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PR Gainesville, LLC v. UP Development - Gainesville 500 Acres, LLC

United States District Court, E.D. Pennsylvania

May 1, 2018

PR GAINESVILLE, LLC, Plaintiff,
v.
UP DEVELOPMENT - GAINESVILLE 500 ACRES, LLC, Defendant.

          MEMORANDUM

          Schiller, J.

          This case is about a Florida land deal that never got off the ground. According to PR Gainesville, LLC (“PR Gainesville”), it had a deal with UP Development - Gainesville 500 Acres, LLC (“UP Development”) to sell UP Development 507 acres of unimproved property in Florida for $22, 500, 000. As part of that agreement, UP Development deposited $150, 000 in escrow. The deal never closed, and the parties are now fighting about which entity is entitled to the money in escrow. UP Development claims that the purported agreement lacked an essential term and thus no agreement between the parties ever existed.

         PR Gainesville sued UP Development in the Philadelphia County Court of Common Pleas, claiming breach of contract. Following removal to this Court, UP Development filed a motion to dismiss, arguing that the case should be dismissed because this Court lacks personal jurisdiction over UP Development and because UP Development has failed to state a breach of contract claim. Because PR Gainesville has submitted an affidavit that asserts that UP Development had numerous contacts with individuals located in Pennsylvania while negotiating the deal, as well as contact within Pennsylvania trying to resuscitate the deal, the Court concludes that it has personal jurisdiction over UP Development. As for UP Development's argument that Plaintiffs failed to state a claim for breach of contract, this argument is best addressed at summary judgment. Based on the allegations in the Complaint, PR Gainesville has stated a claim. UP Development's motion will therefore be denied.

         I. FACTUAL BACKGROUND

         A. PR Gainesville's Allegations

         PR Gainesville is a Delaware business entity located in Philadelphia. (Compl. ¶ 1.) UP Development is located in Florida. (Id. ¶ 2.) PR Gainesville owns 500 acres of real property in Florida, which, on April 28, 2015, it agreed to sell to UP Development for $22, 500, 000. (Id. ¶¶ 5-7.) After the parties executed the agreement of sale, UP Development deposited $150, 000 in escrow and entered a due diligence period that ran from April 28, 2015 through June 27, 2015. (Id. ¶¶ 8-11.) During the due diligence period, UP Development was permitted to terminate the agreement and have its deposit returned. (Id. ¶ 12.) If the buyer failed to terminate the agreement during the due diligence period, it lost the right to do so later. (Id. ¶ 13.) The agreement required a closing date sixty days after the expiration of the due diligence period, which PR Gainesville asserts was August 26, 2015. (Id. ¶¶ 15, 18.) UP Development did not close on the property on August 26, 2015. (Id. ¶ 19.) On August 28, 2015, PR Gainesville informed UP Development that its deposit was non-refundable. (Id. ¶ 21.)

         UP Development stated that it believed that the effective date of the agreement was June 5, 2015, not April 28, 2015. (Id. ¶ 20.) An effective date of June 5, 2015, meant that the closing date would have been October 3, 2015. (Id. ¶ 22.) UP Development did not close on the property on October 3, 2015. (Id. ¶ 23.)

         On September 2, 2015, UP Development stated that it believed that the effective date of the agreement was August 28, 2015, not June 5, 2015, which would make the closing date December 26, 2015. (Id. ¶¶ 24-25.) UP Development again did not close on the property on December 26, 2015. (Id. ¶ 26.)

         On August 3, 2016, and again on November 16, 2016, and again on September 22, 2017, PR Gainesville gave written notice to UP Development that it was terminating the agreement due to UP Development's various defaults. (Id. ¶¶ 27, 30, 32.) When PR Gainesville demanded disbursement of the deposit pursuant to the agreement, UP Development objected. (Id. ¶¶ 29, 31, 33.)

         The Complaint claims that UP Development breached the agreement by failing to close by the date provided in the agreement. (Id. ¶¶ 44-54.) PR Gainesville claims that it is entitled to keep the deposit as a result of the breach. (Id. ¶ 54.) The Complaint also alleges that UP Development breached the covenant of good faith and fair dealing. (Id. ¶¶ 67-70.) PR Gainesville also seeks attorney's fees under Florida law. (Id. ¶¶ 59-65.)

         B. UP Development's Connection to Pennsylvania

         PR Gainesville included in its opposition to Defendant's motion to dismiss a declaration from Joshua Schrier, who is the Vice President of Acquisitions for Pennsylvania Real Estate Investment Trust, which is located in Philadelphia. (Pl.'s Mem. of Law in Opp'n to Mot. to Dismiss Ex. A [Schrier Decl.].) According to Schrier, Scott Fish, who resides in Tennessee, and is the principal of UP Development, “introduced himself” to Pennsylvania Real Estate Investment Trust “after acquiring a parcel of real estate in Orlando that had been adjacent to another property owned by one of [Pennsylvania Real Estate Investment Trust's] affiliate entities.” (Id. ¶ 3.) After that deal was consummated, Fish sought out additional deals with Schrier's company, including the deal that is now before the Court. (See id. ¶¶ 4-6.) On January 12, 2015, Fish flew to Philadelphia to negotiate this deal; this was “one of many trips made by Mr. Fish to Philadelphia during the relevant time period.” (Id. ¶¶ 7-8.) Following the first meeting in January, Fish's lawyer, from his office in Philadelphia, continued to negotiate as UP Development's agent. (Id. ¶ 9.) According to Schrier, the lawyers continued to negotiate “in Philadelphia by way of hundreds of calls and emails.” (Id. ¶ 10.) Fish also continued to deal with Schrier, and on many occasions, Fish “was also physically present in Pennsylvania at the time of the call or email.” (Id.) Schrier believed that Fish, on UP Development's behalf, came to Philadelphia at least one additional time, prior to executing the agreement, to meet with Schrier's representatives. (Id. ¶ 11.) Fish also met with Schrier and representatives of his company on at least two additional occasions after the agreement was executed, including a meeting “to discuss the ramifications of Buyer's failure to close on the subject transaction and the potential for resuscitating the deal.” (Id. ¶ 14.)

         II. STANDARD OF REVIEW

         A. Failure ...


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