tenant shall not in good [311]*311faith have commenced such performance within such thirty (30) day period and shall not diligently proceed therewith to completion;
If any event specified above shall occur and be continuing, Landlord shall have the right to cancel and terminate this Lease, as well as all of the right, title and interest of Tenant hereunder.
31. NOTICES. Whenever it is provided herein that notice, demand, request, or other communication shall or may be given to or served upon either of the parties by the other, and whenever either of the parties shall desire to • give or serve upon the other any notice, demand, request, or other communication with respect hereto or with respect to the Premises, each such notice, demand, request, or other communication shall be in writing and, any law or statute to the contrary notwithstanding, shall be effective for any purpose if given or served as follows:
A. If by Landlord, by mailing the same to Tenant by registered mail, postage prepaid, return receipt requested, addressed to Tenant at 4662 Okemos Road, Okemos, Michigan 48864, or at such other address as Tenant may from time to time designate by notice given to Landlord by registered mail.

At the time the Lease was originally signed, both parties anticipated the construction of the “golf-real estate development.” Defendant was to develop the then-undeveloped Golf Property into 27 golf course holes, and WPL was to develop the surrounding land into residential real estate.

Defendant complied with its obligation under the Lease to construct the 27-hole golf course. Plaintiff has not yet initiated construction on the residential real [312]*312estate. Defendant had paid rent in a timely manner and fully complied with its other obligations under the Lease until the instant litigation commenced.

According to defendant, it has invested more than $6 million in the Golf Property and has paid over $1.6 million in rent to plaintiff. According to Frank Crouse, a manager of both WPL and plaintiff, defendant recovered its investment in the Golf Property within the first six years.

In March 2003, defendant and WPL (later, plaintiff, as WPL’s successor in interest), began merger negotiations. In the potential merger, defendant was to transfer all of its interest in the Golf Property to plaintiff in exchange for an 85 percent membership interest in plaintiff. These merger negotiations continued until the present litigation began.

On October 27, 2006, Crouse (as manager of WPL) sent a letter to Pat Hayes, defendant’s president. In this letter, he discussed the status of the ongoing merger negotiations and also discussed the status of the zoning approval process for WPL’s “Master Plan” for development. He listed six necessary points of agreement for a successful merger and approval of the Master Plan. The fifth point of agreement required defendant’s approval of a “road easement” between holes #21 and #22 (the Road Easement). WPL needed defendant’s approval of the Road Easement to obtain Hartland Township’s final approval of WPN’s Master Plan.

On April 3, 2007, WPL conveyed title to the Golf Property to plaintiff,1

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Stein v. Home-Owners Insurance
843 N.W.2d 780 (Michigan Court of Appeals, 2013)
Russell v. Harman International Industries, Incorporated
945 F. Supp. 2d 68 (District of Columbia, 2013)

Cite This Page — Counsel Stack

Bluebook (online)
823 N.W.2d 610, 297 Mich. App. 305, Counsel Stack Legal Research, https://law.counselstack.com/opinion/majestic-golf-llc-v-lake-walden-country-club-inc-michctapp-2012.