Court Opinion

ID: 9956250
Source: CourtListenerOpinion
Date Created: 2024-04-01 17:01:06.336562+00
Date Added: 2024-06-11T08:15:06.247799
License: Public Domain

NOT FOR PUBLICATION                       FILED
                        UNITED STATES COURT OF APPEALS                      APR 1 2024
                                                                     MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
                                 FOR THE NINTH CIRCUIT

In re: AFFORDABLE PATIOS &                        No.   22-60059
SUNROOMS, DBA Reno Patio and
Fireplaces, DBA Reno Patio*,                      BAP No. 22-1063

                   Debtor,
                                                  MEMORANDUM*
------------------------------

CHRISTOPHER P. BURKE, Chapter 7
Trustee,

                   Appellant,

  v.

LEGACY FIRE SERVICES, LLC,

                   Appellee.

                             Appeal from the Ninth Circuit
                              Bankruptcy Appellate Panel
                Faris, Taylor, and Brand, Bankruptcy Judges, Presiding

                                 Submitted March 7, 2024**
                                    Las Vegas, Nevada

Before: M. SMITH, BENNETT, and COLLINS, Circuit Judges.

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      Christopher T. Burke, the Chapter 7 Trustee (the Trustee) appointed to

administer the estate of Affordable Patios & Sunrooms d/b/a Reno Patio and

Fireplaces, appeals from an order of the Bankruptcy Appellate Panel (BAP)

affirming the bankruptcy court’s order granting summary judgment to Legacy Fire

Services, LLC (Legacy). We have jurisdiction pursuant to 28 U.S.C. § 158(d). We

review de novo the bankruptcy court’s grant of summary judgment. In re Slatkin,

525 F.3d 805, 810 (9th Cir. 2008). Because the parties are familiar with the facts,

we do not recount them except as necessary to provide context. We affirm.

      In granting summary judgment to Legacy, the bankruptcy court held that there

were numerous unsettled material terms that precluded the formation of a real estate

contract between the Trustee and Legacy, such that the Trustee’s claim for turnover

of a debt pursuant to 11 U.S.C. § 542(b) against Legacy for breach of contract failed

as a matter of law. On appeal, the Trustee argues that the bankruptcy court erred

because it disregarded genuine disputes of fact over whether a contract ever formed.

      Nevada law is clear that “preliminary negotiations do not constitute a binding

contract unless the parties have agreed to all material terms.” May v. Anderson, 119

P.3d 1254, 1257 (Nev. 2005). “A valid contract cannot exist when material terms

are lacking or are insufficiently certain and definite.” Id. Material terms often

include “subject matter, price, payment terms, quantity, and quality.” In re Est. of

Kern, 823 P.2d 275, 277 (Nev. 1991). Viewing the evidence in the light most

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favorable to the Trustee, see T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n,

809 F.2d 626, 630–31 (9th Cir. 1987), we conclude that, because the parties never

reached agreement as to the “quality” or “quantity” of the property, no contract ever

formed between the Trustee and Legacy as a matter of law.

      In its “formal offer” letter to the Trustee, Legacy expressed interest in

purchasing “the three buildings and associated land” at 910 Glendale Avenue and

stated that the Trustee should contact Legacy “to discuss possible contingencies and

further terms of an agreement.” The latter phrase, on its face, refutes the Trustee’s

contention below that “Legacy never advised [the Trustee] that it wanted to negotiate

any other specific conditions.” In particular, nothing in Legacy’s letter resolved the

crucial issue of what the quality of the property had to be in connection with the sale.

The undisputed evidence shows that, during a visit to the property, representatives

from Legacy were unable to access at least one of the three buildings on the property,

which was occupied by squatters. And as the Trustee put it in his moving papers

below, the property was also littered with a “great deal of debris” that presented “a

potential fire hazard.” On this record, no reasonable trier of fact could conclude that

the parties had come to agreement as to what the condition of the property had to be.

The only reasonable reading of Legacy’s letter is that this critical term would be the

subject of further discussions before a sufficient agreement would be reached.

      Moreover, the Trustee acknowledged that, for Legacy, a crucial aspect of the

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sale was that all three buildings be included. Nonetheless, the Trustee’s purported

written acceptance of Legacy’s “formal offer” confusingly agreed to sell “the

commercial building”—singular—“at 910 Glendale Ave.” Indeed, when asked at

his deposition to identify issues that might be among the “further terms of

agreement” that would have to be clarified, the Trustee noted that Legacy “wanted

to make sure that [the sale] included the three buildings,” with no liens. On this

record, the only reasonable conclusion is that the parties’ exchange of letters did not

suffice to resolve the crucial question of “quantity.”

      Because Nevada law is clear that a contract does not come into existence at

all “when material terms are lacking or are insufficiently certain and definite,” May,

119 P.3d at 1257, the bankruptcy court properly concluded that no contract was

formed here.

      AFFIRMED.

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