No: 03-4407 LLB Realty, L.L.C v. Core Laboratories, LP; Core Laboratories, LLC

* Honorable Ronald L. Buckwalter, United States District Judge for the Eastern
District of Pennsylvania, sitting by designation.
1It is not necessary to resolve Core’s suggestion that the Sale and Purchase Agreement
was merely an agreement to agree, and not a binding contract. Rather, for purposes of our
discussion, we can assume arguendo that the signed agreement was intended to bind Core
and LLB.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No: 03-4407
LLB Realty, L.L.C.,
Appellant
v.
Core Laboratories, LP;
Core Laboratories, LLC
Appeal from the United States District Court
for the District of New Jersey
(Civil Action No. 01-cv-00676)
District Judge: Hon. Mary Little Cooper
Argued: November 12, 2004
Before: McKEE and CHERTOFF, Circuit Judges,
and BUCKWALTER, District Judge.*
(Filed : February 9, 2005)
OPINION
McKEE, Circuit Judge.
We are asked to review the district court’s dismissal of a suit for specific
performance of a purported contract for the sale of a parcel of real estate.1 For the

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reasons that follow, we will affirm.
I.
This suit arises from protracted but failed negotiations between LLB Realty,
L.L.C., and Core Laboratories, LP. For many years, Core has owned and occupied a
parcel of commercial property in West Windsor, New Jersey. LLB became interested in
purchasing that property because it abuts property LLB already owns. (Pa 5, Pa 154, Pa
249). In 1997, LLB contacted its real estate broker, Peter M . Dodds, and asked him to
contact Core’s then Senior Vice President, Joseph Perna, to ascertain whether Core was
interested in selling the parcel. (Pa 499).
Dodds and Perna conducted written and oral negotiations which eventually
resulted in an Offer to Purchase and Standstill Agreement (“OPSA”), that both parties
signed on January 23, 1998. (Pa 528, Pa 518, Pa 426-27). The OPSA memorialized a
sale price and included a provision for a ten year leaseback arrangement the parties had
negotiated as part of the consideration. However, the OPSA also provided that the parties
would enter into a subsequent sale and purchase agreement within 60 days to allow for
due diligence. (Pa 518-520). At the expiration of the “stand still period” provided in the
OPSA, counsel for LLB mailed a draft Purchase and Sale Agreement to Core, and asked
Core to inform LLB of the name of Core’s counsel. (Pa 537). Two months later, in May
1998, Core’s counsel returned a revised draft of the Purchase and Sale Agreement to
LLB’s attorneys. (Pa 593). Four days after receiving those revisions, LLB’s counsel sent

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a 48-page first draft of a lease to Core. (Pa 646). Approximately three weeks later,
LLB’s counsel sent Core a draft agreement that incorporated nearly all of Core’s
proposed changes. (Pa 700).
Core’s counsel never responded to that revised draft, and in July 1998, LLB
learned that Core had decided not to go through with the deal for business reasons. (Pa
751). Core’s decision not to sell was formally communicated to LLB in an exchange of
letters between counsel in July and August of 1998. (Pa 750-54). That exchange
concluded with a letter one of Core’s attorneys sent to LLB on August 31, 1998. That
letter explicitly rejected LLB’s demands for assurances that Core intended to proceed
with the sale and leaseback, and instead insisted that the OPSA was merely a non-binding
preliminary agreement. (Pa 754).
Over the next two and one-half years, LLB did nothing to force Core to sell the
land although Dodds did periodically contact Core’s new Senior Vice President to inquire
about Core’s continued interest in selling the property. Each time, Core’s Senior Vice
President refused to sell. Those intermittent calls constituted the only contact between
Core and LLB until January 2001, when Core told Dodds that Core was thinking about
selling the property to a new prospective buyer, and offered LLB an opportunity to make
another offer. However, Core made it clear that it would not entertain any offer that
included a leaseback. (Pa 286-290).
LLB responded by retaining litigation counsel and, in February 2001, finally filed

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suit against Core. The suit requested specific performance of the real estate agreement
and damages. LLB also filed a lis pendens on the property. (Pa 10-11). The district
court subsequently dismissed LLB’s suit and entered an order vacating the lis pendens.
On October 30, 2003, the district court issued a permanent injunction discharging the lis
pendens and enjoining LLB from filing any further lis pendens on the property. This
appeal followed.
II.
We have appellate jurisdiction to review the district court’s injunction under 28
U.S.C. § 1292(a)(1). We also have jurisdiction to review the order dismissing LLB’s
action for specific performance because that dismissal is “inextricably linked” to the
permanent injunction. See M arshak v. Treadwell, 240 F.3d 184, 190 (3d Cir. 2001)
(“[w]hen we have jurisdiction to review an order relating to an injunction under 28 U.S.C.
§ 1292(a)(1), our jurisdiction extends to matters inextricably linked to the appealable
order.”).
III.
Our review of the district court’s legal conclusions, including its application of
New Jersey law, is plenary. See Snyder v. Pascack Valley Hospital, 303 F.3d 271, 273
(3d Cir. 2002). In reviewing the dismissal we must view the facts in the light most
favorable to LLB (the non-moving party), and draw all reasonable inferences in LLB’s
favor.

