GW Acquisition Co. v. Pageland Liab. Co.

• Decision Date: 06 January 2023
• Docket Number: 1:22-cv-255 (LMB/JFA)
• Parties: GW ACQUISITION CO, LLC, Plaintiff, v. PAGELAND LIMITED LIABILITY CO, et al, Defendants/Third-Party Claim Plaintiffs, v. MAGLANDBROKER, LLC, et al, Third-Party Defendants.
• Court: U.S. District Court — Eastern District of Virginia

GW ACQUISITION CO, LLC, Plaintiff,
v.
PAGELAND LIMITED LIABILITY CO, et al, Defendants/Third-Party Claim Plaintiffs,
v.
MAGLANDBROKER, LLC, et al, Third-Party Defendants.

No. 1:22-cv-255 (LMB/JFA)

United States District Court, E.D. Virginia, Alexandria Division

January 6, 2023

MEMORANDUM OPINION

Leonie M. Brinkema United States District Judge

Before the Court are four dispositive motions: Defendants Pageland LLC's and Barbara Brower's Motion to Dismiss Plaintiff GW Acquisition Co, LLC's First Amended Complaint or, in the Alternative, for Summary Judgment (“Sellers' First Motion”) [Dkt. No. 122], Plaintiff GW Acquisition, LLC's Motion for Summary Judgment (“Buyer's Motion”) [Dkt. No. 127], Third-Party Defendants' Motion for Summary Judgment (“Broker's Motion”) [Dkt. No. 130], and Third-Party Claim Plaintiffs Pageland LLC, Barbara Brower, and Jon Sanders Brower's Motion for Summary Judgment as to Third-Party Defendants MagLandBroker, LLC and Mary Ann Ghadban (“Sellers' Second Motion”) [Dkt. No. 133].

For the reasons that follow, the Sellers' First Motion will be granted as to Counts II, III, IV, VI, and VII of the First Amended Complaint and those counts will be dismissed, and the motion will be denied in all other respects; the Buyer's Motion will be granted as to Counts I and V of the First Amended Complaint and denied in all other respects; the Broker's Motion will be

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granted as to the Third-Party Complaint; and the Sellers' Second Motion will be denied as to the Third-Party Complaint.

I. BACKGROUND

This civil action concerns two disputes arising out of the Prince William County Digital Gateway Project (“PWC Digital Gateway Project”), which proposes to convert 2,100 acres of rural land around Pageland Lane in Prince William County into a data center corridor. Plaintiff GW Acquisition Co., LLC (“plaintiff,” “GWA,” or “Buyer”), a developer involved in the PWC Digital Gateway Project, initiated this civil action against defendants Pageland Limited Liability Company (“Pageland LLC”), Barbara Brower, and Jon Sanders Brower (“Brower”) (collectively, “defendants” or “Sellers”) to force them to comply with their agreement to sell three parcels of land to the Buyer.^[1] The Sellers, in turn, brought a third-party suit against the broker who represented them in the sale, third-party defendants MagLandBroker, LLC (“MagLandBroker”) and Mary Ann Ghadban (“Ghadban”) (collectively, “third-party defendants” or “Broker”).^[2]

Despite the factual complexity and multiple legal issues involved in the disputes among the parties, the uncontested record reflects that these disputes boil down to a case of sellers' remorse. Specifically, although the Sellers may regret agreeing to sell their land to GWA under a deal arranged by the Broker and foregoing a more lucrative offer, they cannot use this litigation

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to escape liability for breaching an otherwise enforceable sales contract with GWA and are not entitled to obtain millions of dollars from the Broker who negotiated the sales contract.

A. Factual Background

Unless indicated otherwise, the following facts are undisputed and are based on the parties' Joint Pre-Trial Statement, in which they stipulated to uncontested facts, [Dkt. No. 110], as well as the facts drawn from the parties' statements of undisputed fact accompanying their respective motions for summary judgment.

1. The Sellers and Broker's Dispute

In 2019, Ghadban became interested in selling 55 acres of land that she owns along Pageland Lane in Prince William County to data center providers, which would require rezoning the area for data center development. [Dkt. No. 134] ¶¶ 4-5; [Dkt. No. 132] ¶¶ 1-2. Pageland Lane is part of a no-build zone known as the Rural Crescent, but it has immediate proximity to transmission and high-speed fiber lines, making the area a favorable site for data centers. [Dkt. No. 132] ¶ 1; [Dkt. No. 138] at 2. Given the zoning restrictions on the Rural Crescent, the development of data centers required a Comprehensive Plan Amendment (“CPA”) approved by Prince William County. [Dkt. No. 132] ¶ 3; [Dkt. No. 138] at 2. Ghadban assembled multiple properties from neighbors around Pageland Lane to pursue a CPA and subsequent rezoning (the “assemblage”). [Dkt. No. 132] ¶¶ 3, 6; [Dkt. No. 134] ¶ 6.

