UNITED STATES DISTRICT COURT, DISTRICT OF NEW JERSEY
March 30, 1982
A-S DEVELOPMENT, INC., a New Jersey corporation, Plaintiff,
W. R. GRACE LAND CORPORATION, a New York corporation, Defendant
The opinion of the court was delivered by: THOMPSON
This action began as a suit for specific performance of a real estate transfer. With the passage of time it became a claim for damages. On November 25, 1980, after a 12-day trial devoted exclusively to liability issues, this court rendered an opinion in favor of the plaintiff, A. S. Development, Inc. The opinion held that the defendant W. R. Grace Land Corporation was liable for refusing to take title to Channel Club Tower, a Monmouth Beach condominium project, on March 13, 1975. Thereafter, on various days in September and November 1981, a damages trial was held. Subsequently, the parties submitted proposed Findings of Fact and Conclusions of Law. The parties submitted alternative damage schedules. I have carefully considered the thorough submissions of counsel and have drawn heavily upon them. The following Findings of Fact and Conclusions of Law are entered pursuant to Rule 52(a) of the Federal Rules of Civil Procedure as to the damages issues.
FINDINGS OF FACT
In 1974 A. S. Development, Inc. (hereinafter "A. S."), decided to terminate its real estate activities and to sell to the defendant W. R. Grace Land Corporation (hereinafter "Grace"), all of its substantial real estate holdings located in various parts of the United States. The parties drafted an agreement reciting the terms of that transfer dated June 30, 1974. Without the fault of the parties, one of the parcels in the transaction, Channel Club Tower, (hereinafter "CCT"), which was then under construction, became involved in a controversy regarding its electrical power supply. The parties agreed to remove the sale of CCT from the main agreement and to make it instead the subject of what was labeled a "supplemental agreement", also dated June 30, 1974. This supplemental agreement contained the specific conditions and contingencies relating to the transfer of CCT as well as to the transfer of A. S.'s interest in some undeveloped land not involved in this lawsuit.
The Sales Price
The supplemental agreement provided that the sales price for CCT was to be the book value of CCT as of the close of business on the day prior to closing. This book value ultimately was to be "determined as specified in a letter of instructions addressed ... to Arthur Young & Co.,"
an accounting firm. Book value was defined in the trial testimony as historical cost. By letter of March 12, 1975, A. S. advised Grace that the book value was $ 9,632,364 subject to review and certification by Arthur Young & Co. Plaintiff obtained a review and certification of that figure in a report dated January 23, 1980. That report set forth a sales price of $ 9,721,754. The price included the following items and amounts:
Land $ 587,304
Onsite Cost 7,071,275
General Conditions 562,493
Marketing Costs 598,338
Capitalized Interest 543,323
and Other Finance
Lag Time Costs 70,108
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