Monument Realty v. Washington Metro. Area Transit
| Decision Date | 28 February 2008 |
| Docket Number | Civil Action No. 07-1821 (EGS). |
| Citation | 540 F.Supp.2d 66 |
| Parties | MONUMENT REALTY LLC, et al., Plaintiffs, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, Defendant. |
| Court | U.S. District Court — District of Columbia |
Louis E. Dolan, Jr., Vernon Webster Johnson, III, Heather Lynn Carlton, Nixon Peaoby, LLP, Washington, DC, for Plaintiffs.
Bruce P. Heppen, Donald A. Laffert, Washington Metropolitan Area Transit Authority, Harvey A. Levin, Thompson Coburn, LLP, Washington, DC, for Defendant.
Monument Realty LLC ("Monument"), and its affiliate MR Ballpark 7 LLC ("MRB 7"), collectively referred to as plaintiffs, commenced this action against the Washington Metropolitan Area Transit Authority ("WMATA") alleging that WMATA breached its contract to sell Monument real property, known as the Southeast Bus Garage ("Bus Garage"), located in the District of Columbia. Plaintiffs also challenge WMATA's decision to award a competitive bid for the sale of the Bus Garage to the John Akridge Company ("Akridge"). Pending before the Court is plaintiffs' motion to enjoin the disposition of the Bus Garage. Upon consideration of the motion for a preliminary injunction, the response and reply thereto, supplemental memoranda, the arguments made at the hearing on January 23, 2008, and the applicable law, the motion is. GRANTED.
Monument and MRB 7 are limited liability companies doing business in the District of Columbia. Amend. Compl. ¶¶ 1-2. MRB 7 was created by Monument on July 18, 2007 for the purpose of purchasing the Southeast Bus Garage, which is located in the Ballpark District of Washington, D.C.1 Id. ¶ 2.
WMATA was created in 1966, when Congress, acting pursuant to the Compact Clause of the Constitution, U.S. Const. art. I, § 10, cl. 3, approved the Washington Metropolitan Area Transit Authority Compact between Maryland, Virginia, and the District of Columbia to deal with growing traffic problems in the Washington area. See Pub.L. No. 89-774, 80 Stat. 1324 (1966) (); H. Rep. No. 89-1914, at 5-6 (1966). Responsible for creating a coordinated public transportation system for the region, WMATA now operates an extensive Metrobus and Metrorail system running throughout northern Virginia, the District, and two Maryland counties. Beebe v. WMATA, 129 F.3d 1283, 1285 (D.C.Cir.1997). WMATA is the record owner of the real property at issue, the Bus Garage.
Oil October 26, 2007, plaintiffs filed a motion for a temporary restraining order ("TRO"), a motion for a preliminary injunction, and a twelve-count amended complaint alleging that WMATA was liable for breach of contract, fraud, breach of fiduciary duty, failure to formulate and follow policies concerning the disposition of real property, and challenging WMATA's decision to award a bid to the John Akridge Company. Thereafter, WMATA filed a motion to dismiss all counts in the amended complaint. The Court dismissed the tort claims based on WMATA's sovereign immunity, but denied the motion with respect to all other counts.2 Monument Realty LLC, et al. v. Wash. Metro. Area Transit Auth., 535 F.Supp.2d 60, 78-79, 2008 WL 510333, *16-47 (D.D.C.2008).
The motions for a TRO and a preliminary injunction were consolidated, and the parties subsequently engaged in limited discovery. On January 2, 2008, plaintiffs filed an amended motion for a preliminary injunction.
In response to Major League Baseball's 2004 announcement that the League was considering relocating the Montreal Expos baseball franchise to Washington, D.C., the District of Columbia government created the Anacostia Waterfront Corporation (AWC). Amend. Compl. ¶ 9. The AWC's mission was to develop and revitalize the underutilized public lands along the Anacosta River by: 1) developing a comprehensive "Master Development Plan" for the area surrounding the baseball team's new stadium ("the Ballpark District"); 2) acquiring property in the Ballpark District; and 3) selling the acquired property to selected Master Developers. Id. ¶ 11.
WMATA owned several properties within the Half Street Area of the Ballpark District, including the Navy Yard Metro Station site and the Southeast Bus Garage, and the AWC sought to acquire and develop those properties as a part of its Master Development Plan. Id. ¶ 15. WMATA initially issued a Joint Development Solicitation ("JDS"), inviting real estate developers to jointly develop with WMATA the properties it owned in the Ballpark District. Id. ¶ 16. The District of Columbia, however, requested that WMATA cancel the JDS and participate in the master development planning process. Id. ¶ 17. WMATA subsequently withdrew the JDS, and thereafter coordinated with the AWC in implementing the Master Development Plan. Id.
