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Lakeview Collection LLC v. Bank of America

October 11, 2012

LAKEVIEW COLLECTION LLC
v.
BANK OF AMERICA



Order Form (01/2005)

Name of Assigned Judge Amy J. St. Eve Sitting Judge if Other or Magistrate Judge than Assigned Judge

CASE TITLE

DOCKET ENTRY TEXT

Defendant's motion to dismiss or for judgment on the pleadings [172] is denied. Status hearing set for 11/13/12 is stricken and reset to 10/24/12 at 8:30 a.m.

O[ For further details see text below.] Notices mailed by Judicial staff.

STATEMENT

Before the Court is Defendant Bank of America, N.A.'s self-described "Motion to Dismiss or for Judgment on the Pleadings." (R. 172, Def.'s Mot.) For the reasons explained below, the motion is denied.*fn1

Courtroom Deputy KF

Initials:

I. Allegations in the Complaint*fn2

A. Background

In 2005, LaSalle Bank N.A. ("LaSalle") owned real estate in Chicago, Illinois, located at 3201 North Ashland Avenue (the "Main Parcel"), and at 3301 North Ashland Avenue (the "Drive-Up Parcel"). (Am. Compl.*fn3 & Am. Ans.*fn4 ¶ 5.) LaSalle operated banking facilities on both parcels. (Id. ¶¶ 5-6) LaSalle additionally had an option to purchase another property located at 3225 North Ashland Avenue in Chicago, Illinois (the "Option Parcel"). (Id. ¶ 5.) LaSalle "desired to exercise its option to acquire the Option Parcel and to sell all three parcels for development prior to 2005." (Am. Compl. ¶ 7.)

LaSalle and Plaintiff Lakeview Collection LLC ("Lakeview") worked together on a potential purchase and redevelopment of the three properties. (Id. ¶ 8.) Lakeview intended to redevelop the properties into a "mixed-use" complex "containing a building with retail, a branch bank and residential condominiums." (Id.) LaSalle "desired" to close on the sale prior to the end of 2005, which was sooner than Lakeview could begin redevelopment. (Id. ¶¶ 7, 9.) Lakeview would incur "carry costs" in excess of $121,000.00 per month if the deal were to close before it could begin redevelopment. (Id. ¶¶ 11-13.)

To "facilitate" the transaction, "LaSalle and Lakeview agreed" to a sale-leaseback arrangement, whereby the sale would close by the end of 2005, and LaSalle would simultaneously "enter into a lease with Lakeview and pay Lakeview the carry cost of the parcels [in the form of rent] during the period needed to complete the process necessary to begin construction." (Id. ¶ 13.) The "rent came to $1,457,467.50 annually." (Id.)

B. Agreements

On December 29, 2005, the parties executed three separate agreements: the Purchase Agreement (or "PA"); the Existing Space Lease (or "ESL"); and the Temporary Space Lease (or "TSL"). (See Am. Compl. & Am. Ans. ¶¶ 15, 18-19.)

1. Purchase Agreement

Under the terms of the Purchase Agreement, Lakeview agreed to purchase the Drive-Up Parcel for $5,455.000; the Option Parcel for $1,375,000; and the Main Parcel for $13,273,000. (PA § 1.) The Rider to the Purchase Agreement expressly conditioned the sale upon the parties entering into the Existing Space Lease, the Temporary Space Lease, and later, a Branch Lease for "space in the to-be constructed" complex in the redevelopment. (Id., R-3(a)-(c).)

2. Existing Space Lease

Under the terms of the Existing Space Lease Agreement, LaSalle agreed to lease the Main Parcel and the Drive-Up Parcel from Lakeview for an annualized base rent of $1,457,467.50, payable in monthly installments. (ESL § 3(a).) The agreement included the following recitals:

WHEREAS, the parties entered into a [Purchase Agreement] and Rider of even date herewith ("Sales Contract") for the sale and purchase of certain real estate including parcels located at 3201 North Ashland Avenue ("Main Parcel"); 3301 North Ashland Avenue ("Drive-Up Parcel"); ...


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