Greer Properties, Inc. v. Lasalle National Bank

874 F.2d 457 (7th Cir. 1989)

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Nature of the Case

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Facts

Four developers formed a partnership. That partnership bought property and intended to develop it, but that failed. The partnership then attempted to sell the property. Legal title to the property was held in trust by LaSalle Bank (D). The first attempt at selling the property failed when the buyer discovered that the property was contaminated by environmental waste. The partnership then negotiated with Marriot Corporation through its subsidiary, Greer Properties, (P). P agreed to purchase the property, but the partnership (who was charged with cleanup) was allowed to terminate that agreement if the cost of cleanup proved too costly. That determination was left to the best efforts of the partnership and its best business judgment. The cleanup cost was first estimated at $100,000 and then estimated at $200,000 on the high side, which was much lower than that $500,000 that the first buyer has estimated. The partnership entered into a new agreement with the first buyer and then terminated their contract with P. The final cost of cleanup was $251,825. P sued for specific performance. The partnership moved for summary judgment, and that motion was granted; the language of the contract gave them broad discretion to terminate based on the soil consultant's study. P appealed; the partnership acted in bad faith a genuine issue of material fact still not determined and at issue.