Stephen Sloan Realty Co. v. 555 South Woodward Associates

601 F. Supp. 1008, 1985 U.S. Dist. LEXIS 22803
CourtDistrict Court, E.D. Michigan
DecidedFebruary 6, 1985
DocketCiv. A. No. 83 1555
StatusPublished
Cited by1 cases

This text of 601 F. Supp. 1008 (Stephen Sloan Realty Co. v. 555 South Woodward Associates) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stephen Sloan Realty Co. v. 555 South Woodward Associates, 601 F. Supp. 1008, 1985 U.S. Dist. LEXIS 22803 (E.D. Mich. 1985).

Opinion

MEMORANDUM OPINION AND ORDER

ANNA DIGGS TAYLOR, District Judge.

Plaintiff Stephen Sloan Realty Corporation has filed a complaint, alleging breach of contract, breach of fiduciary duty and intentional interference with contractual relations, against 555 South Woodward Associates (S.W. Associates) and its representatives Bruce Miller and John Thompson, as well as against Lawrence Gechter, Herbert Sillman and Bruce Thai, who are professional accountants. The action arises from a March 22, 1982 Agreement of Sale into which plaintiff entered with S.W. Associates for plaintiffs purchase of an apartment, office and commercial development called the 555 South Woodward Buildings.

Section 18(c) of the agreement allowed plaintiff until May 21, 1982 to obtain a written commitment on a mortgage. The same paragraph provided that if plaintiff should fail to acquire a mortgage commitment by May 21, 1982, the contract would be terminated but plaintiff would still retain a right of first refusal for one hundred twenty days following termination.

The deadline for plaintiffs acquisition of the mortgage commitment was extended in writing on two occasions. On May 25, 1982, S.W. Associates gave plaintiff a written extension to June 7, 1982; and, on June 11, 1982 the deadline was extended to July 15, 1982. These extensions were made without reference to plaintiffs original right of first refusal.

Plaintiff was unable to obtain a written commitment by July 15, 1982. However, negotiations between plaintiff and representatives of S.W. Associates continued. In August, 1982 plaintiff engaged a New York law firm to prepare a draft agreement for further negotiations with S.W. Associates at a September meeting. On September 14; 1982, plaintiff had that meeting with S.W. Associates’ representatives in Detroit. The parties were unable to reach an agreement on that date and there were no further negotiations, thereafter. In February of 1983, defendants Gechter, Sillman and Thai acquired their interest in the property. A few months later, plaintiff brought suit in this court for breach of his right of first refusal.

PROCEDURAL HISTORY

On August 29, 1983, this court heard argument on defendants’ motion to dismiss or for summary judgment. For reasons stated on the record, the court granted defendants’ motion as to Count II, which claimed breach of a fiduciary duty. But the court denied the motion as to the two remaining counts, because plaintiff, by affidavit, declared that at the last meeting of these parties, in September of 1982, there had been an oral agreement to extend the right of first refusal. In his affidavit plaintiff stated that defendant Miller attended the September meeting and that plaintiff and he orally agreed that the termination date and the right of first refusal would be extended. Defendants denied that any such agreement was made. The court determined that a genuine issue of material fact had been raised as to whether or not an agreement to extend the right of first refusal had been made, and that the remaining two counts must therefore be tried. The court did not grant the motion on the basis of the Statute of Frauds, which defendants also argued, either.

Now that discovery has been completed, defendants have filed another motion for summary judgment on those same remaining counts of the complaint. Defendants contend now that although plaintiff had stated in his earlier affidavit that an agreement had been made, at a subsequent deposition plaintiff’s testimony about the “extension” meeting made it clear that no agreement was made. At the deposition, plaintiff indicated that he had stated at the September, 1982 meeting, at his departure, that the option was still in existence and [1010]*1010that S.W. Associates’ representatives should notify him if another deal developed. Plaintiff acknowledged that no one had responded to his remark. No other persons present at the meeting recalled that the subject of the right of first refusal has been mentioned at all. Defendants say that, based upon these undisputed facts, they are entitled to summary judgment as to Count I. No agreement can be attributed to the September 14, 1982 meeting.

Defendants also claim that they are entitled to summary judgment on Count III, in which plaintiff alleges that defendants Sill-man, Gechter, and Thai interfered with contractual relations between plaintiff and S.W. Associates. Defendants argue that since the original agreement automatically terminated on July 15, 1982, the option expired at the latest in September of 1982, and defendants did not acquire the buildings until February 24,1983, they could not have interfered with plaintiff’s contract. Defendants could not have usurped plaintiff’s opportunities or engaged in unfair competition with plaintiff for the same reason.

Additionally, defendants suggest that, should the court find that the right of first refusal did not expire until one hundred twenty days after July 15, 1982, the right was terminated by implication on November 12, 1982. And the court notes that even if the extension was agreed upon as plaintiff claims on September 14, 1982, it would have expired by its own terms one hundred twenty days later — and the sale to defendants on February 24, 1983, was one hundred sixty three days later.

Plaintiff’s position, nevertheless, is that as a consequence of his July 14th meeting with Miller and attorneys in New York, a lengthy proposed agreement was prepared in August for him to present, and the parties met again in September. According to plaintiff, when he and S.W. Associates failed to reach an agreement on September 14, 1982, the agreement was terminated on that date and he retained a right of first refusal until January 14, 1983. He contends that the February sale violated his option because Miller had decided to sell the property to the codefendants at some time before the option expired in January.

Plaintiff claims that defendants’ motion should be denied because there are substantial factual issues regarding the agreements to extend the March agreement; as to whether the entire contract, including the right of first refusal, was extended; and whether Gechter, Sillman and Thai interfered with contractual relations. Plaintiff contends that the entire contract was extended, and that he had relied upon the right of first refusal to protect his creative, unique, and inventive financing concepts from seizure by others. He further claims that defendants Gechter, Sillman and Thai knew about the right of first refusal because they insisted that S.W. Associates include a clause in their contract that S.W. Associates would idemnify and hold them harmless from plaintiff’s potential claims of right of first refusal. Moreover, he claims that the accountant defendants did in fact usurp his unique financing concepts.

The court finds that there are no genuine issues of material facts remaining in this case to warrant a trial. First, there is no issue as to whether the option agreement was extended to February 24, 1983, the date on which defendants entered their sale agreement. It was not, even assuming plaintiff’s gloss on the facts. “A party opposing the motion [for summary judgment] must present facts of a substantial nature, and may not rely on conclusions of law____” The mere hope that evidence may surface is not sufficient to have a trial. Provenzino v. Merchants Forwarding, 363 F.Supp. 168, 175 (E.D.Mich.1973).

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Bluebook (online)
601 F. Supp. 1008, 1985 U.S. Dist. LEXIS 22803, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stephen-sloan-realty-co-v-555-south-woodward-associates-mied-1985.