Designer Direct, Inc. v. Deforest Redevelopment Authority

313 F.3d 1036 (2002)

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Nature of the Case

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Facts

The Village of DeForest devised a plan to revitalize its downtown area. The Village created D, which was responsible for the redevelopment. D chose P to create a redevelopment plan to achieve the goals of D. The parties entered into a redevelopment plan agreement and a Phase I sub-agreement in October 1996. P was responsible for finishing the remainder of the redevelopment plan. The parties entered into a second agreement in August 1998 reflecting the new arrangement. This contract consisted of two more phases. Phase II concerned the construction of the infrastructure which would support P's plan and Phase III dealt with the sale of the land and the subsequent construction. D had a contractual obligation to provide a full-time liaison to work with P but failed to do so. P hired outside sources to provide liaison services at a cost of $20,000.00. D reimbursed P but P objected to D's failure to appoint a full-time liaison. Plans were behind schedule and the parcel sizes were constantly being changed by D. This hampered P's ability to perform infrastructure work and resulted in costs to P of approximately $490,000.00 in architectural design, drawings, and engineering changes in the Phase III property development. The modifications frustrated P's ability to purchase the land when D demanded payment on the original closing date. P objected because there was a lack of infrastructure, a lack of zoning, and a lack of building permits. D refused to extend the closing date and notified P that it was in breach but took no other action. It was determined that a public library would be a plausible anchor tenant. D authorized P to contact the DeForest Library Board about the construction of a new library in the downtown area of the city. P had the right to purchase and develop the land where D wanted to put the library. D wanted P to give up its right to purchase the land. P agreed it would on the condition that it would be given the job of overseeing the design and construction of the library. P prepared an agreement. The DeForest Library Board was willing to sign the agreement but D refused. P also became aware that the Library Board would likely delay a month before signing any agreement. P elected to terminate all contacts. P sued D for the failure to pay fees and expenses, failure to return earnest money, and contractual breaches of the Phase II and III agreements. D counterclaimed for failure to develop a new tax base, failure to purchase land, and failure to construct infrastructure improvements as provided for in the contract. P got a judgment in the amount of $85,270.02 and D's counterclaim was dismissed. The court found that D breached the Phase II and III agreements. The court denied P his reliance damages. Both parties appealed.