TEDESCO EXCAVATING & PAVING, INC. V. FWH DEV., LLC, (PENN. Sup. Ct. JUNE, 2024)
CLAIMS: Contractor sued a developer for breach of contract, seeking anticipated 35% overhead and lost profits from contract for construction of a development, after developer put the project on hold for multiple years and subsequently hired another company to complete the work.
EVIDENCE: The developer set out in 2015 to build a development. The developer signed a unit price contract with the contractor for $1,259,000 and required the work to be done in 220 days, with time being of the essence. The contract allowed for termination by the developer without cause after seven days written notice to contractor. Soon after awarding the contract, the developer ran into funding problems and informed the contractor that it was on hold. The parties stayed in communication on the contract for next three years. In 2018 the developer asked the contractor for an updated cost estimate. Contractor provided it, but still nothing commenced. Then in 2019, the contractor learned that the developer had hired a competitor to start the project. The contractor sued the developer. After the lawsuit was filed, and before the work started, the developer sent written notice to the contractor that it was terminating the 2015 contract.
COURT RULING: The Court focused on the basic premise of contract law, reminding that “Three elements are necessary for breach of contract: (1) the existence of a contract, (2) a breach of the contract; and (3) resultant damages.” Clearly, there was a signed written contract. As to breach, the developer argued that there could not have been a breach in paying the contractor because the contractor never started the job or invoked any costs necessitating payment. But the Court rejected that argument and found that the developer’s contractual promise to pay imposed “duties of immediate performance” on the developer long before the time for payments. Thus, an “anticipatory breach” may occur when one party expresses “an absolute and unequivocal refusal to perform or a distinct and positive statement of an inability to do so.” The Court ruled that as early as 2015 when the developer told the contractor that it could not pay, it then anticipatorily repudiated the contract. Contractor wins.
JOHN KEAVENEY, V. TIMOTHY AYERS, ET AL., (MASS. LAND CT. JULY, 2024)
CLAIMS: Property owners in a small six-lot residential subdivision sued each other over the disputed access over walking paths, a tennis court, and a boat dock that were intended for use by all lot owners as common area.
EVIDENCE: In 1976, a developer created a small subdivision and filed a “Declaration of Covenants” to create easements allowing owners access to areas that the Declaration referred to as “Common Properties.” The Common areas included “(1) all circulation paths, (2) recreation areas (tennis court and boat landing and dock), (3) driveways, (4) private ways, and any other easement intended to be common use of the Owners.” A “plan of easements” was attached but with no detail. By the time all lots sold, only the tennis court and dock had been installed, and only a few partially cleared paths. Over the ensuing 40 years, residents simply made their own paths to go to the dock and court. Between the years 2000 and 2018, the neighbors discussed amending the covenants to formalize actual conditions but never did. In 2020 a new owner, of the location that the neighbors had been using to access the dock, blocked access.
COURT RULING: The Court considered whether an easement was legally created despite being vague. It reminded that “when an easement or other property right is created, every right necessary for its enjoyment is included by implication.” The Court found no ambiguity in the basic premise that every owner was granted rights to use the Common Properties subject to the easements. The Plan of Easements unambiguously depicted the easement to the dock crossing over the plaintiff’s lot. The Court also considered abandonment. Abandonment occurs when the easement holder indicates clear intent to “conclusively and unequivocally” abandon the easement. However, “non-use of the easement, by itself, no matter how long it continues, will not operate to extinguish the easement.” At trial, no evidence suggested that the other lot owners ever intended to abandon their right to access the dock. Property owners win and maintain right to cross over the Plaintiff’s lot.
STEWART DEV., LLC V. 111 VETERANS BLVD., LLC, (U.S. DIST. COURT, LOUISIANA NOV., 2023)
CLAIMS: The condemning City challenges the trial court’s admission of evidence, as to valuation, of allegedly dissimilar comparable sales and also a mere signed contract for the purchase of property adjacent to the condemned land.
EVIDENCE: The City sought to condemn 38 acres of owner’s 106-acre land. The City did not condemn 68 acres (the “Remainder”) of the property. The City hired an appraiser who valued the property at $9,429,000 and concluded that there was no damage to the Remainder. The property owner’s appraiser valued the property at $31,091,344 and concluded that there was a diminution of $5,947,046 to the Remainder. The trial court awarded the property owner $25,469,728 for the taken property and $1,631,362 to the Remainder. City objected to the trial court’s allowance of evidence of comparable sales as to properties with improvements instead of raw land like the condemned property, and the City objected to admission into evidence of purchase price in a merely signed contract that the property owner had secured for the Remainder.
COURT RULING: The Court cited that just compensation is measured by the fair market value of the property, taking into consideration its most advantageous use at the time of condemnation.” The fact finder may consider the highest and best use to which the property may reasonably be applied. In doing so, the scope of admissible evidence of a property's value is expansive. The focus should be to replicate the marketplace to determine value and how much a willing buyer would pay if the owner had voluntarily offered the property for sale. The court can consider any competent evidence that affects the market value of the land which a prospective seller or buyer would consider, and thus a contract can be admitted because “in purchase agreements, a valid contract to buy is formed when both parties have agreed to the terms and have undertaken obligations.” Property owner wins.