In December 2005, the AWC designated Monument as Master Developer for the Half Street Area, and Monument and the AWC signed a Letter of Intent memorializing their respective rights and duties. Id. ¶ 23. As Master Developer, Monument was afforded the opportunity to negotiate exclusively to acquire and develop projects within the Half Street Area, once those properties had been acquired by the District of Columbia. Id. ¶¶ 23-24. At the time that Monument and the AWC entered their agreement, the District of Columbia did not own any properties in the Half Street Area, but was seeking to acquire those properties from WMATA.3 Id. Ex. F. at 1.
Plaintiffs allege that WMATA knew that Monument had been awarded the right to negotiate exclusively with the AWC to purchase any properties the District of Columbia acquired within the Half Street Area of the Ballpark District. Amend. Compl. ¶¶ 25-28. Further, based on WMATA's policies and procedures, WMATA had an obligation to first offer the District of Columbia the right to purchase the Bus Garage at fair market value. See Pls.' Mem. 2 (citing Ex. 4, Bottigheimer Dep. 87:11-18). According to Nat Bottigheimer, WMATA's Contracting Officer, WMATA has a policy of first offering to a Compact jurisdiction the opportunity to purchase any property that WMATA decides to sell within that Compact jurisdiction. Id. If the Compact jurisdiction expresses an interest in purchasing the property, the price is negotiated based on fair market value. See Pls.' Mem. Ex. 6. Plaintiffs allege that Monument was an intended third-party beneficiary of WMATA's legal obligation to sell WMATA-owned property located in the District of Columbia to the District upon the City's request.
In addition to plaintiffs' allegation that Monument was a third-party beneficiary of WMATA's agreement with the District of Columbia, plaintiffs also allege that a contractual relationship existed between Monument and WMATA. Beginning in May 2006, Monument engaged in direct negotiations with WMATA to purchase WMATA's property in the Half Street Area. Id. ¶ 30. See also Pls.' Mem. 1-27.
The sale of WMATA's properties was scheduled in phases. See Pls.' Mem. Ex. 18 at 4 ).
In December 2006, Monument submitted an unsolicited offer to WMATA to purchase the Navy Yard Metro Station. Pls.' Mem. 11-12. Thereafter, WMATA issued an Invitation for Bids ("IFB") for the Navy Yard Metro Station, and Monument was the only developer to respond. Subsequently, WMATA sold the property to Monument. Id.
In April 2007, believing that WMATA would now be in a position to proceed with the second sale, plaintiffs submitted an unsolicited bid to purchase the Bus Garage. Pls.' Mem. Ex. 83.
After receiving Monument's unsolicited bid to purchase the Bus Garage, WMATA obtained authorization from its Board of Directors ("Board") to dispose of the property.4 WMATA then issued IFB 07-3, with a bid deadline of July 23, 2007, for the sale of the Bus Garage. See Pls.' Mem. 27. Before the bid deadline, however, the District of Columbia informed WMATA via letter that it would exercise its right to purchase the Bus Garage.5 Pls.' Mem. Ex. 49. In response to the District's letter, WMATA withdrew the IFB and initially agreed to sell that property to the City. Id. Ex. 51, 63.
According to WMATA, however, the District of Columbia subsequently decided not to purchase the Bus Garage, and WMATA then issued IFB 08-1, with a bid deadline of August 28, 2007. See id. Ex. 65; id. Ex. 70. In the IFB, WMATA invited interested parties to submit "sealed bids in accordance with the terms of this Invitation for Bids for Sale, with leaseback of WMATA property." Id. Ex. 70 at 1. The IFB provided that the contract would be awarded to the bid that represented "the best net return to WMATA after leaseback monthly rent for WMATA's anticipated lease term (which may, in WMATA's sole discretion be less than 36 months) is deducted from the Bid Amount." Id. at 7. The IFB also stated that all questions concerning the IFB "will be answered publicly; that is, WMATA will post all questions and answers on its website." Id.
On August 24, 2007, Jeffrey Neal, Monument's president, sent a letter to John Catoe, WMATA's General Manager, stating that Monument would consider WMATA in breach of its agreement to sell the Bus Garage to Monument if WMATA awarded IFB 08-1 to another bidder. See Def.'s Opp'n Ex. E 7. The letter also stated that if WMATA breached its...
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