(logo) Attorneys' Title Guaranty Fund Inc.

Casenotes

Indiana
Contracts

Winterton, LLC v Winterton Investors, LLC, 900 NE2d 754 (Ind Ct App 2009).

Facts:Winterton, LLC (Winterton) entered into a purchase agreement to sell an office park to Jacob Acquisitions, LLC (Jacob). Winterton also entered a back-up contract with Scott Brown to buy the office park if the agreement expired or terminated.

Under the agreement, Jacob's performance did not depend on obtaining financing. However, Jacob sought financing and its lender required certificates of estoppel and subordination agreements (certificates) from the tenants of the office park. Subsequently, Jacob was replaced by Winterton Investors, LLC (Investors) as the buyer.

Winterton rescheduled the closing from June 28, 2002, to July 1, 2002. Investors refused to close on July 1, informing Winterton that its lender would not close until it received certificates from every tenant. The closing did not occur, and on August 7, 2002, Investors sued Winterton for breach of contract for failing to provide the certificates, and changing the closing date. Brown intervened, seeking a declaratory judgment that his back-up contract had become effective even though Winterton had not informed him that the agreement had terminated.

The trial court ruled for Investors on both grounds of its argument and rejected Brown's claim.

Holding:Reversed in part, affirmed in part, and remanded. The court of appeals reversed the trial court's determination that Winterton breached the agreement on either ground. Winterton had no specific obligation to provide certificates under the original agreement, nor did certificates fall under Winterton's general obligation to provide "documents&€¦necessary&€¦to consummate the Transaction." That interpretation would unreasonably require Winterton to obtain documents its tenants were not required to sign. Investor's own obligation to its lender to provide certificates did not oblige Winterton, who was not a party to that contract. Finally, even though an amendment to the agreement made obtaining certificates a prerequisite to closing, that clause did not state which party had the burden to obtain them.

Also, changing the closing date to July 1 did not constitute breach of contract. Investors waived the June 28 closing date when it declared that it could not close even on the later July 1 date. Logically, if Investors could not close on July 1, then Winterton did not harm it by pushing back the closing date.

Finally, the court affirmed the judgment against Brown. Brown's back-up contract did not take effect because the agreement did not expire or terminate when Investors alleged Winterton's breach. When a contract is breached it does not automatically terminate, but rather, the parties have obligations to each other until the breach is resolved. Therefore, as long as the parties actively disputed an alleged breach, the contract could not terminate.

© ATG|Casenotes/Bulletin 0906_v2n7

[Last update: 7-27-09]