Ammerman v. City Stores Company

• Decision Date: 04 April 1968
• Docket Number: No. 21097.,21097.
• Citation: 394 F.2d 950
• Parties: H. Max AMMERMAN et al., Appellants, v. CITY STORES COMPANY, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

394 F.2d 950 (1968)

H. Max AMMERMAN et al., Appellants, v. CITY STORES COMPANY, Appellee.

No. 21097.

United States Court of Appeals District of Columbia Circuit.

Argued September 18, 1967.

Decided April 4, 1968.

Mr. Edgar H. Brenner, Washington, D. C., with whom Messrs. Thurman Arnold, Melvin Spaeth and Michael Schneiderman, New York City, were on the brief, for appellants.

Mr. Robert Martin, Washington, D. C., with whom Messrs. Lloyd Symington, Marx Leva, Richard Shlakman and Richard K. Lyon, Washington, D. C., were on the brief, for appellee.

Before DANAHER, TAMM and ROBINSON, Circuit Judges.

PER CURIAM:

Appellants, builders and developers of Tyson's Corner Shopping Center in Fairfax County, Virginia,¹ challenge the District Court's decision (1) that the builders had given City Stores Company, owners of Lansburgh's Department Store, a binding option to lease one of the major buildings to be constructed at the contemplated shopping center and (2) that the option-lease agreement is sufficiently definite and certain in terms of design, type of construction, and price to be specifically enforced.²

The appellants in their statement of points have here contended that the District Court erred: in ordering specific performance in that the existence and terms of the contract had not been established by clear and convincing evidence; in granting equitable relief despite the appellants' claim that the appellee had been guilty of "laches and unclean hands"; and in ordering specific performance of the contract since some substantial details will require future negotiations and yet others are said to be unclear or can not be performed.

At the core of the dispute is an undated letter (text, infra), from the appellants to one Jagels, then President of Lansburgh's, given at a time when the builders were attempting to obtain a ruling from the Fairfax Board of County Supervisors which would permit the rezoning of their tract of land for use as a shopping center. Prospects for a favorable outcome at a May 31, 1962, hearing, then yet in the future, were in doubt. The county planning commission and the planning staff had already recommended against the appellants' application, and another group of developers, Rouse-Reynolds, had a similar petition before the Board for a different center but in the same general area.

In early 1962, during the course of negotiations with Messrs. Gudelsky and Lerner for a lease at one of their developments in Maryland, Lansburgh's president, Jagels, had expressed an interest in the Tyson's Corner project. Thereafter Lerner requested a letter from Jagels, expressing Lansburgh's preference for appellants' site over the Rouse-Reynolds tract, which the builders could use in the Fairfax zoning hearing. Although Lansburgh's would ordinarily have been unwilling to risk offending the Rouse-Reynolds group by committing itself to the Gudelsky-Lerner project,³ it was eager to improve its declining economic position in the Washington area by expanding into the suburbs. Jagels provided the requested letter⁴ which the appellants subsequently presented at the rezoning hearing to support their application.⁵

Judge Gasch agreed with the appellee that the Jagels letter was given in exchange for a promise that Lansburgh's be given an opportunity to become a major tenant at Tyson's Corner on terms equal to those given other major tenants. The trial judge further found that this promise had been memorialized in the following undated letter given to Mr. Jagels on or about May 29, 1962⁶:

Dear Mr. Jagels:

We very much appreciate the efforts which you have expended in endeavoring to assist Mr. Gudelsky and me in our application for zoning at Tyson\'s Corner for a Regional Shopping Center.

You have our assurance that in the event we are successful with our application, that sic we will give you the opportunity to become one of our contemplated center\'s major tenants with rental and terms at least equal to that of any other major department store in the center. Emphasis added.

Sincerely yours /s/ Isadore M. Gudelsky /s/ Theodore N. Lerner

I

Deeming the assistance afforded by the appellee to the appellants, particularly the May 29, 1962 letter, to be adequate consideration for a valid unilateral contract binding on the appellants, Judge Gasch considered whether the contract, so found, was an option. He noted that an option contract, defined as "a continuing offer for a fixed or reasonable period of time * * * which is binding on the offeror because given for a valuable consideration,"⁷ usually describes in particularity what is offered. But he also recognized that "option" is a business concept,⁸ not a narrow legal term.

