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JKC Michaels LLC v. KTJ Limited Partnership Eighty-Four

March 13, 2009

JKC MICHAELS LLC, PLAINTIFF,
v.
KTJ LIMITED PARTNERSHIP EIGHTY-FOUR, A MINNESOTA LIMITED PARTNERSHIP; OPPIDAN, KTJ LIMITED INC., A MINNESOTA CORPORATION; AND JVC BUILDERS, INC., DEFENDANTS.
KTJ LIMITED PARTNERSHIP EIGHTY-FOUR, A MINNESOTA LIMITED PARTNERSHIP; OPPIDAN, INC., A MINNESOTA CORPORATION, CROSS-CLAIM PLAINTIFFS,
v.
JVC BUILDERS, INC., CROSS-CLAIM DEFENDANT.
JVC BUILDERS, INC.; AND KTJ LIMITED PARTNERSHIP EIGHTY-FOUR, A MINNESOTA LIMITED PARTNERSHIP; OPPIDAN, INC., A MINNESOTA CORPORATION, THIRD-PARTY PLAINTIFFS,
v.
ASPLIN EXCAVATING, INC., A NORTH DAKOTA CORPORATION; BRAUN INTERTEC CORPORATION, A MINNESOTA CORPORATION; LANEY'S, INC., A NORTH DAKOTA CORPORATION; AND ROERS CONSTRUCTION, INC., A NORTH DAKOTA CORPORATION, THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Ralph R. Erickson, District Judge United States District Court

ORDER ON PARTNERSHIP EIGHTY-FOUR AND OPPIDAN, INC.'S SUMMARY JUDGMENT MOTION AGAINST PLAINTIFF

INTRODUCTION

Before the Court is Defendants/Cross-Claim Plaintiffs KTJ Limited Partnership Eighty-Four and Oppidan, Inc.'s summary judgment motion against Plaintiff (Doc. #89).*fn1 The parties filed briefs with respect to the motion and presented oral argument on February 17, 2009. The Court, having considered all of the briefs and documents filed by the parties as well as the arguments presented at the hearing, now issues this memorandum opinion and order.

SUMMARY OF DECISION

Under the unambiguous terms of the purchase agreement, Plaintiff was required to bring its claims within 18 months of closing. Because Plaintiff failed to give notice of its claims within the requisite time period, the claims are time-barred and KTJ/Oppidan is entitled to summary judgment.

Further, Plaintiff purchased the property "as is" with all its faults. The alleged claims in this case pertain to the soil on the property and/or the building's foundation. Because Plaintiff's claims are precluded under the plain language of the purchase agreement, KTJ/Oppidan is entitled to summary judgment for this additional reason.

Finally, Plaintiff's negligence claim fails as a matter of law because Plaintiff has not identified an independent non-contractual duty that has been breached. For these reasons, KTJ/Oppidan's summary judgment motion is GRANTED in its entirety.

RELEVANT FACTUAL BACKGROUND

This case arises from alleged construction deficiencies in a building referred to in this lawsuit as Michaels Arts & Crafts store in West Fargo, North Dakota. Initially, KTJ Limited Partnership Eighty-Four ("KTJ") owned the property on which the Michaels store was built. Oppidan, Inc. ("Oppidan") is KTJ's general partner. Oppidan is a developer of retail buildings. KTJ/Oppidan intended to construct a building on the property that would be leased to Michaels for operation of a store.

Before construction began, KTJ/Oppidan hired Braun Intertec to perform a geotechnical and soil analysis. The report indicated the soil on the property consisted of mainly "fat clay." It further noted that fat clay has a potential for volume change due to changes in moisture content. The report made several recommendations regarding care that should be taken during construction.

KTJ/Oppidan contracted with JVC Builders, Inc. to construct the building. A representative from Oppidan testified that Braun Intertec's report was provided to JVC Builders. JVC Builders hired subcontractors, Asplin Excavating, Inc., Laney's, Inc., and Roers Construction, Inc., for the work. Construction began in September 2003. Michaels' lease with KTJ/Oppidan commenced on March 3, 2004. Michaels took possession of the building on May 2, 2004.

On May 14, 2004, John Kiefer made an offer to KTJ/Oppidan to purchase the property as an investment. Kiefer has a four-year business degree from Oregon State University. He owns car dealerships in Oregon and Idaho. Around the time Kiefer was purchasing the property in dispute, he also purchased property in Corvallis, Oregon for $1,300,000 for use as a car dealership.

KTJ and Kiefer signed a purchase agreement dated June 11, 2004. The purchase price for the property and building was $3,400,000. The purchase agreement contains the following disputed provisions:

REPRESENTATIONS AND WARRANTIES. The parties to this Agreement hereby warrant and represent to each other as follows:

5.1 Seller's Representations and Warranties Seller hereby represents and warrants to Buyer as follows:

(h) Improvements. All Improvements on the Property have been constructed in a good and workmanlike manner, in conformity with all applicable laws and regulations.

Except with respect to the warranties set forth in the Deed and in Sections 5.1(a) through (h) hereof, Seller has not made any warranty or representation, express or implied, written or oral, concerning the Property, including without ...


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