Austin Hill Country Realty, Inc. v. Palisades Plaza

Facts

The plaintiff, Palisades, owned an office complex in Austin. The defendant, Hill Country, was a real estate brokerage comprised of three realtors. On September 15, 1992, Palisades and Hill Country executed a five-year commercial lease for a suite in the Palisade’s office complex. An addendum to that lease set the base rent for each of the five years. Palisades and Hill Country also signed an additional agreement calling for Palisades to convert the shell office spaces into working offices for Hill Country. The lease was set to start on the “commencement date,” which was defined in the lease as: (1) the day Hill Country occupied the space, or (2) the date that Palisades substantially completed the improvements to the office space, or would have done so but for “tenant delay.” Hill Country and Palisades both anticipated the lease would begin November 15, 1992. By the middle of October 1992, Palisades had nearly finished the improvements to the office space. However, construction came to a halt on October 21, 1992, when Palisades received conflicting instructions on how to complete the space. One of the realtors comprising Hill Country sent one set of instructions, and another sent a conflicting set. Palisades sent letters to Hill Country and all three of the realtors, indicating it would not continue construction until they designated a single representative to make the decisions. Hill Country and the three realtors all failed to respond to the letters. November 19, 1992, Palisades informed Hill Country and the realtors their failure to designate a representative was an anticipatory breach of contract. The parties tried and failed to resolve their differences. Palisades sued.