Yesteryears, Inc. v. Waldorf Restaurant, Inc.

• Citation: 730 F. Supp. 1341
• Decision Date: 11 December 1989
• Docket Number: Civ. No. HM-88-444.
• Parties: YESTERYEARS, INC., etc., et al. v. WALDORF RESTAURANT, INC., etc., et al.
• Court: U.S. District Court — District of Maryland

730 F. Supp. 1341

YESTERYEARS, INC., etc., et al. v. WALDORF RESTAURANT, INC., etc., et al.

Civ. No. HM-88-444.

United States District Court, D. Maryland.

June 28, 1989.

Memorandum and Order December 11, 1989.

Dushko Zdrakovich, Upper Marlboro, Md., for plaintiffs.

Roger D. Redden, James P. Gillece, Jr. and Lynette M. Phillips, Piper & Marbury, Baltimore, Md., and John F. Hyland, Jr., Trainum, Holland & Hyland, Washington, D.C., for defendants.

MEMORANDUM

HERBERT F. MURRAY, Senior District Judge.

Now before the Court are motions for summary judgment that have been filed by the defendants regarding the plaintiffs' claims and the defendants' counterclaim. The Court has reviewed all the papers in this case,¹ has determined that no hearing is necessary, Local Rule 6, and is now prepared to rule.

I. Facts

As defendants did not attack the factual allegations of plaintiffs' complaint in their motions for summary judgment, for present purposes they must be accepted as true. The following facts are therefore taken substantially verbatim from plaintiffs' complaint.

On or about August 9, 1983, Jean F. Kingham, Valerie Ellsworth, Patricia Roberts and Joseph Mona ("Lessees") entered into a lease agreement with defendants Tim S. Brown and Margaret P. Brown ("defendants Brown") for the second floor of the building known as the Waldorf Restaurant, Waldorf, Charles County, Maryland ("leased premises"). Immediately thereafter, the Lessees assigned their lease as tenants to the plaintiff, Yesteryears, Inc.

Yesteryears, Inc. is a Maryland Corporation with its principal place of business in Prince George's County, State of Maryland. The Charter of Yesteryears, Inc. has been forfeited by the Maryland State Department of Assessments & Taxation. The plaintiffs Joseph F. Mona and Jean Mona (the former Jean F. Kingham) are the last acting directors of Yesteryears, Inc., and bring this suit in the name of the Corporation as authorized by Section 3-515(c) of the Corporations and Associations Article of the Annotated Code of Maryland. The Monas are United States citizens of the white race.

The defendants Brown had leased the Waldorf Restaurant building, in turn, from the defendant Waldorf Restaurant, Inc. Waldorf Restaurant, Inc. is the owner of the real property which contained the restaurant building and the Waldorf Motel building. The defendant Francis H. Chaney, II was the chief operating officer of Waldorf Restaurant, Inc., and defendant Thomas F. Goldsmith was President of that company. Defendant Chaney Enterprises, Inc. is a corporation affiliated with Waldorf Restaurant, Inc.

Yesteryears began operations as a nightclub on the leased premises, after spending substantial amounts of money to adapt the premises for that purpose. The nightclub traded under the name "The Penthouse."

The Waldorf Restaurant building and Penthouse are located on U.S. Route 301 and Maryland Route 5, a heavily traveled highway used by persons traveling from the District of Columbia and Maryland to Virginia. Many of the patrons of The Penthouse came from outside the State of Maryland. A substantial portion of the food, liquor and other items which the plaintiff Yesteryears served at the Penthouse moved in interstate commerce. The operations of The Penthouse affected travel, trade, commerce, transportation or communication among, between and through several states and the District of Columbia.

During the course of its business operations, Yesteryears engaged and booked bands with black musicians to perform at the nightclub. These bands appealed to and drew black patrons. On numerous occasions, the majority of patrons at the nightclub were of the black race.

All defendants expressed strong displeasure and disapproval of Yesteryears' policy of booking bands with black musicians and bands which appealed to black patrons. These defendants referred to the plaintiff's patrons in derogatory and insulting terms. All defendants took action to prevent Yesteryears from operating its business to serve black patrons, to prevent plaintiff from booking bands with black musicians, or in the alternative, to prevent the plaintiff from continuing its business operations.

Among other things, all defendants took the following actions:

(1) The defendants made racially derogatory comments to Yesteryears' customers.

(2) The defendants would not permit Yesteryears' customers to park in the immediate vicinity of the restaurant building, but required that they park at distant locations on the property.

