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MCGARRY v. RESOLUTION TRUST CORP.

December 5, 1995

ROBERT MCGARRY AND NANCY MCGARRY, Plaintiff,
v.
RESOLUTION TRUST CORPORATION AS RECEIVER FOR POLIFLY SAVINGS & LOAN ASSOCIATION, Defendant.



The opinion of the court was delivered by: WALLS

 WALLS, District Judge

 This matter comes before the Court on defendant Resolution Trust Corporation's ("RTC") motion under Local Rule 12(i) for reargument with respect to an order entered June 22, 1995 denying its motion for summary judgment.

 Defendant had moved for summary judgment on the following grounds: (1) the uncontested facts; (2) 12 U.S.C. 1823(e) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"); (3) no contract to extend the lease was formed as there was no "meeting of the minds"; (4) the statute of frauds; (5) the doctrines of estoppel and laches; and (6) the plaintiff's claim for damages was unsupported by the facts. Summary judgment was denied because material issues of fact were found as to the existence of a contract and the issue of damages. Defendant asserts that this ruling should be reconsidered because the Court "overlooked" the statutory (§ 1823) claim which provides an independent basis for summary judgment even if a binding leasehold agreement exists.

 STATEMENT OF FACTS

 In March 1988, plaintiffs McGarry and Polifly Savings & Loan Association ("Polifly") entered into a two-year lease agreement. The rider to the lease agreement contains a renewal option for an additional three year lease term:

 
Tenant shall have an option to renew the Lease ("Renewal Option") for an additional three (3) year period ("Renewal Period") upon the same terms and conditions as contained in the within Lease with the exception of rental . . . In the event that Tenant exercises the Renewal Option during the second year of the Lease, rental for the Renewal Period will be negotiated by the Landlord and Tenant. Tenant may exercise the Renewal Option by giving written notice to the Landlord . . . three (3) months prior to the end of the second year of the Lease.

 See Certification of Helen Nau, Exh. 1, paragraph 2.

 On December 20, 1989 during the second year of the original two-year term, Polifly gave written notice to plaintiffs:

 
Please be advised that in accordance with the terms and conditions set forth in the lease agreement . . . , we are hereby notifying you that we desire to exercise the renewal option contained in the aforementioned lease.

 See Certification of Sandy Coulthart, Exh. A.

 Thereafter the McGarrys and Polifly negotiated the rental amount by letter. On March 20, 1990, plaintiffs offered monthly payments of $ 2,400.00, $ 2,700.00 and $ 3,000.00 for the first, second and third years respectively. Id. at Exh. B. Polifly, on May 4, 1990, responded with a counteroffer of $ 2,200.00, $ 2,500.00 and $ 2,800.00 for the first, second and third years respectively. Id. at Exh. C.

 Plaintiffs set forth a rent schedule for a ten-year lease in a May 18, 1990 letter which related that said schedule was "per [Polifly's] conversation with [plaintiff's] staff. Id. at Exh. D. The letter also cautioned:

 
All proposals regarding a long term lease are subject to approval of my attorney Bruce Atkins.
 
Your June rent shall be $ 2,984.00. If you should choose to remain leasing the property, please adhere to the above mentioned schedule. Also, the above is conditional upon entering into a formal lease.

 Id. Polifly did not respond to the May 18, 1990 letter in writing. However it did pay plaintiffs' monthly rental amounts outlined in the May 18, 1990 letter. See Affidavit of Robert McGarry, Exh. A.

 On July 22, 1991, Polifly wrote a letter to the plaintiffs asserting that it considered itself a month-to-month tenant and that it would vacate the premises on or about November 30, 1991. See Certification of Sandy Coulthart, Exh. E. Polifly later vacated the premises.

 In January 1992, plaintiffs filed their Complaint alleging wrongful termination of the lease agreement and that Polifly had caused substantial damage to the leased premises.

 PROCEDURAL HISTORY

 As above, on January 30, 1992, plaintiffs, Robert and Nancy McGarry filed, a Complaint in the Superior Court of New Jersey, Bergen County, against defendant Polifly Savings & Loan Association.

 On November 19, 1992, the Office of Thrift Supervision, Department of Treasury, declared Polifly Savings & Loan insolvent, ordered it closed, and appointed the ...


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