Appeal from the Superior Court of the District of Columbia (Hon. Wendell P. Gardner, Jr., Trial Judge) (CA157-99)
Before Terry and Schwelb, Associate Judges, and Newman, Senior
The opinion of the court was delivered by: Terry, Associate Judge
Appellant, Trilon Plaza, Inc. ("Trilon"), filed an action for breach of contract against the Comptroller of the State of New York, in his capacity as trustee of the state's Common Retirement Fund, and Mellon Mortgage Company. In its complaint Trilon alleged that the Comptroller had breached the terms of a promissory note by refusing to accept partial prepayments of the unpaid balance. The Comptroller filed a motion for summary judgment, which the trial court granted, ruling that there were no genuine issues of material fact and that, as a matter of law, Trilon did not have a right to make partial prepayments on the promissory note. Trilon appeals; we affirm. *fn1
In 1972 Trilon and the Comptroller negotiated for loans totaling $34,550,000, to be paid to Trilon over the four phases of an urban redevelopment project in the District of Columbia known as Waterside Mall. *fn2 The present litigation, which concerns the Phase One loan (in the amount of $12,450,000), arises from the several contract documents which, read together, reflect the agreement between the parties. The relevant documents are as follows:
1. An unsigned letter dated May 5, 1972, from the Comptroller to Charles Bresler, a representative of Trilon, stating what it characterized as the "terms" of the loan. This letter, to which the parties generally refer as the "Commitment Letter," states that any note used to secure payment on a phase of the loan
may be prepaid in whole, but not in part, on 30 days' notice, on the first day of any month following the tenth anniversary of the date of such Note at a price equal to the entire outstanding principal amount thereof, plus interest accrued and unpaid thereon, plus a premium which shall be 5% of the outstanding principal amount to be prepaid, if such payment is made during the 12 month period following the tenth anniversary of the date thereof, which premium shall decline by ½ % for each succeeding anniversary to a minimum premium of 1%. [Emphasis added.]
2. A second letter dated May 24, 1972 ("the May 24 letter"), from the Comptroller to Trilon and others, *fn3 which spells out in detail the phases of the loan as stated in the May 5 Commitment Letter. The May 24 letter also includes a provision that each of the four promissory notes is to be secured by a deed of trust on a portion of the maker's leasehold interest in the premises that are the subject of the development proposal. The May 24 letter states that its principal purpose is "to coordinate these financing arrangements, subject, however, to compliance with all the terms and conditions of the Commitment [Letter], so that the Phases of the Permanent Loan can be consummated . . . ." This letter is signed by the Deputy Comptroller of the State of New York, on behalf of the Comptroller. Following his signature appears the statement, "The foregoing agreement is hereby accepted as of the date first above written," i.e., May 5, 1972. Below that statement are the signatures of representatives of Trilon Plaza, Inc., Bresler & Reiner, Inc. (see note 3, supra), and the New York bank which had agreed to make some of the initial construction loans.
3. A deed of trust, dated July 15, 1974, and signed on August 22, 1974, incorporating in its "whereas" recitals both the Commitment Letter and the promissory note.
4. A promissory note ("the Note"), signed on August 22, 1974. The Note does not mention the Commitment Letter, but does refer to the deed of trust: "Reference is made to the Deed of Trust for a description of the property thereby bargained, sold, granted, mortgaged, conveyed, and assigned, the nature and extent of the security for the Notes." The Note further states:
The Company [Trilon] shall have the option on at least thirty (30) days' prior written notice by prepaid registered or certified mail to the payee at its address for the payment of principal and interest hereunder, to prepay the entire outstanding principal amount of this Note on September 1, 1984, or on the first day of any month thereafter . . . . [Emphasis added.]
The remaining terms of this option to prepay, such as the decreasing schedule of premiums to be paid upon prepayment, match the terms stated in the May 5 Commitment Letter.
In June 1998 Trilon tendered a partial prepayment of principal to Mellon Mortgage Company ("Mellon"), the servicer of the loan, in the amount of $275,338.52. The Comptroller and Mellon informed Trilon that they would accept this first prepayment, but that this acceptance did not waive their rights under the loan documents which prohibited such prepayments. In August 1998 Trilon proffered two additional prepayments of $554,060.05 and $1,000,000.00, respectively. The Comptroller rejected these prepayments on the ...