Feltman v. Sarbov

Decision Date22 November 1976
Docket NumberNo. 8518.,8518.
Citation366 A.2d 137
PartiesRalph H. FELTMAN, Appellant, v. Christos D. SARBOV, Appellee.
CourtD.C. Court of Appeals

Robert J. Stanford, Washington, D.C., for appellant.

Samuel M. Shapiro, Washington, D.C., for appellee.

Before KELLY and HARRIS, Associate Judges, and REILLY, Chief Judge, Retired.

REILLY, Chief Judge, Retired:

This is an appeal from a judgment after a jury trial awarding plaintiff, a parking lot operator, $30,000 in compensatory damages and $30,0001 in punitive damages. On appeal, defendant, lessor of one of these lots, urges us to reverse, or to grant a new trial.

The complaint was divided into three counts — two of fraud, and one for breach of contract. A motion for a directed verdict by defendant was granted at the close of plaintiff's case on the breach of contract allegations.

According to the record, Feltman, a local businessman, leased with an option to renew, on February 7, 1964, some unimproved land on 20th Street in downtown Washington to Sarbov, a well-known parking lot operator. The negotiations were carried out and the lease drawn up by a lawyer retained by the landowner. The instrument contained a statement to the effect that it was the lessor's intention to develop the property to its fullest income potential and provided that in the event he should receive an offer in writing for sale, purchase, or long-term lease for the property, the lessee would be given a copy and 60 days to exercise his right to match the terms of the offer (i.e., a right of first refusal). Insofar as pertinent, the lease provided:

It is further expressly agreed and stipulated, superseding any and all other provisions of this lease, that the lessors have and shall have the absolute right to terminate this lease and cause it to cease and end on or any day after October 6th, 1966, for the purpose of putting the property up for sale, for long-term lease (20 to 99 years), or for any other use, purpose, reason or desire without limitation or restriction of any kind upon the lessors, it being the present intention and desire of the lessors to immediately contact, interview, offer and deal with persons and companies — as they have been doing in the past to interest such and all in buying or acquiring the premises, or in negotiating and entering into contract(s) of long-term leasing looking toward the erection of an apartment, office or other building or structure thereon, to the end that the lessors may have and gain the maximum price, earnings, income or return of and from the use of said property, and this lease shall in no wise limit, (interfere with or in any manner prevent or limit the lessors in and from exploiting the property to the full of its value and income potential). The lessees understand and agree that their tenancy in all probability will not continue longer than Thirty Six (36) months beyond its date of beginning.

If during the renewal terms of this lease, should the lessors or their successors in interest receive in writing a bona fide offer for the sale, purchase or longterm lease of the premises (20 to 99 years), which the lessors desire to accept, then the privilege of buying or long-term leasing the demised premises on the same price, terms and conditions, with the same cash, financial security and other benefits to the lessors as other persons or companies have offered and are otherwise as acceptable to the lessors, and they shall be given sixty (60) days within which to exercise this privilege from the date that the lessors deliver to lessees or either of them a copy of the proposed sale, long-term lease or other disposition, and upon the written notification to the lessors or their successors of the exercise of this option by the lessees, the lessors shall be bound to accept or enter into a long-term lease with the lessees.

Following the expiration of the original term of the lease Sarbov, who testified that he was losing between $1,500 and $2,000 per month on this parking lot operation, was encouraged by lessor's counsel to renew the lease despite a substantial increase in property taxes which Sarbov had to bear. According to Sarbov's testimony, in entering into a lease for another term, he relied upon assurances by counsel that if the option to renew the lease was exercised the lessee would maintain his valuable right of first refusal, and that in the event a new building was subsequently constructed, counsel would see to it that Sarbov received the garage concession. He also assured Sarbov at one conference concerning this lease renewal in the presence of two other attorneys, both of whom testified for the plaintiff at trial, not only that he had the power to make these statements on behalf of his client but that his client would do what he was told.

At the time these negotiations were taking place, appellant Feltman had already made arrangements with a long-standing business associate to erect an office building on the site of the parking lot. The understanding was that this associate would gain an interest in the projected building by arranging financing, guaranteeing whatever loans were made, and supervising its construction.

Approximately 20 months after the renewal of the lease, Sarbov was asked to vacate the premises by appellant's attorney, who repeated the promise that Sarbov would get the parking concession in the new building. On this occasion, the attorney advised Sarbov that Feltman and his wife, without partners, were about to put up an office building. Sarbov vacated the lot a few days later without insisting upon the 90-day notice provided in the lease.

Subsequently Feltman and his business associate executed a written partnership agreement which gave the latter a 40% interest in the project. When the building was ultimately erected, the garage contained only enough parking spaces for the tenants and Sarbov was never offered a lease for this facility.

In urging this court to affirm the judgment for damages, Sarbov argues that he was the victim of actionable fraud as he had relied not only on false assurances that he would obtain the parking concession in the new building, but had renewed an unprofitable lease only because the lessor represented that the provisions contained in that instrument giving him a right of first refusal were valuable. He points out that as these representations were made at a time when, in fact, Feltman had already entered into an unwritten agreement to go into partnership with another businessman and develop the property, thereby making the option in the lease to match any offer for purchase or leasehold illusory. Had he known this, he contends, he would have refused to continue a parking operation in which he was losing approximately $1,500 or $2,000 monthly.

Stressing the fact that none of these promises or representations was actually made to Sarbov by appellant, the latter's position is that his...

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24 cases
  • Ellerin v. Fairfax Sav., F.S.B.
    • United States
    • Maryland Court of Appeals
    • September 1, 1993
    ...damages may be awarded. See BWX Electronics, Inc. v. Control Data Corp., 929 F.2d 707, 712-713 (D.C.Cir.1991) (applying Feltman v. Sarbov, 366 A.2d 137, 141 (D.C.1976)); German Auto, Inc. v. Tamburello, 565 So.2d 238, 240 (Ala.1990) ("Punitive damages may be awarded if there is a finding of......
  • Daisley v. Riggs Bank, N.A.
    • United States
    • U.S. District Court — District of Columbia
    • May 31, 2005
    ...been disclosed" may also constitute fraud, Sage v. Broadcasting Publ'ns, Inc., 997 F.Supp. 49, 52 (D.D.C.1997) (citing Feltman v. Sarbov, 366 A.2d 137, 140-41 (D.C.1976)), "especially where there is a duty to disclose." Pyne v. Jamaica Nutrition Holdings Ltd., 497 A.2d 118, 131 (D.C.1985) (......
  • SIGAL CONST. CORP. v. STANBURY, 89-866
    • United States
    • D.C. Court of Appeals
    • February 5, 1991
    ...person to reasonably believe the principal had consented to the exercise of authority the agent purports to hold.' " Feltman v. Sarbov, 366 A.2d 137, 139 (D.C. 1976) (quoting Drazin v. Jack Pry, Inc., 154 A.2d 553, 554 (D.C. 1959)). Critical to apparent authority, therefore, is the third-pa......
  • Blackman v. Hustler Magazine, Inc.
    • United States
    • U.S. District Court — District of Columbia
    • July 11, 1984
    ...or conduct of the agent for which the principal is responsible." W. Seavey, Agency, §§ 8, 18 at 13, 33. In accord, Feltman v. Sarbov, 366 A.2d 137, 139-40 (D.C.App.1976); Insurance Management of Washington, Inc. v. Eno & Howard Plumbing Corp., 348 A.2d 310, 312 7 The Copyright Act of 1909 w......
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