United States District Court, N.D. Ohio, Eastern Division
OPINION AND ORDER
CHRISTOPHER A. BOYKO, J.
matter is before the Court on a Motion to Dismiss by
Defendant The Great Lakes Towing Company. (ECF # 5). For the
following reasons, the Court grants Defendant's Motion
and dismisses the above-captioned case.
to Plaintiff, the Parties entered into a valid contract for
the sale of a tugboat, which Defendant breached when it
refused to close on the sale. Plaintiff also claims
Promissory Fraud for Defendant's statement that it would
sell the boat for $3 million, which Plaintiff alleges was
made with no intent of following through with the sale.
Lastly, Plaintiff claims Promissory Estoppel because
Plaintiff relied on Defendant's $3 million offer in
sending representatives to inspect the boat.
claims concern the sale of a tugboat to Plaintiff Franco
Marine 1, LLC by Defendant The Great Lakes Towing Company.
Harley Franco (“Mr. Franco”) is the Governor of
Plaintiff Franco Marine 1, LLC and the Chairman and CEO of
Harley Marine Services. Defendant's President Joseph
Starck, Jr. (“Mr. Starck”) emailed Mr. Franco
advertising the tugboat San Jose (the “Tugboat”)
“available for immediate sale.” Compl. Ex. A.
When Mr. Franco indicated his interest in the Tugboat, Mr.
Starck replied, “$3MM and it's yours.” Compl.
Ex. B. Mr. Franco responded by making arrangements to inspect
the Tugboat. Later that day, Mr. Starck emailed Mr. Franco
offering a charter arrangement:
With regard to sale, we would prefer to do a short term
charter, with purchase at the end of the charter. We propose
a 6-month charter, with one (1) payment of $600, 000 due
on/before Delivery. Upon expiration of the charter, Harley
will close on the purchase at a price of $2.50MM.
Compl. Ex. C. Mr. Franco sent employees to inspect the
Tugboat, and about a week later, emailed Mr. Starck,
purporting to accept Mr. Starck's offer:
This will confirm that we have accepted your $3, 000, 000
offer to sell Harley Marine Services or Harley Franco LLC. To
purchase the above reference tugboat. This will further
confirm the vessel comes with spares listed and that all
certifications are current. This will further confirm you
will send us a signed purchase and sale agreement
immediately. We will schedule a closing immediately.
Compl. Ex. E. Mr. Starck replied, “I will have the
Purchase and Sale to you tomorrow.” Compl. Ex. E. The
next day, Mr. Starck emailed Mr. Franco with an unsigned copy
of the Vessel Purchase and Sale Agreement, stating, “I
have initialed each page, except the signature page. To be
timely effectuated, we will require this agreement to be
fully executed by 1700 Hours ET today. Upon receipt of your
signed copy by return email, I will immediately sign and
return the fully executed agreement to you.” Compl. Ex.
F. Forty minutes later, Mr. Starck emailed Mr. Franco,
“I have now been advised that acceptance of any
Purchase and Sale Agreement by Great Lakes will be subject to
prior review and approval by the Company's board of
directors before I can sign.” Compl. Ex. G. Mr. Franco
signed the Agreement and sent it back to Mr. Starck. The next
day, Mr. Franco emailed Mr. Starck, “Joe need signed
agreement.” Compl. Ex. J. Mr. Starck replied,
“[t]his is to advise that our board did not approve the
agreement to sell the tug to Harley Marine, and therefore we
have no contract.” Compl. Ex. J. Mr. Franco replied,
“[w]e believe we have a contract, and now have
damages.” Compl. Ex. J. According to Plaintiff,
Defendant sold the Tugboat to another party shortly after it
refused to close on the deal with Plaintiff.
Complaint alleges Breach of Contract for Defendant's
failure to sell the Tugboat for $3 million, Promissory Fraud
for Mr. Starck offering to sell the Tugboat when Mr. Starck
had no intention of following through on the offer, and
Promissory Estoppel for Plaintiff's reliance on
Defendant's offer in sending representatives to inspect
argues that Plaintiff's Breach of Contract claim fails
because there was no $3 million offer on the table for Mr.
Franco to accept. The initial $3 million offer was revoked by
Mr. Starck's subsequent offer of a charter arrangement
with a final purchase price of $3.1 million. If Mr.
Franco's purported acceptance was a counteroffer,
Defendant argues it would be unreasonable to construe Mr.
Starck's statement that he would send a Purchase and Sale
contract the next day as an acceptance. There was no meeting
of the minds because both parties required a formal writing
to be bound; Defendant stated that the contract would not be
effectuated until it was signed, and Plaintiff refused to
wire money until there was a signed, written contract.
Furthermore, Defendant argues that the agreement was
indefinite as to the essential terms of price ($3 million vs.
$3.1 million), down payment (no down payment vs. $300, 000
vs. $600, 000) and party (Harley Marine Services vs. Franco
Marine 1, LLC).
also argues that Plaintiff has failed to state a claim for
Promissory Fraud because Plaintiff has not adequately and
plausibly stated that any promise made by Defendant was false
when made. To the extent that Plaintiff argues that the false
promise was Mr. Starck's initial offer to sell the
Tugboat for $3 million, Defendant claims that this is not an
actionable false promise because the offer was rescinded
later that day and prior to Plaintiff's purported
acceptance. According to Defendant, even if Mr. Starck's
subsequent offer was not a revocation, Plaintiff still cannot
claim reasonable reliance because the parties stated they
would not be bound unless they signed a formal contract.
Furthermore, any reliance on Mr. Starck's email
statements by Plaintiff would be unreasonable per se
because the parties are sophisticated businesses negotiating
a multimillion dollar sale. Finally, Defendant argues that
reliance on the offer would be unreasonable because Defendant
could have withdrawn the offer at any time.
Defendant argues that Plaintiff's Promissory Estoppel
claim also fails because it could not have reasonably relied
on Mr. Starck's statements for the reasons discussed in
the previous paragraph. Furthermore, Defendant argues that
Plaintiff was not injured by its reliance because Plaintiff
arranged for inspection of the Tugboat without any ...