THE LEGAL ENVIRONMENT DIMENSION Why did the appellate court dismiss 607 South Park’s argument that 02 Development should be required to prove that it had funding commitments for $ 8.7 million?

THE ETHICAL DIMENSION What might have been some of the reasons that 607 South Park refused to sell the property to 02 Development?

In 2004, 607 South Park, LLC, entered into a written agreement to sell Park Plaza Hotel to 607 Park View Associates, Ltd., for $8.7 million. The general partner of 607 Park View Associates was Creative Environments of Hollywood, Inc. In 2005, Creative Environments assigned the rights to the hotel purchase to another company, 02 Development, LLC. At the time, 02 Development did not yet exist; it was legally created several months later. When 607 South Park subsequently refused to sell the hotel, 02 Development sued 607 South Park for breach of the hotel purchase agreement. 607 South Park moved for summary judgment, arguing that no enforceable contract existed because at the time of the assignment, 02 Development did not yet legally exist. Furthermore, 607 South Park argued that 02 Development suffered no damages because it was “not ready, willing, and able to fund the purchase of the hotel.” The trial court granted the motion and entered judgment in favor of 607 South Park. 02 Development appealed.