Sekulow v. 11th & F St. Valet, Inc.

162 F.2d 19, 82 U.S. App. D.C. 244, 1947 U.S. App. LEXIS 2091
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 14, 1947
DocketNo. 9432
StatusPublished
Cited by2 cases

This text of 162 F.2d 19 (Sekulow v. 11th & F St. Valet, Inc.) 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
Sekulow v. 11th & F St. Valet, Inc., 162 F.2d 19, 82 U.S. App. D.C. 244, 1947 U.S. App. LEXIS 2091 (D.C. Cir. 1947).

Opinion

CLARK, Associate Justice.

Plaintiffs below appeal from the action of the District Court, sitting without a jury, entering judgment for defendants and ordering plaintiffs’ cause dismissed. The action sought the cancellation of an existing lease, the reinstatement of a prior lease, and the recovery of rent and money paid as a result of alleged fraud and duress.

In July, 1942, appellants, who are engaged in the business of selling ladies’ hats, entered into a lease agreement with appel-lee Valet, Inc., covering the first floor and basement of the premises 604 11th Street, Northwest, Washington, D. C . The lease was for-a term of three years with a right, to renew for a term of five years at a rent not to exceed $1,000 per month, provided “that the lessor , still occupies the premises as a tenant of the owner.” Prior to this, the same parties had been participants in two other leases concerning the same premises, these earlier leáses each containing a renewal clause which had been abandoned by the parties as the successive leases were executed. At the time of entering into lease No. 3, appellants, on reading the proviso quoted-above, first: became aware that Valet, Inc., was not the owner of the premises, but was a tenant of the.owner. The fact was, although appellants did not learn of this until later, that Goda had leased the premises from the owner and had then assigned the lease to Valet, Inc., a corporation owned and controlled solely by him. Although there was a conflict of testimony on the point, the trial court found' that the parties did discuss the clause prior to the execution of lease No'. 3.

Some fourteen or fifteen months before lease No. 3 was to expire, appellant Jack Sekulow contacted appellee Goda and told him appellants were ready to.'exercise the renewal option and attempted to set a rental for the five year term. Goda delayed taking action on the grounds that it was too early to talk about it and that there was plenty of time.

The events following are set out by the trial court in his findings of fact: “During the summer of 1944, there were numerous conversations between plaintiff, Jack Seku-low, and defendant, Goda, concerning the renewal clause and in the latter part of August, 1944, Goda stated that rather than renew with plaintiffs at a rental not to exceed $1,000.00 per month, the corporation would forego the renewing of its lease with the owner, because he was not making any money out of it Lease No. 3, by its terms was not to expire until July 30, 1945 ; there were some further conversations, and Goda testified he entered into a verbal agreement with the plaintiff, Jack Sekulow, that Lease No. 3 was to be released and a new lease entered into, commencing September 15, 1944, and ending on September 30, 1950. The .plaintiffs deny that there was any such agreement. The defendant Goda, through his attorney on September 8, 1944, mailed to the plaintiffs a copy of a new proposed lease, in which letter the attorney further stated that the matter had to be consummated not later than September 15. The plaintiffs sought an extension of time, which was refused.”

Accordingly, appellant Jack Sekulow and hi? attorney met with appellee Goda and his attorney in the latter’s office in Washington on September 15, 1944. Sekulow made an effort to discuss the terms of the proffered lease, but was told by Goda that if he was not going to sign the lease under the listed.rentals there was nothing to discuss. Appellants then entered into a release of lease No. 3 and executed lease No. 4 running from September 15, 1944 to September 30, 1950, which provided for rent in excess of $1,000 per month.

In the meantime, bn September 7, 1944, Goda had exercised a renewal option contained in his lease with the owner of the premises, extending the term until September 30, 1950. While appellants did not know of this prior to the meeting in Washington on September 15, 1944, there was attached to lease No. 4 a letter dated September 7, 1944, from the owner to Goda permitting Goda to sublease to Sekulow Brothers “for a term not to exceed the expiration date of your lease with us for the premises namely Sept. 30, 1950,” which letter was seen by appellant Jack Sekulow [21]*21prior to the time lease No. 3 was released and lease No. 4 was executed.

The court further stated in his findings of fact “that the parties were dealing at arm’s length, that there was no duress, threats of eviction or undue influence. * * * That there was not even what amounts to extreme business compulsion, inasmuch as on September 15, 1944, the plaintiffs’ lease still had almost nine months to run. They were then represented by counsel and are presumed to have known that they could have enjoined Goda from renting to any other party if he renewed his own lease. The Court further finds that there is no ambiguity in the phrase, ‘provided the lessor still occupies the premises as a tenant of the owner,’ and that the defendants were at perfect liberty not to renew their option if they chose not to do so. On the contrary, the Court finds that the plaintiffs in order to assure themselves of the continued use of the premises at the expiration of lease No. 3, which would be certain only in the event that the sublessor renewed his master lease, voluntarily Executed the release of lease No. 3 and entered into sublease No. 4 at terms which, although not as favorable as they wished, were accepted by them.”

As we have above indicated^ appellants sought to have lease No. 4 cancelled, to have lease No. 3 reinstated, and to recover back money paid to appellees under lease No. 4.

Appellants allege as error the findings of the trial court that the parties were dealing at arm’s length, that there was no duress, threats of eviction or undue influence, nor what amounts to business compulsion, that the plaintiffs voluntarily executed the release of lease No. 3 and voluntarily executed lease No. 4, that the defendants were at liberty not to renew their option if they chose not to do so, that the option provision did not create an absolute right on the part of the plaintiffs, and that there was consideration for the execution of the release of lease No. 3 and for the execution of lease No. 4. In addition, they assert the following conclusions and generalities

which they believe apply to the facts: (1) that appellees’ action constitued fraud; (2) that it constituted business duress; (3) that a fiduciary relationship existed under the parties’ relationship of landlord and tenant; (4) that the renewal provision required Goda to act in good faith to remain a tenant; (5) that their option right became effective when Goda renewed the master lease; and (6) that a corporation cannot be used as a cloak to perpetrate or protect a fraud.

There is little we can add to the findings of fact of the trial court and his conclusions of law based thereon, which were that there was neither duress nor fraud, that the option proviso was explicit and unambiguous, and did not create an absolute right on the part of appellants, nor a duly on the part of appellees to renew the lease with the owner, and that there was consideration for the execution of the release of lease No. 3 and for the execution of lease No. 4. The findings of fact are supported by ample evidence and not clearly erroneous and thus are binding on this court,1 and the court’s conclusions of law are in complete accord with our views.

The evidence shows that appellants were experienced business men and as such stood on an equal footing with Goda in their business dealings with him.

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Cite This Page — Counsel Stack

Bluebook (online)
162 F.2d 19, 82 U.S. App. D.C. 244, 1947 U.S. App. LEXIS 2091, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sekulow-v-11th-f-st-valet-inc-cadc-1947.