IN THE CIRCUIT COURT FOR MONTGOMERY COUNTY, MARYLAND
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)
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. 129192-V
)
Plaintiff )
)
v. )
)
LERNER CORPORATION, )
)
Defendant )
)
________________________________________)
MOTION FOR PARTIAL SUMMARY JUDGMENT
Plaintiff Three Winthrop Properties, Inc. ["Three Winthrop"], pursuant
to Maryland Rule 2-501, hereby moves for the entry of summary judgment in its
favor on Count I of its Complaint to Enforce Contract ["Count I"]. There is no
genuine issue of material fact and Three Winthrop is entitled to judgment as a
matter of law on Count I.
WHEREFORE, and for such reasons as this Honorable Court may deem just
and proper, Three Winthrop respectfully requests the entry of summary judgment
in its favor on Count I. A Supporting Memorandum of Points and Authorities, as
well as the Affidavit of Barry Bass and a proposed form of Order, are submitted
herewith.
REQUEST FOR HEARING
Pursuant to Maryland Rule 2-311(f) and Section 3-409(e) of the Md. Cts.
& Jud. Proc. Code Ann., Three Winthrop requests a speedy hearing as to all
matters set forth herein.
Date: Respectfully submitted,
Three Winthrop Properties, Inc.
By its attorneys,
__________________________________
Seth D. Greenstein
McDermott, Will & Emery
1850 K Street, N.W.
Washington, D.C. 20006-2296
(202) 887-8000
Barbara L. Moore, BBO# 352780
John J. Tumilty, BBO# 560017
COOLEY, MANION, MOORE & JONES, P.C.
21 Custom House Street
Boston, MA 02110
(617) 737-3100
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. 129192-V
)
Plaintiff )
)
v. )
)
LERNER CORPORATION, )
)
Defendant )
)
________________________________________)
MEMORANDUM IN SUPPORT OF PLAINTIFF'S MOTION
FOR PARTIAL SUMMARY JUDGMENT
INTRODUCTION
Plaintiff Three Winthrop Properties, Inc. ["Three Winthrop"] submits
this memorandum in support of its Motion for Partial Summary Judgment, filed
herewith. Three Winthrop seeks summary judgment on Count I of its Complaint to
Enforce Contract, filed with this Court on or about November 18, 1994, in which
it seeks a judicial declaration as to the interpretation of a provision of a
written management and leasing contract between the parties. For the reasons
set forth herein and in the accompanying Affidavit of Barry H. Bass, there is no
genuine issue of material fact in dispute and Three Winthrop is entitled to
judgment as a matter
of law as to Count I of the Complaint.
FACTUAL BACKGROUND
Three Winthrop is the Managing General Partner of Springhill Lake
Investors Limited Partnership ["the Investor Partnership"], which was formed for
the purpose of allowing qualified investors to invest in the ownership and
operation of real estate. [Bass Affidavit, Paragraph 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"], which own and operate a 96-building garden apartment complex
located in Greenbelt, Maryland ["the Apartments"]. [Bass Affidavit, Paragraph
3].
On or about January 16, 1985, Three Winthrop, acting on behalf of the
Operating Partnerships, entered into a Management and Leasing Agreement ["the
Agreement"] with defendant Lerner Corporation ["Lerner"] pursuant to which
Lerner would act as the exclusive leasing and management agent for the
Apartments. [Bass Affidavit, Paragraph 6; a true and accurate copy of the
Agreement is attached to the Bass Affidavit and marked "A"].
Section 14(b) of the Agreement provides:
[Three Winthrop] shall have the right,
without liability and without cause to
2
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.
[Bass Aff. Exh. A, Section 14(b), pp. 30-31]. The tenth anniversary of the
date of the Agreement falls during January, 1995; therefore, January 31, 1995
is "the last day of the calendar month in which occurs the tenth (10th)
anniversary of the date of this Agreement," as set forth in Section 14(b).
[Bass Aff. Paragraph 8].
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. [Bass
Affidavit Paragraph 9; a true and accurate copy of the notice is attached to
the Bass Affidavit and marked "B"]. By letter dated October 25, 1994, Lerner
responded to Three Winthrop's notice of termination and indicated that it would
not honor that notice. [Bass Affidavit Paragraph 10; a true and accurate copy
of Lerner's response to the notice is attached to the Bass Affidavit and marked
"C"].
