168th and Dodge, LP v. Rave Reviews Cinemas, LLC

Red Development of West Dodge, LLC, and 168th and Dodge, L.P (collectively “RED”) (plaintiffs) are commercial property developers. Rave Reviews Cinemas, LLC (Rave) (defendant) owns and operates a chain of movie theaters. The two parties previously worked together on a theater project known as the Jefferson Pointe Project. In March 2002, RED submitted a proposal for Village Pointe, a new outdoor shopping center, to the Omaha City Planning Department. In April 2002, Rave contacted RED about a proposal to build a movie theater in Village Pointe. In September 2002, RED sent a revised proposal containing a movie theater to the Omaha City Planning Department, and purchased additional land for the theater. On October 3, 2002, RED faxed Rave a letter of intent, dated June 25, 2002. Rave’s president stated in a follow up letter that he believed Rave was in agreement with “most of all of the major issues” set forth in the June 25th letter of intent. The letter also stated Rave’s need to ultimately receive approval for the project from its board of directors. The parties drafted a second letter of intent, dated November 13, 2002, that outlined the proposed terms for a lease between the parties. The letter stated that it should “not be construed as either a lease agreement or an option to lease.” Rather, the letter described the terms that would be controlling if a subsequent agreement were to be executed. On November 26, 2002, Rave signed the letter of intent and sent it, along with an accompanying letter, to RED. Rave’s accompanying letter restated the need for Rave to obtain approval for the project from its board. The Omaha City Planning Board approved the project in December 2002. Rave and RED continued negotiations about the lease under March 22, 2003, when Rave informed RED that it did not actually intend to build a movie theater at Village Pointe. In August 2003, RED entered into a contract with Douglas Theaters, another movie theater company, for the project. RED brought suit against Rave in federal district court for breach of express contract, breach of implied contract, and promissory estoppel. The district court granted Rave’s motion to dismiss RED’s breach of express contract claim, and granted Rave’s motion for summary judgment on RED’s breach of implied contract and promissory estoppel claims. RED appealed.