Wal-Mart Real Estate Bus. Tr. v. Garrison Realty Inv'rs, LLC
| Decision Date | 23 February 2023 |
| Docket Number | Civil Action RDB-21-2319 |
| Parties | WAL-MART REAL ESTATE BUSINESS TRUST, Plaintiff/Counter-defendant, v. GARRISON REALTY INVESTORS, LLC, Defendant/Counter-plaintiff. |
| Court | U.S. District Court — District of Maryland |
Richard D. Bennett, United States Senior District Judge.
This case features a contract dispute between Plaintiff/Counter-Defendant Wal-Mart Real Estate Business Trust (“Walmart”) and Defendant/Counter-Plaintiff Garrison Realty Investors, LLC (“Garrison”) featuring a parcel in Owings Mills, MD (the “Premises”). In 2001, Walmart leased the Premises from Garrison for an initial period of twenty years to open a Sam's Club and a Walmart store. (Compl ¶¶ 1, 27.) After the Sam's Club closed in 2018 Walmart declined to renew the Ground Lease and elected to exercise its contractual right to demolish the building, but was unable to obtain the necessary permits from Baltimore County. (Id. ¶¶ 40-62.) Walmart and Garrison now allege competing breaches of the Ground Lease and assorted tort claims under Maryland law. Currently pending is Walmart's Motion to Dismiss Garrison's Counterclaim (ECF No. 22). The parties' submissions have been reviewed and no hearing is necessary. See Local Rule 105.6 (D. Md. 2021). For the reasons that follow, Walmart's Motion to Dismiss (ECF No. 22) is hereby GRANTED.
In ruling on a motion to dismiss, this Court “accept[s] as true all well-pleaded facts in a complaint and construe[s] them in the light most favorable to the plaintiff.” Wikimedia Found. v. Nat'l Sec. Agency, 857 F.3d 193, 208 (4th Cir. 2017) (citing SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412, 422 (4th Cir. 2015)). The facts alleged in Walmart's Complaint were reviewed in this Court's opinion addressing Garrison's motion to dismiss, and are summarized below. See Wal-Mart Real Est. Bus. Tr. v. Garrison Realty Invs., LLC, RDB-21-02319, 2022 WL 3647781, at *1-3 (D. Md. Aug. 24, 2022). As relevant, these contentions are supplemented by the allegations set forth in Garrison's Counterclaim.[1] Additionally, this Court shall consider the text of the Ground Lease, which both parties have incorporated by reference. See Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016) ().
This litigation arises from Walmart's efforts to demolish a building located at 9750 Reisterstown Road, Owings Mills, Maryland (the “Premises”). Garrison Realty Invs., 2022 WL 3647781, at *1. Walmart leased the premises from Garrison on December 9, 2000, in order to construct a new building that would be occupied by a Wal-Mart and a Sam's Club. Id. at *2. The parties' Ground Lease ran from August 1, 2001, to July 31, 2021, and authorized up to fourteen five-year extension periods, with automatic renewals unless Walmart gave written notice of termination at least 90 days prior to the end of the current term. Id. at *1. This lease authorized Walmart to construct any buildings or improvements on the Premises-and gave Walmart authority to raze those improvements and reduce the Premises to slab at its sole discretion. Id. at *2 (citing Ground Lease § 6(a)). These rights were conditioned on Walmart's generalized obligation to “comply with all laws and regulations of any government authority with respect to the Premises.” Id. (quoting Ground Lease §§ 7, 22).
When the Sam's Club closed in 2018, Walmart attempted to negotiate a reduction in rent, but was unsuccessful. Id. Consequently, Walmart determined that a five-year renewal of the Ground Lease would be “economically unacceptable,” and elected to terminate the lease as of July 31, 2021, at the conclusion of its initial twenty-year term. Id. . Walmart also decided to exercise its rights under Section 6(a) of the Ground Lease to demolish its building and raze the Premises to slab. Id. at *3. Walmart applied for a demolition permit from the Baltimore County Department of Permits, Approvals, and Inspections on June 11, 2021, and retained an engineering contractor to complete the demolition work prior to the termination of the Lease. Id. Walmart's contractor projected that the work would be completed before the end of the lease term. Id.
