District-Realty Title Insurance Corporation v. Rudolf Ensmann, James S. Sollins

767 F.2d 1018, 247 U.S. App. D.C. 228, 1985 U.S. App. LEXIS 20575
CourtCourt of Appeals for the D.C. Circuit
DecidedJuly 23, 1985
Docket84-5475
StatusPublished
Cited by20 cases

This text of 767 F.2d 1018 (District-Realty Title Insurance Corporation v. Rudolf Ensmann, James S. Sollins) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
District-Realty Title Insurance Corporation v. Rudolf Ensmann, James S. Sollins, 767 F.2d 1018, 247 U.S. App. D.C. 228, 1985 U.S. App. LEXIS 20575 (D.C. Cir. 1985).

Opinion

MIKVA, Circuit Judge:

This statutory interpleader action, like the related case of Schneider v. Dumbarton Developers, Inc., 767 F.2d 1007, (also released today), derives from Ferd Schneider’s unsuccessful efforts to sell the Clermont apartment building, located at 2106 F Street, N.W., in Washington. Dumbarton Developers, Clermont Corporation, James S. Sollins, Dianna Brochendorff, and a number of project creditors appeal here from the district court’s entry of summary judgment in favor of appellees Rudolf Ensmann and 2106 F Street Associates. The district court found that the agreement between the parties unambiguously required return of all the interpleaded funds to Ensmann. The court refused to allow the introduction of extrinsic evidence to contradict the terms of the written contract and found the prevention doctrine inapplicable. We affirm.

The facts underlying this dispute are summarized in some detail in our related opinion and consequently we need repeat only the bare essentials here.

By a contract dated February 10, 1981, Schneider agreed to sell the Clermont to a partnership composed of two District of Columbia corporations: Dumbarton Developers, Inc. (“Dumbarton”) and Clermont Tenants Association, Inc. (“CTA”) t/a Clermont Partnership (collectively, the purchaser). After acceding to several requests on the part of the purchaser to postpone settlement, Schneider declared that unless settlement was made by May 17, 1982, he would terminate the agreement. Settlement was not made, and Schneider sued in district court for a declaratory judgment that the agreement was terminated. That lawsuit was settled under an “Agreement of Settlement and Release” dated August 4, 1982. The settlement gave purchaser another two months to complete the transaction but asserted that time was of the essence and that the time for settlement could not be extended beyond October 4, 1982, for “any reason whatsoever.”

Unbeknownst to Schneider, Dumbarton had brought in West German investor Rudolf Ensmann as a financial backer. Subsequently, Dumbarton, CTA, and Ensmann had become embroiled in disputes over the respective rights and duties of the parties and, in particular, over which entity should take title to the property at the closing. When the crucial date — October 4 — arrived, these disputes had still not been resolved. On the morning of the 4th, however, Ensmann finally persuaded CTA to assign its interests to Ensmann and to attempt to exercise its option to buy out Dumbarton’s share of the partnership. But when Dum *1021 barton learned of CTA’s plan, Dumbarton objected and insisted that any purported exercise of the option would be invalid. The parties continued to wrangle with each other throughout the day and into the night. Several different sets of escrow instructions were delivered to the title company, District-Realty Title Insurance Corporation, none of which could be fully implemented. Ensmann’s attorneys created appellee 2106 F Street Associates (“2106”), as a District of Columbia limited partnership 99% owned by Ensmann, with the intent that 2106 would ultimately take title to the property. They also transferred approximately $1,405,000 to the title company. Eventually, moreover, they obtained an assignment from Dumbarton. But, as of midnight, settlement had neither been made nor consummated. See Schneider, at 1010-1012, 1012-1015.

At about 2:50 P.M. on October 5, purchaser had still not made settlement. Schneider declared the Land Purchase Agreement terminated and requested that the title company return all documents submitted in connection with the transaction. In an apparent effort to salvage the situation, the would-be purchaser immediately arranged for the title company to issue Schneider a check for the adjusted purchase price and sent a new deed naming 2106 as grantee. Schneider was given a copy of the CTA assignment, but, for some reason, not the Dumbarton assignment. Schneider’s attorney inquired as to whether a similar assignment could be obtained from Dumbarton and was told it could not. Ensmann’s attorneys nonetheless encouraged Schneider to go through with the sale, offering to indemnify him in the event that he was sued for wrongful transfer. Schneider’s attorney advised that such an indemnification would be inadequate to fully protect Schneider from resulting litigation. Consequently, on October 6, Schneider brought a second suit for declaratory judgment.

A few days later, Ensmann sought return of the money he had paid over to the title company. Aware of disputes among the parties and of the claims of various project creditors, the title company refused to comply with the request. Instead, on October 13, it filed an interpleader action pursuant to 28 U.S.C. § 1335, naming Ensmann, Dumbarton, Clermont Corporation (Dumbarton’s successor in interest), James S. Sollins and Dianna Brochendorff (principals of Dumbarton and Clermont), CTA, Schneider, one of the tenants of the apartment building, and a number of Dumbarton creditors who had performed work related to the property. The title company deposited $245,000, representing an approximation of the aggregate value of the claims, with the court. (The balance was disbursed in accordance with Ensmann’s directions.)

The district court denied a motion to consolidate the two suits, but granted 2106’s motion to intervene. It then stayed the interpleader action pending disposition of Schneider v. Dumbarton Developers. Following rendition of judgment in Schneider, the district court granted summary judgment in favor of movants Ensmann and 2106. The judge ruled that there were no genuine issues of material fact and that movant was entitled to judgment as a matter law. He found that the pertinent contractual provisions were unambiguous and contemplated return of all funds to Ensmann in the event of nonsettlement. The judge refused to allow the introduction of extrinsic evidence to vary what he found to be clear contractual terms. He found no evidence that Ensmann had frustrated the contract, but concluded that in any event, the contract allocated the risk of intentional frustration to the Dumbarton Group (which includes Dumbarton, Clermont Corporation, Sollins and Brochendorff). He found the prevention doctrine inapplicable and concluded that no waiver had occurred. The district court awarded Ensmann the funds less counsel fees and expenses awarded to District-Realty and $50,000 liquidated damages awarded to Schneider. The Dumbarton Group and a number of project creditors appeal. District-Realty was discharged of all responsibility or liability for the inter-pleaded funds by order of the district *1022 court. CTA has disclaimed any interest in the money. They and Schneider take no part in this appeal.

This appeal turns on the language of the Settlement Agreement between the Dumbarton Group and Ensmann. See Settlement Agreement, reprinted in Record Excerpts (“R.E.”) at 38-46. There is no doubt that under the agreement, Ensmann assumed full responsibility for paying the project creditors and others if the deal went through. The dispute here is whether Ensmann assumed responsibility for the payments even if the deal failed. The district judge found that Ensmann did not. We agree.

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Bluebook (online)
767 F.2d 1018, 247 U.S. App. D.C. 228, 1985 U.S. App. LEXIS 20575, Counsel Stack Legal Research, https://law.counselstack.com/opinion/district-realty-title-insurance-corporation-v-rudolf-ensmann-james-s-cadc-1985.