West Virginia Record

Friday, July 19, 2019

W.Va., Indiana companies go to court in parking garage flap

By Kelly Holleran | Nov 25, 2008

CLARKSBURG – A West Virginia company claims it should receive more than $58,000 from an Indiana company that backed out of a purchase agreement after allegedly discovering it was not able to build a parking garage on nearly one acre of Morgantown land.

Blue Sky Realty claims it lost about $19,600 in rent money alone after it canceled numerous paying leases in anticipation of SC Bodner Company's and Mountaineer Place Apartments's acquisition of the property.

Bodner has filed a counterclaim against Blue Sky, claiming the company is trying to impose liability and obligations outside the written agreement, requiring Bodner to prosecute the action.

In a purchase agreement dated Nov. 1, 2007, Bodner arranged to buy the "approximately" one acre of land in the Sunnyside section of Morgantown for $2,425,000 from Blue Sky, according to the complaint Blue Sky filed Sept. 29 in Monongalia Circuit Court.

It backed out of the agreement on March 20 because the property was less than one acre and the city of Morgantown would not approve a parking building on that acreage, the suit states.

In its answer to the complaint, Bodner only admits the land was less than one acre, but denies the remaining allegations of its plan to build a parking garage.

As part of the original agreement, Bodner was supposed to pay $15,000 earnest money, which would be applied to the purchase price at closing or which would be delivered to Blue Sky if Bodner failed to meet all terms of the purchase agreement, the suit states.

In addition, Blue Sky claims the agreement called for Bodner to pay $25,000 if a closing was not consummated within the 75 days of Nov. 1, 2007.

Pursuant to the agreement, Blue Sky spent money obtaining ATLA title insurance, a metes and bound survey and a phase one environmental report, according to the complaint.

After Bodner requested a 45-day extension on closing because of its financial arrangements, Blue Sky signed a mutual extension agreement with the company in which Bodner agreed to pay an additional $25,000 for the extra time, the suit states.

"Blue Sky relied upon this mutual extension agreement by keeping the Property off the market and continuing to cooperate in providing any assistance, documents and data necessary to move towards a closing of the deal," the suit states. "Bodner at no time indicated that it was terminating the Purchase Agreement or refused to pay or dispute the $25,000 requirement to extend."

A string of e-mails further led Blue Sky to believe Bodner would follow through with its agreement, according to the complaint.

After backing out of the agreement, Bodner informed Blue Sky it would not pay the $25,000 because it had found other property, Blue Sky alleges.

"Upon information and belief, Plaintiff alleges that Bodner had been looking for other real estate to replace the Blue Sky parcels without regard to its contractual obligations to Blue Sky under the Purchase Agreement, completely disregarding the fact that Blue Sky was doing everything within its power to work towards a closing of the transaction in mid March, 2008, all as shown by email string consisting of numerous representations and responses leading Plaintiff to believe and rely upon Defendant's promise to close the purchase as contemplated thereby," the suit states.

Bodner, though, argues it should not have to pay the $25,000.

"Paragraph 3(d) of the writing provides for an additional payment of $25,000, but only if the Purchaser exercises its right to extend the term of the agreement for an additional 45 day period; specifically deny that the writing requires that the Defendants make this payment to Plaintiff or that the writing imposes an obligation to extend," Bodner's answer to the suit states.

And although Bodner admits to corresponding with Blue Sky via e-mails between Feb. 17 and March 20, Bodner denies Blue Sky's claims that it was led to believe Bodner would follow through with the agreement.

"Defendants specifically deny the allegations with respect to the meaning, understanding, intent or effect of that correspondence; specifically deny the allegation that any further agreement or obligation was created or established by that email correspondence," the company's answer states.

Because of Bodner's alleged breach of contract, Blue Sky claims it lost rental income, plus $11,500 for survey and map preparation, $6,855 in legal fees and $25,000 in the additional money it should have received for extending the closing.

But Bodner claims it has paid all the necessary damages it should have to pay.

"Plaintiff and Defendants expressly agreed upon and provided in writing for an amount as liquidated damages, which was demanded by, fully paid over to and accepted by the Plaintiff, and Plaintiff is both contractually and equitably prohibited from attempting to impose further liability or obligation on the Defendants," the company's answer states.

Blue Sky is seeking compensatory damages consisting of an $11,002.50 engineering bill for survey and plat costs, a $6,850 Bowles and Rice legal bill, a $750 bill to "Independent Trustees" information Bodner requested, an ongoing $4,900 per month loss of rental income that comes to more than $15,000, the $25,000 extension fee and other compensation, damages and amounts unknown to Blue Sky.

In addition, it is seeking costs, expenses and attorneys' fees and other relief the court deems just.

Bodner is seeking attorney's fees, costs and other relief the court deems just in its counter claim.

At the request of Bodner, the case was removed to federal court on Nov. 5 because the amount Blue Sky is seeking is more than $75,000 and because the plaintiffs and defendants are residents of different states.

Blue Sky is represented by Thomas L. Linkous and Jason M. Walls of The Fusco Legal Group in Morgantown.

Bodner is represented by William E. Galeota of Steptoe and Johnson in Morgantown.

U.S. District Court case number: 1:08-cv-198

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