My client, 4860 Lancaster, LLC (“4860”), was under contract to purchase real estate in Philadelphia, for a restaurant and bar business, along with the liquor license and other licenses, from EP White Horse Tavern, Inc. (“White Horse”) in the Fall of 2020. 4860 was faced with a significant problem because it was intent on completing the transaction, but White Horse took the position that it could terminate the contract and was adamant that it would not sell the real estate and licenses.
After White Horse backed out of the deal with 4860, we sued in the Philadelphia Courts to compel White Horse to sell the real estate and liquor license. The case went to trial in 2023 and I was able to obtain a verdict in 4860’s favor directing White Horse to convey the real estate, liquor license and all of the other licenses to 4860.
Courts typically award money damages in lawsuits and only rarely order specific relief such as requiring a defendant to complete a transaction. In the present case, 4860 was not only faced with seeking the unusual and extraordinary remedy of specific performance (that would compel White Horse to complete the transaction and convey ownership of the real estate, liquor license and other licenses to 4860) my client also faced evidentiary issues that we had to overcome in proving its case. Central to the dispute between the parties was whether the closing date on the agreement of sale was extended from September 25, 2020 to November 13, 2020. It was 4860’s position that the agreement of sale was extended, and that White Horse improperly terminated the agreement of sale and refused to go to settlement.
The agreement of sale contained an original signature from the owner of White Horse. The addendum to the agreement of sale that extended the settlement date to November 13, 2020 was accomplished via electronic signature. During discovery, we were able to learn that the electronic signature was added to the extension of the agreement of sale by virtue of an e-mail address that belonged to the son of the owner of White Horse. Compounding 4860’s problem was that the son could not be located and was never deposed nor testified. Moreover, at trial, the owner of White Horse testified that he did not sign the extension, he did not have an e-mail and that he never authorized anyone to sign the addendum on his behalf.
While the son was not available, we were able to locate and obtain the testimony of White Horse’s realtor. At trial, I questioned White Horse’s realtor, and she testified that the son of the owner of White Horse was regularly present and involved with the sale of the license and real estate because the owner of White Horse was elderly and had very poor vision. The realtor further testified that she reviewed and discussed the extension of the closing date with the owner (at a time when the owner’s son was not present), and the owner told her that he agreed to the extension of the agreement of sale. The realtor also testified that owner told her to send the addendum to his son electronically to have it signed on his behalf. Finally, the realtor testified that following the signing of the extension of the closing date of the agreement of sale, she met with owner three times over the next month to review matters related to the sale of the real estate and liquor license.
At trial, I also presented evidence of activities that took place after the signing of the extension of the agreement of sale, including that 4860’s realtor and White Horse’s realtor spoke with each other several times a week over the next four to five weeks in moving the sale towards closing. Additionally, during this period, 4860 was given access to the real estate for the purposes of an appraisal and for 4860’s contractors to inspect the property. Finally, 4860’s owner testified that in October, after the signing of the extension of the closing date of the agreement of sale, he was granted access to the real estate on four occasions for the purposes of conducting an appraisal in relation to his loan to finance the transaction and also for his contractors to inspect and assess the real estate.
In ruling in favor of 4860, the Court concluded that a valid agreement existed between 4860 and White Horse, that the agreement was violated by White Horse and that 4860 did not have an adequate remedy at law. Under Pennsylvania case law, the real estate, licenses and business conducted at the real estate were unique as a matter of law because that same restaurant and liquor dispensing establishment at that definite location could not otherwise be purchased in the market and therefore could not be compensated by money damages. Under all of the evidence produced at trial by 4860, the Court concluded that the extraordinary remedy of specific performance was warranted and entered the Order directing the transfer of the real estate, liquor license and other licenses from White Horse to 4860.
Leo Gibbons works with clients involving the purchase or sale of real estate, the leasing of real estate, the transfer of liquor licenses and disputes involving these types of transactions. The law will often afford a remedy or monetary recovery for when a party is injured as a result of the other party breaking or violating a contractual agreement. He provides legal counsel to clients in these types of situations and can be reached at 610-840-0227 and [email protected].
