Saturday, July 28, 2007

Nebraska court of appeals rules against member of homeowners association that had tried to reach agreements with real estate developers. appeals court in unpublished opinion finds no enforceable contract from the negotiations between the developer and the homeowners that resulted in merely vague promises of covenant details. While the district court had found an enforceable contract, which the appeals court reversed, the reviewing court agrees that a plaintiff in a breach of contract case may not seek profit disgorgement in any even from the defendant. MERLE RAMBO V. SULLIVAN R.E. GROUP, "The district court was clearly wrong to find an enforceable contract from the (vague agreements at the) June 1998 city council meeting. For example, Sullivan and the RNA, whose members opposed the zoning change, clearly agreed to a nine-lot subdivision for purposes of the zoning change. Sullivan and the RNA also clearly contemplated that certain covenants would be entered into and that such covenants would contain provisions favored by the RNA and would be enforceable by the RNA in some manner. However, the draft covenants provided to the city council did not contain all such provisions, which were merely outlined in argument before the council. There were essential terms left open for future agreement, including an enforcement mechanism, a definition of which RNA members would have the ability to enforce the covenants, and what ability, if any, there would be to amend the covenants once filed. We conclude that what was reached at the June 1998 meeting was an agreement for future negotiations. In fact, such negotiations did occur. further disgorgement of profits is not an appropriate remedy in this breach of contract claim. Nebraska has not recognized disgorgement of the breaching party’s profits as damages available to an injured party.

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