Case Overview

This case involved an officetel purchaser who sought rescission or termination of a sale agreement and demanded the return of the down payment from the trust company acting as the project trustee under a managed land trust arrangement.

The plaintiff alleged fraudulent inducement and contractual non-performance based on discrepancies between marketing materials and the completed building, as well as delays in the designated occupancy period.
The plaintiff further argued that the trust company, as the project trustee, was liable for refunding the purchase price and paying contractual damages.

In response, One Law Partners, LLC represented the trust company. The appellate court ultimately dismissed all claims, holding that the trust company's liability was limited under the special provisions of the sale agreement.

Key Issues

This case primarily concerned:

• Whether a trust company acting as a project trustee under a managed land trust structure bears an obligation to refund sale proceeds following termination of a sale agreement; and

• How liability should be allocated between the trust company as the formal contracting party and the entity that served as the actual project developer.

Legal Strategy

Attorney Eun‑young Jung of One Law Partners, LLC focused on a detailed interpretation of the contractual structure and the special provisions governing the parties' rights and obligations.
Relying on the special provisions expressly set forth in the sale agreement, the defense demonstrated that the trust company performed only limited trustee functions and did not assume substantive responsibility for the development project itself.
The defense further presented a systematic analysis of the contractual disclaimer provisions, establishing that the trust company did not bear any contractual obligation to refund the sale proceeds.

Significance of the Decision

The court held that, pursuant to the special provisions of the sale agreement, the trust company was not responsible for returning the down payment following termination of the agreement.

This decision confirms that contractual allocations of responsibility in managed land trust projects are legally enforceable and that a trustee cannot automatically be held broadly liable merely because it appears as a formal party to the agreement.
The ruling further demonstrates that special provisions and disclaimer clauses in sale agreements can effectively limit the legal risks assumed by trust companies in managed land trust transactions.
 

Attorney Eun‑young Jung | eyjung@onelawpartners.com
 

Public Relations Team, One Law Partners, LLC | pr@onelawpartners.com