Adkins Limited Partnership v. O Street Management, LLC

Citation278 A.3d 106
Decision Date14 July 2022
Docket Number20-CV-13
Parties ADKINS LIMITED PARTNERSHIP, Appellant, v. O STREET MANAGEMENT, LLC, Appellee.
CourtCourt of Appeals of Columbia District

Ronald C. Jessamy, Washington, with whom Robert L. Bell was on the brief, for appellant.

Paul Kiernan, Washington, for appellee.

Before Blackburne-Rigsby, Chief Judge, Deahl, Associate Judge, and Washington, Senior Judge.

Deahl, Associate Judge:

In 2001, Adkins Limited Partnership and O Street Management (OSM) jointly formed O Street Roadside, LLC, to develop a large piece of real estate in the District's Shaw neighborhood. The death of one Adkins partner and the incapacitation of another triggered a buyout provision in Roadside's operating agreement, allowing OSM to buy Adkins out of its seventy-five percent interest in Roadside. That led to an initial round of litigation, and in 2009, the Superior Court ruled that OSM was entitled to buy Adkins out of its interest. We affirmed that decision the following year. In 2012, the Superior Court issued a second order resolving the only issue left open by the first round of litigation—the buyout price that OSM would have to pay to acquire Adkins’ ownership interest in Roadside. The court confirmed the price as $721,000, and we again affirmed.

For various reasons, OSM never actually bought Adkins out of its interest in Roadside. Each party casts blame on the other for that failure. OSM complains that Adkins refused to accept the payments it tendered shortly after the buyout price was set. Adkins counters that it had not exhausted its appeals at that point, and that once it had done so in 2013, it made clear it was ready to accept payment and settle, but OSM refused. In 2018, after repeated failed attempts to procure the buyout payment from OSM, Adkins recorded the 2012 order setting the buyout price and filed a complaint in the Superior Court to enforce it as a "final judgment or final decree for the payment of money." See D.C. Code § 15-101 (2012 Repl.). The trial court dismissed Adkins’ complaint, ruling that the 2012 order was not a "final judgment or final decree for the payment of money" and was therefore not enforceable as a money judgment under D.C. Code § 15-101.

Adkins now appeals, contending that the 2012 order was an enforceable money judgment under § 15-101. In the alternative, it argues that it was deprived of its interest in Roadside without just compensation, in violation of the Fifth Amendment's Takings Clause. We disagree with Adkins on both points and affirm.

I.

This dispute has come before this court twice before. Adkins Ltd. P'ship v. O St. Mgmt. , No. 09-CV-1067, Mem. Op. & J., 995 A.2d 230 (May 20, 2010) ( Adkins I ) ; Adkins Ltd. P'ship v. O St. Mgmt. , 56 A.3d 1159 (D.C. 2012) ( Adkins II ) . In 2001, Adkins and OSM became the joint owners of Roadside, which was formed to manage valuable real estate that was previously owned by Adkins alone. The real estate is located at the site of the historic O Street Market, at 9th and O Streets NW, and it now houses a multi-use development, including a Giant supermarket. Adkins II , 56 A.3d at 1162. Adkins contributed the property to Roadside, and received a seventy-five percent interest in the venture. OSM acquired the remaining twenty-five percent interest in Roadside, and in exchange agreed to pay off substantial liens encumbering the property and other obligations of Adkins. Adkins I , supra , at 2.

In 2008, one Adkins partner died and the other was deemed incapacitated, so that the partnership was dissolved. This triggered an "Optional Buy-Out" provision in the Roadside operating agreement, which permitted OSM to purchase Adkins’ interest in Roadside at fair-market value, with twenty-five percent down and the balance payable in installments over a period of five years. OSM filed suit in the Superior Court for a declaratory judgment that it could enforce the buyout provision, and the court ruled in 2009 that OSM was entitled to buy Adkins out of its interest. This court affirmed that ruling the following year in Adkins I .

After that affirmance, the only remaining dispute between the parties was the buyout price that OSM would have to pay Adkins in exchange for its interest in Roadside. Per Roadside's operating agreement, in the event Adkins and OSM failed to agree to a purchase price, the price would be determined via an appraisal process. At the first stage of that process, each party would appoint an appraiser to assess the fair-market value of Adkins’ interest. If the results of those appraisals were within $50,000, the purchase price would be the average of the two. If the appraisals were further apart than $50,000, that would trigger the second stage of the appraisal process, in which a third and neutral appraiser would be appointed. The median of the three appraisals, i.e., the price in the middle, would then be set as the buyout price.

