METRO HOLDINGS ONE, LLC, EXPROMAN, INC., and QUAKER SALES & DISTRIBUTION, Appellants-Defendants,
FLYNN CREEK PARTNER, LLC, Appellee-Plaintiff
As Corrected December 30, 2014.
[Copyrighted Material Omitted]
APPEAL FROM THE HENDRICKS SUPERIOR COURT. The Honorable Mark A. Smith, Judge. Cause No. 32D04-1204-PL-39.
ATTORNEYS FOR APPELLANTS, METRO HOLDINGS and EXPROMAN: ANDREW W. HULL, DANIEL K. BURKE, Hoover Hull LLP, Indianapolis, Indiana.
ATTORNEYS FOR APPELLANT, QUAKER SALES & DISTRIBUTION, INC.: THOMAS F. BEDSOLE, MAGGIE L. SMITH, RACHEL M. SCHAFER, Frost Brown Todd LLC, Indianapolis, Indiana.
ATTORNEYS FOR APPELLEE: SCOTT S. MORRISSON Krieg DeVault LLP Carmel, Indiana; LIBBY Y. GOODKNIGHT, Krieg DeVault LLP, Indianapolis, Indiana.
PYLE, Judge. FRIEDLANDER, J., and MATHIAS, J., concur.
STATEMENT OF THE CASE
In this consolidated appeal, we are called upon to address a contract dispute between parties at the summary judgment level. Here, the contract is a real estate purchase agreement between sophisticated business entities--Appellants-Defendants Metro Holdings One LLC (" Metro Holdings" ); Exproman, Inc. f/k/a Exxcel Project Management (" Exproman" ) (collectively, " Metro" ); and Quaker Sales & Distribution, Inc. (" Quaker" ) on one side and Appellee-Plaintiff Flynn Creek Partners, LLC (" Flynn Creek" ) on the other side. The purchase agreement required the buyer, Metro, to purchase two contiguous parcels of real estate from the seller, Flynn Creek, on two separate closing dates.
The purchase and closing of the second property parcel is at issue in this appeal. On the day of the scheduled closing on the second parcel, Metro--relying on a term of the purchase agreement--sent Flynn Creek a notice, indicating that Flynn Creek had failed to satisfy certain closing conditions and invoking the sixty-day period for Flynn Creek to satisfy the disputed closing conditions. Flynn Creek--also relying on a term of the purchase agreement--responded by sending Metro a letter, asserting that Metro had defaulted in its performance under the purchase agreement by failing to purchase the second property parcel. Thereafter, Metro--relying on yet another term of the purchase agreement--sent Flynn Creek a letter, stating that it was electing to terminate the purchase agreement due to the presence of wetlands on the second property parcel.
Ultimately, Flynn Creek filed a suit for breach of contract against Metro and Quaker based upon Metro's failure to purchase and close on the second property parcel. Flynn Creek sought specific performance of the purchase agreement or an alternative remedy of damages for its breach of contract claim. Metro counterclaimed, arguing that Flynn Creek had repudiated or anticipatorily breached the purchase agreement. After the parties filed cross-motions for summary judgment, the trial court granted Flynn Creek's motion for summary judgment (finding, in relevant part, that Metro had breached the purchase agreement by failing to purchase the second property parcel and that Flynn Creek was entitled to specific performance of the purchase agreement) and denied Metro's cross-motion for summary judgment.
Metro now appeals, challenging the trial court's grant of summary judgment on Flynn Creek's breach of contract claim and request for specific performance and the trial court's denial of its repudiation claim. Metro's main appellate argument is that Flynn Creek, as a seller in this real estate transaction, was not entitled to the equitable remedy of specific performance where an adequate remedy at law existed. Additionally, Metro argues that the trial court erred by denying summary judgment on its repudiation claim.
Because our Indiana Supreme Court has explained that specific performance is an available remedy to a seller of real property even though the seller may have action at law and because the parties included a specific provision in their contract that Flynn Creek had the right to specific performance upon a default by Metro, we affirm the trial court's grant of summary judgment on Flynn Creek's breach of contract claim and request for specific performance. Additionally, because Metro did not show on summary judgment that Flynn Creek's actions constituted a clear or absolute statement that Flynn Creek was repudiating or anticipatorily breaching the Purchase Agreement, we affirm the trial court's denial of summary judgment on Metro's repudiation claim.
We consolidate the issues presented and restate the issue on appeal as:
Whether the trial court erred by granting Flynn Creek's motion for summary judgment and denying Metro's cross-motion for summary judgment.
We first point out that many of the facts designated as evidence in this summary judgment proceeding are subject to a trial court order excluding them from public access. As such, portions of the parties' appendices are filed on green paper and marked as " confidential" or " not for public access." See Ind. Admin. R. 9. We have attempted to exclude such matters from this opinion. However, to the extent such matters are included in this opinion, we deem such information to be essential to the resolution of the litigation or appropriate to further the establishment of precedent
or the development of the law. See Admin. R. 9(G)(3); 9(G)(4)(c)(ii)(B),(C).