Pageland LLC, a Virginia limited liability company managed by Brower, owns three parcels of land along Pageland Lane, totaling 131.789 acres (collectively, “Brower property”). [Dkt. No. 110] ¶ 4. On August 19,2020, Brower entered into a Listing and Marketing Agreement (“Listing Agreement”) with Ghadban for her to list and market the Brower property as part of the assemblage of properties she had put together. Id. ¶ 5; [Dkt. No. 134] ¶ 6; [Dkt. No. 142] at 4. Under the Listing Agreement, the assemblage was defined as “those certain

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parcel[s] of real property consisting of approximately 529 acres owned by Snyder, Ghadban, Brower and Abul Husn [or “Aboulhosn”] who each own properties along Pageland Lane, and under all circumstances consist[s] of all of [the] parcels the purchaser... has agreed to purchase and rezone in accordance with the terms set forth above.” [Dkt. No. 132-2] ¶ 5; [Dkt. No. 134-2] ¶ 5. Brower was represented throughout these transactions by counsel, Tim Purnell (“Purnell”), who reviewed the Listing Agreement before Brower signed it. [Dkt. No. 132] ¶ 4; [Dkt. No. 138] at 2; [Dkt. No. 132-9] at 20.

The Listing Agreement provided that the purchase price for the Brower property “shall be determined by a survey based on the asking price of not less than [Redacted] per acre,^[3] unless a signed consent is signed by Seller for the sale of the property.” [Dkt. No. 132-2] ¶ 3(A); [Dkt. No. 134-2] ¶ 3(A). Under the Listing Agreement, Ghadban had the exclusive right to list and market the property and would be paid a commission of [Redacted] of the final sales price “if she is working with another agent for the Purchaser” or [Redacted] of the final sales price “if she is a dual agent with no other broker involved.” [Dkt. No. 132-2] ¶ 2; [Dkt. No. 134-2] ¶ 2.

The Listing Agreement contained a conflict of interest provision, which disclosed that Ghadban owned property that was to be marketed as part of the assemblage. [Dkt. No. 132-2] ¶¶ 7,11; [Dkt. No. 134-2] ¶¶ 7, 11. Specifically, paragraph 7 provided:

It is hereby disclosed that Broker is also acting as the real estate broker for all of the other owners of parcels in the Assemblage, and as such, it is understood and disclosed that Broker has a financial interest in completing the sale of the entire Assemblage or as many parcels in the Assemblage as possible to the purchaser. It is further understood and disclosed that Broker has a substantial ownership interest in one or more parcels within the Assemblage, and intends to enter into a contract of purchase and sale for the sale of properties owned by Broker or in which Broker has an interest to the

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purchaser of the Assemblage. Client hereby waives any conflict of interest and authorizes Broker to represent and serve as the exclusive agent and broker for all of the other owners of parcels within the Assemblage. Notwithstanding this wavier, the Broker shall seek to value Client's property as equivalent to all other Parcels in the Assemblage inasmuch as the assemblage required [sic] the full participation of all owners and all parcels.

[Dkt. No. 132-2] ¶ 7; [Dkt. No. 134-2] ¶ 7. Ghadban ultimately signed listing and marketing agreements with other Pageland Lane landowners, resulting in a total assemblage of approximately 801 acres. [Dkt. No. 132] ¶ 7; [Dkt. No. 138] at 3.

Around August 2020, Ghadban began contacting various data center users who she thought might be interested in acquiring the assemblage, [Dkt. No. 110] ¶ 6, and worked with Carter Wiley (“Wiley”) as a co-broker to market the properties, [Dkt. No. 134] ¶ 10; [Dkt. No. 142] at 5. Although Ghadban marketed all the properties in the assemblage together as part of one sale, at some point, she decided to divide the properties into two groups, known as Phase 1 and Phase 2, which are geographically separated. [Dkt. No. 132] ¶ 9; [Dkt. No. 138] at 3. Phase 1 included 15 parcels of land owned by Ghadban and 6 other individuals or entities and was offered at [Redacted] per acre, a higher price per acre than the Phase 2 parcels, which were offered at [Redacted] per acre and included 12 parcels of land owned by Brower, Aboulhosn, and 6 other individuals or entities. [Dkt. No. 134-4], Ex. C; [Dkt. No. 132] ¶ 9; [Dkt. No. 138] at 3.

The Sellers dispute Ghadban's reasons for dividing the assemblage into two phases. The Broker contends that the Phase 1 properties were offered at a higher price due to their proximity to water and sewer resources, whereas the Phase 2 properties, which were separated from the Phase 1 properties by two miles, were offered at a lower price because of higher development costs, including the need to build water, sewer, and pump stations, as well as the need to obtain rights of way from owners of the land located between Phase 1 and Phase 2 for water and sewer easements and for widening Pageland Lane from two to four lanes, all of which would require an

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expensive and contentious CPA and entail substantial costs for the developer. [Dkt. No. 132] ¶9. The Sellers dispute this explanation, which they assert is based only on Ghadban's personal knowledge and word, and they call into question her motivations, namely that she sought to obtain a higher price for her own property at the expense of the Phase 2 properties. [Dkt. No. 138] at 3-4. The Sellers also point out that widening Pageland Lane would affect development costs for both Phase 1 and Phase 2, and that Ghadban's explanation about infrastructure costs is undermined by her admission that a substantial portion of her property in Phase 1 would be used for open space...