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BOOMHOWER, INC. v. LAVINE

May 15, 1957

BOOMHOWER, Inc., Plaintiff,
v.
Louis L. LAVINE, trading as District Dental Supply, Defendant



The opinion of the court was delivered by: KEECH

This is an action for damages for breach of contract in connection with the assignment to the defendant, Louis L. Lavine, trading as the District Dental Supply, by the plaintiff, Boomhower, Inc., of the latter's lease from George J. Ohanides, deceased, of an office building at 1826 K Street, N.W. At the time of the assignment the property was owned by several heirs, who resided in Turkey.

Under the contract of assignment, it was provided that the plaintiff should receive, in addition to other consideration, the sum of $ 3,600, provided that this sum would not be payable unless there should be procured in defendant's favor on or before July 31, 1956, a valid lease covering the premises for a term of not less than three years from January 31, 1956, under all of the same terms and conditions of the existing lease, or a new lease for three years under the same terms and conditions except for a stipulated increase in rental. The contract of assignment further provided that the plaintiff should 'forthwith' give notice of the assignment to the administrator of the estate of lessor and to two subtenants, and included the following paragraph:

 '8. This contract embraces the entire agreement and understanding and representations of the parties; and may not be changed or modified except in writing signed by the parties; and shall be binding upon the parties hereto, their heirs, executors, administrators and assigns.'

 The form of agreement was originally drafted by Mr. Benton, president-attorney of the plaintiff. The defendant Lavine on August 8, 1952, submitted a counter-offer, adopting Mr. Benton's draft, but increasing plaintiff's time within which to accept from 48 to 72 hours, amending the sums to be paid plaintiff for the lease, and adding a new paragraph '7' (providing for the bonus to plaintiff upon extension of the lease) and '9' (providing for delivery to defendant of the duplicate original lease and sublease upon execution of the assignment contract). It is plaintiff's contention that on August 8, 1952, after Mr. Benton and defendant had left the office of defendant's attorney, Mr. Hornstein, and as they were going out of the building, Mr. Benton and defendant made an oral side agreement that the owners of the property and their agent would not be informed of the fact that defendant was willing to pay plaintiff a bonus if an extension of the lease were obtained. Thereafter, on August 11, 1952, plaintiff accepted the contract of assignment as drafted by its president-attorney, with defendant's amendments, and still containing the provisions for forthwith notice by plaintiff to the owner of the assignment and paragraph '8' as quoted above.

 The plaintiff did not notify the owners or their agent of the assignment of the lease. When the defendant attempted to pay the first month's rent, Mr. Grindley, attorney for the lessor's estate and agent for the heirs, the present owners, returned the check (via his attorney), inasmuch as defendant was a stranger to him. Thereafter, on September 8, 1952, pursuant to a telephone conversation between them, Mr. Hornstein, defendant's counsel, mailed to Mr. Riordan, the agent's attorney, a copy of the written assignment agreement, with a covering letter which called attention to the provision evidencing defendant's desire to obtain an extension of the lease. Thereupon the owners' agent accepted defendant as assignee of the lease.

 At the time of the assignment of the lease to defendant, plaintiff had pending a suit against the lessor for an alleged breach of warranty of fitness of the premises as to the heating plant and plumbing, as well as in other respects (C.A. 4984-51). This fact was not made known to the defendant Lavine until some time after he had signed his firm offer of August 8, 1952. Although Mr. Lavine testified that, in a conversation between him and Mr. Benton as they went down in the elevator and walked out of the building, Mr. Benton mentioned for the first time that he had a law case pending against the owner of the property for certain services which had not been properly given to the plaintiff, the defendant frankly admitted that he was not clear as to the specific dates of certain other statements by Mr. Benton in his many telephone calls and conversations after execution of the assignment contract. 'The' statement by Mr. Benton in his letter to Mr. Lavine of August 17, 1952 (after execution of the assignment contract by both parties), 'I have a claim against the owner for his omission to supply what I regard as sufficient and proper heating apparatus,' does not indicate that the information was being given for a second time. There is no conflict in the evidence that on September 10, 1952, Mr. Benton discussed with Mr. Lavine his pending suit against the landlord and, by letter of the same date, forwarded a copy of the complaint to the defendant.

