Friday, November 29, 2013

168th and Dodge, LP v. Rave Reviews Cinemas, LLC case brief

168th and Dodge, LP v. Rave Reviews Cinemas, LLC case brief summary
501 F.3d 945 (2007)

CASE SYNOPSIS
Appellants sought review of a judgment of the United States District Court for the District of Nebraska, in their action against defendant for breach of express contract, breach of implied contract, and promissory estoppel.

CASE FACTS
  • Red Development of West Dodge, LLC, and 168th and Dodge, L.P (Ps) are commercial property developers. 
  • Rave Reviews Cinemas, LLC (D) owns and operates a chain of movie theaters. 
  • The parties previously worked together on a theater project, the Jefferson Pointe Project. 
  • In March 2002, RED submitted a proposal for Village Pointe, a new outdoor shopping center, to the Omaha City Planning Department. 
  • During April 2002, Rave contacted RED about a proposal to build a movie theater in Village Pointe. 
  • In September 2002, RED had sent a revised proposal containing a movie theater to the Omaha City Planning Department, and purchased additional land for the theater. 
  • On October 3, 2002, RED faxed Rave a letter of intent, which was dated June 25, 2002. 
  • Rave’s president stated in a follow up letter that he had believed that Rave was in agreement with “most of all of the major issues” that were set forth in the June 25th letter of intent. 
  • The letter also stated Rave’s need to ultimately receive approval for the project from its board of directors. 
  • The parties later drafted a second letter of intent, dated November 13, 2002, which outlined the proposed terms for a lease between the parties. 
  • The letter stated that it should “not be construed as either a lease agreement or an option to lease.” 
  • Instead, the letter described terms that would be controlling if a subsequent agreement was to be executed. 
  • On November 26, 2002, Rave signed the letter of intent and sent it, along with an accompanying letter, to RED. 
  • Rave’s accompanying letter restated the need for Rave to obtain approval for the project from its board. 
  • The Omaha City Planning Board approved the project in December 2002. Rave and RED continued negotiations about the lease under March 22, 2003, when Rave informed RED that it did not actually intend to build a movie theater at Village Pointe. 
  • In August 2003, RED entered into a contract with Douglas Theaters, a different movie theater company, for the project. 
  • RED then brought suit against Rave in federal district court for the following: breach of express contract, breach of implied contract, and promissory estoppel. 
  • The district court granted Rave’s motion to dismiss RED’s breach of express contract claim, and granted Rave’s motion for summary judgment on RED’s breach of implied contract and promissory estoppel claims. 
  • RED then appealed.
ISSUE
Is an preliminary agreement that is indefinite, which outlines the terms of a potential future agreement sufficient to form a binding contract?

CLAIMS
On appeal, appellants asserted that the district court erred in: (1) granting defendant's motion to dismiss the express contract claim; (2) granting defendant summary judgment on the implied contract claim; (3) granting defendant summary judgment on the promissory estoppel claim; and (4) affirming the clerk of the district court's taxation of costs.

DISCUSSION
  • As to the express contract claim, the instant court concluded that in the absence of a definitive lease agreement, no express contract existed. 
  • The parties' letter of intent expressly stated that it was not to be construed as either a lease agreement or an option to lease. 
  • The letter of intent was not definite, as it contemplated that a definitive agreement could be executed in the future. 
  • Furthermore, the letter was expressly conditional. 
  • As to the implied contract claim, the subject of the purported implied contract was a 20-year lease for an interest in real estate. Such a contract is subject to the statute of frauds. 
  • However, no writing existed to satisfy the statute of frauds. 
  • As to promissory estoppel, no "promise" existed in the letter of intent upon which appellants could rely.
CONCLUSION
The instant court affirmed the judgment of the district court.

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