Stratosphere Litigation L.L.C. v. Grand Casinos, Inc.

298 F.3d 1137 STRATOSPHERE LITIGATION L.L.C., Plaintiff-Appellant, v. GRAND CASINOS, INC., Defendant-Appellee. No. 01-15947. United States Court of Appeals, Ninth Circuit. Argued and Submitted May 14, 2002. Filed August 13, 2002. COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED Jay Goldberg, New York, NY, for the plaintiff-appellant. Howard J.C. Nicols, Squire, Sanders & Dempsey L.L.P., Cleveland, OH, for the defendant-appellee. Appeal from the United States District Court, For the District of Nevada, David Warner Hagen, District Judge, Presiding. D.C. No. CV-97-01252-DWH. Before: SNEED, HUG, and BERZON, Circuit Judges. OPINION SNEED, Circuit Judge. 1 This case arises out of the bankruptcy of Stratosphere Corporation ("Stratosphere"). Stratosphere Litigation, LLC ("SL") appeals the district court's grant of partial summary judgment and its decision in favor of Grand Casinos, Inc. ("Grand") following a bench trial. 2 SL filed a breach of contract action against Grand as a third-party beneficiary to a contract between Grand and Stratosphere. The contract provided that should Stratosphere's annual cash flow fall below a target, Stratosphere would be obligated to raise…

This case arises out of the bankruptcy of Stratosphere Corporation (“Stratosphere”). Stratosphere Litigation, LLC (“SL”) appeals the district court’s grant of partial summary judgment and its decision in favor of Grand Casinos, Inc. (“Grand”) following a bench trial.

SL filed a breach of contract action against Grand as a third-party beneficiary to a contract between Grand and Stratosphere. The contract provided that should Stratosphere’s annual cash flow fall below a target, Stratosphere would be obligated to raise additional equity and Grand would be obligated to fund an escrow account.

Stratosphere’s annual cash flow fell below the target. SL asserts that Grand failed to fund an escrow account when Stratosphere’s cash flow fell below the target. It follows, SL insists, that Grand breached the contract.

The district court rejected SL’s claim. It held that Grand’s obligation to fund an escrow account was a concurrent condition to Stratosphere’s obligation to raise additional equity. Having filed for bankruptcy, Stratosphere could not raise the required equity. Therefore, Grand’s obligation to fund an escrow account was dis *1141 charged. We have jurisdiction pursuant…

concurring in part:

I join only Part I of the majority’s opinion. In light of our conclusion in Part I that res judicata controls the outcome of this case, it is unnecessary to reach the contract interpretation questions raised *1148 here. For that reason, I do not join the remainder of the majority’s opinion.