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Halpern v. Tharaldson

United States District Court, D. Nevada

March 22, 2017

JASON HALPERN, Plaintiffs,
v.
GARY THARALDSON, Defendants.

          ORDER

         Presently before the court is defendant Gary Tharaldson's motion for summary judgment. (ECF No. 61). Plaintiff Jason Halpern filed a response (ECF No. 66), to which Tharaldson replied (ECF No. 70).

         I. Facts

         Halpern and Tharaldson were part of a group of investors that invested in the acquisition of a property located in Las Vegas, Nevada, for the purpose of creating a master-planned residential community, which included a golf course. (ECF No. 1 at 12). To purchase the property, the group obtained a $30 million loan, on which Tharaldson provided his personal guaranty. (ECF No. 1 at 12). As a result of the 2007-08 financial crisis, the investors agreed that the property could not be developed further at that time. (ECF No. 1 at 12). However, the existing golf course could not support the payments on the loan, and the loan went into default. (ECF No. 1 at 12).

         The loan was subsequently sold to a third party. (ECF No. 1 at 12). After this sale, there were multiple attempts by the investors to try to purchase the loan. (ECF No. 1 at 13-14). While Halpern had nearly closed several attempts to purchase the debt, Tharaldson ultimately acquired the debt in order to extinguish his personal guaranty on the full $30 million. (ECF No. 1 at 14).

         Tharaldson entered into a contract (“the contract”), on March 3, 2015, with Halpern and two of the other original investors. (ECF No. 1 at 14). The terms of the contract included that Tharaldson would provide one of the investors with consulting fees and then reimburse Halpern and the other investor for their costs incurred in negotiating their attempted purchase of the loan. (ECF No. 1 at 14).

         The contract also included an option for either Halpern or his affiliate to acquire a 50 percent interest in the loan. (ECF No. 1 at 14). To acquire this 50 percent interest, Halpern needed to satisfy three conditions: (1) before the seventy-fifth day following the closing date, Halpern had to provide written notice to Tharaldson of his intention to acquire the interest; (2) Halpern was required to pay Tharaldson 50 percent of the purchase price under the loan purchase agreement together with interest thereon at an annual rate of 8 percent from the closing date through and including the date upon which such payment is made; and (3) Halpern needed to reimburse Tharaldson 50 percent of the reimbursement and the closing expenses. (ECF No. 1 at 14).

         If these conditions were met, Halpern and Tharaldson would enter into a joint venture on “commercially reasonable terms.” (ECF No. 1 at 15). While not exhaustive, these terms included:

(i) all decisions and governance with respect to the Loan Purchaser, the Loan, the Property, the budget and the business plan and any all things in connection therewith will require the consent and approval of both [Tharaldson] and [Halpern] (or their respective affiliates), and (ii) a buy/sell provision on commercially reasonable terms in the event [Tharaldson] and [Halpern] are unable to agree on any particular decision, and (iii) pari passu and pro rata capital contributions and returns/distributions to each party.

(ECF No. 1 at 15).

         Halpern, through an associate, began conducting negotiations in April and May 2015, to convert the property into the previously-planned residential community. (ECF No. 1 at 15-17). After beginning these negotiations, Halpern alleges that he “made several attempts to exercise his right pursuant to the contract;” however, every time he “expressed his interest” or “tried to exercise his right, ” “[Tharaldson] and those who work for [Tharaldson] made it abundantly clear that Halpern was not welcome in the partnership.” (ECF No. 1 at 17).

         Halpern also describes further issues between the two parties that made consummation of the joint venture impossible prior to the seventy-fifth day following the closing date. (ECF No. 1 at 17-18). Despite these issues, both parties claim that they were still amenable to the deal. (ECF No. 1 at 18). They jointly agreed-via a side letter-to extend Halpern's election period under the contract from May 26, 2015, to June 19, 2015. (ECF No. 1 at 18).

         Halpern then alleges that Tharaldson refused to cooperate and “would fight Halpern over every term in a joint venture agreement.” (ECF No. 1 at 18). As a result of this breakdown, Halpern filed the instant action on July 9, 2015, in the Supreme Court of the State of New York. (ECF No. 1 at 10). The complaint alleges three causes of action: (1) breach of contract; (2) anticipatory breach; and (3) breach of the covenant of good faith and fair dealing. (ECF No. 1 at 18-20).

         The suit was then removed to the United States District Court for the Eastern District of New York, and thereafter the suit was transferred to the District of Nevada. (ECF No. 12). On July 18, 2016, the court granted Tharaldson's partial motion to dismiss Halpern's claims for breach of contract and breach of the implied covenant of good faith and fair dealing. (ECF No. 55).

         In the instant motion, Tharaldson moves for summary judgment on Halpern's remaining claim for anticipatory breach. (ECF No. 61).

         II. ...


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