Stender v. Archstone-Smith Operating Trust, 910 F.3d 1107

Background

Investors formed an umbrella partnership real estate investment trust (Archstone-Smith Operating Trust) issuing A-1 preferred units; Archstone-Smith Trust held a large majority of units and GP interest.
A proposed sale to Lehman/Tishman would merge a newly created entity into the operating trust; the merger would eliminate A-1 units, offering A-1 holders cash or shares in the new entity.
A-1 unitholders sued, alleging the declaration of trust did not permit the Archstone-Smith Trust to approve a merger that terminated A-1 units without a class vote.
The district court granted summary judgment to defendants, concluding the declaration unambiguously permitted such a merger; the A-1s appealed.
On de novo review applying Maryland law, the Tenth Circuit held key trust provisions (§§5.3(B), 9.2(B), 12.3, 12.4) allowed a merger-approved-by-majority that could terminate A-1 units without a separate A-1 class vote.
The court also affirmed summary judgment on fiduciary-duty claims: (1) no contractual breach occurred; (2) judicial estoppel barred A-1s from asserting expectations beyond the declaration; and (3) several other claims were forfeited or abandoned.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the declaration of trust permitted a merger that terminated A-1 units without an A-1 class vote	§5.3(A) and amendment provisions (Arts. 12.3–12.4) required amendment with an A-1 class vote before attributes could be changed	§§5.3(B) and 9.2(B) allow a ‘‘termination transaction’’ (including a merger) approved by a majority of outstanding units; merger conditions were met	Court: Merger provision unambiguously allowed termination without an A-1 class vote; defendants entitled to summary judgment on contract claim
Whether A-1s preserved their §5.3(A)-based argument	§5.3(A) limits trustee action and thus was raised	Defendants: A-1s forfeited that specific §5.3(A) argument because it was not fairly presented below	Held: A-1s forfeited the §5.3(A) argument on appeal
Whether defendants breached fiduciary duties by terminating A-1 units	Termination was oppressive/unfair and breached fiduciary duties beyond contract terms	Fiduciary duties are measured by contractual rights; no contractual breach; judicial estoppel prevents reliance on extra-contractual expectations	Held: No fiduciary breach; judicial estoppel applied to bar extra-contractual expectation theory; unfairness theory forfeited
Whether extrinsic evidence or post-merger amendments change interpretation	A-1s argued extrinsic facts and post-merger amendments show intent/requirements	Defendants: unambiguous text controls; amendments occurred after A-1 units were terminated so no class to vote	Held: Unambiguous trust language controls; post-merger amendments irrelevant; extrinsic evidence cannot alter unambiguous terms

Key Cases Cited

Reid v. Geico Gen. Ins. Co., 499 F.3d 1163 (10th Cir. 2007) (governs de novo review and summary-judgment posture)
Higby Crane Serv., LLC v. Nat. Helium, LLC, 751 F.3d 1157 (10th Cir. 2014) (summary judgment appropriate when contract language is unambiguous)
Elliott Assocs., L.P. v. Avatex Corp., 715 A.2d 843 (Del. 1998) (when charter grants only vote-on-amendment right, preferred holders lack a class vote in a merger)
Calomiris v. Woods, 727 A.2d 358 (Md. 1999) (extrinsic evidence cannot alter unambiguous contract language)
New Hampshire v. Maine, 532 U.S. 742 (2001) (judicial estoppel prevents parties from adopting positions inconsistent with those successfully asserted earlier)
Evanston Ins. Co. v. Law Office of Michael P. Medved, P.C., 890 F.3d 1195 (10th Cir. 2018) (issues not fairly presented below are forfeited on appeal)
Queen v. TA Operating, LLC, 734 F.3d 1081 (10th Cir. 2013) (standards for applying judicial estoppel on appeal)
Kramer v. Liberty Prop. Trust, 968 A.2d 120 (Md. 2009) (Maryland courts often look to Delaware corporate law for guidance)