IN THE CIRCUIT COURT FOR MONTGOMERY COUNTY, MARYLAND
________________________________________
)
THREE WINTHROP PROPERTIES, INC., )
as Managing General Partner of )
Springhill Lake Investors Limited )
Partnership, as General Partner )
of First, Second, Third, Fourth, )
Fifth, Sixth, Seventh, Eighth and )
Ninth Springhill Lake Limited )
Partnerships and Springhill )
Commercial Limited Partnership, ) Case No.
)
Plaintiff )
)
v. )
)
LERNER CORPORATION, )
11501 Huff Court )
North Bethesda, Maryland 20895 )
)
Defendant )
________________________________________)
COMPLAINT TO ENFORCE CONTRACT
INTRODUCTION
The plaintiff brings this action to enforce the express term of a
written contract which controls termination of that contract.
COUNT I
PARTIES
1. Plaintiff Three Winthrop Properties, Inc. ["Three Winthrop"] is a
corporation organized and existing under the laws of the Commonwealth of
Massachusetts, with its principal place of business at One International Place,
Boston, Massachusetts. Three Winthrop is a wholly owned subsidiary of First
Winthrop Corporation.
2. Three Winthrop is the Managing General Partner of Springhill Lake
Investors Limited Partnership ["the Investor Partnership"], a limited
partnership organized and existing under the laws of the state of Maryland, with
a usual place of business at One International Place, Boston, Massachusetts.
The Investor Partnership has as its limited partners several hundred investors,
most of whom are individuals, who invested funds in return for an ownership
interest in the Investor Partnership.
3. The Investor Partnership is the sole general partner of First,
Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth and Ninth Springhill Lake
Limited Partnerships and Springhill Commercial Limited Partnership [collectively
"the Operating Partnerships"], each of which is a Maryland limited partnership.
The Investor Partnership owns a 90% general partnership interest in the
Operating Partnerships.
4. The Operating Partnerships own and operate a 96 building garden
apartment complex located in Greenbelt, Maryland ["the Apartments"].
5. As the Managing General Partner of the sole general partner of the
Operating Partnerships, Three Winthrop exercises day-to-day control over the
Operating Partnerships.
6. Three Winthrop brings this action in its capacity as Managing
General Partner of the sole general partner of the Operating Partnerships, on
behalf of the Operating Partnerships.
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7. Defendant Lerner Corporation ["Lerner"] is a Maryland corporation
whose principal place of business is located at 11501 Huff Court, North
Bethesda, Maryland.
JURISDICTION AND VENUE
8. This Court has jurisdiction over the subject matter of these claims
pursuant to Md. Cts. & Jud. Proc. Code Ann., Section 1-501.
9. This Court has the authority to enter the declaratory relief and
other relief sought in these claims pursuant to Md. Cts. & Jud. Proc. Code Ann.,
Section 3-403 et seq.
10. Venue is proper in this Court pursuant to Md. Cts. & Jud. Proc.
Code Ann., Section 6-201(a).
THE CONTRACT
11. On or about January 16, 1985, Three Winthrop, acting on behalf of
the Operating Partnership, entered into a Management and Leasing Agreement ["the
Agreement"] with Lerner pursuant to which Lerner would act as exclusive leasing
and management agent for the Apartments. A true and accurate copy of the
Agreement is attached hereto and marked "A".
12. Section 14(b) of the Agreement provides:
[Three Winthrop] shall have the right, without liability and
without cause to terminate [the Agreement] at any time from and
after the last day of the calendar month in which occurs the tenth
(10th) anniversary of the date of this Agreement by giving [Lerner]
written notice of its election to do so. Such notice shall specify
the effective date of such termination (which shall be a
"Termination Date"), which date shall be not earlier than 90 days
after such notice is given.
