Greyhound Lines, Inc. v. Bender

595 F. Supp. 1209, 1984 U.S. Dist. LEXIS 24668
CourtDistrict Court, District of Columbia
DecidedJuly 31, 1984
DocketCiv. A. 82-2049
StatusPublished
Cited by11 cases

This text of 595 F. Supp. 1209 (Greyhound Lines, Inc. v. Bender) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Greyhound Lines, Inc. v. Bender, 595 F. Supp. 1209, 1984 U.S. Dist. LEXIS 24668 (D.D.C. 1984).

Opinion

MEMORANDUM OPINION

JUNE L. GREEN, District Judge.

This is an action by Greyhound Lines, Inc. (“Greyhound” or “GLI”), against Morton A. Bender (“Bender” or “MAB”), individually and doing business as Michael Murray Associates, Michael Murray, doing business as Michael Murray Associates, and Julian Scheer, doing business as Michael Murray Associates, for breach of contract and fraudulent misrepresentation. Greyhound seeks compensatory damages for breach of contract and fraudulent misrepresentation, restitution, and punitive damages for fraudulent misrepresentation. Defendants have asserted affirmative defenses and counterclaims for breach of contract, fraud in the inducement, and misrepresentation. Defendants seek rescission and reimbursement, as well as compensatory and punitive damages. Originally, both parties also sought specific performance but they withdrew these claims at the pretrial conference, shortly before trial.

In a thirteen-day trial to the Court, the Court heard testimony from the following witnesses: Armen Ervanian, Vice President of Real Estate at the Greyhound Corporation; Earl E. Shew, Executive Vice President for GLI until he retired, effective November 1982; John P. Kyle, a salesman for Coldwell Banker; John T. Nygren, Assistant General Counsel at the Greyhound Corporation; Susan Mann, an attorney in the Greyhound Corporation Law Department; Robert W. Wening, Jr., an architect in the firm of Mills, Clagett & Wening; Warren C. Marggraf, Vice President of the Architectural Engineering and Property Department at GLI; William T. Duncan, Senior Vice President for Real Estate at the American Security Bank; Frank L. Nageotte, Chief Executive Officer and President of Greyhound Corporation and Chairman of the Board of GLI; James B. Fagan, Director of Property in the Architectural Engineering and Property Department at GLI; William J. Hallinan, Executive Director of Taxes at Greyhound Corporation; Richard L. Patch of R.L. Patch, Inc., a construction cost engineer who estimates cost of construction; Marvin Stein, general contractor and President of Edmar Construction Company, Inc. (“Edmar”); William Benson, Vice President in charge of new construction at Edmar; Michael Murray, partner with Morton Bender and Julian Scheer in Michael Murray Associates who brought the principals in this transaction together; Victor Samuel Schneibolk of SB Construction Company; Donald Urquhart, real estate appraiser; Leon Weiner, builder and developer; Richard H. Rubin, real estate developer; and Morton Bender, developer and general contractor.

Deposition testimony also was introduced of the following individuals: F. Edward Lake, Vice President and Treasurer of Greyhound Corporation; James Mizes, Financial Analyst at Greyhound Corporation; Richard C. Stephan, Vice President and Controller at Greyhound Corporation; Bruce Thomas, Vice President of Greyhound Corporation; William F. Tritton, Vice President and Controller at GLI; *1212 Frederick P. Dunikoski, President and Chief Operation Officer of GLI; Robert O. Lowe, Vice President and Assistant Controller at Greyhound Corporation; John G. Keller, Director of Tax Administration and Planning at Greyhound Corporation; Carroll Bumpers, Vice President and Financial Advisor to the Chief Executive Officer of the Greyhound Corporation; as well as Susan Mann; Armen Ervanian; and James B. Fagan.

FINDINGS OF FACT

Plaintiff GLI is a subsidiary of the Greyhound Corporation. It is a corporation organized under the laws of the State of California and has its principal place of business in Phoenix, Arizona.

Defendant Bender is a resident of the District of Columbia and a citizen of the United States. Defendant Michael Murray (“Murray”) is a resident of the State of Maryland and a citizen of the United States. Defendant Julian Scheer (“Scheer”) is a resident of the Commonwealth of Virginia and is a citizen of the United States. All three defendants transact business in the District of Columbia. Michael Murray Associates is a general partnership organized and doing business in the District of Columbia. Mr. Bender holds a ninety percent interest in Michael Murray Associates and defendants Murray and Scheer each hold a five percent interest in the partnership.

Greyhound currently owns and operates a bus terminal at 1110 New York Avenue, N.W., Washington, D.C. (“the old terminal”). The value of this property had been rising for a number of years as a result of an increased demand for office space, as well as the proposed construction of the D.C. Convention Center across the street. To take advantage of the increase in real estate values, Greyhound decided to sell the old terminal and build a modern facility. During 1980 and early 1981, Greyhound looked at possible sites for the new terminal.

On February 5,1981, the Greyhound Corporation approved “Project Concept 81-5” which authorized, inter alia, the expenditure of $75,000 to obtain an option to purchase land at 90 K Street, N.E., near Union Station in Washington, D.C., at a price of $8,310,240. Armen Ervanian, Vice President for Real Estate at the Greyhound Corporation, suggested that this project concept be approved. He handles real estate matters for all of the subsidiary companies of Greyhound Corporation, including GLI, and was the Greyhound official who was in charge of the new terminal project.

On February 17, 1981, Greyhound purchased an option for this land which would be the site of Greyhound’s new terminal (“the new terminal site”). The option was to expire on June 17, 1981.

As contemplated by Greyhound, a developer would purchase this property, pursuant to the option Greyhound had obtained, and would build a new terminal to Greyhound’s specifications. In a “tax-free exchange,” Greyhound would then trade the old terminal to the developer in exchange for the new terminal property and cash representing any difference between the value of the old terminal and the cost of developing the new terminal.

In January 1981, defendant Murray learned that Mr. Bender was interested in purchasing the old terminal property on New York Avenue. He told Mr. Ervanian about Mr. Bender’s interest and Mr. Ervanian asked that Mr. Bender write to him. On January 26, 1981, Mr. Bender wrote to Mr. Ervanian expressing his interest in this property. On March 4, 1981, they met and discussed Greyhound’s proposal for a tax-free exchange, the price of the old terminal and development of the new terminal site.

Between March 4, 1981, and March 30, 1981, the parties negotiated the price at which the old and new properties would be exchanged. The parties eventually agreed to a price of $21 million, or about $650 per square foot, for the old terminal property.

On April 2, 1981, Mr. Ervanian sent a draft of the proposed exchange agreement to Mr. Bender. On April 16 and 17, 1981, Mr. Bender met in Phoenix, Arizona, with *1213 Mr. Ervanian and other members of the Greyhound staff. At this time, Mr. Ervanian informed Mr. Bender that a completed agreement had to be signed by April 17, 1981, to enable Mr. Ervanian to submit the contract to Greyhound Corporation’s Board of Directors for approval before the option to buy the new terminal property expired.

On April 17, 1981, Greyhound and Mr. Bender executed the “Greyhound-Bender Agreement for Exchange of Real Properties” (the “Exchange Agreement”).

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Bluebook (online)
595 F. Supp. 1209, 1984 U.S. Dist. LEXIS 24668, Counsel Stack Legal Research, https://law.counselstack.com/opinion/greyhound-lines-inc-v-bender-dcd-1984.