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Dly-Adams Place, LLC v. Waste Management of Maryland

August 5, 2010

DLY-ADAMS PLACE, LLC, APPELLANT/CROSS-APPELLEE
v.
WASTE MANAGEMENT OF MARYLAND, INC., APPELLEE/CROSS-APPELLANT



Appeals from the Superior Court of the District of Columbia (07-CAB-5958) (Hon. Thomas J. Motley, Trial Judge).

The opinion of the court was delivered by: Kramer, Associate Judge

Argued April 6, 2010

Before REID and KRAMER, Associate Judges, and KING, Senior Judge.

DLY-Adams Place ("DLY") sued Waste Management of Maryland, Inc. ("WMI") to prevent WMI from driving its garbage trucks through an alleyway on DLY's property. On appeal, we are asked to interpret a restrictive covenant and a forbearance agreement that arose out of a real estate transaction in which DLY bought real property, including the alleyway, from WMI. The trial court held that WMI did not reserve a right to use the alleyway when it sold the property to DLY, but that the forbearance agreement precludes DLY from taking any action to prevent WMI's use of the alleyway. We find no error and affirm.

I. Factual Summary

WMI has operated a waste transfer station at 2160 Adams Place, Northeast since 1996. George Galich, the former general manager of DLY-Adams Place, owns property near WMI's facility and has objected to the operations of WMI since its facility opened. There is a history of litigation between the parties, as well as between WMI and other neighbors, including nuisance complaints regarding unwanted odors, vermin, rats, hazardous conditions, and heavy truck traffic in the neighborhood. In 1999, Galich and WMI reached a settlement, in which Galich agreed not to participate in any further action against WMI.

In 2005, Galich decided that he wanted to buy 2230 Adams Place, a property adjacent to the WMI facility. At the time, WMI leased 2230 Adams Place and retained an option to buy the property. WMI agreed to buy the property and sell it to Galich. In December 2005, DLY, as a contract assignee of Galich, purchased 2230 Adams Place from WMI. As part of the sale, DLY and WMI executed a purchase and sale agreement ("PSA"), a deed of conveyance, and a forbearance letter. Each document contained a restrictive covenant addressing WMI's concern that Galich and DLY would interfere in its business operations.

The covenant in the PSA provided:*fn1

Purchaser agrees and accepts that title to [2230 Adams Place] shall be conveyed to Purchaser by Seller subject to a restrictive covenant that runs with the land to the Property as described in the Deed, which restrictive covenant shall prohibit Purchaser from taking any direct or indirect action or inaction that would create, cause or otherwise result in any restriction on, or curtailment or cessation of Seller's business operations at its solid waste facility located at [2160 Adams Place] . . . .

In addition, the forbearance agreement, interpreted by the trial court as a covenant not to sue provided that:

[B]y this letter, you agree . . . that you shall not take any direct or indirect action that would create, cause or otherwise result in any restriction on, or a curtailment or cessation of [WMI's] operation of its solid waste facility at [2160], whether as currently operated or may be operated, for so long as [WMI] determines in its sole discretion to operate that solid waste facility on that property.

Since at least 1996, tractor trailer trucks have used the alleyway between WMI's building and DLY's building at 2230 Adams Place. DLY apparently did not realize that the alleyway was part of the 2230 Adams Place property at the time of the sale and the drafting of the transaction documents. But, about a year and a half after purchasing the building from WMI, DLY asked WMI to refrain from using the alley. WMI refused, and DLY brought this lawsuit for a declaratory judgment.

Both parties filed motions for summary judgment. After several hearings, Judge Thomas Motley entered an order granting in part and denying in part both motions. In essence, Judge Motley held that none of the transaction documents granted WMI an easement, or any other property right, to use the alleyway. Nonetheless, Judge Motley held that the forbearance agreement ...


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