FAYETTEVILLE -- A lawsuit by Central United Methodist Church to rescind the sale of property on Dickson Street should be dismissed for failure to state a valid claim, according to a court filing Wednesday.
The church sued Barbstan Partners, a brother and sister partnership, in Washington County Circuit Court in August. The church bought adjacent property from Barbstan in 2014 for $3.3 million. The church owes about $2.75 million on the property, which is now valued at $5 million, according to the lawsuit.
An error in understanding facts, meaning of words or the law, which causes one party or both parties to enter into a contract without understanding the responsibilities or outcomes. Such a mistake can entitle one party or both parties to a rescission, or cancellation, of the contract. A mistaken understanding of the law, as distinguished from facts, by one party only is usually no basis for rescission since “ignorance of the law is no excuse.”
The Post Office has leased the property since 1971, according to the lawsuit. The lease was amended in 1981 and later extended through July 2021. The church was bound by the terms of purchase to honor the lease.
Church officials said they recently learned a provision in the 1971 lease gives the Post Office an option to buy the land in 2021 for $1.2 million, rather than fair market value, which the lawsuit contends is what both sides thought was the case, based on the 1981 lease.
Post Office officials have told the church they intend to exercise their option and buy the property when the lease expires, according to the lawsuit.
"Our contention is that both parties entered into the sale and purchase of the property under a false premise that the only option available to the U.S. Postal Service to acquire the property was by a fair market value price," Brian Swain, executive director of the church, said in a letter to the congregation.
The issue apparently came to light in March after a third party approached the church about buying the property. During preliminary discussions, the church received information the option to buy in the 1971 lease might not be superseded by provisions of the 1981 lease and the post office might have an option to buy the property in 2021 for $1.2 million.
The lawsuit contends the church offered to give the property back to Barbstan, but Barbstan refused.
The lawsuit has since been transferred to federal court. Barbstan filed an answer denying the church's allegations and a motion to dismiss Wednesday.
The motion to dismiss contends the lawsuit is based on hypothetical, future events and there's nothing for a court to rule on at the present time.
"The complaint for rescission and request for a declaration from this court that the real estate contract should be deemed null and void is based solely upon an event which may or may not occur three years from now," according to the motion. "As such, plaintiff's complaint should be dismissed for failure to plead facts showing a present, actual controversy ripe for judicial determination."
The motion says the underlying basis for the lawsuit is the contingent, uncertain possibility the U.S. government will exercise its option to buy the property.
"Clearly, if the Post Office chooses not to exercise the option to purchase in 2021, United Methodist would no longer seek rescission of the real estate contract." according to the motion.
The motion goes on to say there was no mutual mistake by the parties and that church officials were aware of the Post Office's 1971 lease-purchase option because it was referenced in the real estate contract between the parties 27 times.
The motion also contends if there was a mistake, it was a mistake of law on the part of United Methodist because the church came to an erroneous conclusion as to the legal effect of the contract, according to the motion.
NW News on 09/13/2018
Print Headline: Motion contends church knew about lease-purchase option