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Empire Realty Investments, Inc. v. U.S. Affordable Housing, LLC

United States District Court, N.D. Indiana, Fort Wayne Division

May 19, 2015

EMPIRE REALTY INVESTMENTS, INC. Plaintiff,
v.
U.S. AFFORDABLE HOUSING, LLC, Defendant.

OPINION AND ORDER

RUDY LOZANO, District Judge.

This matter is before the Court on (1) the Motion for Judgment on the Pleadings filed by Defendant U.S. Affordable Housing, LLC, on December 26, 2014 (DE# 12), and (2) the Request for Oral Argument on Motion for Judgment on the Pleadings filed by Defendant on February 20, 2015 (DE# 26). For the reasons set forth below, Defendant's Motion for Judgment on the Pleadings (DE# 12) is GRANTED, and Defendant's Request for Oral Argument on Motion for Judgment on the Pleadings (DE# 26) is DENIED. This case remains pending as to Defendant's counterclaims.

BACKGROUND

In November 2014, Plaintiff Empire Realty Investments, Inc. ("Empire") filed a complaint against Defendant U.S. Affordable Housing, LLC ("USAH") in Indiana state court. (DE# 4 at 1-12 ("Compl.").) Attached to the Complaint was an Agreement of Sale executed by Empire and USAH. (DE# 4 at 13-57 ("Agreement").) In December 2014, USAH removed the case to federal court and filed its Answer, Affirmative Defenses and Counterclaims. (DE## 1, 10.) USAH then filed the instant Motion for Judgment on the Pleadings. (DE# 12.) Empire filed its Answer and Affirmative Defenses to USAH's Counterclaims in January 2015. (DE# 19.) The parties have fully briefed the instant motion, and USAH requests oral argument. (DE## 22, 25, 26.)

FACTS

The Court accepts as true, as it must when considering a motion for judgment on the pleadings, the following facts alleged in Empire's Complaint. Forseth v. Village of Sussex, 199 F.3d 363, 368 (7th Cir. 2000).

On or about July 9, 2014, Empire and USAH entered into an Agreement of Sale ("Agreement"), pursuant to which USAH agreed to sell and Empire agreed to purchase certain real estate for $3, 425, 000. (Compl. ¶¶ 4, 9; Agreement § 2.) The real estate is located at 407 North Gatewood Drive, City of Marion, County of Grant, Indiana, and includes a 220-unit apartment complex known as Eagle Chase ("Property"). (Compl. ¶¶ 3, 8.)

The Agreement includes several provisions at issue in this case. Section 4 of the Agreement contemplates a period during which Empire was entitled to investigate the Property ("Investigation Period"), and states in part:

A. Investigation. Commencing on the Agreement Date, [Empire]... shall have the right to enter upon the Property to conduct or cause to be conducted upon the Property... other physical examinations of the Property as [Empire] may deem necessary, and [Empire] may otherwise do that which, in the opinion of [Empire], is necessary for [Empire] to satisfy itself with regard to the physical condition of the Property and all other aspects of the Property....
B. Right to Terminate in Investigation Period.... If [Empire] determines that it is not satisfied for any reason, or no reason, in its sole discretion, with the results of its investigations, or the status of any other condition of or relating to the Property, whether known or unknown on the Agreement Date, and notifies [USAH] in writing of its election to terminate this Agreement, the Initial Deposit shall be returned to [Empire] and this Agreement shall, without any further action by [Empire] or [USAH], become null and void, and all of the parties to this Agreement shall be released from any and all further obligation or liability thereunder.

(Agreement § 4.)

Section 9(A) of the Agreement provides several representations and warranties of USAH:

A. Representations and Warranties of [USAH]. In order to induce [Empire] to enter into this Agreement and purchase the Property, and with full knowledge that [Empire] is relying thereon, [USAH] hereby warrants and represents to [Empire] as follows....
(5) Condemnation. There are no condemnation proceedings pending or proposed with regard to the Property.
(6) Notice of Violations. [USAH] has not received any written notices of violations of any applicable ordinances, regulations, or other laws with respect to the Real Property which are uncorrected [as] of the Agreement Date (the "Violation Notices").
If any Violation Notices are received by [USAH] after the Agreement Date and prior to the Closing, [USAH] shall pay the cost of complying with such Violation Notices. In addition, on or before Closing, [USAH] shall deliver any applicable certificate of occupancy or use and occupancy permit to [Empire] and make any repairs required by the applicable municipality for the issuance of same.

(Agreement § 9(A).)

Section 10 of the Agreement addresses the conditions precedent to Empire's obligation to purchase the Property, and Empire's options if the conditions precedent are not satisfied on the closing date:

A. Conditions Precedent. The obligation of [Empire] to complete the purchase of the Property from [USAH] in accordance with this Agreement is subject to satisfaction of each of the following conditions (the "Conditions Precedent"), any of which may be waived ...

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