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Rabadi v. D R Horton, Inc.

United States District Court, D. New Mexico

July 9, 2018

SHARIF A. and SAMIA RABADI, Plaintiffs,
v.
D R HORTON, INC., Defendant.

          PROPOSED FINDINGS & RECOMMENDED DISPOSITION

         THIS MATTER is before the Court on Defendant D R Horton, Inc.'s Motion for Summary Judgment, filed on March 9, 2018. Doc. 20. Having considered the record, submissions of counsel, and relevant law, the Court recommends that Defendant's motion be granted in part.[1]

         I. Background[2]

         Plaintiffs, both residents of New Mexico and doing business as Star Trust of New Mexico, “were the owners and developers of a certain approved subdivision” called Paradise View in Albuquerque. Doc. 1-A (“1st Am. Compl.”) ¶ 1; Doc. 35 (“Rabadi Aff.”) ¶ 3; Doc. 21 Undisputed Material Fact (“UMF”) 1. Plaintiffs owned building lots in Paradise View that the City of Albuquerque had platted and approved for residential home construction. Rabadi Aff. ¶ 3. Defendant “is a Delaware Corporation transacting business in the State of New Mexico as a home builder.” 1st Am. Compl. ¶ 2. In April 2017, the parties “began negotiations for the purchase and sale of” Plaintiffs' building lots. Rabadi Aff. ¶ 4. Plaintiffs owned 40 lots and were asking $60, 000 per lot. Id.

         While Plaintiffs preferred to sell all 40 lots together, Defendant only wanted to buy 24 of the lots. Rabadi Aff. ¶ 6. Plaintiffs agreed to sell Defendant 24 lots and believed that “Defendant would also purchase certain impact fee credits[, ]”[3] worth $71, 401.13, that Plaintiffs also owned.[4] Id. ¶ 8. The parties signed the Purchase Agreement for the 24 lots on May 11, 2017. See Docs. 22-1 at 17; 21 UMF 2. The Purchase Agreement is silent on any purported agreement for Defendant to purchase impact fee credits. See Doc. 22-1.

         On June 16, 2017, Mr. Patrick B. (“Brent”) Lesley, Land Manager for Defendant, “prepared and sent [to Plaintiffs] a draft conditional agreement to purchase the impact fee credits . . . .” Doc. 21 UMF 5; see also Doc. 22 (Lesley Aff.) at 1 & ¶¶ 1, 8. Under the terms of the proposed agreement, Defendant offered to purchase up to $50, 000 of Plaintiffs' impact fee credits at 75% of their face value. Doc. 22-2 at 3. Plaintiffs assert that certain restrictions in the proposed agreement meant that Defendant would only actually purchase approximately $6, 000 in impact fee credits. Rabadi Aff. ¶ 11.

         Dissatisfied with Defendant's offer, Plaintiffs sent a counteroffer on July 19, 2017. Lesley Aff. ¶ 9; Rabadi Aff. ¶ 11; Doc. 21 UMF 6. Plaintiffs' counteroffer required Defendant to purchase the whole of Plaintiffs' $71, 401.13 in impact fee credits at 75% of their face value. Lesley Aff. ¶ 9; Rabadi Aff. ¶ 11; Doc. 21 UMF 6; Doc. 22-3. Plaintiffs assert that in a phone call, Mr. Lesley told Mr. Rabadi that “it ‘was a done deal.'” Rabadi Aff. ¶ 12; see also Doc. 21-A at 2 (an August 31, 2017 email from Mr. Rabadi to Mr. Lesley, noting that after Plaintiffs sent the counteroffer, Mr. Lesley “advised [Plaintiffs] that everything was approved and we had a deal”).

