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PENNSYLVANIA AVE. DEV. CORP. v. ONE PARCEL OF LAND

March 21, 1980.

PENNSYLVANIA AVENUE DEVELOPMENT CORPORATION, Plaintiff,
v.
ONE PARCEL OF LAND IN the DISTRICT OF COLUMBIA et al., Defendants.



The opinion of the court was delivered by: PRATT

MEMORANDUM OPINION

JOHN H. PRATT, District Judge.

 In this condemnation action, plaintiff Pennsylvania Avenue Development Corporation has deposited $1,415,000 in the court registry as estimated compensation for the taking in fee simple absolute of certain land and improvements in the District of Columbia. This case is before us on the motion of defendant Trustees of the Estate of Henry K. Willard for allocation and distribution of these funds and on motions for partial summary judgment by defendants Metropolitan Parking, Inc. and Gal-Tex Hotel Corporation. We must determine who is entitled to a share of the condemnation award. For the reasons discussed below, we have determined that only the owner of the property in fee simple absolute at the time of the condemnation, defendant Trustees, are entitled to the condemnation award.

 FACTS

 On October 3, 1979, plaintiff Pennsylvania Avenue Development Corporation filed a Complaint for Condemnation and a Declaration of Taking and acquired title in fee simple absolute to the land and premises described on the Records of the Assessor of the District of Columbia as Lot 31, Square 225, located in the District of Columbia. On that date plaintiff also deposited $1,415,000 in the registry of the court as estimated compensation for the taking. *fn1"

 The property at issue, which is being taken in implementation of the development plan for the Pennsylvania Avenue Development Area, is located at 1416 F Street, Northwest, and is now used as a parking garage. At the time of the taking, defendant Trustees of the Estate of Henry K. Willard (hereinafter "Trustees") owned the land in fee simple absolute.Defendant Metropolitan Parking, Inc. (hereinafter "MPI"), an assignee of the original lessee, *fn2" leased the premises and operated the parking garage. The lease, dated November 25, 1952, provided for a term of 25 years with an option to renew for an additional ten years. The option was exercised, extending the lease to June 30, 1988. MPI seeks compensation for the value of its leasehold while defendant Trustees seek the entire compensation award.

 Another defendant claiming a share of the compensation award is Gal-Tex Hotel Corporation, owners and operators of the Hotel Washington, which is located adjacent to the parking garage on Lot 30 of Square 225. Gal-Tex's interest stems from an agreement dated September 24, 1953 between MPI and a predecessor to Gal-Tex, granting such predecessor certain rights of ingress and egress to the parking garage through an entranceway connecting the hotel lobby with the parking garage. The agreement was to run concurrently with the terms of the lease between defendants Trustees and MPI.

 Also claiming a share in the compensation award is defendant Elenora Shaffer Carson, successor in interest to E. Whyland Shaffer, one of the two agents designated in Article 3 of the lease to jointly receive a monthly commission during the term of the lease. *fn3"

 Defendant Trustees have moved for allocation and distribution of funds, requesting an order that the entire condemnation award be paid to them. The other defendants -- each claiming a share of the condemnation award -- have opposed complete distribution to lessors. Defendants MPI and Gal-Tex have moved for partial summary judgment, seeking a judgment that they are entitled as a matter of law to share in the condemnation award. *fn4" We must therefore determine who is entitled to a share of the condemnation award.

 ANALYSIS

 1. Interest of MPI

 Defendant MPI, whose lease on the condemned premises expires June 30, 1988, argues that it is entitled as a matter of law to be compensated for its leasehold interest. It correctly asserts that it is well-established that "... the holder of an unexpired leasehold interest in land is entitled... to just compensation for the value of that interest when it is taken upon condemnation by the United States." Alamo Land and Cattle Co. v. Arizona, 424 U.S. 295, 303, 96 S. Ct. 910, 916, 47 L. Ed. 2d 1 (1976). See United States v. Petty Motor Co., 327 U.S. 372, 66 S. Ct. 596, 90 L. Ed. 729 (1946); A. W. Duckett & Co. v. United States, 266 U.S. 149, 45 S. Ct. 38, 69 L. Ed. 216 (1924). On the other hand, it is also recognized that a lessee may be barred from receiving a share of the condemnation award by a provision in the lease generally referred to as a condemnation clause. See United States v. Petty Motor Co., supra, and the cases cited in footnote 5 at 376, 66 S. Ct. at 599. Such clauses specifically provide that if the property should be taken by eminent domain for public use, in whole or in part, the lease term shall come to an end. Under such clauses, the tenant has no estate or interest surviving the condemnation which entitles him to a portion of the condemnation award.

 To determine whether defendant MPI, the lessee, is barred from receiving a portion of the condemnation award by the terms of its lease with the lessor, we focus on the following provisions of the lease:

 ARTICLE I

 DEFINITIONS

 For the purposes hereof, unless the context otherwise requires:

 Section 1.04. Any reference herein to the termination of this lease shall be deemed to include any termination hereof by ...


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