Valley Place Ltd. v. T. I. Equity Fund 1995 LP

Incapacitation of seller's general partner did not constitute an act of God that would relieve seller of its obligation under a real estate sales contract to obtain rezoning for the property in question.

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Valley Place Ltd. sued T. I. Equity Fund to recover the balance it claims was due on a promissory note for the sale of real estate. Valley Place agreed to sell T. I. an apartment complex consisting of 250 apartments. After the execution of the contract but before closing, the parties discovered that the property was zoned for only 244 apartments. The parties modified the warranties and representations section of the contract to include the acknowledgment that the property was not properly zoned and that Valley Place agreed to “promptly apply for and pursue” rezoning. The parties then agreed to go forward with the transaction and at closing on December 2, 1996, T. I. executed a promissory note in the amount of $625,000 that was to mature one year later. The Note outlined T. I.’s remedy in the event that Valley Place failed to acquire to required zoning.

When Valley Place failed to obtain the necessary zoning by December 2, 1997, T. I. offset the amount due by $172,000 pursuant to the terms of the Note, and tendered $109,250 as payment in full.1 Valley Place sued to recover the $172,000, and both parties moved for summary judgment. The trial court granted T. I.’s motion for summary judgment while denying Valley Place’s motion. Valley Place appeals this judgment in Case No. A00A1363. The court also denied T. I.’s motion to set up its counterclaim by leave of court, which order T. I. cross-appeals in Case No. A99A1364.

Valley Place Ltd. v. T. I. Equity Fund 1995 LP

Incapacitation of seller's general partner did not constitute an act of God that would relieve seller of its obligation under a real estate sales contract to obtain rezoning for the property in question.

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