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09/30/91 RIGGS NATIONAL BANK v. CARL G. ROSINSKI

September 30, 1991

RIGGS NATIONAL BANK, TRUSTEE, APPELLANT
v.
CARL G. ROSINSKI COMPANY, APPELLEE



Appeal from the Superior Court of the District of Columbia; Hon. Warren R. King, Trial Judge

Terry, Steadman and Wagner, Associate Judges.

The opinion of the court was delivered by: Steadman

In this breach of contract non-jury action, the trial court found in favor of plaintiff-appellee Carl G. Rosinski Company ("Rosinski"). On appeal, defendant-appellant Riggs National Bank seeks reversal on the grounds that the trial court erred in its finding of breach and in the award of interest. We affirm.

I

Rosinski served as the leasing agent for Edward Fawsett, trustee of the Clifford C. Fawsett Trust, *fn1 with respect to property located at 1357-59 Wisconsin Avenue, N.W., Washington, D.C. The property was leased to Canterbury Tales, Inc. ("CTI"), on December 13, 1971. At the time the lease was negotiated, Richard Hindin and David Pensky were president and vice president, respectively, of CTI and owned 100% of the stock of the company. Hindin and Pensky sold CTI to CML Group, Inc., a publicly traded company, in 1983. Hindin and Pensky remained as officers and directors of CTI, and continued under an employment contract with CML to operate the business. Paragraph twenty-nine of the lease contains the following provision:

In the event the Lessee directly or indirectly purchases or otherwise acquires title to the premises, or to the property of which the premises are a part, during the term of the lease, or during the continued occupancy of the tenant, whether or not under a renewal or extension of this lease, said Carl G. Rosinski Company, shall be deemed to be the procuring agent in the transaction, whether or not it shall have participated in negotiation of such purchase, and will be paid by the lessor, at settlement, a commission of five percentum (5%) of the sales price or exchange value. . . . (emphasis added).

In 1985, Edward Fawsett engaged his son Robert Fawsett, a licensed real estate agent employed by Coldwell Banker, to sell the property. Hindin and Pensky submitted a bid for $1.3 million which Fawsett accepted. Fawsett elected to sell to Hindin, and Pensky because he knew them and considered the deal likely to go smoothly. In September or October of 1985, Robert Fawsett informed appellee that Edward Fawsett had agreed to sell the property to Hindin and Pensky. Robert Fawsett offered to pay appellee two and a half percent of the sales price, but appellee rejected the offer, contending it was entitled to five percent as provided in the lease. This litigation then ensued.

II

Riggs first challenges the trial court's determination that Edward Fawsett breached paragraph twenty-nine of the lead. Riggs contends that the trial court was required to consider what each party to the agreement intended at the time they entered the agreement and the court therefore erred when it only considered Fawsett's intentions. Riggs argues alternatively that the evidence does not support the trial court's ruling. We disagree.

If a court finds that the terms of the agreement are ambiguous, i.e., reasonably susceptible of different constructions or interpretations," 1901 Wyoming Avenue Coop. Ass'n v. Lee, 345 A.2d 456, 461 n.7 (D.C. 1975), the court is then required to determine "what a reasonable person in the position of the parties would have thought the disputed language meant." Intercounty Construction Corp. v. District of Columbia, 443 A.2d 29, 32 (D.C. 1982) (citations omitted). "There are many prongs to the reasonableness determination. First, there is the presumption that the reasonable person knows all the circumstances surrounding the making of the contract. Secondly, the reasonable person is bound by all usages which either pity knows or has reason to know. Thirdly, the reasonable person standard is applied both to the circumstances surrounding the contract and the course of conduct of the parties under the contract. Finally, the court should look to the intent of the parties entering into the agreement." Id. at 32 (citations omitted).

The record reveals that the court followed governing precedent in interpreting the agreement. The provision at issue was plainly ambiguous in the factual setting here, and the trial court correctly considered what the parties intended by the provision, "in the event the Lessee directly or indirectly purchases or otherwise acquires title," as contained in the lease. It was perfectly appropriate to focus on what Fawsett intended. It was Fawsett who would be held to have breached the contract and thus his intent was highly relevant to the Disposition of this case. The court's inquiry was proper as a basis to determine how a reasonable person in Fawsett's shoes would have intended the terms to be interpreted. *fn2

The court found Fawsett considered himself to be dealing with Hindin and Pensky without particularly discriminating between the legal entity CTI and the principals behind it. The court said, "Mr. Fawsett believed . . . he was dealing with Mr. Hindin. So that when the sale to Mr. Hindin and Mr. Pensky occurred later, that was in my judgment an indirect sale to the parties listed in the lease."

Our review of a trial court's interpretation of the meaning of an ambiguous provision is limited. "In such a case, the trial court will essentially have been acting as a finder of fact, Dodek v. CF 16 Corp., 537 A.2d 1086, 1092 (D.C. 1988), and we will reverse only if the trial court's determination is 'plainly wrong or without evidence to support it.' D.C. Code ยง 17-305(a) (1989)." Waverly Taylor, ...


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