Metro Holdings One, Llc, Exproman, Inc., and Quaker Sales & Distribution v. Flynn Creek Partner, Llc
25 N.E.3d 141
| Ind. Ct. App. | 2014Background
- Flynn Creek (seller) and Quaker (buyer, later assignments to Exproman then Metro Holdings) entered a 2007 Purchase Agreement for two contiguous parcels (Phase 1 and Phase 2); Phase 2 closing was scheduled for March 30, 2012 after two paid extensions.
- The Agreement included express provisions: a wetlands-delineation due diligence window ending April 15, 2007 (Section 4(e)); procedures for title/survey objections and a 60-day seller cure period after buyer notice of unsatisfied closing conditions (Section 9(c)); and a contract clause allowing the seller, upon purchaser default after Phase 1 closing, to seek remedies at law or equity including specific performance (Section 14).
- Metro sent a March 30, 2012 letter invoking Section 9, asserting certain closing conditions (Sections 8(b) and 8(f)) were unsatisfied and giving Flynn Creek 60 days to cure. Flynn Creek responded that it was ready to close and issued a notice asserting purchaser default (Section 14).
- Metro then sent an April 3, 2012 letter terminating the Agreement under Section 4(e) based on wetlands discovered in a 2007 study; Metro later reiterated termination on May 30, 2012. Flynn Creek sued for breach and sought specific performance; Metro counterclaimed (including repudiation) and both moved for summary judgment.
- The trial court granted Flynn Creek summary judgment, holding Metro breached by failing to close and that Metro’s attempted wetlands-based termination was untimely (delineation and notice required within the 2007 due-diligence period); the court ordered specific performance and denied Metro’s summary judgment. Metro appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Metro breached by failing to purchase/closing on Phase 2 | Flynn Creek: Metro breached by failing to close March 30, 2012 and its April 3, 2012 wetlands termination was untimely under Section 4(e) | Metro: Flynn Creek repudiated/anticipatorily breached on March 30, 2012, discharging Metro’s obligations; alternatively Metro’s termination was proper | Court held Metro breached: wetlands termination was untimely (required study and written termination before Apr 15, 2007); Flynn Creek did not repudiated as a matter of law |
| Whether seller (Flynn Creek) may obtain specific performance despite available legal remedies | Flynn Creek: Contract expressly grants seller the right to seek specific performance (Section 14); Indiana precedent allows vendor relief | Metro: Specific performance unavailable because an adequate remedy at law exists (money damages/resale), so equitable relief should be denied | Court held specific performance available: parties contracted for it; Indiana law permits specific performance to vendors and the contract’s clear grant of the remedy controls |
| Whether Flynn Creek’s March 30, 2012 actions amounted to anticipatory repudiation | Flynn Creek: merely asserted purchaser default and reserved rights; acted to effectuate closing—no clear, absolute repudiation | Metro: Flynn Creek’s March 30 notice and insistence on performance constituted anticipatory breach, releasing Metro | Court held no anticipatory repudiation: repudiation must be clear and absolute; Flynn Creek’s conduct did not meet that strict standard |
Key Cases Cited
- Migatz v. Stieglitz, 77 N.E. 400 (Ind. 1906) (equity may grant specific performance to vendor; vendor may compel acceptance and payment although vendor also has action at law)
- Humphries v. Ables, 789 N.E.2d 1025 (Ind. Ct. App. 2003) (specific performance can be ordered for seller where contract allows it; courts enforce remedies parties agreed upon)
- Kesler v. Marshall, 792 N.E.2d 893 (Ind. Ct. App. 2003) (trial court’s specific performance order reversed where seller failed to show substantial performance and money damages were adequate)
- Salin Bank & Trust Co. v. Violet U. Peden Trust, 715 N.E.2d 1003 (Ind. Ct. App. 1999) (vendor awarded specific performance where purchaser’s defective performance relieved vendor of certain obligations)
- Rice v. Strunk, 670 N.E.2d 1280 (Ind. 1996) (appellate review principles for cases with trial court findings; conclusions of law are not binding on appeal)