Breach of Contract Found in Delaware Land Use Case

June 29, 2009, Sussex County, DE – In a May 29, 2009 decision issued by Judge T. Henley Graves of the Superior Court in Sussex County, Delaware, Kaplin Stewart, a law firm recognized for its land use practice, obtained a judgment for its owner/developer client, Caldera Properties LLC, against a national home builder, Centex Homes, and Ridings Development in a land use litigation.
In 2004, Centex Homes which, together with Beazer Homes created The Ridings Development, LLC for the purposes of this particular development project, entered into an agreement with Caldera to purchase Caldera’s property in Sussex County, Delaware. Centex was to purchase the 225 subdivision lots in three installments. After closing on the first phase, Centex installed improvements site-wide, including a waste water treatment plant to service all the lots. In 2007, in the midst of a declining real estate market, Centex reneged on the agreement to buy the remaining phases and Ridings refused to allow Caldera to use the treatment plant unless Caldera agreed to reimburse Ridings for two thirds of the cost of the site improvements and treatment plant.
Caldera brought suit against Centex for breach of contract and Ridings counterclaimed seeking reimbursement for the costs of the improvements and treatment plant. During the trial in April 2009 Kaplin Stewart attorneys Barbara Anisko and Pamela Tobin argued that Caldera was entitled to $1.2 million in liquidated damages for Centex’s breach of contract and use of the wastewater treatment plant, without paying a fee.
The court agreed that it was unfair to transfer the risks of the down market to Caldera and that Centex understood and accepted the risks and was not permitted to transfer the risks to Caldera. The court found for Caldera on its breach of contract claim and denied Ridings’ claim for the $6 million in costs.
"This case was a particularly important victory in this tumultuous time in our industry as it reaffirms a party's duty to fulfill its contractual obligations”, said Daniel McGreevy, president at Caldera Properties. “We are more than pleased at the outcome of this case and with our representation through Kaplin Stewart."
“This case involves the fallout from the housing market’s boom-to-bust cycle and the failure to clearly provide for the ‘what if,’” said Barbara Anisko, Esquire, Caldera’s lead trial counsel. “This case affirms the principal that a party cannot benefit from its own wrongdoing and if reimbursement for costs is expected after breach, it should be spelled out in the contract.”

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About Kaplin Stewart Meloff Reiter & Stein, P.C.
Kaplin Stewart is a regional law firm with offices in Blue Bell and Philadelphia, Pennsylvania and Cherry Hill, New Jersey. The firm has a broad-based commercial practice and represents a wide range of clients, from Fortune 500 companies to closely-held businesses, as well as governmental entities, non-profit corporations and individuals. Clients include entrepreneurs engaged in real estate ventures, construction, manufacturing, technology, healthcare and professional services.

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