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Devco v. T10 Meltel, LLC

United States District Court, N.D. Illinois, Eastern Division

February 27, 2017

ARLINGTON DEVCO, Plaintiff,
v.
T10 MELTEL, LLC, f/k/a T10 UNISON SITE MGMT, LLC Defendant.

          MEMORANDUM OPINION AND ORDER

          Jeffrey Cole Magistrate Judge.

         In June 2011, the plaintiff purchased a building, which was formerly a hotel, in Arlington Heights, Illinois. The plan was to transform the hotel into an apartment building. At the time of the purchase, there were a number of cellular carrier “tenants” - T Mobile, U.S. Cellular, and Nextel are specified - operating their cellular equipment on the building's roof pursuant to leases. [Dkt. #1-1, Pages 10-79/116]. After its purchase of the property, the plaintiff entered into negotiations to sell the cellular leases to the defendant. The agreement the parties reached included a $362, 822.40 holdback of the purchase price which would be released to the plaintiff if certain conditions relating to a specific cellular company operating on the site were met. The plaintiff contends that it is entitled to the holdback amount because it met those conditions as Clearwire is one of the cellular companies operating on the site. The defendant contends that those conditions were not met because the parties agreed that Nextel, not clearwire, had to be operating on the site for plaintiff to receive the holdback amount. The defendant never paid plaintiff the holdback amount and, so, the plaintiff brought a breach of contract claim against the defendant. The defendant has moved for summary judgment on that claim.

         ANALYSIS

         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Bordelon v. Bd. of Educ. of the City of Chicago, 811 F.3d 984, 989 (7th Cir. 2016). This requires that “there be no genuine issue of material fact, ” and “the mere existence of some alleged factual dispute” will not defeat summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); Bordelon, 811 F.3d at 989. The moving party bears the initial burden of production, and must inform the district court why a trial is not necessary. Celotex Corp., 477 U.S. at 325; Sterk v. Redbox Automated Retail, LLC, 770 F.3d 618, 627 (7th Cir. 2014). The party opposing summary judgment must go beyond the pleadings to show that there is a genuine issue of fact that must be resolved with a trial. Hassebrock v. Bernhoft, 815 F.3d 334, 342 (7th Cir. 2016).[1]

         A.

         The parties' first step toward litigation was to stagger their negotiations into three agreements. They began with a “Terms of Agreement” dated May 8, 2012, which the parties acknowledged were “the business terms upon which this transaction will be completed . . . However, the terms are subject to due diligence and final Underwriting by [defendant], and receipt by [defendant] of all required documentation.” [Dkt. #1-1, Page 80/116]. Under the “Terms of Agreement”, the purchase price the defendant would pay for the 50-year easement was about $1.3 million. [Dkt. #1-1, Page 80/116]. Most of the defendant's payment to the plaintiff for the easement would be made at closing, but part would be made 48 months later “if and only if Nextel is still operating on the site, paying rent, and has not provided any indications of intent to terminate or decommission.” [Dkt. #1-1, Page 80/116]. Although it purportedly covered payments four years in the future, it was nevertheless set to expire in 6 months - November 2012 - unless extended by mutual consent. [Dkt. #1-1, Page 80/116].[2]

         Two months later, in July 2012, the defendant wrote to plaintiff [Dkt. #39, ¶ 17], saying its letter would “serve as a record of [the parties'] mutual agreement” that defendant would fund escrow accounts to cover two holdbacks: a $362, 822.40 Nextel Holdback and a $300, 000 Relocation Holdback. The terms of the funding of the escrow account for the holdback at issue, the Nextel Holdback, were as follows:

1. Nextel Holdback Amount. For a period not to exceed 48 months from the date of closing (the “Closing Date”), $362, 822.40 (72x) for Nextel if and only if Nextel is (i) still operating on the site, (ii) paying rent, and (iii) has not provided any indications of intent to terminate or decommission; . . .

[Dkt. #1-1, Page 92/116]. The document went on to state that defendant would release the Nextel holdback only if some very specific conditions were met:

[Defendant] will release the Nextel Holdback amount to [plaintiff] amount within 48 hours of the following:
1. Pictures from [defendant's] representative confirming the then current Nextel installation showing electric meters operating and equipment installed connected and operating;
2. Receipt of a the [sic] rent check from Nextel for payment of the rent for the then current month following the Closing Date in accordance with the current rent structure on the Closing Date; and
3. Receipt of written confirmation from [defendant's] Lease Administration Department and [plaintiff] that Nextel has not provided any indication of intent to terminate or decommission.

[Dkt. #1-1, Page 92-93/116]. The agreement went on to provide that defendant would release the funds to itself - i.e., close the escrow and retain the money - “upon the earlier of . . . 48 hours after the expiration of the 48th month following the Closing Date” if the three conditions were satisfied or “on or before the end of the twelfth (12th) month following the Closing Date, if Nextel ceases to pay rent under the current rent structure.” [Dkt. ...


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