L J Sutter Partners v. Odysseus Farms CA3

BACKGROUND

We recount the factual and procedural history only to the extent pertinent to the resolution of the repudiation of contract arguments raised on appeal by LJ Sutter. An Expensive Option Becomes a Problem for LJ Sutter In 2004, South Sutter County was the focus of numerous developers who wanted to build residential and industrial projects. Part of Odysseus’s property appeared to be valuable as mitigation property. In 2005, Odysseus sold a long-term option for acquisition of its mitigation property to LJ Sutter Partners. A crisis loomed for LJ Sutter when a payment of $1,750,000 to renew the option was coming due in January 2008. With the severe downturn in the real estate market, LJ Sutter had run into financial difficulties, lawsuits, and roadblocks in its attempts to develop property in Sutter County. As the referee found, “by the end of 2006, it had become clear that LJ Sutter would not be able to realize the substantial profits contemplated when it entered into the O[ption] A[greement] with Odysseus in January, 2005. . . . [¶] Similarly, the only apparently available means to turn a profit from a different deal –- either with [the owners of the Sacramento] Kings or…