Wash. Inv. Partners of Del. Llc v. the Sec. House, s. 09–CV–670

• Decision Date: 15 September 2011
• Docket Number: 09–CV–1031.,Nos. 09–CV–670,s. 09–CV–670
• Citation: 28 A.3d 566
• Parties: WASHINGTON INVESTMENT PARTNERS OF DELAWARE, LLC, Appellant,v.The SECURITIES HOUSE, K.S.C.C., et al., Appellees.
• Court: D.C. Court of Appeals

28 A.3d 566

WASHINGTON INVESTMENT PARTNERS OF DELAWARE, LLC, Appellant,

v.The SECURITIES HOUSE, K.S.C.C., et al., Appellees.

Nos. 09–CV–670

09–CV–1031.

District of Columbia Court of Appeals.

Argued Sept. 8, 2010.Decided Sept. 15, 2011.

Dale A. Cooter, with whom Donna S. Mangold, Washington, DC, was on the brief, for appellant.W. Ray Persons, with whom Ashley C. Parrish, Washington, DC, and Richard T. Marooney were on the brief, for appellees.Before WASHINGTON, Chief Judge, OBERLY, Associate Judge, and FARRELL, Senior Judge.WASHINGTON, Chief Judge:

Washington Investment Partners (“WIP”), a Delaware Corporation operating in the District, appeals from several rulings of the trial court in favor of appellees, a Kuwaiti investment corporation and its affiliates.¹ WIP raises many issues, none of which we find to have merit. Thus, we affirm.

I. FACTS

This case is the culmination of a business deal gone bad between two parties who contracted to purchase and manage a building in Washington, D.C., called the Transpoint Building (“Transpoint”).² Under the first of two contracts between the parties, called the “Letter Agreement,” appellees paid WIP to locate and facilitate the purchase of Transpoint as an investment property for appellees. The Letter Agreement provided that the parties would negotiate a second agreement, called the “Asset Management Agreement” (“AMA”), and laid out many of the AMA's essential terms. Under the AMA, WIP was appointed manager of the appellees' investment in the building, responsible for securing a return for appellees through a continued lease or a resale of the property. The AMA contained a schedule of fees to be paid to WIP, including a monthly fee for its management services and a large payout in the event that WIP secured a new lease in, or a profitable resale, of the building. The AMA also included clauses that allowed WIP to be terminated as manager if WIP failed to provide certain services to appellees or if the individual executives in charge of WIP at the time ever left the company. Under the AMA, once terminated, WIP would no longer be entitled to payment of any fees. In what was called its “Integration Clause,” the AMA stated that it embodied the entire understanding of the parties and specifically terminated the Letter Agreement.

While WIP was successful in facilitating appellees' acquisition of the building, appellees found that after signing the AMA, WIP failed to perform its duties as manager and that one of WIP's executives had arranged to leave the company. As a result, appellees terminated WIP as manager. Appellees later sold the building for a large profit. WIP believed that it should have been entitled to the payout upon the sale of the building, but appellees refused to pay WIP any further fees.

WIP subsequently sued appellees for hundreds of millions of dollars in fees and disgorgement damages on theories of breach of both contracts, breach of fiduciary duty, and fraudulent conveyance of the building. Appellees brought a counterclaim for breach of contract seeking the amount of fees they had paid WIP under the AMA.

Prior to trial, the trial court granted summary judgment for appellees on WIP's claim for breach of the Letter Agreement. Because the AMA clearly provided that no fees would be paid after WIP was terminated, WIP attempted to establish in the trial court that the AMA was void or, alternatively, otherwise ineffective to cancel the Letter Agreement, which also mentioned the payout but without the termination condition. However, the trial court found that the Letter Agreement was canceled based on the plain language of the AMA's “Integration Clause” and that WIP's arguments to the contrary lacked merit.

The remaining claims went to trial before a jury. At the close of appellant's case, WIP moved for judgment as a matter of law on appellees' counterclaim. The trial court reserved ruling on the motion and submitted the claim to the jury. WIP also tendered several nonstandard jury instructions, all of which the trial court rejected. The jury returned a verdict for appellees on all of WIP's claims and awarded appellees $636,000 on their counterclaim. The trial court also granted appellees' motion to add prejudgment interest to its award.

On appeal, WIP challenges these and other rulings of the trial court. We address each of WIP's contentions in turn, supplementing our discussion with further facts where relevant.

