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BRANNOCK ASSOCS. v. CAPITOL 801 CORP.

November 25, 1992

BRANNOCK ASSOCIATES, INC., Plaintiff,
v.
CAPITOL 801 CORPORATION and FINARD & COMPANY, INC., Defendants.



The opinion of the court was delivered by: JOHN H. PRATT

MEMORANDUM OPINION

 In this case *fn1" , we are presented with yet another set of leasing disputes surrounding the commercial lease agreements between Brannock Associates, Inc. ("Brannock"), Finard & Co., Inc. ("Finard"), and Capitol 801 Corporation ("Capitol"). While this diversity action primarily concerns the leasing commission allegedly owed to Brannock by defendants, we also take this opportunity to review defendants' claims for indemnification and Capitol's Motion for Rule 11 Sanctions.

 Before the Court are plaintiff Brannock's Motions for Summary Judgment on its claims against Finard and Capitol and Motion for Summary Judgment on Finard's counterclaim; defendant Finard's Motions for Summary Judgment against Brannock as to Brannock's claim and Finard's counterclaim; and defendant Capitol's Motion for Summary Judgment against Brannock on Brannock's claim and against Finard on its counterclaim, Motion for Summary Judgment as to Finard's cross-claim, and Motion for Rule 11 Sanctions against Finard.

 I. Background

 The current set of disputes arises from a contract to purchase and lease units at 801 North Capitol Street in Northeast Washington, D.C. On November 24, 1986, defendant Finard, which owned the rights to purchase the building, assigned those rights to Capitol under an "Assignment Agreement." Finard retained the right to receive additional compensation of $ 1,000,000 from Capitol, held in trust, if it procured two commercial leases for Capitol under the terms of that agreement. *fn2" Under the Assignment Agreement, the parties agreed to obtain the services of H.L. Rust Company t/a Jackson-Cross Company ("Jackson-Cross") and Eagle Realty and Business International ("Eagle Realty") in procuring the commercial leases. Under Section 8.2 of the Agreement *fn3" , Finard also agreed to bear the costs of any leasing commissions for brokers used in obtaining any leases which did not comply with the terms of the Agreement outlined in Article 3.

 After signing the Assignment Agreement, Finard retained the services of real estate broker Percy A. Brown at Jackson-Cross to procure the leases. In March 1987, Brown left Jackson-Cross and became Vice-President of Brannock. By agreement with Finard and Capitol, Brannock obtained the deal to procure leases for 801 North Capitol. On July 6, 1988, Brannock delivered to Capitol a fully executed five year lease with the District of Columbia government at 801 North Capitol providing for a total of $ 9,353,507.00 in fixed rent to be paid over the five year term.

 Following the execution of the lease, Brannock submitted to Finard and Capitol a request for the standard leasing commission of 2.5% of the gross lease value of $ 9,353,507.00, totalling $ 233,838.00. Finard subsequently filed a claim against Capitol with this Court, seeking to obtain delivery of the $ 1,000,000 promissory note for obtaining the 5-year lease with the D.C. government and to hold Capitol liable for the leasing commission claimed by Brannock. In Finard & Co., Inc. v. Capitol 801 Corp., 749 F. Supp. 15 (D.D.C. 1990) ("Finard I"), we held that Finard was not entitled to the $ 1,000,000 because it had failed to deliver a lease complying with the terms of the Assignment Agreement. *fn4" We further held that, under Section 8.2 of the Assignment Agreement, Finard was liable for all leasing commissions owed to Brannock for procuring a lease which failed to comply with Article 3. Id. at 20.

 The Court of Appeals substantially affirmed the decision in a Memorandum Opinion, holding that Finard could not collect on the $ 1,000,000 promissory note. See Finard & Co., Inc. v. Capitol 801 Corp., No. 91-7106, 1992 WL 266115 (D.C. Cir. Sept. 23, 1992) ("Finard II"). With respect to Brannock's commission, the Court of Appeals held that Finard would be liable for any commissions found to be owed, but held that liability to Brannock itself was not before the court since Brannock was not a party to the action. Id. at *2.

 Brannock meantime filed the present action against Finard and Capitol to obtain $ 233,838.00 in leasing commissions. That issue is now ripe for review, along with defendants' Motions for Summary Judgment on other claims.

 II. Discussion

 Summary judgment is appropriate if "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The burden is on the non-moving party to present evidence that a genuine issue exists "such that a reasonable jury could return a verdict for a non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). In viewing the evidence, the court must draw all inferences in the light most favorable to the non-moving party. Id. at 255.

 A. Leasing Commissions Claimed By Brannock

 Brannock has moved for summary judgment against both Finard and Capitol, alleging that defendants are liable to Brannock for $ 233,838.00 in leasing commissions. Brannock asserts that Capitol is liable on the theories of quantum meruit and unjust enrichment. *fn5" Brannock also moves for summary judgment on its claims against Finard on the theories of breach of contract and unjust enrichment. Both defendants have filed Motions for Summary Judgment in opposition to Brannock's claims.

 1. Liability of Capitol

 With respect to Capitol, it is necessary to note at the outset that Finard II prevents our holding Capitol liable for any part of the payment of Brannock's claim for leasing commissions. In its Memorandum Opinion, the Court of Appeals held that, pursuant to Section 8.2 of the Assignment Agreement, "if Capitol 801 Corporation is subsequently held to owe leasing commissions to any party in connection with leases Finard & Company, Inc., procured, or attempted to procure, for Capitol . . . . , Finard & Company, Inc., shall pay any and all such leasing commissions." Finard II, 1992 WL 266115 at *2. Therefore, even if Capitol were found to owe Brannock for part or all of the commission, Finard would be obligated to pay Capitol's debt.

 The sole issue for our consideration with respect to Capitol, then, is whether Capitol has accrued any debt to Brannock, which Finard is obligated to pay. Brannock asserts that Capitol is, in fact, liable for the full amount of the commission under the theories of quantum meruit and unjust enrichment because Capitol enjoyed the full value of Brannock's services in procuring the lease with the D.C. government. Since the standard commission is 2.5% of the total of the fixed rents payable under the lease ($ 9,353,507.00), Brannock claims that Capitol should be held liable for the full $ 233,838.00. See Brannock's Motion at 30.

 In ordering compensation under a theory of quantum meruit or unjust enrichment, the court must find that the following criteria are met:

 (1) valuable services must be rendered [by the plaintiff];

 (2) for the person sought to be charged;

 (3) which services were accepted by the person sought to be charged, and enjoyed by him or her; and

 (4) under such circumstances has reasonably notified the person sought to be charged that the plaintiff, in performing such services, expected to be paid.

 TVL Associates v. A & M Constr. Corp., 474 A.2d 156, 159 (D.C. App. 1984). We fail to find that Brannock has satisfied all of the ...


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