CR-RSC Tower I, LLC v. RSC Tower I, LLC
32 A.3d 456
Md. Ct. Spec. App.2011Background
- CR-RSC Tower I, LLC et al. leased Montgomery County land for two 90-year ground leases to develop apartment towers; Canyon Ranch development modifications occurred but abandoned in 2006 with termination agreement.
- Appellees (RSC Tower I/II) sought to modify leases, obtain financing, and later claimed monetary damages plus costs due to breaches.
- Appellants refused to sign unconditional estoppel certificates drafted to satisfy financing requirements, causing financing difficulties.
- The 2006 action sought declaratory and injunctive relief and damages; a 2007 summary judgment found breaches and ordered performance while reserving monetary damages as potential relief.
- In 2008–2010, appellees amended/drafted new complaints seeking substantial damages, and a consolidated trial proceeded, yielding a jury verdict awarding damages; appellants appeal on multiple grounds including liability scope, evidentiary rulings, jury instructions, and attorneys’ fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Final judgment and preclusion | Appellants argue res judicata bars damages and that further relief was improper | Appellees contend express reservation allowed further relief and proceedings weren’t barred | Reservation barred res judicata; damages pursued as further relief in 2006 and 2009 |
| Sufficiency of evidence for lost profits | Appellees claim damages supported by expert projections and market analyses | Appellants argue lack of reasonable certainty and causation | Evidence sufficient to prove collateral lost profits with reasonable certainty and causation |
| Sufficiency of evidence for reliance damages | Appellees incurred post-breach expenses reasonably foreseeable and incurred in reliance on leases | Appellants contend some expenditures predated the leases and others were not tied to the ground leases | Reliance damages supported; expenditures tied to project and foreseeability established |
| Joint and several liability and uniform plan of development | Appellees contend covenants and intended cross-benefits justify joint liability | No intention to create third-party beneficiaries; uniform plan not established; should not be joint liable | No joint and several liability; remand to correct judgments; no enforcement under uniform plan doctrine |
| Evidentiary and jury instructions | Challenged expert testimony, admission of pre-2007 conduct, and privilege rulings | Court properly exercised discretion; instructions supported by law; privilege issues appropriately handled | Evidentiary rulings and jury instructions affirmed; some privilege issues addressed; new trial not required on this basis |
Key Cases Cited
- Hoang v. Hewitt Ave. Assocs., 177 Md.App. 562 (Md. Ct. App. 2007) ( collateral lost profits and reasonable certainty principles applied)
- M & R Contractors & Builders, Inc. v. Michael, 215 Md. 340 (Md. 1958) ( proximate causation and damages measured by existing market conditions)
- Bankers and Shippers Ins. Co. of New York v. Electro Enterprises, Inc., 287 Md. 641 (Md. 1980) ( declaratory judgments and further relief; law-of-the-case considerations)
- Nova Research, Inc. v. Penske Truck Leasing Co., 405 Md. 435 (Md. 2008) ( general principles of declaratory relief and res judicata)
- Macke Co. v. Pizza of Gaithersburg, Inc., 259 Md. 479 (Md. 1970) ( collateral profits and post-breach experience used to prove damages)
- Harrison v. State, 276 Md. 122 (Md. 1975) ( waiver considerations for attorney-client privilege)
- ST Sys. Corp. v. Maryland Nat’l Bank, 112 Md.App. 20 (Md. Ct. Spec. App. 1996) ( advice-of-counsel defense and privilege scope)