ARGUMENT
The parties disagree as to the interpretation of Section 14(b) of the
Agreement. It is Three Winthrop's position that Section 14(b) clearly and
unambiguously gives it the right "to terminate" the Agreement effective as
3
of January 31, 1995. It is apparently Lerner's position that Section 14(b)
only gives Three Winthrop the right to send a notice of its intent to terminate
on January 31, 1995, which termination would not then be effective until 90
days thereafter.
Count I presents a straightforward legal question of contract
interpretation. Three Winthrop submits that its interpretation of Section
14(b) of the Agreement is mandated by the clear and unambiguous language of the
Agreement.
Summary Judgment is Appropriate
To Interpret Unambiguous Contract Language
The function of summary judgment is "to determine whether there is an
issue of fact to be tried and, if there is none, to cause judgment to be
rendered accordingly." Consumer Life Ins. Co. v. Smith, 587 A.2d 1119, 1121
(Md. App. 1991). In Maryland, the construction of a written contract, like the
Agreement, is a matter of law to be resolved by the court. Metropolitan Life
Ins. Co. v. Promenade Towers Mutual Housing Corp., 84 Md. App. 702, 716, 581
A.2d 846, 853 (1990).
Where contract language like that contained in Section 14(b) of the
Agreement is clear and unambiguous, there is no room for construction because
the parties are presumed to have intended what they expressed. Schuster v.
White Coffee Pot Family Inns, Inc., 43 Md.
4
App. 550, 551, 406 A.2d 452, 452 (1979). The "unilateral 'understanding' of
one party to a contract is not a material fact" precluding summary judgment.
Mallinakrodt v. Bioproducts, 81 Md. App. 96, 566 A.2d 1113, 1116 (1989).
Moreover, merely because the parties disagree as to the meaning of the
provisions of Section 14(b) does not create an ambiguity precluding summary
judgment. See Faw, Casson & Co., v. K. Thomas Everngam, Jr., 94 Md. App. 129,
135, 616 A.2d 426, 429 (1992), cert. denied, 330 Md. 155, 622 A.2d 1195 (1993).
It is well settled that Maryland follows the objective theory of
contracts. Faw, Casson & Co., 94 Md. App. at 134, 616 A.2d at 429. In
construing Section 14(b) of the Agreement, the Court must first determine from
the language of the Agreement itself what a reasonable person in the position
of the parties would have meant, bearing in mind that when contract language is
plain and unambiguous there is no room for construction and the Court must
presume that the parties meant what they expressed. Id. at 135, 616 A.2d at
429. In such circumstances, the test of what is meant is not what the parties
intended, but what a reasonable person in the position of the parties would
have thought the contract language meant. Id.
5
The Agreement Gives Three Winthrop
The Right to Terminate the Agreement
Effective as of January 31, 1995
The language in question gives Three Winthrop "the right . . . to
terminate [the Agreement] at any time from and after" January 31, 1995. It
does not give it only the right to give notice of termination as of that date;
it gives the right "to terminate" as of that date. It is clear from the use of
the words "to terminate" that, if ninety (90) days notice is properly given,
the Agreement will "terminate" as of January 31, 1995. That is exactly what
Three Winthrop is seeking to do.
Three Winthrop followed precisely the requirements of Section 14(b) of
the Agreement. On October 17, 1994, which was one hundred (100) days prior to
January 31, 1995, Three Winthrop gave written notice of termination to Lerner.
[Bass Aff. Exh. B]. That notice specified that "the effective date of such
termination" would be January 31, 1995, the "Termination Date". The
"Termination Date" was "the last day of the calendar month in which occurs the
tenth (10th) anniversary of the date of [the] Agreement."
Three Winthrop followed Section 14(b) of the Agreement to the letter.
This Court should summarily rule that the Agreement has been terminated
effective as of January 31, 1995.
6
The interpretation of Section 14(b) advanced by Three Winthrop is,
moreover, the only interpretation that makes any sense in the context of the
parties at the time the contract was entered into. Faw, Casson & Co., 94 Md.
