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GLS DEV. v. WAL-MART STORES

November 7, 1996

GLS DEVELOPMENT, INC., Plaintiff,
v.
WAL-MART STORES, INC., et al., Defendants.



The opinion of the court was delivered by: SHADUR

 In its First Amended Complaint GLS Development, Inc. ("GLS") has sued both Wal-Mart Stores, Inc. ("Wal-Mart")(Count I) and DiMucci Development Corporation ("DiMucci")(Count II), charging each with breach of contract. This Court's May 30, 1996 memorandum opinion and order (the "Opinion," 1996 WL 296594) denied a motion by DiMucci for summary judgment under Fed. R. Civ. P. ("Rule") 56. Now Wal-Mart has filed its own summary judgment motion. Both Wal-Mart and GLS have complied with this District Court's General Rule ("GR") 12(M) and 12(N), *fn1" and Wal-Mart's motion is fully briefed and ready for decision. For the reasons stated in this memorandum opinion and order, the motion is granted in part and denied in part.

 Summary Judgment Standards

 Familiar Rule 56 principles impose on Wal-Mart the burden of establishing the lack of a genuine issue of material fact ( Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)). For that purpose this Court is "not required to draw every conceivable inference from the record--only those inferences that are reasonable"--in the light most favorable to GLS ( Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991) and cases cited there). As with every summary judgment motion, this Court accepts nonmovant GLS' version of any disputed facts.

 This Court has already set out the background facts underlying this lawsuit in some detail in the Opinion. Accordingly this opinion will outline only those facts necessary to the resolution of this Wal-Mart motion for summary judgment. What follows is a version of the material facts culled from the parties' submissions, with any differences being resolved in GLS' favor.

 Facts

 In November 1992 Wal-Mart acquired an option to purchase some Cicero, Illinois real estate from an Illinois land trust, the beneficial interest of which was owned by William Pacella (the "Pacella option") (G. 12(N) P6). At that time Wal-Mart intended to "self-develop" the Cicero property (without the employment of an independent real estate developer) by tearing down an older existing Sam's Club and building both a new Sam's Club and Wal-Mart store (G. 12(N) P7). In January 1993 *fn2" the Town of Cicero ("Cicero") approved a Redevelopment Agreement with favorable financing terms, under which Wal-Mart was to develop the Cicero parcel (W. 12(M) R. P2). In March, however, Wal-Mart's Real Estate Committee rejected the proposed self-development (G. 12(N) P10).

 In mid-March Kimberly ("Kim") Black ("Black," though now known as Kimberly Lane), a real estate manager for Wal-Mart, took over responsibility for development of the Cicero property. Black began negotiations with DiMucci's Director of Leasing and Commercial Development Richard Filler ("Filler") to have DiMucci develop the Cicero project. Under a proposed agreement between Wal-Mart and DiMucci, the latter would (1) acquire and exercise Wal-Mart's rights under the Pacella option, (2) build a new Sam's Club and (3) enter into a long-term lease with Wal-Mart for the new store. As of late June, however, Wal-Mart and DiMucci could not reach agreement as to an appropriate rental rate, and Wal-Mart decided to seek out GLS as an alternative developer (G. 12(N) PP11-14).

 On July 21 GLS' President Gary Schwab ("Schwab") submitted a written proposal to Wal-Mart for development of the Cicero property (Complaint Exhibit 1). GLS offered to accept an assignment of the Wal-Mart option to purchase the Cicero property, to demolish and remove the older Sam's Club, to build a new Sam's Club and to lease the new project to Wal-Mart for a 25-year term. GLS' July 21 offer was made expressly contingent on the successful negotiation of a number of collateral agreements, including an agreement between GLS and Cicero for tax increment financing for the development:

 
Our offer is contingent upon the following items which must be accomplished prior to September 2, 1993...(4) Execution of a T.I.F. agreement between the Town of Cicero and GLS which will provide for the sale of bonds within 90 days of closing which proceeds shall be distributed fully to GLS (Complaint Exhibit 1).

 GLS' offer was approved by Wal-Mart's Executive Committee and then accepted by Wal-Mart in an August 2 letter from Black to Schwab. Although GLS had proposed that it would accept assignment of the Pacella option, instead Wal-Mart exercised the option itself and notified GLS in Black's August 2 letter that Wal-Mart had begun "preparing an Assignment Agreement of the above referenced Option assigning Wal-Mart's interest to GLS Development, Inc." (Complaint Exs. 1 and 2, Schwab Dep. 35-36). Under the Pacella option the property purchase had to be closed within 30 days after the option was exercised (W. 12(M) R. P7).

 In early August, shortly after Wal-Mart and GLS had reached agreement, Wal-Mart's broker met with Cicero officials to explain that GLS would be developing the Cicero project (W. 12(M) R. P9). Before that meeting Cicero Town Attorney Dennis Both ("Both") had been working on a new redevelopment agreement with the understanding that the development would be done by DiMucci. In an August 5 letter to Wal-Mart's broker, Both expressed surprise that his "repeated warnings" to Wal-Mart that Cicero's redevelopment agreement not be "shopped" had been ignored, and insisted that Cicero "will no longer be taken for granted as a rubber stamp" (G. 12(N) Supp. PP11-12, App. 11). Cicero officials refused to meet with GLS in August, and Schwab became convinced by late August that Cicero would not enter into a redevelopment agreement with GLS (W. 12(M) R. P13; G. 12(N) P21).

