Finard & Co., Inc. v. Capitol 801 Corp.
| Decision Date | 18 October 1990 |
| Docket Number | Civ. A. No. 88-3109. |
| Citation | 749 F. Supp. 15 |
| Parties | FINARD & COMPANY, INC., Plaintiff, v. CAPITOL 801 CORPORATION, Defendant. |
| Court | U.S. District Court — District of Columbia |
Jeffrey W. Harab, Harab and Rosenberg, P.C., Washington, D.C., for plaintiff.
Judah Lifschitz, Gerald W. Heller and Randal W. Wax, Laxalt, Washington, Perito & Dubuc, Washington, D.C., for defendant.
This case arises from a contract under which the plaintiff, Finard & Company, Inc. ("Finard"), agreed to procure certain commercial leases for the defendant, Capitol 801 Corporation ("Capitol") in return for additional compensation as set forth below. Finard at one time owned the rights to purchase a building located at 801 North Capitol Street in Northeast, Washington, D.C. On November 24, 1986, Finard assigned its rights to purchase said building to Capitol for $10,000,0001 and at the same time the parties entered into a contract entitled "Assignment Agreement" (the "Agreement") whereby Finard would receive additional compensation (up to one million dollars from Capitol) contingent on its procuring two commercial leases for the building which met certain specific terms and delivering these leases by a specified date.
To secure payment of this additional compensation, the defendant, pursuant to the Agreement, executed a promissory note for $1,000,000 and a deed of trust. The promissory note and deed of trust were to be held in escrow pending physical delivery of the leases.
Finard eventually delivered only one lease to Capitol which did not comply with the terms set forth in the Agreement. Further, this lease was delivered more than one year after the delivery deadline had passed. Finard now sues Capitol seeking a declaration that Finard is entitled to the promissory note. Capitol counter-claimed, asking the Court to declare Finard in breach of the Agreement, and to release Capitol of any obligations under the promissory note. Both parties have moved for summary judgment and the matter has been fully briefed.
We reject all of Finard's arguments that it is still entitled to the million dollar note despite its obvious non-compliance with the Agreement. We therefore deny plaintiff Finard's motion for summary judgment, and grant defendant Capitol's motion for summary judgment on plaintiff's claim and on its counter-claim.
Article 3 of the Agreement sets forth the terms and conditions of the leases Finard was to procure. At the time the Agreement was signed, floors two to nine of the building were occupied by the government of the District of Columbia. These floors are referred to in the Agreement as the "Government Space." Section 3.1 of the Agreement states that the new lease for the Government Space should be for ten years, and sets forth different methods of calculating an appropriate rent. The other tenant in the building at the time the contract was executed was People's Drugstore, which occupied the basement and first floor of the building, an area referred to as the "Retail Space." Section 3.2 of the Agreement mandates that the new lease for this space should also be for ten years, and sets forth the appropriate payment terms for that lease. Section 3.4 of the Agreement states that rent shall be paid under the lease beginning April 30, 1987 for the Government Space, and March 1, 1987 for the Retail Space, respectively. These dates are specifically referred to as "Rent Effective Dates."
The Agreement provided that if Finard was able to deliver these leases to Capitol before June 30, 1987, it was to be compensated for procuring these leases via a $1,000,000 promissory note, secured by a deed of trust, both of which would be held in escrow. Article 5 of the Agreement sets forth different amounts Finard would be paid which vary according to the time when Finard delivered the leases.2 If Finard failed to deliver the leases by June 30, 1987, it had the right to continue negotiating for new leases thereafter, but its only compensation if it delivered a lease after this date would be a refund of the $60,000 it had paid to Capitol. Section 5.5(b).3 Thus, if Finard delivered a lease after June 30, 1987, all it would receive would be a refund of the money it furnished to Capitol to offset Capitol's leasing costs.
The Agreement explicitly states that the contract requires strict compliance in the following language:
FINARD AGREES THAT IF LEASES MEETING THE APPLICABLE CRITERIA ARE NOT DELIVERED TO CAPITOL CORPORATION AS REQUIRED BY THIS AGREEMENT, THEN FINARD SHALL RECEIVE NO COMPENSATION, CONSIDERATION OR PAYMENT OF ANY KIND UNDER THIS AGREEMENT OTHER THAN THE FOUR (4%) PERCENT COMMISSION WHICH MAY BE EARNED UNDER THE TERMS OF ARTICLE 5 OR ARTICLE 7 HEREOF.
