Leeds v. First Allied Connecticut Corp.

521 A.2d 1095 (1986)

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Nature of the Case

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Facts

Leeds (P) wanted to find a buyer for his nursing home. An employee of First Allied (D) entered into initial discussions with P. P claims that he mentioned to D the special form of financing through IRB bonds. D did not recall that ever being mentioned. The price with the bonds was $3.5 million and the price without the bonds was $4.5 million, and the down payment was to be $1.0 million. After a cursory review of the financials, D waited before contacting P again, and when D contacted P, P quoted the IRB price of $3.5 million. D did not fully understand the implications of using IRB financing. Eventually, D offered a lower down payment and the parties compromised on a down payment of $600,000. D then sent out of a letter of intent on November 15th to ensure that he was dealing with a person in authority and then the parties could enter into a formal agreement. Before signing the letter, D drafted a detailed letter back to D that went over the IRB bond scenario but did not send that letter back with the signed document of the intended terms of the transaction. D viewed the signed letter as a contract to buy the assets. P did not. D had his shell corporation 'approve the deal.' A further meeting was arranged on December 19th to work out the final details of the purchase, and nothing went well. D assumed that the deal was over and P assumed that there was nothing but a letter of intent with no deal at all. P then drafted a letter to D disclaiming his intent to transact business, but D had already recorded the 'document' against the property. P sued D.