         Around August 14, 2017, Plaintiffs learned that they had approximately $10, 000 more in impact fee credits and sent Defendant an offer to purchase these additional credits at a deeper discount.[5] See Rabadi Aff. ¶ 14; Doc. 22-4. In both of their proposed counteroffers, Plaintiffs included a provision that provided, “[t]he parties acknowledge that this closing must take place before the closing of any other lots sold and closed to the Purchaser in the [Paradise View] subdivision.” Docs. 22-3 at 4; 22-4 at 2. Despite this provision, the parties closed on the Purchase Agreement for the 24 lots on August 18, 2017, without signing or closing on an agreement regarding the impact fee credits. See Lesley Aff. ¶ 12; Doc. 21 UMF ¶ 8. Plaintiffs assert that they “closed on the real estate purchase agreement with the understanding the impact fee agreement would be closed later.” Rabadi Aff. ¶ 18.

         On September 19, 2017, Mr. Rabadi emailed Mr. Lesley and stated:

I sent you my thoughts on the impact fee deal wherein you would agree to take all my impact fees, i.e. all eighty some thousand. I believe you offer [sic] to take the seventy one thousand, but wished to pay only 50K for them. I made a counter offer, but have not heard from your. [sic] Please let me know one way or other asap.

Doc. 37-B. Defendant expressly declined Plaintiffs' second counteroffer (regarding the additional $10, 000 in impact fee credits). Id.; see also Rabadi Aff. ¶ 22. Plaintiffs responded, “Okay, will you let me know what you [w]ill do right away.” Doc. 39-2 at 3. Mr. Lesley shared this email thread with Mr. Dean Anderson, Division President for Defendant. Doc. 39-2; see also Lesley Affidavit ¶ 6. Mr. Lesley said that he had

been pretty much ignoring [Plaintiffs'] impact fee issue in favor of more important matters. Here's an email [Mr. Rabadi] sent last week. He emailed a follow up message earlier this week . . . . Every time he has attempted to re-negotiate “the deal” serves as evidence there is no deal, as I see it.

Doc. 39-2 at 1. Mr. Anderson advised Mr. Lesley to stop responding to Mr. Rabadi's emails. Id. at 2.

         It is Plaintiffs' understanding that “[j]ust prior to closing on the” Purchase Agreement for the 24 lots, Mr. Lesley reneged on the parties' oral agreement for Defendant to buy $71, 401.13 in impact fee credits at 75% of face value, because he had not secured corporate approval. See Doc. 21-A at 2; Rabadi Aff. ¶ 15. Plaintiffs assert that they would not have sold Defendant the 24 lots, which were the biggest lots Plaintiff owned, if Plaintiffs knew that Defendant would not purchase the impact fee credits. Rabadi Aff. ¶ 23. Before Defendant decided to buy only 24, as opposed to 40, lots, Plaintiff “advised the other builders in the subdivision who had options for first refusal on the balance of the lots . . . that they were all sold . . . .” Id. ¶ 24. Consequently, the builders “sold their models and moved out of the subdivision, forcing . . . Plaintiffs[] to close on the 24 larger lots and to find other buyers for the balance of the unsold lots” at a reduced price. Id. Plaintiffs are now stuck with over $81, 000 in impact fee credits and have no other subdivisions on which to use them. Id. ¶ 25.

         II. Summary Judgment Standard of Review

         Summary judgment is appropriate when the Court, viewing the record in the light most favorable to the nonmoving party, determines “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir. 2005). A fact is “material” if it could influence the determination of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute over a material fact is “genuine” if a reasonable trier of fact could return a verdict for either party. Id. The moving party bears the initial responsibility of “show[ing] that there is an absence of evidence to support the nonmoving party's case.” Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).

         Once the moving party meets this burden, Rule 56(e) “requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324 (quoting Fed.R.Civ.P. 56(e)) (quotation marks omitted). The party opposing a motion for summary judgment “must set forth specific facts showing that there is a genuine issue for trial as to those dispositive matters for which it carries the burden of proof.” Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990) (citing Celotex, 477 U.S. at 324). Rule 56(c) provides that “[a] party asserting that a fact . . . is genuinely disputed must support the assertion by . . . citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials . . . .” Fed.R.Civ.P. 56(c)(1)(A). The respondent may not simply “rest on mere allegations or denials of [her] pleadings.” Anderson, 477 U.S. at 259; see also ...


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