(3) The defendants required that bands playing at Yesteryears' nightclub enter and exit the nightclub by unsafe and dimly lit back stairs rather than through the main entrance.

(4) The defendants took steps to stop Yesteryears from selling alcoholic beverages as permitted under the lease until Yesteryears stopped booking bands with black musicians.

(5) The defendants refused to make repairs to the Waldorf Restaurant building which were required in order for Yesteryears to conduct its business operations.

(6) The defendants forcibly removed Yesteryears' agents and employees from the leased premises during the term of the lease and barred them from the premises.

The defendants stated their displeasure on many occasions that Yesteryears booked bands with black musicians and served black patrons. The actions taken by these defendants were with the express stated intention of having Yesteryears either change its format to appeal to a white clientele, to prevent Yesteryears from operating its business to service black patrons, or to cause Yesteryears to cease business operations.

The defendants acted to prevent Yesteryears from enjoying and enforcing its rights under the Lease and Assignment solely because Yesteryears in its operation of The Penthouse booked bands with black musicians and served black patrons.

As a result of the actions of the defendants, Yesteryears was required to close its nightclub and suffered economic loss. This economic loss included forfeiture of improvements to the leased premises, a loss of fixtures and equipment purchased for the leased premises, the loss of revenue and profits, and other damages.

In doing the above described unlawful acts, the defendants acted maliciously, with the intent of forcing Yesteryears to not book bands with black musicians, not cater to black patrons, and to cease business operations.

The plaintiff Joseph F. Mona had entered into an employment contract with Yesteryears and was at all times the chief operating officer of Yesteryears. As chief operating officer, Joseph F. Mona invested time in the operation of the nightclub business conducted by Yesteryears with the expectation that he would receive income and bonuses.

As a result of an alleged conspiracy by the defendant, the nightclub business operated by Yesteryears ceased business operations. As a result of this, Joseph F. Mona was deprived of the income and profits for which he had contracted and expected from the successful operation of the nightclub business.

At all times during its operation, Yesteryears sold alcoholic beverages under the liquor license held by the defendants Brown. This was done in accordance with the terms of the lease and in accordance with the custom in Charles County.

In furtherance of their efforts to prevent Yesteryears from serving black patrons, the defendants Waldorf Restaurant, Inc., Francis Chaney, II, and Chaney Enterprises, Inc. conspired with the Charles County Liquor Board to prevent Yesteryears from selling alcoholic beverages. As a result of this conspiracy Yesteryears was not permitted to sell alcoholic beverages. As Yesteryears was unable to sell alcoholic beverages it ceased business operations and sustained losses.

The actions of Waldorf Restaurant, Inc., Francis Chaney, II, and Chaney Enterprises, Inc. were done for the purpose of depriving Yesteryears of its right to sell alcoholic beverages in accordance with the law and custom in Charles County.

On or about August 3, 1986, Waldorf Restaurant, Inc. and Chaney Enterprises, Inc., forcibly removed Yesteryears, its agents, servants and employees from the leased premises, prevented Yesteryears, its agents and employees from entering the leased premises, and barred Yesteryears, its agents and employees from entering the leased premises by locking all doors. As a result of the actions of Waldorf Restaurant, Inc. and Chaney Enterprises, Inc., Yesteryears was deprived of the use of the leased premises. As a further result, Yesteryears sustained the loss of its personal property, was unable to continue its business operations, and sustained permanent financial damage.

The actions of Waldorf Restaurant, Inc. and Chaney Enterprises, Inc. were done with full knowledge of the lease agreement between Yesteryears and defendants Brown, and were done intentionally for the purpose of interfering with that lease agreement and preventing Yesteryears from exercising its rights under that lease agreement.

In addition to the above facts taken from the complaint, copies of the papers in case no. E4-2-1983-86 in the District Court of Maryland for Charles County have been submitted to this Court. That action was brought by Waldorf Restaurant and the Browns against Jean F. Kingham, Valerie Ellsworth, Patricia Roberts and Joseph Mona. According to the papers, that action was commenced on July 29, 1986 by the filing of a Landlord's Complaint for Repossession of Rented Property. On July 30, 1986, the summons was issued. The only evidence submitted by defendants that shows service of any kind is a notation on the docket sheet of the state court case, dated August 1, 1986, which states "Posted as to all parties." Three days later, on August 4, 1986, trial was held.

This is the entire transcript of the August 4, 1986 hearing:

THE COURT: 86-1983, Waldorf Restaurant, Incorporated and Tim and Margaret Brown versus Kingham, Ellsworth, Roberts, Mona, Yesteryears, Incorporated.

MR. FITZGERALD:

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