App. at 135, 616 A.2d at 429. The Agreement was, from its inception, a ten-
year contract. Section 14(a) of the Agreement provides that the Agreement
"shall be in effect from and after the date hereof until" January 31, 1995.
[Bass. Aff. Exh. A, Section 14(a), p. 30]. By its terms, the Agreement will
"be automatically renewed for successive one year terms" after its automatic
expiration on January 31, 1995, "subject to termination at any time pursuant
to, and on the conditions set forth in" Section 14 of the Agreement. [Bass.
Aff. Exh. A, Section 14(a), p. 30].
This automatic expiration and renewal structure makes it clear that the
Three Winthrop has the power to prevent the automatic renewal of the Agreement
on January 31, 1995 by terminating it as set forth in Section 14(b). If Three
Winthrop follows the "conditions set forth in" Section 14(a), it can
"terminate" the contract upon its expiration on January 31, 1995.
There is nothing in the language of the Agreement which supports
Lerner's interpretation of Section 14(b). Nowhere is there any suggestion that
Three Winthrop has only the power to give notice of termination on January
7
31, 1995, and lacks power to cause the Agreement to terminate effective as of
that date. Lerner is seeking, in the interpretation which it advances, to
rewrite the terms of the Agreement for its financial benefit.
CONCLUSION
For the reasons set forth above, plaintiff Three Winthrop Properties,
Inc., acting on behalf of the Operating Partnerships, requests that the Court
enter judgment in its favor on Count I of its Complaint to Enforce Contract,
and award the declaratory relief specified in that count.
Date: Respectfully submitted,
Three Winthrop Properties, Inc.
By their attorney,
___________________________________
Seth D. Greenstein
McDermott, Will & Emery
1850 K Street, N.W.
Washington, D.C. 20006-2296
(202) 887-8000
Barbara L. Moore, BBO# 352780
John J. Tumilty, BBO# 560017
COOLEY, MANION, MOORE & JONES, P.C.
21 Custom House Street
Boston, MA 02110
(617) 737-3100
8
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. 129192-V
)
Plaintiff )
)
)
v. )
)
LERNER CORPORATION, )
)
Defendant )
________________________________________)
AFFIDAVIT OF BARRY H. BASS IN SUPPORT OF MOTION
FOR PARTIAL SUMMARY JUDGMENT
I, Barry H. Bass, hereby under oath depose and state as follows:
1. I am more than eighteen (18) years of age, reside in the
Commonwealth of Massachusetts and am competent to testify as to the matters set
forth in this Affidavit on the basis of my personal knowledge.
2. I am Vice President of plaintiff Three Winthrop Properties, Inc.
["Three Winthrop"]. Three Winthrop is a wholly owned subsidiary of First
Winthrop Corporation.
3. Three Winthrop is the Managing General Partner of Springhill Lake
Investors Limited
Partnership [the "Investor Partnership"], a Maryland limited partnership formed
for the purpose of allowing qualified investors to invest in the ownership and
operation of real estate. 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.
4. As Managing General Partner of the sole general partner of the
Operating Partnerships, Three Winthrop exercises day-to-day control over the
Operating Partnerships. 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.
5. The Operating Partnerships own and operate a 96-building garden
apartment complex located in Greenbelt, Maryland ["the Apartments"].
6. On or about January 16, 1985, Three Winthrop, acting on behalf of
the Operating Partnerships, entered into a Management and Leasing Agreement
["the Agreement"] with defendant Lerner Corporation ["Lerner"] pursuant to
which Lerner would act as exclusive leasing and management agent for the
-2-
Apartments. A true and accurate copy of the Agreement is attached hereto and
marked "A".
7. 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.
8. The tenth anniversary of the date of the Agreement will occur
during January, 1995; therefore, January 31, 1995 is "the last day of the
calendar month in which occurs the tenth (10th) anniversary of the date of this
Agreement," as set forth in Section 14(b) of the Agreement.
9. 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".
10. 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".
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I do solemnly declare and affirm under the penalties of perjury and
upon personal knowledge that the facts set forth in the foregoing affidavit are
true and correct.
Dated: ____________________________________
Barry H. Bass
SPRING/32000110
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