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Ajax Management Corporation v. Boeing Company

United States District Court, E.D. Pennsylvania
Mar 25, 2004
CIVIL ACTION 03-3706 (E.D. Pa. Mar. 25, 2004)

Opinion

CIVIL ACTION 03-3706

March 25, 2004


MEMORANDUM ORDER


On March 15, 2005, a trial commenced in the above-captioned suit involving a business transaction between sophisticated business entities, Ajax Management Corporation ("Ajax") and The Boeing Company ("Boeing"). The parties have submitted proposed findings of facts and conclusions of law and my findings and conclusions are set forth herein. The evidence presented at trial supports the contention that Boeing owned a tract of land and sold it to MGMRP, Inc. ("MGM") pursuant to the misrepresentation by MGM that it would use it as a parking lot. The evidence also reveals that MGM has brought action to require Ridley township to authorize the use of the land as an alcohol beverage serving adult entertainment site. Due to the site's close proximity to Boeing's plant, where in excess of 4,000 employees are located, Boeing views such a use as undesirable and has pursued legal action against MGM for its alleged misrepresentation of the use.

While Ajax has brought this action, the contract at issue (Exhibit Pl) actually involved St. John's Holdings, and not Ajax as a party to that contract. However, the Complaint filed and the evidence make clear that Ajax is authorized to pursue the action as an affiliate of St. John's. In addition, Boeing has not made an objection. The Ajax/St. John entity will be referred to as "Ajax."

As to Plaintiff's proposed findings, I find as fact paragraphs numbered: 1-10, 16, 19, 26-31, 38, 39. There is not a preponderance of evidence to support the proposed findings of fact as stated in paragraphs numbered: 11-15, 17, 18, 20-25, 32-37. The proposed conclusions of law submitted by Plaintiff are rejected as stated. As to Defendant Boeing's proposed findings, I find as fact paragraphs numbered: 1-9, 11, 12, 15-27. There is not a preponderance of evidence to support the proposed findings of fact as stated by Defendant in paragraphs numbered: 10, 13, and 14. As to Defendant's proposed conclusions of law, I find as law paragraphs numbered: 2, 3, 7, 8, and 10. There is not a preponderance of evidence to support the proposed conclusions of law as stated in paragraphs numbered: 1, 4, and 9.

The Plaintiffs are real estate developers who seek to assemble land in Ridley Township for commercial use as a shopping center. Plaintiffs admit that the use of the parcel of land owned by MGM as an adult entertainment center would preclude it from obtaining the type of anchor tenant it would need in a shopping center and that given their common interest in preventing the use of the parcel of land as an adult entertainment center, Ajax and Boeing discussed ways of restricting the land's use. The discussions resulted in an agreement set forth in writing on May 1, 2002 in a letter from Timothy Coyle, the Boeing Philadelphia Site Manager to Mr. Tancredi of St. John Holdings, Inc. The letter was provided as consideration and inducement for Ajax to enter into an agreement to purchase from MGM a restriction on the use of said land. The letter stated:

Exhibit P1.

Ajax has entered into an agreement, a copy of which is attached hereto as Exhibit "A" and made a part hereof, to acquire rights to develop the MGM Property as an adult entertainment facility, and to place on such property a deed restriction prohibiting its use for any type of adult entertainment establishment, and said agreement requires Ajax to make a nonrefundable down payment. Should Ajax be unable to consummate the acquisition under such agreement as a result of some change in circumstances or other reason beyond Ajax's reasonable control, Boeing agrees to reimburse Ajax for the amount of such down payment up to a maximum of $150,000 upon written notice from Ajax that the agreement regarding the MGM property has been terminated. (Letter from Coyle to Tancredi of 5/1/02, at 1.)

As Ajax and MGM did not reach a final conclusion, the extent and scope of the conditions of the agreement are the focus of this dispute.

Ajax contends Boeing should reimburse the $150,000 deposit paid to MGM because the lack of an anchor tenant and the failure to obtain formal agreements to obtain the other parcels constitutes changes in conditions under the agreement which trigger reimbursement. The evidence discloses that Ajax abandoned the agreement with MGM to prevent the disbursement of additional money that would become due under the MGM agreement four months from the date of signing and that there was no change in conditions in regard to the availability of purchasing the other parcels of land. Failure to continue to pursue the project was a unilateral business decision made by Ajax. Boeing contends Ajax is not entitled to reimbursement under these circumstances.

The issue before this court is whether the promise in the letter binds Boeing to reimburse Ajax the $150,000 under these facts. In determining this issue, the court interprets the contract so as to give meaning to the intention of the parties. Ludwig v. Fletcher. 405 F.2d 1123, 1131 (3d. Cir. 1969) ("It is generally stated that the fundamental or paramount question in the legal construction of all contracts is a determination of the real intention of the parties.") (citing Williston, Interpretation and Construction of Contracts, Ch. 22, § 601); Winter v. Welker, 174 F. Supp. 836, 842 (E.D.Pa 1959) (To determine the intention of the parties, "the court may consider the situation of the parties, the objects they apparently had in view, the nature of the subject matter of the agreement, and the surrounding circumstances.") In this case, we look to whether the voluntary withdrawal by Ajax from the MGM deal was contemplated by the parties in drafting the agreement. Upon consideration of the evidence presented at trial, I find that Ajax has not established by a preponderance of the evidence that there was ever a meeting of the minds that Ajax could voluntarily withdraw from the MGM agreement and receive reimbursement of the deposit from Boeing. Assuming, arguendo, that Ajax believed and intended that it had a right to withdraw based solely on its own business judgment, the evidence is clear that Boeing never so intended.

Clearly, the second part of the letter agreement dealing with reimbursement states that something beyond the control of Ajax would be required to trigger the reimbursement. Ajax still needed to attract an anchor tenant at the time of the withdrawal; however, all of the transactions for acquiring the surrounding parcels were still feasible. The evidence supports a finding that Ajax continued to pursue the same potential anchor tenant for the development with the belief that it could still put together all of the pieces of the shopping center transaction while avoiding additional deposit obligations under the MGM agreement.

Ajax also makes claims under alternate theories of unjust enrichment and quantum meruit. As Boeing did not receive the benefit of obtaining a permanent restriction on the land, which was the purpose for entering into the agreement, they were not enriched. There also is no basis for quantum meruit recovery because Ajax's voluntary withdrawal, which it had a right to do, prevented Boeing from achieving its objective. Accordingly, it is ordered that pursuant to the findings of fact and conclusions of law set forth herein, the verdict of the Court is in favor of Defendants and against Plaintiffs. An appropriate order follows.

ORDER

AND NOW this ___ day of March, 2004, IT IS HEREBY ORDERED that judgment is entered in favor of the Defendants and against Plaintiffs.


Summaries of

Ajax Management Corporation v. Boeing Company

United States District Court, E.D. Pennsylvania
Mar 25, 2004
CIVIL ACTION 03-3706 (E.D. Pa. Mar. 25, 2004)
Case details for

Ajax Management Corporation v. Boeing Company

Case Details

Full title:AJAX MANAGEMENT CORPORATION, Plaintiffs v. THE BOEING COMPANY, Defendants

Court:United States District Court, E.D. Pennsylvania

Date published: Mar 25, 2004

Citations

CIVIL ACTION 03-3706 (E.D. Pa. Mar. 25, 2004)