Section 8 of the Agreement covers the payment of leasing commissions to brokers. In Section 8.2 of the agreement, Finard agreed to bear the cost of any leasing commissions owed to brokers in connection with leases procured under the Agreement. There was only one exception to this provision: Finard would not be responsible for paying the commission if a Government Lease was procured that met certain specific criteria under Article 3 of the Agreement. See Section 3.1(b)(i); Section 8.2.
After the Agreement was signed, Finard engaged the services of a real estate broker, Percy A. Brown, to procure the leases. Mr. Brown was Vice-President of a company called Brannock Associates.
In February of 1987, new leases had not been signed, and People's Drugstore quit the premises. Later on, the District of Columbia expressed interest in renting the entire premises, and on March 10, 1987 Finard and Capitol met and discussed the possibility of Capitol approving a lease if it represented a certain minimum net present value. After this meeting, Capitol, on March 18, 1987, sent Finard a letter encouraging Finard to procure a lease for the entire building. Capitol also enclosed a table of minimum net present values the leases were to represent. However, on April 2, 1987, Capitol sent Finard another letter stating that "any authorization that may be given to proceed with negotiating any leases should not, of course, be construed as an agreement as to any consideration that might become payable to Finard if such leases should be entered into." Defendant's Exhibit 13.
The June 30, 1987 deadline eventually passed, and Finard did not deliver a lease to Capitol, nor did it pay Capitol the $60,000 as compensation for Capitol's leasing costs. On July 6, 1988, over one year later, Finard finally delivered to Capitol a single five year lease with the District of Columbia government for the entire building. Under this lease, rent was to be paid to Capitol beginning April 1, 1987 for all floors except the first floor of the building. Rent was to be paid for the first floor commencing April 1, 1988. The tenant also had the option to renew the lease for an additional five year period. Two days after delivering the lease, Finard demanded release of the promissory note. Capitol refused to comply with this demand and this litigation ensued.
Summary judgment is appropriate if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R. Civ.P. 56(c). To establish there is a genuine issue, the non-moving party must present evidence "such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). In deciding a motion for summary judgment it must be determined "whether there is a need for a trial, whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250, 106 S.Ct. at 2511.
In this case, we find no dispute of any material issues. This case involves the application of undisputed facts to a contract which is clear and unambiguous. When a contract is unambiguous, it is to be interpreted by the court rather than by the jury. Kass v. William Norwitz Co., 509 F.Supp. 618, 623 (D.D.C.1980); Spellman v. American Security Bank, 504 A.2d 1119, 1127 (D.C.1986). Thus, "the contract speaks for itself and the liabilities of the parties must be determined by its plain and obvious meaning." Siegal v. Banker, 486 A.2d 1163, 1166 (D.C.App.1984).
Both parties agree that the lease Finard finally delivered to Capitol did not meet the requirements of the Agreement. Finard did not deliver two leases covering the Government Space and the Retail Space for ten years each. The single lease it delivered covered the Government Space for five years, and the Retail Space for five years, and for one year only part of the Retail Space was rented. This lease was delivered July 6, 1988, over one year past the June 30, 1987 deadline in the Agreement. Clearly, Finard did not meet its obligations under the Agreement as clearly written.
Finard, in its motion, attempts to excuse its non-compliance by characterizing its suit as "equitable in nature." It states that it seeks "its due compensation after having conferred to Capitol Corporation the full benefit it requested." Plaintiff's Memorandum at 1. This, of course, is not true. Moreover, Finard may not now seek equitable relief when its compensation is specifically set forth in a written contract agreed to by the parties. See Chancellor v. L.J. Hooker Commercial Real Estate, Inc., 690 F.Supp. 35, 39 (D.D.C.1988); Wilderness Society v. Cohen, 267 A.2d 820, 822 (D.C.App.1970) (). Whatever relief Finard may seek must be evaluated in terms of compliance or non-compliance with...
To continue reading
Request your trial
-
Bingham v. Goldberg. Marchesano. Kohlman.
...parties is covered by an express written contract." Standley v. Egbert, 267 A.2d 365, 368 (D.C.1970); see also Finard & Co. v. Capitol 801 Corp., 749 F.Supp. 15, 18 (D.D.C. 1990), aff'd in part, 298 U.S.App.D.C. 140, 976 F.2d 1444 (1992); Chancellor v. L.J. Hooker Commercial Real Estate, In......
-
Brannock Associates, Inc. v. Capitol 801 Corp.
...with the D.C. government and to hold Capitol liable for the leasing commission claimed by Brannock. In Finard & Co., Inc. v. Capitol 801 Corp., 749 F.Supp. 15 (D.D.C.1990) ("Finard I"), we held that Finard was not entitled to the $1,000,000 because it had failed to deliver a lease complying......