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WP 851 Associates, L.P. v. Wachovia Bank

February 26, 2009

WP 851 ASSOCIATES, L.P., PLAINTIFF,
v.
WACHOVIA BANK, N.A. DEFENDANT.



The opinion of the court was delivered by: Jones, J.

MEMORANDUM AND ORDER

Defendant Wachovia Bank, N.A. ("Wachovia") moves for summary judgment pursuant to Federal Rule of Civil Procedure 56 on the remaining claims asserted by Plaintiff WP 851 Associates, L.P. ("WP 851") -- namely, Count I (breach of contract) and Count III (promissory estoppel. Because there is insufficient disputed record evidence that an oral agreement to lease existed between the parties, summary judgment is appropriate.

I. Procedural History

This straightforward dispute concerns an unconsummated lease for certain commercial property. WP 851 sued Wachovia alleging (1) breach of contract, (2) fraud, (3) promissory estoppel and (4) breach of the duty to negotiate in good faith. In an Order dated January 10, 2008, the Hon. Gene E.K. Pratter dismissed the fraud and breach of the duty to negotiate in good faith claims, but allowed the breach of contract and promissory estoppel claims to proceed.*fn1

Plaintiff moved to re-assert Count IV of the Complaint (breach of duty to negotiate in good faith), and this Court denied that motion in an Order dated January 8, 2009. Now pending is Defendant's Motion for Summary Judgment (Docket No. 30).

II. Legal Standard

Under Fed. R. Civ. P. 56(c), summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a summary judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Fed. R. Civ. P. 56(c). In order to defeat a motion for summary judgment, disputes must be both (1) material, meaning concerning facts that will affect the outcome of the issue under substantive law, and (2) genuine, meaning the evidence must be such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is mandated "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322-23. An issue is genuine if the fact finder could reasonably return a verdict in favor of the non-moving party with respect to that issue. Anderson, 477 U.S. at 248. In reviewing a motion for summary judgment, the court "does not make credibility determinations and must view facts and inferences in the light most favorable to the party opposing the motion." Seigel Transfer, Inc. v. Carrier Express, Inc., 54 F.3d 1125, 1127 (3d Cir. 1995).

III. Facts

The Court finds that there are no disputes of material fact in this case. The undisputed facts are as follows.

WP 851 is a Pennsylvania limited partnership formed in 2005 for the purpose of acquiring the property that is at issue in this case (located at 851 Lancaster Avenue, Devon, Pennsylvania) (the "Property"), and the Property was acquired in 2005. Hess Dep. at 15, 19. WP 851 acquired the property for the purpose of developing commercial retail space known as the Shoppes at Devon. Complaint ¶ 3. WP 851 hired Dan Zelson from Charter Realty as its leasing broker for the Property. Hess Dep. at 20. Wachovia is a national banking association with thousands of branches throughout the United States. Complaint at ¶ 2.

In early 2006, Wachovia and WP 851 began discussion about WP 851 leasing to Wachovia a pad site on which Wachovia would build a bank branch with drive through lanes. Zelson Dep. at 28. Initially, the parties discussed locating the pad site and drive through lanes within the parameters of the Property, but when Wachovia determined that its configuration for the branch with drive through lanes would not fit within the parameters of the Property, the parties then looked into the possibility of WP 851 gaining control of the property located in front of the Property on which a Leslie Pool store was located. McDevitt Dep. at 28; Rosenberg Dep. at 34. WP 851 attempted to purchase the Leslie Pool property but was unsuccessful.Rosenberg Dep. at 34.

The next option considered by Wachovia and WP 851 was for WP 851 to gain control over the property located to the west of the Property on Lancaster Avenue (the "Donato Property"). McDevitt Dep. at 48-49; Hess Dep. at 37-38. WP 851 began negotiations with the owners of the Donato Property in November 2006 to ground lease the property. Def's Summ. Judg. Mot. Exh. 5 (November 28, 2006 Letter of Intent from Bryan Weingarten to Robert Donato). On November 28, 2006, WP 851 executed a letter of intent for the Donato Property in anticipation of negotiating and executing a 20 year ground lease. Id. WP 851 and the owners of the Donato Property then undertook to negotiate a lease agreement. Barkhouse Dep. at 8-21. WP 851 was unable to obtain the necessary signatures of all the owners of the Donato property and there is no evidence in the record to suggest that WP 851 ever could have obtained control over the Donato property and delivered it to Wachovia to build the pad site.

Id. at 18-21. WP 851 never executed a lease for the Donato Property. Id. at 49; Barkhouse Dep. at 16-17.

After WP 851 had already executed the letter of intent for the Donato Property, it moved forward with more serious negotiations with Wachovia which culminated in Wachovia sending WP 851 a seven page letter of intent dated January 12, 2007 (the "LOI"). Def's Summ. Judg. Mot. Exh. 7. While the LOI identified some terms such as location (albeit incorrectly), rent ($315,000), and term (20 years with renewals), it did not address other material terms such as the date on which rent would commence, default remedies, and build and open covenants. Id. The LOI set forth Wachovia's express limitation of its intent to be bound by any preliminary negotiations with WP 851. Id. According to the LOI, Wachovia would not be bound until a mutually satisfactory lease was fully executed and delivered to all parties. Id. According to the LOI, Wachovia would not enter a lease agreement absent approval of the terms by its real estate committee. Id.*fn2 At no time after sending the LOI did Wachovia represent to WP 851 that it had obtained the approval of its real estate committee to enter a lease with WP 851. Hess Dep. at 86. Under the unsigned LOI, Wachovia did not have an obligation to negotiate in good faith and only with WP 851. Id. Wachovia never represented to WP 851 that it was negotiating exclusively with it. Zelson Dep. at 46-47; Barkhouse Dep. at 29. The LOI was never signed by either WP 851 or Wachovia. Pl's Dismissal Opp. Brief at 10. WP 851 concedes the LOI was not intended to be a binding contract. Hess. Dep. at 50.

On January 22, 2007, Mr. Zelson sent an email in which he referenced a "deal" (the "1/22 Zelson Email"). Def's Summ. Judg. Mot., Exh. 8. Wachovia responded that it would prepare the paperwork to memorialize the "deal." Id. Mr. Zelson testified at his deposition that the "deal" ...


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