Keystone Land & Development Company, Plaintiff-Counter-Defendant-Appellant v. Xerox Corporation, Defendant-Counter-Claimant-Appellee

This diversity case arises from a contract dispute. Plaintiff Keystone Land & Development Company (“Keystone”) claims that it formed two binding contracts with Defendant Xerox Corporation (“Xe rox”): a contract to buy a building owned by Xerox, and a contract to negotiate the terms of a Purchase and Sale Agreement for that building. Keystone filed suit for breach of contract in Washington state court and, to secure its claims, Keystone filed a lis pendens notice for the property. Xerox removed the case to federal court and filed a counterclaim for damages, and attorney’s fees, caused by an allegedly improper lis pendens. The district court granted summary judgment to Xerox on its defense of the two contract claims asserted by Keystone, and also granted summary judgment to Xerox on its counterclaim. Keystone appealed these rulings.

In a separate opinion, Keystone Land & Development Co. v. Xerox Corp., 353 F.3d 1070 (9th Cir.2003) (Keystone I), we affirmed the summary judgment dismissing Keystone’s claim of a breach of contract to sell the building, and we reversed the summary judgment awarding damages to Xerox because of the lis pendens.

In a companion published order, Keystone…