Before addressing the relevant facts, we pause briefly to review the parties on appeal. This appeal involves a real estate purchase agreement between seller, Flynn Creek, and purchaser, Quaker, who assigned its rights as purchaser to Exproman, who then later assigned its rights to Metro Holdings. Flynn Creek is a joint venture between Midwest Logistics Partnership, a Holladay Properties' subsidiary, and Airwest Partners, a Denison Properties' subsidiary. Metro Holdings and Exproman are real estate construction firms and development companies owned by F. Douglas Reardon (" Reardon" ) and are headquartered in Ohio. Metro Holdings was formed to " develop, design and build [a distribution] facility for Quaker." (Appellee's App. 1121). Quaker is a Delaware corporation and is a subsidiary of Pepsico.
In 2006, a representative from Pepsico approached Flynn Creek about obtaining property so it could build a distribution facility for Quaker's use. On March 12, 2007, Flynn Creek entered into a real estate purchase agreement (" Purchase Agreement" ) with Quaker. Under the Purchase Agreement, Quaker agreed to purchase from Flynn Creek approximately 106 acres of real estate located in the Ameriplex Business Park in Marion County and Hendricks County.
The Purchase Agreement provided that Quaker would purchase the real estate in two different phases. In the first phase, Quaker was to purchase approximately seventy-six acres of land (" Phase 1 Property" ) for $6.84 million. Quaker planned to build a one-million-square-foot Gatorade distribution facility on the Phase 1 Property, and Exproman was the proposed developer of the project.
In the second phase, Quaker was to purchase the remaining acres (" Phase 2 Property" ), which abutted the Phase 1 Property, for a base amount of $750,000 plus an additional amount per net acre depending on the date of the closing for the Phase 2 Property. Here, the additional amount was set at $88,000 per net acre because Metro Holdings, pursuant to an option in the Purchase Agreement, twice extended the closing date for the Phase 2 Property. Thus, the total purchase price for the Phase 2 Property was approximately $3.4 million.
In regard to conditions of performance and closing on the Phase 2 Property, which are at issue in this appeal, the Purchase Agreement contained the following relevant provisions:
4. Conditions of Performance.
All of the items in this Section 4 shall be completed and/or satisfied on or before [April 15,] 2007 (the " Due Diligence Period" ), and Purchaser's obligations under this Agreement shall be contingent upon the timely and complete satisfaction of the following conditions precedent or waiver thereof by Purchaser, in writing:
(a) Survey. Seller has provided Purchaser with a survey of the real estate. Purchaser shall update the Survey in accordance with ALTA/ACSM minimum detail land survey requirements (said survey, as updated hereinafter referred to as the " Survey" ).
The updated Survey shall: (i) be certified to Purchaser, Seller, Title Company and any other party designated by Purchaser; (ii) be as of a current date and by an Indiana registered land surveyor; (iii) show no items which would adversely affect Purchaser's ownership or intended use of the Real Estate; (iv) reflect the boundaries of the [Phase 1 Property] and the [Phase 2 Property]; (v) calibrate the [Phase 1 Property] so it is exactly 76 Gross Acres, with the balance of the Real Estate being the [Phase 2 Property]; and (vi) reflect all existing easements, rights-of-way, roadways, floodways and flood hazard areas located within the boundaries of each of the [Phase 1 Property] and the [Phase 2 Property] . . . .
(b) Title. Fee simple, marketable title to the [Phase 1 Property] and the [Phase 2 Property] shall be conveyed by Seller to Purchaser at the Phase 1 Closing and the Phase 2 Closing, respectively, subject only to (collectively, the " Permitted Exceptions" ): (i) current, non-delinquent taxes and assessments; (ii) those defects, covenants, conditions, easements, liens, encumbrances and restrictions and other matters of record set forth in the Title Commitment (as hereinafter defined) to which Purchaser does not object pursuant to this Section 4 or, if Purchaser objects thereto, Purchaser thereafter waives such objection, in writing, and (iii) those items reflected in the Survey to which Purchaser does not object pursuant to this Section 4 or, if Purchaser objects thereto, Purchaser thereafter waives such objection, in writing. As soon as reasonably practicable after the Execution Date, Seller, at Purchaser's cost and expense, shall deliver to Purchaser a title insurance commitment issued by Title Company covering the [Phase 1 Property] and the [Phase 2 Property] (each, a " Title Commitment" and, collectively, the " Title Commitments" ). In each of the Title Commitments, Title Company shall agree to insure in the name of Purchaser and for the full amount of the [Phase 1 Property] Purchase Price and the [Phase 2 Property] Purchaser Price, good indefeasible, and marketable fee simple title to the [Phase 1 Property] and the [Phase 2 Property], respectively, subject only to the Permitted Exceptions. If the Survey and/or the Title Commitments reveal any exceptions to title, defects or other matters Purchaser finds objectionable, in its sole discretion (collectively, " Objections" ), Purchaser shall have ten (10) business days after receiving the later of the Title Commitments and the Survey to provide Seller with written notice of such Objections. If Seller is unable to cure all Objections to the satisfaction of Purchaser, in its sole discretion, within ten (10) business days after receiving notice thereof from Purchaser, and it gives Purchaser written notice of such, then Purchaser may take any one or more of the following actions: (iv) by written notice to Seller, give Seller additional time to cure such Objections to the satisfaction of Purchaser, in its sole discretion; (v) waive such Objections, in writing, and proceed with the transaction contemplated herein, in which such case such exceptions, defects and/or other matters shall be deemed Permitted Exceptions; or (vi) terminate this Agreement by giving written notice to Seller. If Seller fails to notify Purchaser pursuant to this Subsection 4(b) of its inability to cure the Objections, then it shall be
deemed that Seller has elected to cure such Objections to the satisfaction of Purchaser in its sole discretion. At each Closing, Seller shall cause Title Company to issue to Purchaser a Form B-1970 ALTA Owner's Policy of Title Insurance in conformity with the Title Commitment covering the [Phase 1 Property] and the [Phase 2 Property], respectively including any endorsements Purchaser deems necessary (each, a " Title Policy" and, collectively, the " Title Policies" ). Seller shall pay the premiums for the issuance of each of the Title Policies and Purchaser shall pay the cost of any endorsements it desires to such Title Policies.
