Soo v. Maumelle Co.

897 F. Supp. 414, 1994 WL 847349
CourtDistrict Court, E.D. Arkansas
DecidedApril 15, 1994
DocketCiv. No. LR-C-92-439
StatusPublished

This text of 897 F. Supp. 414 (Soo v. Maumelle Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Soo v. Maumelle Co., 897 F. Supp. 414, 1994 WL 847349 (E.D. Ark. 1994).

Opinion

MEMORANDUM AND ORDER

JONES, United States Magistrate Judge.

Now pending are plaintiffs’ motion for class certification, defendants’ motion for summary judgment and plaintiffs’ cross-motion for summary judgment. Also pending is plaintiffs’ motion for authorization to submit affidavits (Doc. #40).

In their complaint, plaintiffs, who bought property in Maumelle, Arkansas, a subdivision owned by defendant DeHaven, Todd & Co., and listed for sale by defendant The Maumelle Company, allege they were induced to purchase property in the subdivision by false promises made by the sales agents, in violation of the Interstate Land Sales Full Disclosure Act (the Act), 15 U.S.C. sections 1701 et seq., and that defendants failed to provide a property report at the time the agreement to purchase the property was signed, also in violation of the Act; that the representations made by defendants’ [415]*415agents constituted fraud, deceit and misrepresentation; that the defendants are liable for breach of contract in that most of the improvements promised have not been completed; and that the actions of defendants constitute intentional infliction of emotional distress. Plaintiffs request rescission of the promissory notes signed by them, return of the down payments and any other payments made by them, with interest, compensatory and punitive damages and attorney’s fees and costs.

The Court will first address the parties’ motions for summary judgment. Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Although the moving party has the burden of showing the absence of a genuine issue of material fact, the nonmoving party has the burden of producing “evidence that would support a jury verdict.” Anderson v. Liberty Lobby, 477 U.S. 242, 256, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986). Summary judgment must be granted “after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).

The nonmovant has an affirmative burden “to go beyond the pleadings” and “by affidavit or otherwise” designate “specific facts showing that there is a genuine issue for trial.” Commercial Union Insurance Co. v. Schmidt, 967 F.2d 270, 271 (8th Cir.1992) (citations omitted).

The non-moving party must establish significant probative evidence to prevent summary judgment. In addition, the court must give the benefit of all favorable inferences to the party opposing summary judgment. In a trilogy of cases, the Supreme Court established that the Rule 56 motion should be interpreted to accomplish its purpose of disposing of factually unsupported claims.

Johnson v. Enron Corp. 906 F.2d 1234, 1237 (8th Cir.1990) (citations omitted).

When a party opposing summary judgment fails in its burden, summary judgment “may and should be granted” if the moving party otherwise satisfies the Rule 56(c) requirements. Summary judgment is not to be construed as a “disfavored procedural short-cut” but should be interpreted to accomplish its purpose of isolating and disposing of factually unsupported claims and defenses. Yet the Supreme court also notes that trial courts should act with great caution and may deny summary judgment when it believes “the better course is to proceed to a full trial.”

Commercial Union Insurance Co. v. Schmidt, 967 F.2d at 272.

[A]t the summary judgment stage the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.... [TJhere is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.

Anderson v. Liberty Lobby, Inc., supra at 247-50 (citations omitted).

In their motion for summary judgment, defendants argue that beginning June 3, 1989, they were exempted1 from the requirements of the Act because of their inclusion of a “building provision”2 in the sales [416]*416contracts, which bound them to erect a residential building on the properties sold within two years from the date of the sale.3

Plaintiffs also request summary judgment in their favor. They argue that the building provision in defendants’ sales contract is insufficient to create the exemption because it did not unconditionally obligate the defendants to build a house for the buyers within a period of two years and it required the buyers to perform several obligations before defendants’ duty to build a home on the lot arose. They contend

the seller’s obligation to build a house on the lot is conditioned upon the buyer’s providing plans, securing financing, and paying the full cost of the construction of the house plus ten percent. [The] provision also limited the seller’s duty to perform within two years if weather conditions were encountered, or if the buyer failed to comply with the requirements of that provision. The seller could avoid any responsibility to build a house simply by making it economically unfeasible for the buyer to comply. The Maumelle Company retained the right to select the materials and the labor, which cost could easily be made prohibitive.

In Markowitz v. Northeast Land Co., 906 F.2d 100, 104-05 (3rd Cir.1990), the court discusses the exemption claimed by defendants in this case and addressed by the “Guidelines for Exemptions Available Under the Interstate Land Sales Full Disclosure Act,” at 24 C.F.R. Ch. X, Part 1710, App. A (1989).

While noting that “remedies clauses are matters to be decided by the parties to the contract under the laws of the jurisdiction in which the construction project is located,” the Secretary has provided that “the contract must not allow nonperformance by the seller at the seller’s discretion.... contracts that permit the seller to breach virtually at will are viewed as unenforceable because the construction obligation is not an obligation in reality. Thus, for example, a clause that provides for a refund of the buyer’s deposit if the seller is unable to close for any reason within the seller’s control is not acceptable for use under this exemption.

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897 F. Supp. 414, 1994 WL 847349, Counsel Stack Legal Research, https://law.counselstack.com/opinion/soo-v-maumelle-co-ared-1994.