 On August 24 Black spoke with Schwab by telephone to discuss the status of the Cicero Sam's Club development. Black asked that GLS "walk away" from the development because Cicero wanted DiMucci to develop the project. As compensation to GLS, Black offered that Wal-Mart would "make sure that you [GLS] are taken care of" to the tune of a $ 500,000 payment to GLS--the same amount that Wal-Mart had asked GLS to make to DiMucci when GLS had been awarded the development contract--and would give GLS "a few" additional projects to work on in lieu of the Cicero development (G. 12(N) PP22-24; Schwab Dep. 11-18). Because that area of Schwab's testimony was obviously so critical to the current dispute, Wal-Mart's attorney interrogated him repeatedly and at length on that score--and Schwab consistently characterized the reference to the $ 500,000 payment in the same terms, including this statement of Black's promise (referring to the same $ 500,000 amount that Schwab testified GLS was to pay DiMucci when the GLS-DiMucci positions had been reversed)(Schwab Dep. 19):

 
She said whatever the amount was that's what you'll be paid. *fn3"

 Schwab accepted those terms, and GLS withdrew from the project.

 Between August 24 and August 27 Schwab became concerned about Black's agreement to do "a few" more developments with GLS, for her promise had eroded in subsequent conversations to doing only "a couple" more (G. 12(N) Supp. P26). On August 27 Schwab sent a letter to Black via facsimile, stating in part (G. 12(N) P26; Answer to Complaint Ex. A):

 
In consideration for stepping aside and the time and effort GLS Development, Inc. has put forth in trying to secure the development of the site, Wal-Mart Stores Inc. will provide two (2) future site locations, either in Chicago proper or the suburbs of Chicago, for GLS Development, Inc. to develop.

 Schwab's letter did not include any reference to the $ 500,000 payment because Black had acknowledged that payment obligation on later occasions, and Schwab was not concerned about her honoring her commitment--she had told Schwab that her word should be good enough (G. 12(N) Supp. PP27-28). In response to Schwab's letter, Black crossed out the words "provide two (2) future site locations" and replaced them with "use its best efforts to find another location." Black also added the phrase "should Wal-Mart continue the Chicago Metro program." Black then signed and returned the letter to Schwab via facsimile (G. 12(N) P27; Answer to Complaint Ex. 1).

 On August 27 Black also signed on Wal-Mart's behalf a "Letter of Intent" agreement with DiMucci for the Cicero development. As part of that letter DiMucci agreed to pay $ 250,000 to GLS (G. 12(N) P29):

 
At such time as the tax increment financing bonds to be issued by the City of Cicero in connection with our acquisition of the property are funded, we [DiMucci] agree to pay GLS Development, Inc. Two Hundred Fifty Thousand Dollars ($ 250,000) as a cancellation fee for its existing agreement with you [Wal-Mart].

 DiMucci's Filler has testified that Black urged DiMucci to pay GLS that amount so that GLS would withdraw and the Cicero development could go forward (W. 12(M) R. P16). Schwab received a copy of the DiMucci-Wal-Mart Letter of Intent on August 27 via facsimile (G. 12(N) P30).

 DiMucci ultimately completed the Cicero project but has not paid $ 250,000 to GLS. Wal-Mart has neither made a $ 500,000 (or any) payment nor offered any further development contracts to GLS.

 Enforcement of the Oral Contract

 Wal-Mart first claims that GLS has sued on the basis of an unenforceable oral contract. Wal-Mart argues that even should Schwab's testimony about the August 24 telephone call between him and Black be accepted in its entirety, no meeting of the minds occurred as to essential terms of the purported agreement. Further, Wal-Mart argues, any agreement that the parties might have reached lacks the specificity and definiteness required of an oral contract to be enforced under Illinois law. Both of those contentions must fail if GLS is to survive the present motion.

 On the first of those issues this Court must examine whether a trier of fact (a jury in this case), if it accepted GLS' version of any disputed facts, could determine that the parties agreed on the essential terms of an understanding and that the parties intended to be bound to that oral agreement ( M.T. Bonk Co. v. Milton Bradley Co., 945 F.2d 1404, 1407 (7th Cir. 1991)). If that first hurdle is overcome, this Court must then examine whether the terms of the proposed contract are sufficiently definite and certain to be enforceable at law (id.). In that respect such cases as Academy Chicago Publishers v. Cheever, 144 Ill. 2d 24, 29, 578 N.E.2d 981, 983, 161 Ill. Dec. 335 (1991) teach that "in order for a valid contract to be formed, an 'offer must be so definite as to its material terms or require such definite terms in the acceptance that the promises and performances to be rendered by each party are reasonably certain.'" Even if the parties manifest an intent to make a contract, "if the content of their agreement is unduly uncertain and indefinite no contract is formed" (id.).

 GLS points to two promises as having been made by Wal-Mart in the course of the August 24, 1993 phone conversation between Black and Schwab:

 
1. to "take care of" a $ 500,000 cash payment to GLS; *fn4" ...

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