13. The tenth anniversary of the Agreement will occur during January,
1995. Pursuant to Section 14(b) of the Agreement quoted
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above, Three Winthrop has the right to terminate the Agreement effective as of
the last date of that month (January 31, 1995), so long as it has given Lerner
90 days notice of its intent to so terminate.
14. On or about October 17, 1994, Three Winthrop sent to Lerner written
notice of its intent to terminate the Agreement as of January 31, 1995. A true
and accurate copy of that termination notice is attached hereto and marked "B".
15. By letter dated October 25, 1994, Lerner responded to Three
Winthrop's notice of termination and indicated that it would not honor that
notice. A true and accurate copy of Lerner's response is attached hereto and
marked "C".
16. Lerner takes the position that Three Winthrop may not terminate the
Agreement effective as of January 31, 1995, contrary to the express language of
Section 14(b). It is apparently Lerner's position that the Agreement gives
Three Winthrop only the right to give notice of its intent to terminate the
Agreement on January 31, 1995, which termination would then occur 90 days later.
Lerner's interpretation is contrary to the plain and unambiguous language of
Section 14(b) of the Agreement, which gives Three Winthrop the right to
"terminate" the Agreement effective January 31, 1995, not the right to give
notice on that date.
17. Since the Agreement provides substantial compensation to Lerner,
Lerner's attempt to delay the termination of the Agreement would result in
excessive compensation being paid to it
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at the expense of Three Winthrop and the investors in the Investor Partnership.
18. An actual controversy exists with respect to the correct
interpretation of Section 14(b) of the Agreement, which controversy will be
resolved by the entry of a declaratory judgment by this Court.
WHEREFORE, plaintiff Three Winthrop Properties, Inc. requests that the
Court enter judgment in its favor and award the following declaratory relief:
A. Adjudicate and declare that Section 14(b) of the Management and
Leasing Agreement between the parties entitles the plaintiff to terminate the
Agreement effective as of January 31, 1995, so long as notice has been given 90
days prior to that date; and
B. Adjudicate and declare that the plaintiff gave proper and effective
notice on October 17, 1994 of its intent to terminate the Management and Leasing
Agreement effective as of January 31, 1995; and
C. Adjudicate and declare that the Management and Leasing Agreement
between the parties will terminate on January 31, 1995 and will thereafter be of
no force or effect.
COUNT II
19. The plaintiff repeats and incorporates herein by reference the
allegations contained in paragraphs 1 through 18 above.
20. Three Winthrop has been damaged by Lerner's failure and refusal to
honor the notice dated October 17, 1994 of Three
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Winthrop's termination of the Agreement effective as of January 31, 1995.
21. The damage sustained by Three Winthrop includes but is not limited
to all management fees, leasing fees, commissions and other amounts collected by
Lerner from and after January 31, 1995, and the costs and attorneys' fees
incurred by Three Winthrop as a result of commencing this action.
WHEREFORE, plaintiff Three Winthrop Properties, Inc. requests that the
Court enter judgment in its favor and assess and award it damages, including
interest, costs and reasonable attorneys' fees.
Dated: Nov. 17, 1994 PLAINTIFF THREE WINTHROP
PROPERTIES, INC.
By its attorneys:
/s/ Seth D. Greenstein
________________________________
Seth D. Greenstein
MCDERMOTT, WILL & EMERY
1850 K Street, N.W.
Suite 500
Washington, D.C. 20006-2296
(202) 887-8000
Barbara L. Moore
COOLEY, MANION, MOORE
& JONES, P.C.
21 Custom House Street
Boston, MA 02193
(617) 737-3100
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CERTIFICATE OF GOOD STANDING
I hereby certify that I am admitted to practice law in the State of
Maryland and am a member in good standing of the Bar of the State of Maryland.
/s/ Seth D. Greenstein
__________________________
Seth D. Greenstein
MCDERMOTT, WILL & EMERY
1850 K Street, N.W.
Suite 500
Washington, D.C. 20006-2296
(202) 887-8000
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