Opinion ID: 2995635
Heading Depth: 3
Heading Rank: 2

Heading: The drop-dead date

Text: Ocean Atlantic had the right to schedule the closing on any of the ninety-one days between October 26, 2000 and January 25, 2001. Nevertheless, it exercised that right by informing the Sellers that it had chosen to close January 24--a mere one day prior to the drop-dead date. In keeping with what was an unseemly yet now-familiar pattern of delay, Ocean Atlantic’s words were betrayed by its actions. On January 18, Ocean Atlantic sent the Sellers a letter demanding that they move the closing to May 1 and pay an additional $680,000 in development fees. These fees had never been the subject of any prior negotiations nor were they embodied in any prior agreement between the parties. The Sellers rejected Ocean Atlantic’s demand-- which the trial judge described as an attempt to extort nearly 10% of the purchase price on the eve of closing--and warned that [i]f the closing does not occur in accordance with the terms of the settlement agreement, your clients will have no rights whatsoever to the property after January 25, 2001, as clearly spelled out in that same agreement. At this point, Ocean Atlantic withdrew its proposals and thereafter assured the Sellers that it would fully participate in the scheduled closing [January 24], pursuant to the settlement agreement. Sadly, this assurance proved worthless. The Sellers arrived for the closing at the offices of a local trust company on the morning of January 24. The Sellers executed each and every document, and, according to the district court, were entirely willing and able to close that day. However, closing failed to occur on either January 24 (the date selected by Ocean Atlantic) or January 25 (the absolute, final drop-dead date in the Settlement Agreement) because Ocean Atlantic failed to tender the purchase price of $7.267 million for deposit into the Sellers’ escrow account. Ocean Atlantic’s chosen lender--Yorkville National Bank--refused to release the money until: (1) Ocean Atlantic provided the bank with a written loan guarantee from Ocean Atlantic’s equity investment partner, the New York-based Black Acre Capital Group; and (2) Black Acre tendered to the bank a copy of Black Acre’s corporate resolution, along with an opinion from its legal counsel, stating that it is authorized to issue such guarantees. The attorneys representing Ocean Atlantic and Black Acre failed to deliver the documents to the bank until sometime in the afternoon of January 26-- one day after the drop- dead date provided for in the contract. Several hours before the documents reached the bank, the Sellers’ attorneys notified Ocean Atlantic that the contract was terminated. After receiving this notice, Ocean Atlantic pleaded with the Sellers to go forward with the sale, but the Sellers refused and this lawsuit followed. Ocean Atlantic sought specific performance of the contract, and the Sellers asked the district court to rule that the contract was null and void. The district court held a two-day evidentiary hearing and concluded that Ocean Atlantic’s failure to close by the date specified in the contract was a material breach of the agreement. Furthermore, the court found that the agreement has been properly terminated, pursuant to its terms, and that Ocean Atlantic has no rights with respect to the Property at issue in the case sub judice. We are now presented with Ocean Atlantic’s appeal.