Appeal from the Superior Court of the District of Columbia (CA2291-06) (Hon. Geoffrey M. Alprin, Trial Judge).
The opinion of the court was delivered by: Fisher, Associate Judge
Argued September 19, 2007
Before FARRELL, REID, and FISHER, Associate Judges.
In 1998, real estate developers Georgetown Park Associates II and Herbert Miller (appellees) agreed to use a Right of First Offer, controlled by Mr. Miller, to help fellow developer EastBanc (appellant) acquire the Georgetown Park Mall. The parties made various efforts over the years, and they executed a new, temporary agreement in 2001, but EastBanc did not acquire the property. In 2006, Mr. Miller informed EastBanc that he intended to exercise the Right of First Offer for his own benefit. EastBanc sued, alleging breach of the 1998 agreement, but the Superior Court ruled that the statute of limitations barred the complaint. We hold that the signing of the 2001 agreement did not start the running of the limitations period. Accordingly, we reverse and remand for further proceedings.
I. Factual and Procedural Background
A. The Parties, the Property, and the ROFO
Anthony Lanier is president of EastBanc, Inc., a corporation that has been developing commercial real estate in Georgetown since 1996. Herbert S. Miller is the sole general partner of Georgetown Park Associates II Limited Partnership ("GPA II").Acting on behalf of EastBanc, Mr. Lanier decided that he wanted to buy the Georgetown Park Mall ("the Mall" or "the Property"), which was owned by Georgetown Park Associates ("GPA"). However, in an earlier transaction with GPA, Mr. Miller and GPA II had acquired a Right of First Offer ("ROFO") for the Mall. Similar in many ways to a right of first refusal, a ROFO affords the holder an opportunity to purchase property before it is sold to a third party. Thus, in order to acquire the Mall, Mr. Lanier had to contend with the ROFO, which GPA II owned.
B. The 1998 Letter Agreement and Its Aftermath
In April 1998, Mr. Miller and Mr. Lanier reached an oral agreement which was memorialized in a letter dated April 22, 1998 (the "1998 Letter Agreement"). Signed by both Mr. Miller and Mr. Lanier, the letter "confirm[ed]" the parties' agreement "concerning a joint venture to acquire and redevelop the Georgetown Park property." In this document, Mr. Miller reiterated his oral agreement with Mr. Lanier: "I would cooperate with you in exercising my voting rights with respect to the Right of First Offer in a manner that would facilitate your acquiring ownership of the Georgetown Park property, including by assigning . . . the Right of First Offer to you or as you direct."If Mr. Lanier acquired the Mall, whether or not by virtue of the ROFO, Mr. Miller, in return, "would be provided" a 7.5% "carried" interest*fn1 in "an entity formed for the single purpose of acquiring, redeveloping, owning and operating the property."
The 1998 Letter Agreement did not specify how the joint venture would be formed. Likewise, it did not fix a time for performance, or set a date when the agreement would expire. Beyond mentioning the option of assignment, the letter did not define precisely how Mr. Miller was to "cooperate" by exercising his voting rights in order to "facilitate" Mr. Lanier's acquisition of the Property.
EastBanc continued to develop the area surrounding the Mall, but it did not persuade GPA to sell the Mall itself.In mid-November 1998, Mr. Miller wrote toMr. Lanier to "reiterate my intention to try to work with you to acquire this property." Mr. Miller stated in this letter that he had had discussions with GPA, informing them that "I would be working with you in your efforts to acquire the property since we both share an interest in a positive future for Georgetown." Mr. Miller said that he had told GPA that he would "have an open mind" concerning whether GPA should buy back the ROFOor "sell the property to us." Miller also urged that "[o]ne way or another I would like to realize a value of the right of first offer in the near-term future."
EastBanc failed to acquire the Mall during the next two years and, starting in January 2001, Mr. Miller and Mr. Lanier considered modifying their approach. Mr. Miller proposed that he receive a cash payment instead of the 7.5% equity interest described in the 1998 Letter Agreement.The parties continued to negotiate along these lines throughout the spring and summer.
In July 2001, Mr. Miller, Mr. Lanier, and EastBanc signed a new agreement (the "2001 Agreement") that changed the method for compensating Mr. Miller. EastBanc agreed to pay Mr. Miller a $3 million waiver fee if it acquired the Mall by May 31, 2002 ("the Outside Closing Date").In exchange, Mr. Miller promised to exercise (or refrain from exercising) the ROFO to benefit EastBanc and Mr. Lanier, and "otherwise assist Lanier to facilitate the acquisition of the Property by Lanier, Eastbanc*fn2 or the Lanier Entity." The 2001 Agreement stated that it "modifie[d] only the benefit to which Miller will be entitled for fulfilling his obligations set forth in the  Letter Agreement and in this Agreement by substituting the Waiver Fee" for the previously promised equity interest. "The Parties agree[d] that the modification to the  Letter Agreement set forth in this Agreement will terminate as of the Outside Closing Date."
The 2001 Agreement memorialized serious disagreements about what would happen if EastBanc was not able to close on the Mall by May 31, 2002. "Miller maintain[ed] that the Letter Agreement has expired in accordance with its terms and is no longer of any force and effect." On the other hand, the "Lanier Parties maintain[ed] that the Letter Agreement remains in full force and effect and will remain in full force and effect after the Outside Closing Date."Apparently agreeing to disagree, the parties stated that they "do not desire by the terms of this Agreement to either extend or cut short the term of the Letter Agreement or prejudice in any manner the arguments of either party thereto."
Mr. Lanier considered some of these statements by Mr. Miller to be mere posturing to improve his leverage when negotiating for an amendment to the 1998 Letter Agreement.*fn3 Despite continued efforts to acquire the Property before May 31, 2002, EastBanc and GPA II were not able to do so, and the 2001 Agreement expired according to its terms.
Early in 2006, GPA decided to sell the Mall, and its broker sent a prospectus to potential buyers.EastBanc submitted an offer, but GPA rejected it, indicating that it had accepted another bid. At that point, EastBanc believed that the only way it could acquire the Property would be by calling upon GPA II to exercise its ROFO rights.
GPA II did not exercise its ROFO rights in favor of EastBanc, however. In a letter to Mr. Lanier dated March 1, 2006, Mr. Miller asserted that in 1998 and 2001, EastBanc and GPA II "discussed the possibility that GPA II would not exercise its ROFO in order to facilitate your making an offer to purchase [the Mall], but we did not reach a definitive agreement on terms." Mr. Miller advised that GPA II was "considering exercising the ROFO for [its] own account and benefit in order to purchase the Georgetown Park property." Mr. Miller concluded by asserting that "GPA II remains at liberty to exercise its ROFO rights for its own benefit."
EastBanc responded on March 17, 2006, asking for confirmation that GPA II would "honor its obligations to EastBanc" under the 1998 Letter Agreement and requesting that GPA II execute "an appropriate instrument" assigning its rights under the ROFO to EastBanc. GPA II did not do so by the date requested, and on March 23, 2006, EastBanc filed a complaint against GPA II and Mr. Miller, ...