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180 N. LASALLE OWNER, LLC V. 180 N. LASALLE II, LLC 933 N.E.2d 860 (2010)

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Nature of the Case

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Facts

D, as seller, and Younan Properties, Inc. (Younan), as purchaser, entered into a purchase agreement for the sale and purchase of commercial property located at 180 North LaSalle Street. The purchase price was $124 million. The purchase price (less earnest money) was to be deposited with an escrow agent two business days prior to closing. Pursuant to the contract, Younan deposited initial earnest money of $2.5 million into an escrow account. D and Younan executed three amendments to the contract. The first amendment extended the time in which Younan could evaluate and then terminate the contract if it decided to do so. In the second amendment, D and Younan acknowledged that the time to terminate the contract had expired, and as a result, Younan deposited an additional $2.5 million in earnest money with the escrow agent. In the third amendment, P provided Younan with a $500,000 credit against the purchase price, and Younan deposited an additional $1 million in earnest money with the escrow agent. D and Younan also directed the escrow agent to release $1 million of the earnest money to D and agreed that the released earnest money would be credited against the purchase price at closing but was 'hereby deemed earned by D and shall be non-refundable to for any reason whatsoever except in the event of a default by D of D's obligations to close the sale or a failure of a condition to the Purchaser's obligation to close the sale.' D and this time P executed a fourth amendment to the contract. P and D directed the escrow agent to release the remaining earnest money to D and also agreed that the earnest money would be credited at closing and was deemed earned by D and non-refundable, except in the event of default by D of D's obligations to close the sale. In return, the parties extended the closing date to December 17, 2008. P and D acknowledged the assignment and agreed that Younan would be jointly and severally liable with P for buyer's obligations under the contract. Younan joined in execution of the fourth amendment. On November 20, 2008, P and D executed a fifth amendment to the contract. Under this amendment, D agreed to reduce the purchase price by $ 4 million, and P waived the option to extend the closing date beyond December 17, 2008. Younan joined in execution of the fifth amendment. On December 9, 2008, P and D executed a sixth and final amendment to the contract. Under this amendment, the parties agreed to extend the closing date to no later than February 18, 2009. Younan also joined in execution of this sixth amendment. Younan failed to close on purchase and D terminated the contract and retained the deposited earnest money as its sole remedy for breach of the contract. P sued seeking to rescind the contract and recover $6 million in earnest money retained by D. P claimed impossibility of performance due to the 2008 global credit crisis, which it claimed prevented it and Younan from obtaining the commercially-practical financing contemplated when the contract was originally formed. The trial court granted D's motion to dismiss. P appealed.