The parties did not agree on a purchase price, and their appointed appraisers were tens of millions of dollars apart. Adkins’ appraiser valued Adkins’ interest at $22 million, while OSM's appraiser assessed Adkins’ interest as worth only $721,000, or about 3% of Adkins’ valuation. The chasm between the two appraisals stemmed from Adkins’ appraiser calculating its ownership interest as a fee simple interest, whereas OSM's appraiser assessed it as a leased fee interest. Adkins , 56 A.3d at 1163. The difference between the two led to a third appraiser being appointed. The court directed the third appraiser to treat Adkins’ interest as a leased fee interest—in line with OSM's appraiser—and the third appraiser concluded the Adkins’ interest was worth $660,889. That left $721,000 as the middle and therefore controlling figure for buying out Adkins’ interest. OSM promptly wrote to Adkins offering to settle at that price. Adkins refused, contending that the appraisal had been "predicated on factual and legal errors so egregious that the report, among other things, can be deemed irrational, arbitrary and capricious."

In response to Adkins’ refusal to settle, OSM moved the Superior Court to confirm the $721,000 buyout price and order settlement. In its motion, OSM asked the court to "direct[ ] the execution of appropriate documents and payment of required amounts so that the buyout is completed no later than August 2, 2011." Around the same time, OSM began depositing settlement funds—paid in installments as dictated by the agreement—into the Superior Court registry, "[i]n order to avoid any argument that [OSM] had not complied with its payment obligations." The court granted OSM's motion, confirmed the valuation, and ordered settlement, though it did not order that settlement be completed by any particular date, as OSM had requested.1 The court also returned to OSM all payments it had paid into the court registry.

We affirmed the trial court's decision in a published opinion. Adkins II , 56 A.3d at 1169. We explained that, following our 2010 decision, the "only issue left to be decided" was "how much [OSM] must pay [Adkins] in the buy-out," id. at 1165 (emphasis added), and agreed with the Superior Court that "$721,000 was the price OSM had to pay Adkins" in order to buy it out. Id. at 1164-65 (emphasis added). Adkins, still dissatisfied with what it believed to be an erroneous valuation, unsuccessfully petitioned this court for en banc review, and then petitioned the Supreme Court for a writ of certiorari, which was likewise denied. 569 U.S. 1005, 133 S.Ct. 2752, 186 L.Ed.2d 194 (May 28, 2013) (No. 12-1283).

Shortly thereafter, with its litigation options exhausted, Adkins approached OSM to complete the settlement process. OSM demurred. It was no longer interested in pursuing settlement; instead, it obstructed it. It first refused to pay the court-ordered buyout amount until Adkins obtained court confirmation as to who was authorized to wind up Adkins’ affairs following its dissolution, noting that "such authorization ... would come from the DC Superior Court."2 In an attempt to placate OSM, Adkins filed a complaint in the Superior Court naming OSM as defendant and requesting a declaratory judgment confirming the administrators of the Adkins’ estates. But OSM moved to dismiss the complaint for failure to state a claim, which the trial court granted, because Adkins did "not allege that [OSM] has done or failed to do anything for which it could be held liable," or even that OSM disputed Adkins’ position on the matter. In its dismissal order, the court reiterated that the 2012 litigation had "concluded ... with the issuance of an opinion ... that [OSM] must pay [Adkins] $721,000 for the buyout of [Adkins’] interest." (emphasis added).

For a second time, Adkins wrote to OSM requesting settlement. In response, OSM reiterated its demand that Adkins produce an "order or document" confirming the identity of the authorized representatives of the dissolved partnership. About six months later, Adkins complied and sent a third letter requesting payment, this time enclosing an order from the Fairfax County Circuit Court confirming the identity of the administrators of the Adkins estates. At this point, OSM switched tactics and offered to settle for $300,000, or about 40% of the court-ordered buyout price of $721,000. It asserted that the substantial reduction was justified because Adkins should be responsible for three-quarters of Roadside's legal fees from the preceding litigation. Adkins rejected that offer and turned back to the courts to recover the full court-ordered buyout price of $721,000.

To that end, Adkins filed the Superior Court's 2012 order confirming $721,000 as the buyout price with the District's Recorder of Deeds in 2018. It then filed a complaint seeking to enforce that order as a money judgment against OSM. See D.C. Code § 15-101. On OSM's motion, the trial court dismissed Adkins’ complaint, finding that (1) the 2012 order was not a "final judgment or final decree for the payment of money," id....

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT