Wednesday, December 25, 2013

Market Street Associates Ltd. Partnership v. Frey case brief

Market Street Associates Ltd. Partnership v. Frey case brief summary
941 F.2d 588 (7th Cir. 1991)

CASE SYNOPSIS
Plaintiffs, lessor partnership and its general partner, appealed an order from the United States District Court for the Eastern District of Wisconsin, which granted summary judgment in favor of defendants, lessor trust and individual trustees, in plaintiffs' contract action for breach of the duty of good faith performance.

CASE FACTS
Plaintiffs, lessor partnership and its general partner, brought an action against defendants, lessor trust and individual trustees, claiming that defendants breached their duty of good faith performance of the parties' contract. The district court granted summary judgment in favor of defendants.

DISCUSSION

  • On appeal, the court reversed and remanded, holding that summary judgment was not proper because the facts could have been interpreted in favor of plaintiffs. 
  • Under the parties' contract, plaintiff lessor was entitled to purchase the leased property at a price computed in the contract if its request for financing to make improvements on the property failed. 
  • After defendants refused financing, plaintiffs sought to purchase the property. 
  • Plaintiff general partner did not alert defendants to the computation paragraph in the contract. 
  • Viewing the facts favorably to plaintiffs, the court found that whether plaintiffs acted in bad faith in not notifying defendants of the paragraph bore on plaintiff general partner's state of mind.
CONCLUSION
The court reversed summary judgment entered in favor of defendants, lessor trust and individual trustees, and remanded, holding that summary judgment was not proper because when viewing the facts favorably to plaintiffs, lessor partnership and its general partner, whether plaintiffs acted in bad faith in not notifying defendants of a purchase price computation paragraph in the contract bore on plaintiff general partner's state of mind.

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