On June 28, 2021, Garrison sent a letter (the “June 28 Letter”) to six high-level Baltimore County officials opposing Walmart's application-including the County Executive, the County Attorney, and the Director of the Department of Environmental Protection and Sustainability. Id. (citing June 28 Letter, ECF No. 10-2). In the June 28 Letter, Garrison declared that it “was not contacted or consulted prior to the submission of the application and ha[d] not authorized” Walmart to seek a demolition permit, and simultaneously argued that the proposed demolition work would violate applicable stormwater management regulations. Id. (quoting June 28 Letter 1.) The County did not issue the requested permit, and Walmart surrendered the Premises on July 31, 2021, without completing the planned demolition. Id.
Walmart filed suit on September 9, 2021, alleging that Garrison breached Section 6(a) of the Ground Lease, and the implied covenant of good faith and fair dealing, by inducing Baltimore County to deny its demolition permit based on false information. Id. at *3, 5. The crux of Walmart's case is that Garrison's June 28 Letter prompted the County to deny its permit application, and that Garrison's letter “created the misleading and incorrect impression that Walmart should have sought its permission or authorization, without which the permit application was improper.” Id. at *6 Consequently, Walmart brings claims against Garrison for breach of contract, unjust enrichment, and specific performance. Id. at *5. Garrison filed a motion to dismiss these claims, and this Court denied that motion in its entirety on August 24, 2022. Id. at *10.
Thereafter, Garrison filed an Answer and Counterclaim on September 7, 2022, alleging that Walmart breached various provisions of the Ground Lease, and slandered its title by filing a notice of lispendens in Baltimore County. (Countercl. ¶¶ 1-2, ECF No. 19.)[2] The essence of Garrison's case is that this entire dispute is motivated by spite. Garrison claims that Walmart applied for a permit to raze the Premises in order to harm Garrison's business and to retaliate against Garrison for failing to enter a new lease with a decreased rate of rent. (Id. ¶¶ 24-33.) The defendant also claims that demolishing the building would have disrupted the stormwater management plan that governed the Premises-subjecting Garrison to civil and criminal liability under county regulations and requiring it to incur further environmental remediation costs. (Id. ¶¶ 28-30.) Finally, Garrison claims Walmart filed this litigation to spite Garrison, and filed a baseless notice of lis pendens to cloud Garrison's title-requiring Garrison to incur substantial attorney's fees in its defense, and preventing Garrison from marketing the property to institutional investors. (Id. ¶¶ 32, 34-39.)
Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes the dismissal of a complaint if it fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The purpose of Rule 12(b)(6) is “to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)) (internal quotation marks omitted).
To survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint must contain facts sufficient to “state a claim to relief that is plausible on its face.” Ashcroft v Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl., Corp. v. Twombly, 550 U.S. 544, 570 (2007)).[3] Under the plausibility standard, a complaint must contain “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). A complaint need not include “detailed factual allegations.” Twombly, 550 U.S. at 555. A complaint must, however, set forth “enough factual matter (taken as true) to suggest” a cognizable cause of action, “even if ... [the] actual proof of those facts is improbable, and that a recovery is very remote and unlikely.” Id. at 556 (internal quotations omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678; see A Soc'y Without a Name v. Virginia, 655 F.3d 342, 346 (4th. Cir. 2011).
Ordinarily when ruling on a motion to dismiss, a court's evaluation is generally limited to the allegations articulated in the complaint. Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016). However, courts may consider documents that have been explicitly incorporated into the complaint by reference. Id. at 166 (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)). Additionally, a court may “consider a document submitted by the movant that was not attached to or expressly incorporated in a complaint, so long as the document was integral to the complaint and...
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