Feltman v. Sarbov, No. 8518.

• Docket Nº: No. 8518.
• Citation: 366 A.2d 137
• Case Date: November 22, 1976
• Court: Court of Appeals of Columbia District

Page 137

366 A.2d 137 Ralph H. FELTMAN, Appellant,
v.
Christos D. SARBOV, Appellee. No. 8518. District of Columbia Court of Appeals. Argued March 13, 1975. Decided November 22, 1976.

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

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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,

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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...