At the time the contract was made, the builders themselves had no more than a "chance" or "opportunity" to succeed in their Tyson's Corner rezoning project. That it may thus have seemed futile to specify in detail the terms of the agreement, did not preclude a ruling that the Gudelsky-Lerner letter evidenced in Lansburgh's favor a legally binding option to take a lease at the shopping center. The District Judge, finding that an exercise of the option was conditioned upon the happening of certain events, concluded:

The first condition precedent to the Lerner-Gudelsky obligation to Lansburgh\'s was the securing of necessary zoning for its Tyson\'s Corner tract. * * * The second * * * was its entering into leases with other major tenants for stores in the center, so the terms of those leases could provide the essential terms of a lease to be offered to Lansburgh\'s. Appellants did secure the zoning, and they did, in the latter half of 1965, enter into leases with Woodward & Lothrop and Hecht department stores * * * at which time appellants were under an immediate contractual obligation to tender Lansburgh\'s a lease which in all its material terms would be at least as favorable * * * as the two other leases were to their respective stores. * * * Both the Hecht and Woodward & Lothrop leases * * * contain clauses to the effect that their terms will be at least equal to those offered to other lessees in the center. Thus, even though none of the stores * * * will be identical in design, it is apparent * * * that complete equality of material terms governing occupancy, including amount of space and cost per square foot, and substantially equal terms on less material aspects of the lease, is within the customary contemplation of parties entering into shopping center agreements of the type at issue in this case.⁹

The appellants here have consistently refused to recognize the distinction between bilateral and unilateral contracts.¹⁰ The trial judge declared inapposite the rule that there is no present legal obligation attached to an offer which reserves for future negotiation an element material to the contemplated agreement. We agree. An option is more than an offer, the trier noted; it is itself a contract and is not to be confused with the bilateral contract which it gives the optionee the power to bring into being.¹¹

II

Judge Gasch found that Lansburgh's had exercised its option and was entitled to an order compelling the builders to grant it a lease equal in terms to that of the Hecht lease.¹² The appellants argue that the option-lease agreement is too indefinite and uncertain to be specifically enforced because substantial terms have been left to future negotiation.¹³ We approve the trial judge's recognition as a rule of law that

the mere fact that a contract, definite in material respects, contains some terms which are subject to further negotiation between plaintiff and defendant will not bar a decree for specific performance, if in the court\'s discretion specific performance should be granted.¹⁴

The rule so stated violates no precedent in this jurisdiction,¹⁵ but rather is in accord with such of our cases as have considered not dissimilar situations.¹⁶

Treating the enforcement of construction contracts as a question novel to the District of Columbia,¹⁷ Judge Gasch emphasized that the essential basis for interposition by the court is the inadequacy or impracticability of the plaintiff's legal remedy rather than the generic subject matter of the contract.¹⁸

Here it is apparent that Lansburgh's could have had no adequate remedy in damages for any attempt in that respect would have been impractical because of the impossibility of an appropriate measurement. Moreover, damages could hardly compensate for the loss of the sought for opportunity to raise Lansburgh's image and economic position in the Metropolitan Washington area by its anticipated expansion into the suburbs, and for that reason alone could have been deemed inadequate.

Thus, where the contractual obligation being enforced involves more than the mere construction of a building and the building is to be built on land controlled by its owner (making it impossible for the enforcing party to have the job done by another and charged to the defaulting owner), specific enforcement becomes entirely appropriate. Nor should relief be withheld merely because it would order construction unless the difficulties of supervision by the court outweigh the importance of enforcement to the plaintiff.¹⁹ In this case, as the District Judge found, the construction criteria set forth in the Hecht and Woodward & Lothrop leases are sufficiently detailed to allow the court, applying the standard of equality required by the option, to enforce the lease contract with little difficulty of supervision.²⁰ The District Court here has retained jurisdiction and can appoint a special master to settle such details as the parties may not agree upon or which can not be resolved through arbitration.

Affirmed.

1 The principal appellant is the partnership of Tyson's Corner Regional Shopping Center, made up of Messrs. Lerner and Ammerman, their wives, and the Gudelsky Company, which succeeded to the interest of Mr. Gudelsky when he died in 1963.

2 The opinion of...