increased. Because the contract language appeared on a form supplied by a third party, and because the parties had not had quite the adversarial relationship normally present in contract negotiations, the Court allowed testimony on this issue.
The primary witness heard was Judge Lawson, who acted as counsel for both Majestic and Mt. Airy in these negotiations. Judge Lawson specifically testified that she was aware of the language making the non-profit sponsor liable for the entire increase when she advised Mt. Airy to sign Change Order #11, and she accepted that fact. Mt. Airy does not deny that normally it would be bound by this statement. But it claims that in this instance Judge Lawson inadequately represented its interests in favor of those of Majestic. Therefore, Mt. Airy claims, the Court should not impute to it her knowledge and intent.
But Mt. Airy has not indicated where Judge Lawson's advice was inadequate. Her believable and unrefuted testimony, and the record as a whole, make clear the following:
(1) That Majestic was properly asking for a price increase;
(2) That failure to sign Change Order #11 would seriously have jeopardized the project;
(3) That it was very probable that, if the FHA approved the price increase, the mortgage would be increased a commensurate amount;
(4) That before being eligible for a mortgage increase, Mt. Airy had to have agreed to be liable for the entire price increase;
(5) That, since Mt. Airy had no net assets and, because of the statutory limits on rents, no likelihood of obtaining net assets, it itself would not be substantially worse off by signing Change Order #11; and
(6) That, in a general way, Judge Lawson communicated these considerations to Rev. Clarence Long, the president of Mt. Airy, and he agreed that Mt. Airy had no practical alternative to signing Change Order #11.
In these circumstances, the Court concludes that Judge Lawson's advice to Mt. Airy was entirely proper.
Nevertheless, Mt. Airy has attempted to blunt Judge Lawson's testimony with that of Rev. Long that the president of Majestic, who is now dead, "had said several times that he would never move against the corporation." The Court finds this testimony believable also. But nothing more than this statement was made. Mt. Airy has failed to tie it in to the negotiations leading up to the signing of Change Order #11, or to show that the statements constituted a waiver of Majestic's rights under the contract.
Therefore, the Court finds that the parties actually did intend what the language of Change Order #11 indicated -- that Mt. Airy would be liable for the entire amount of the increase.
For the foregoing reasons, the Court concludes that judgment should be entered for the plaintiff. Majestic Builders Corporation will submit an appropriate order, noted by Mt. Airy Baptist Church Housing Corporation. This opinion will constitute the Court's Findings of Fact and Conclusions of Law.
John J. Sirica / United States District Judge
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