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We review the district court’s denial of a request for the equitable remedy of
specific performance for an abuse of discretion. Stehr v. Sawyer, 192 A.2d 569, 570 (N.J.
1963). We uphold the district court’s exercise of discretion if it is consistent with the
substantive law of New Jersey, and is not “arbitrary, fanciful, or unreasonable” or based
on improper standards, criteria, or procedures. Buchanan v. Evans, 555 F.2d 373, 378 (3d
Cir. 1977). Under New Jersey law, we must view the trial court's ruling on specific
performance with deference, as "evaluation of the equities in these cases must be left
largely to the judgment and good conscience of the trial court." Stehr, 192 A.2d at 171.
III.
LLB argues that since Core was not prejudiced by LLB’s two and one-half year
delay in suing for specific performance, the district court erred in concluding that suit was
barred by the defense of laches. According to LLB, laches can not bar an action for
specific performance under New Jersey law absent a showing that the delay has
prejudiced the defendant. See Appellant’s Br. at 24. In a related argument, LLB claims
that the district court’s concern for enforcing an agreement that would have forced LLB
and Core into a ten year leaseback was not justified because the court had the inherent
equitable power to “mold” the agreement to achieve an equitable remedy. Id., at 32.
In Stamato v. Agamie, 131 A.2d 745, 749 (N.J., 1957), the Supreme Court of the
State of New Jersey stated:
There is no precise formula for determining when equity will
grant specific performance to one who fails to meet the time

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provisions of his contract. . . . Rather the general rule is that
he who seeks performance of a contract for the conveyance of
land must show himself ready, desirous, prompt, and eager to
perform the contract on his part.
(internal quotation marks omitted).
The rule of Stamato was more recently relied upon as an additional basis for the
decision in Ridge Chevrolet-Oldsmobile, Inc. v. Scarano, 569 A.2d 296, 300 (N.J. Super.,
1990). Clearly, we can not conclude that the district court abused its discretion in finding
that, given this delay, LLB had not shown itself to be “ready, . . . prompt, and eager to
perform the contract. . . ” as required under New Jersey law.
Moreover, we have already noted that specific performance is an equitable remedy.
The “validity of the defence (sic) [of delay] must be tried upon principles substantially
equitable.” Lavin v. Board of Educ., 447 A.2d 516, 519 (N.J., 1982). Accordingly, there
is another reason to affirm the denial of specific performance here.
New Jersey acknowledges the general rule that "[e]quity will not ordinarily
order specific performance where the duty to be enforced continues over a long time and
is difficult of supervision." Dover Shopping Ctr., Inc. v. Cushman's Sons, 164 A.2d 785,
791 (N.J. Super. Ct. App. Div. 1960). Core’s new Senior Vice President testified that he
did not think leasebacks of real estate were in Core’s best interests. Enforcing a ten year
leaseback would therefore have required the court to create a business relationship that
was contrary to the wishes of Core’s senior management. It would also have forced

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hostile parties into a lengthy and antagonistic lease agreement that would have been
viewed as oppressive and required long-term supervision. The district court wisely
refused to do so, and the fact that it did not factor Core’s prejudice into that equation does
not transform its decision into an abuse of discretion.
It is obvious from the history of the negotiation of the OPSA that the final sales
price was contingent upon, and closely related to, the structure of the leaseback.
Therefore, the court could not simply “mold” the agreement by forcing Core to sell the
property without a leaseback as LLB suggests. See Appellant’s Br. at 32. Although courts
have broad discretion in shaping equity decrees, they will not make a different contract
for the parties in an effort to enforce the contract the parties actually agreed upon. See e.g.
Michele Matthews, Inc. v. Kroll & Trust, 645 A.2d 798, 802 (N.J. Super. Ct. App. Div.
1994), Lemon v. Kurtzman, 411 U.S. 192, 200 (1973). Specific performance of the
contract without the leaseback provision, would have required a revaluation of the sale
price. LLB seeks to minimize this by suggesting that the court could simply order the
sale and award Core damages for the revenue stream Core would lose by not having
income from a leaseback. However, that revenue stream was to flow over a period of ten
years and the court had no way knowing the price Core would have initially set for the
sale (or the price LLB would have been willing to pay) absent the subsequent leaseback.
Thus, LLB’s suggestion would require the district court to negotiate a different real estate
transaction for the parties rather than enforce the one they agreed upon.

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2 We need not separately address LLB’s request for damages because the district
court’s denial of equitable relief precludes any recovery of damages. “[A] right to
damages cannot exist when plaintiff’s conduct is such as to foreclose relief under the
liberal approach of equity.” Stamato, 131 A.2d at 749.
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IV.
For the reasons stated above, we find that the district court properly refused to
grant specific performance to LLB. Accordingly, we will affirm the order of the district
court.2

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