 On August 8, 1952, before the execution of the assignment, Mr. Grindley, at Mr. Benton's instance, sent to the owners in Turkey a cable dictated by Mr. Benton, asking that they cable authority to extend plaintiff's option to renew the lease for the additional three-year period, and stating that this would assure a good tenant over the whole period at a good rental, such extension to be conditioned on dismissal of plaintiff's suit against them. On August 14, 1952, Mr. Benton wrote directly to Mr. Petusis, who represented two of the heirs, repeating his offer to dismiss plaintiff's suit if the proposed extension were granted.

 On November 13, 1952, in reply to a letter dated October 7 from Mr. Grindley, informing him of the assignment of the lease, Mr. Petusis stated that he relied on Mr. Grindley's opinion concerning the District Dental Supply, but made no mention of Mr. Grindley's cable of August 8 or Mr. Benton's letter of August 14 concerning extension of the lease. On March 19, 1953, Mr. Grindley again wrote Mr. Petusis and the third heir, Mrs. Pistikas, stating that it had been suggested at the pre-trial hearing of C.A. 4984-51 that plaintiff would dismiss the suit if the owners would grant a one-year extension of the lease from January 31, 1956, at a rental of $ 300 per month, and recommending the offer be accepted. On April 3, 1953, Mr. Grindley advised the heirs that the offer had been withdrawn and the case would be set down for trial. By letter dated May 3, 1953, Mr. Petusis declined to grant any extension of the lease to plaintiff, but offered to lease the premises directly to the defendant at $ 325 a month, if plaintiff would withdraw the suit and reimburse the owners for all their expenses incident to its defense. He did not, however, state the duration of the proposed lease to defendant.

 On January 29, 1954, Mr. Grindley wrote Mr. Petusis and Mrs. Pistikas that they had successfully defended plaintiff's suit in the lower court and that the case was pending in the Court of Appeals. He suggested, if it be their intention to sell the property, they had better try to do so promptly, in view of the falling real estate market. After some correspondence with reference to the condition of the property, offers to purchase, and defendant's exercise of a two-year option to renew contained in the existing lease, Mr. Grindley again wrote Mr. Petusis, on June 8, 1955, that the present tenant was an excellent one, who was anxious to secure an extension of from three to five years if the owners intended to keep the property or would be interested in purchasing it if the price were not exorbitant.

 By letter of August 19, 1954, Mr. Grindley informed the heirs that plaintiff's breach of warranty suit against the lessor had been decided in their favor by the Court of Appeals. The correspondence concerning this suit discloses that the heirs were very much displeased with plaintiff for bringing the action, which they considered entirely unwarranted. It is also apparent from the correspondence that the heirs were desirous of selling the property if they could get a good price.

 On July 21, 1955, Mr. Grindley submitted to Mr. Petusis and Mrs. Pistikas an offer by Mr. Benton, on behalf of plaintiff, to pay the owners a bonus of $ 1,000 if a three-year extension of the lease were granted on or before July 30, 1955. By letter dated July 31, 1955, Mr. Petusis rejected Mr. Benton's offer, stating the heirs whom he represented desired to sell the property at a minimum price of $ 50,000 net. By letter dated August 8, 1955, Mrs. Pistikas replied, stating she had not received the proposal until August 6 and that she would approve a sale of the property for $ 60,000 net.

 Some time after July 31, 1955, defendant made an offer to purchase the building for $ 35,000, the value at which it had been appraised. This was rejected, and the building was sold some time after defendant's lease had terminated, for the sum of $ 60,000 to a purchaser who had previously endeavored to purchase from the former owner for a sum far in excess of the appraised value and to whom the property had a peculiar value because of its location.

 The defendant denies that he entered into any oral side agreement with the plaintiff's president-attorney, and contends the written assignment contract embodied all of their understanding, as stated therein. The record shows that the defendant, contrary to hindering the plaintiff in obtaining an extension of the lease, was very anxious to stay in the premises, to the extent of indicating to the agent his willingness to buy the building for a reasonable figure if the lease were not to be extended.

 There is no evidence that the heirs in Turkey were at any time informed by anyone of the provision in the assignment contract for payment of a bonus to plaintiff should defendant be granted the three-year extension of the lease. Mr. Grindley, their local agent, denied that his recommendations concerning renewal of the lease were in any way affected by his knowledge of the bonus provision. Although his attorney, Mr. Riordan, admitted he told Mr. Benton that Mr. Grindley would not consent to any extension to plaintiff and, in substance, that Mr. Grindley would not enable Mr. Benton to receive the ...


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