Ouida Massengill, Plaintiff-Counter v. Guardian Management Company, Defendants-Counter

19 F.3d 196, 1994 U.S. App. LEXIS 6887, 1994 WL 116008
CourtCourt of Appeals for the Fifth Circuit
DecidedApril 8, 1994
Docket92-7345
StatusPublished
Cited by9 cases

This text of 19 F.3d 196 (Ouida Massengill, Plaintiff-Counter v. Guardian Management Company, Defendants-Counter) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ouida Massengill, Plaintiff-Counter v. Guardian Management Company, Defendants-Counter, 19 F.3d 196, 1994 U.S. App. LEXIS 6887, 1994 WL 116008 (5th Cir. 1994).

Opinion

DeMOSS, Circuit Judge:

This appeal concerns an agreement for the sale of general partnership interests, with each side accusing the other of breach. Both parties were in the business of developing, managing and investing in federally funded low-income apartment complexes, and their attempted transaction was a sale of general partnership interests in a number of such properties. Plaintiff-appellant Ouida Mas-sengill is appealing the magistrate judge’s decision to grant damages arid specific performance to the defendant-appellee Guardian Management Company (“Guardian”) on its counterclaim and to award Massengill nothing on her suit. We REVERSE and RENDER because we hold that the agreement between Guardian and Massengill is so vague and ambiguous as to be legally unenforceable under Mississippi law.

PROCEDURAL BACKGROUND

Guardian, an Alabama general partnership, filed a complaint in federal court in Alabama on January 19,1989, seeking a declaration of the rights and obligations of the parties under three documents executed by Guardian and Massengill: (1) the Sales of Interest Agreement; (2) the Amendment; and (3) the Addendum. Massengill, a Mississippi resident, filed a motion to dismiss for lack of personal jurisdiction, which was granted. Several days later, she filed suit against Guardian in federal court in Mississippi, seeking a declaration of rights and obligations under the instruments in question as well as damages for breach of contract. Guardian answered and asserted a counterclaim, claiming that Massengill had breached the contract, asking for damages, and asking the court to require Massengill to sell to Guardian her general partnership interests that were the subject of the Sales of Interest Agreement.

*198 The parties consented to have the case tried before a magistrate judge. See Fed. R.Civ.P. 73. The bench trial was held on March 24 and 25, 1992. At the end of the trial, the magistrate judge dictated an oral bench opinion, ruling in favor of Guardian and ordering Massengill to transfer her general partnership interests in the properties upon Guardian’s tender of the agreed per-unit price. 1 The magistrate judge also awarded Guardian damages of $97,780.80 plus interest for the loss of revenue on management fees as a result of Massengill’s refusal to transfer the general partnership interests to Guardian by a particular date for each property as provided in the Sales of Interest Agreement. Massengill appeals from the decision of the magistrate judge. See Fed.R.Civ.P. 73(c).

FACTUAL BACKGROUND

In 1984 or 1985 the defendant-appellee, Guardian, wanted to expand the number of low income housing projects it managed. Guardian was interested in projects financed by the federal Farmers Home Administration (“FmHA”). Guardian solicited FmHA project owners in Alabama and Mississippi, offering to purchase the general partnership interests in the projects in order to gain management control. Obtaining management control was important because such control carried with it the right to receive federally approved management fees. Mas-sengill, who had developed, managed and invested in FmHA projects for more than a decade, responded to a solicitation letter from Guardian. At that time, Massengill testified, she wanted to get away from the FmHA business and its numerous federal regulations and concentrate more on regular commercial real estate. She thus wanted to sell her interests in more than 20 FmHA projects, which she owned through separate Mississippi limited partnerships with herself as the general partner for each project. (Massengill also owned the majority of the limited partnership interests in each project, but there were other limited partners in many of the projects.)

Massengill negotiated with representatives from Guardian for the sale of her general partnership interests. She argues that her intent was to sell each project only as a complete transaction; she would sell her general partnership interest in a particular project only after, or at the same time as, the limited partnership interests in the same project were also purchased, either by Guardian or by a syndicator. 2 Massengill testified at trial that she felt a responsibility to her limited partner investors; therefore she wanted to syndicate the limited partnership interests first, so her investors could get a good price for their interests. That way, her investors could get out of the project before Massengill was required to transfer her managing interest to a new general partner, who could potentially hurt the investments of the limited partners who had trusted her.

Charles Martin, a partner in Guardian Management, testified at trial that Guardian’s objective in the negotiations was to acquire the general partnership interests in all of Massengill’s projects; Guardian was not interested in syndicating the limited partnership interests. Martin testified that Guardian would introduce Massengill to a syndicator and assist her in the syndication. Martin said his impression at the beginning was that Massengill wanted to syndicate all of her projects, but his understanding later was that she did not want to syndicate all of the projects “because of tax considerations.”

Sales of Interest Agreement

The negotiations between Guardian and Massengill resulted in the execution by both *199 parties of the November 7, 1985 Sales of Interest Agreement. The Agreement provided generally that Massengill would transfer her general partnership interests in the designated projects to Guardian, for an agreed-upon per-unit price, upon the completion of certain conditions listed in the Agreement. One of the conditions that had to occur before Massengill was required to sell her general partnership interests was that Massengill had to enter into a contract with a syndicator “binding the syndicator to syndicate the projects.” There was some ambiguity about whether Guardian was obligated to locate the syndicator. The sale of the general partnership interests was also expressly made contingent upon approval of the transaction by the FmHA and by Massengill’s limited partners. These approvals were also required by federal law and Mississippi law.

The Sales of Interest Agreement also provided that Guardian would purchase the limited partnership interest in one project, Oak-view Apartments, Ltd., for $130,000 in cash. (Massengill owned 100 percent of both the general and limited partnership interests in the Oakview project.)

Amendment To Sales of Interest Agreement

The second document executed by the parties was titled “Amendment to Sales of Interest Agreement.” The three-page document states that Massengill and Guardian desire to amend their agreement, and it goes on to state which numbered paragraphs of the Sales of Interest Agreement shall be deleted and replaced by new paragraphs set out in the Amendment. The Amendment was signed by Massengill on November 25, 1985 and by Charles Martin of Guardian on December 7, 1985.

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19 F.3d 196, 1994 U.S. App. LEXIS 6887, 1994 WL 116008, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ouida-massengill-plaintiff-counter-v-guardian-management-company-ca5-1994.