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WASHINGTON PROPERTIES L.P. v. RESOLUTION TRUST COR

May 1, 1992

Washington Properties Limited Partnership, Plaintiff
v.
The Resolution Trust Corporation, Receiver for Baltimore Federal Financial, F.S.A., Defendant.



The opinion of the court was delivered by: CHARLES R. RICHEY

MEMORANDUM OPINION OF CBARLES R. RICHEY UNITED STATES DISTRICT JUDGE

 Before the Court is the defendant Resolution Trust Corporation's ("RTC") Motion for Summary Judgment in the above-captioned case. *fn1" The plaintiff, Washington Properties Limited Partnership ("Washington Properties", "WPLP") has opposed the Motion for Summary Judgment on the rescission claim, and moved for a stay on the motion as it relates to the other claims in the Complaint.

 The plaintiff's request for a stay of the motion with respect to all claims except the rescission claim is based on the unusual procedural posture of this case. On October 11, 1991, this Court, pursuant to Rule 42(b) of the Federal Rules of Civil Procedure, and for expedition, economy, and in order to further the convenience of the parties, ordered a separate trial on the claim of rescission, an equitable matter. See Order filed October 11, 1991. When the Motion for Summary Judgment was filed, trial was imminent on the rescission claim alone. Plaintiff accordingly took the position that the summary judgment motion on the eve of trial was premature as to all claims but the rescission claim.

 On the date that the Court heard oral argument on the summary judgment motion, plaintiff filed for bankruptcy in the United States Bankruptcy Court for the District of Maryland. Trial was postponed to allow consideration of the effect of the bankruptcy on the jurisdiction of this Court to adjudicate the many issues before it.

 Since trial has been postponed, it would now seem appropriate to rule on the Motion for Summary Judgment as to all claims. However, the Court believes that the plaintiff requested a stay in good faith and shall allow it an opportunity to respond to the defendant's motion as to the other claims before ruling. Accordingly, the Court addresses here the merits of summary judgment only as to rescission.

 Upon careful consideration of the submissions of the parties, the arguments of counsel, the applicable law, and the entire record herein, the Court concludes that it must grant the defendant's Motion for Summary Judgment as to the rescission claim.

 I. Background

 Specifically, the Deed of Trust stated that:

 to secure the prompt payment of said indebtedness and all charges and advances . . . Grantor [1301] and Landlord [WPLP] . . . do hereby grant and convey in fee simple unto the Trustees all of their right, title and interest in and to the hereinafter described property

 Complaint, Ex. D., at 2. The Deed of Trust further provided that

 It is the intent of this Deed of Trust that, in the event of a default hereunder, Trustees may sell at foreclosure and thereafter convey fee simple title to the Property, unencumbered by Grantor's [1301] or Landlord's [WPLP] leasehold interests under the Ground Lease or by the Landlord's reversionary interest in the Property . . . Landlord covenants and agrees that the indebtedness secured hereby shall have priority in all respects over any claim of Landlord for rent or otherwise under the Ground lease . . .

 Id. at 4.

 The Deed of Trust incorporated by reference, and was made subject to, all of the conditions and covenants in the Construction Loan Agreement. Id. at 12, § 1.26(a). Incorporated into the Construction Loan Agreement was the loan budget, which was annexed thereto. See Complaint, Ex. B. The Construction Loan Agreement provided in pertinent part that:

 All conditions of the obligations of the Lender [BFF] to make advances hereunder are imposed solely and exclusively for the benefit of the Lender and its assigns and no other persons shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that the Lender will refuse to make advances in the absence of strict compliance with any or all thereof and no other person shall, under any circumstances, be deemed to be beneficiary of such conditions, any or all ...


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