Pepsi-Cola Bottling Co. v. Handy

2000 WL 364199 (Del. Ch. 2000)

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Nature of the Case

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Facts

Pepsi (P) is a corporation that bottles soft drinks. The defendants are Handy Realty Inc. (D), Willow Creek Estates, LLC, Randall Handy Jr, Michael Ginsburg, and Larry McKinley. In 1997, Handy acting for himself, Ginsburg, and McKinley contracted to purchase land for development into Willow Creek Estates, a residential subdivision. Before settlement, Handy took steps to develop the property. Handy immediately learned that the property contained wetlands. This adversely affected the property value. Ds immediately abandoned their plans to develop and decided to sell the land. The sign placed on the land said “Excellent Development Potential.” P became interested in the property and acquired an option to purchase. Handy had yet to complete his original purchase agreement. Ginsburg and McKinley then formed Willow Creek LLC. P hired a soil engineer. Handy did not disclose the true condition of the property. He also falsely represented that no analytical tests or inspections had been conducted on the groundwater, surface water, or soil. At that time, the LLC had been formed, and Handy was acting as its agent. Ds purchased the land for $174,000 and 4 months later sold it to P for $455,000. P learned of the true condition and sued for fraud, breach of express warranty, and unjust enrichment. P sought rescission and all costs and damages. Ds moved to dismiss under Rule 12(b)(6).