II. DISCUSSION

A. Summary Judgment

WIP first challenges the trial court's grant of summary judgment to appellees on WIP's breach of contract claim based on the 2003 Letter Agreement. The trial court found that there was no issue of material fact that would allow WIP to prevail on a breach of contract claim on the Letter Agreement because the AMA, “signed by WIP and containing an integration clause, explicitly terminated the Letter Agreement.” The trial court further found that “none of the arguments made by [WIP] to disavow the termination of the Letter Agreement [were] meritorious.” Specifically, WIP argues that the trial court erred by relying on the language of the AMA because: (1) the AMA's integration clause is inoperative to extinguish the rights WIP had under the Letter Agreement; (2) the AMA is void for lack of consideration; and (3) the AMA is voidable because of fraud in the inducement. We disagree and therefore affirm.

In reviewing a trial court order granting a motion for summary judgment, we “conduct[ ] an independent review of the record, and appl [y] the same standard of review used by the trial court in the first instance.” Sherman v. District of Columbia, 653 A.2d 866, 869 (D.C.1995) (citations omitted). To prevail on a motion for summary judgment, the moving party bears the burden of demonstrating, based on the pleadings, discovery, and any affidavits submitted, that there is no genuine issue as to any material fact and that it is therefore entitled to judgment as a matter of law. Grant v. May Dep't Stores Co., 786 A.2d 580, 583 (D.C.2001). The trial court views the record in favor of the non-moving party and may grant the motion only if a reasonable juror, having drawn all inferences in favor of the non-moving party, could not find for the non-moving party under the appropriate burden of proof. New Places, Inc. v. Communications Workers of Am., Inc., 619 A.2d 73, 75 (D.C.1993).

1. Whether the AMA's “Integration Clause” Canceled the Letter Agreement

WIP attacks the “Integration Clause,” arguing that this section of the AMA is ineffective to terminate the Letter Agreement. We are satisfied, however, based on the plain language of the AMA which explicitly extinguishes WIP's rights under the Letter Agreement, that the trial court did not err.

We have held that where a contract's “language is clear and unambiguous, its plain language is relied upon in determining the parties' intention.” GLM P'ship v. Hartford Cas. Ins. Co., 753 A.2d 995, 998 (D.C.2000). Moreover, where a contract contains language releasing another party from its obligations under a different contract, “we must rely solely upon its language as providing the best objective manifestation of the parties' intent,” and “where the terms of the document leave no room for doubt, [its] effect ... can be determined as a matter of law.” Bolling Fed. Credit Union v. Cumis Ins. Soc'y, Inc., 475 A.2d 382, 385 (D.C.1984).

The integration clause in the AMA reads:

[The AMA] embodies the entire understanding of the parties hereto with respect to the subject matter hereof.... Without limiting the foregoing, that certain letter agreement, dated October 8, 2003, between the Asset Manager and Global Securities House is hereby terminated, and the Asset Manager agrees that it shall submit no further claim for the payment of any compensation or other amounts thereunder.

(Emphasis added). This language expressly refers to the Letter Agreement and the parties thereto and unambiguously terminates WIP's rights thereunder. Accordingly, summary judgment on WIP's breach of contract claim based on the Letter Agreement was proper.

Neither of WIP's arguments that the AMA's language is inoperative to cancel the Letter Agreement has merit. First, focusing on the integration clause's reference to “the subject matter hereof,” WIP argues that the two contracts concerned different subject matter, and therefore the AMA could not affect the Letter Agreement.³ However, the extent of WIP's attempt to distinguish the subject matter of the two agreements is to conveniently italicize certain phrases in the Letter Agreement, but not similar phrases in the AMA. WIP goes on to recite provision after provision of the Letter Agreement, but does not distinguish this language from similar language in the AMA, or account for the contemplation of the AMA itself within the Letter Agreement. The Letter Agreement covers “the purchase of the Building, its ongoing management, its refinancing or sale and the compensation to be paid to WIP and the Asset Manager in connection therewith.” These are precisely the same subjects of the AMA at issue in this litigation, as the AMA sets forth in detail the duties and compensation of WIP in its management of the building. Moreover, as explained earlier, the Letter Agreement expressly contemplated the negotiation of a second agreement, the AMA, by the parties. Accordingly, nothing about the subject matter of the agreements undermines the effect of the AMA's integration clause.

Second, WIP argues that the two agreements were signed by different companies, and therefore the AMA, signed by TBC, cannot effectively amend the terms of the Letter Agreement which, according to its language, could only be amended by a writing signed by GSH and WIP. This argument might have some force and effect if WIP by signing the AMA had not specifically agreed to terminate the Letter Agreement and release all claims it had to compensation thereunder. Here, it matters only that the AMA was ...