This is the case of Killian v. Ricchetti

Fact:

Judgment:

Issue:

Holding:

General Analysis

Applied Analysis

Killian V. Ricchetti 2016 WL 6471245 (E.D. Pa. Oct. 31, 2016) | David J. Killian and Christopher Ricchetti became friends in 2011, based on their shared interest in real estate development. Each owned a property in Philadelphia that, together, they believed they could leverage to co-develop a mixed-used condo- minium and retail project. From September 201] into early 2012, they exchanged ideas on how they could use Killian 's condo on Pine Street to generate cash income to use for construction loans to develop the condo/retail project on a vacant lot Ricchetti owned at 2nd and Brown Street. In order to move forward, the 2nd and Brown Street property needed to be rezoned for mixed commercial use, and a number of other permits and construction arrangements needed to be made. With regard to the Pine Street condo, the idea was that Ricchetti would buy a senior mortgage on the condo and foreclose on it to give Killian the cash to participate in the 2nd and Brown Street development. On February 6 and 8, 2012, the two exchanged e-mails setting out much of these plans in detail. However, that e-mail exchange left several important terms unresolved, and the messages were best characterized as an aer and counteroer. No acceptance took place. Following that, on February 19, Ricchetti initiated a dierent e-mail chain by asking Killian four questions about the Pine Street condo mortgage, namely, how the loan would be split, the value of the mortgage, legal review of the mortgage, and the timing of the Pine Street condo sale. Ricchetti proposed, \"when the Pine is clear title we form an LLC with an equal partnership of 50% and [wje do so only [to] develop that property as planned with 10 or more units, 6 oors and retail bottom. We both agree that we have no [other] plans but to develop that property this year, and cost are equal for us, as well as prot when we agree to sell. We both have rights to see and obtain all cost information records related to 2nd and [B ]rown. If one of us is found and proven stealing from the other or the business the[ y] [ 1 Jose their half of the property.\" On February 20, Killian responded, \"OF COURSE\" to Ricchetti 's proposal. Killian also answered Ricchetti 's questions about the Pine Street condo mortgage and told Ricchetti he was waiting for Prudential's attorney, the lender for Pine Street, to get back to him so they could close on the Pine Street condo mortgage. Thereafter, both Richetti and Killian undertook a number of steps to move their plans forward, including working with the Philadelphia Streets Department for approval of a curb cut and discussing the zoning code parking requirements for the 2nd and Brown Street location. They worked to get the rezoning approval. They secured an architect for the development. They or- ganized a civic meeting to get neighborhood support for the project. And they moved forward with the purchase and sale of the Pine Street condo. Ricchetti paid Prudential $100,000 to assign its mortgage to him, and he instituted foreclosure proceedings. Ricchetti never successfully foreclosed on the condo, however, because Wells Fargo, which held a junior lien on the condo, was \"adamant\" in asserting its position, and Ricchetti decided not to ght the legal battle necessary to overcome Wells Fargo's position. Despite the substantial progress the two made on the plans for the 2nd and Brown Street development ( including ultimately securing Zoning Board approval for the mixed-use building) and despite holding themselves out to everyone as partners on the project, Ricchetti sold the 2nd and Brown Street property as a vacant lot for $740,000 several months after the Zoning Board approval. He did not share any of the proceeds from the sale of 2nd and Brown Street with Killian. Killian sued Richetti for breach of contract, alleging damages in excess of $50, 000. Ricchetti moved for summary judgment arguing that no contract existed as a matter of law. Kearney, District Judge The e-mails exchanged between Killian and Ricchetti on Febru- ary 19th and February 20th do form a contract but it could not be breached, as a matter of law, because the required condition never occurred. . . . The February 19th and February 20th emails evidence a \"meeting of the minds\" but because the contract is based on a condition precedent which never occurs, the contract never ma- tures. \"It is well settled that if a contract contains a condition precedent, the condition precedent must occur before a duty to perform under the contract arises.\" The February 19th and February 20th emails evidence a meeting of the minds on the defined terms. Ricchetti and Killian agree they will have a deal when Ricchetti receives clear title to this year and both Ricchetti and Killian will share profits, costs, and an equal right to see financial information. Ricchetti and Killian also agreed if one partner is proven to have stolen from the partnership, he will lose his share of the partnership. Ricchetti and Killian's agreement is based on the condition precedent of Ricchetti receiving clear title on Killian's Pine Street condo. Ricchetti's offer opens with, \"when the Pine is clear title.\" The parties do not dispute Ricchetti never received clear title to Killian's Pine Street condo because of Wells Fargo's unexpected intransigence. There is no evidence either party interfered with performing the condition precedent. Because the condition prec- edent never occurred, the contract never matured and the parties' duty to perform under the contract never arose. *** Killian's Pine Street condo. Once Ricchetti receives clear title, Ricchetti and Killian agree they will form a partnership shared Conclusion fifty/fifty to develop 2nd and Brown Street. They agree develop- We grant Ricchetti's motion for summary judgment as to ing 2nd and Brown Street is the only project for their partnership Killian's breach of contract claim as a matter of law