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(e) Wetlands Delineation Study. Purchaser, at its cost and expense, may conduct or have conducted any wetland delineation study of the Real Estate, to determine whether there are any wetlands on the Real Estate under the jurisdiction of the Army Corps of Engineers. In the event that wetlands are discovered on the Real Estate, at Purchaser's election, this agreement shall terminate and Purchaser shall receive an immediate refund of the earnest money, together with any interest earned thereon, or Purchaser may proceed with the purchase and receive a reduction of the per acre price to the extent of any delineated wetlands located on the [Phase 2 Property].
In the event Purchaser terminates this Agreement by written notice to Seller prior to the expiration of the Due Diligence Period, Purchaser shall receive an immediate refund of the Earnest Money together with any interest earned thereon.
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8. Conditions to Closing.
All of the items in this Section 8 shall be completed and/or satisfied on or before each Closing Date, and Purchaser's obligations under this Agreement shall be contingent upon the timely and complete satisfaction of each of the following conditions precedent (collectively, the " Closing Conditions" ) or the waiver thereof by Purchaser, in writing:
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(b) Real Estate. The Real Estate shall be in compliance with the provisions hereof and Title Company shall be irrevocably and unconditionally prepared to issue to Purchaser each Title Policy covering the [Phase 1 Property] or the [Phase 2 Property], as applicable, with liability in the full amount of the [Phase 1 Property] Purchase Price or the [Phase 2 Property] Purchase Price, respectively, showing Purchaser in title thereto, subject only to the Permitted Exceptions.
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(f) Later Title Objections. Other than the Permitted Exceptions, no additional matters affecting title to the Real Estate shall have arisen on or before each Closing (" Later Title Objections" ).
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9. Non-Satisfaction of Closing Conditions.
If all of the Closing Conditions contained in Article 8 do not exist at or are not satisfied by each Closing Date, Purchaser may, in addition to and not in limitation of Purchaser's other rights and remedies hereunder, elect to either: (a) consummate the transaction contemplated in this Agreement; (b) extend the applicable Closing Date for one or more further periods of time in order for Seller or Purchaser to satisfy any outstanding Closing Conditions; or (c) after written notice to Seller of the non-satisfaction of a Closing Condition and
the failure of Seller to satisfy the same within [sixty (60)] days of receipt of such notice, receive a return of the Earnest Money together with any interest earned thereon and any Extension Fee, following which this Agreement shall terminate and none of the parties hereto shall have any further duties, liabilities or obligations to one another hereunder.
(App. 102, 104, 106, 107).
Additionally, the Purchase Agreement contained the following provisions in the event that either party defaulted on its obligations under the agreement in regard to the Phase 2 Property:
14. Purchaser's Default After Phase 1 Closing.
IF, AFTER THE PHASE 1 CLOSING, PURCHASER DEFAULTS IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT WITH RESPECT TO THE PURCHASE OF THE [Phase 2 Property] AND FAILS TO CURE SUCH DEFAULT WITHIN TEN (10) DAYS AFTER WRITTEN NOTICE FROM SELLER TO PURCHASER SPECIFYING SUCH DEFAULT, SELLER MAY SEEK ANY REMEDY PROVIDED BY EQUITY OR LAW, INCLUDING THE RIGHT OF SPECIFIC PERFORMANCE, OR TERMINATE THIS AGREEMENT AND RECEIVE THE EARNEST MONEY AS LIQUIDATED DAMAGES.
15. Seller's Default.
If Seller fails to cure within ten (10) days after written notice from Purchaser to Seller: (a) a default in the performance of any of its obligations under this Agreement; or (b) a breach of any of Seller's representations and warranties hereunder, then Purchaser may: (i) terminate this Agreement and receive a return of the Earnest Money together with any interest earned thereon and any Extension Fee; (ii) bring legal action against Seller for out of ...