Galardi v. Naples Polaris, L.L.C.
129 Nev. 306
| Nev. | 2013Background
- This Nevada supreme court case concerns an option contract where Naples Polaris could buy property for $8 million in cash from Galardi and Birdie, LLC.
- The property is subject to a $1.3 million deed of trust predating the option; who must pay that debt is disputed.
- Naples acquired its option rights by assignment from Galardi's lessee, French Quarter, which later filed for bankruptcy.
- The bankruptcy sale would permit paying off the encumbrance and yield the full $8 million while generating surplus for creditors, but the parties disagreed on who bears the debt.
- The option contract contains an integration clause but is silent on preexisting encumbrances and is argued by both sides to be unambiguous.
- The district court granted summary judgment for Naples; the Nevada Supreme Court affirmed, focusing on trade usage and contract interpretation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether usage of trade can illuminate contract meaning without ambiguity | Naples contends contract is ambiguous and trade usage supports its reading. | Galardi argues contract unambiguous; extrinsic usage should not trump terms. | Usage evidence properly considered; contract deemed unambiguous in light of trade. |
| Whether 'costs of transfer and closing' includes retiring the preexisting encumbrance | Naples reads costs as ordinary transfer costs, not encumbrances. | Galardi contends costs include settling debt so he can receive full price. | Contract reads costs to exclude prior encumbrances; Galardi bears the debt. |
Key Cases Cited
- Ellison v. Cal. State Auto. Ass'n, 106 Nev. 601 (1990) (contract interpretation on summary judgment; de novo review)
- May v. Anderson, 121 Nev. 668 (2005) (ambiguous contract standard; summary judgment guidance)
- Margrave v. Dermody Props., 110 Nev. 824 (1994) (ambiguity standard; contract interpretation)
- Dickenson v. State, Dep't of Wildlife, 110 Nev. 934 (1994) (ambiguity determination and extrinsic evidence rule)
- Kaldi v. Farmers Ins. Exch., 117 Nev. 273 (2001) (parol evidence and integrated contracts)
- Parman v. Petricciani, 70 Nev. 427 (1954) (summary judgment on contract interpretation; no ambiguity)