IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

SIMON-MILLS II, LLC, ARUNDEL 

MILLS MEZZANINE GP, L.L.C., 

GRAPEVINE MILLS OPERATING 

COMPANY, L.L.C., CONCORD 

MILLS MALL GP, L.L.C., KATY 

MILLS MALL GP, L.L.C., 

COLORADO RETAIL 

DEVELOPMENT COMPANY, L.L.C., 

and DENVER WEST DEVELOPMENT 

COMPANY, LLC, 

 Plaintiffs / Counterclaim 

 Defendants,

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v.

KAN AM USA XVI LIMITED 

PARTNERSHIP, KAN AM USA XII 

LIMITED PARTNERSHIP, KAN AM 

USA XIV LIMITED PARTNERSHIP, 

KAN AM USA XIX LIMITED 

PARTNERSHIP, KAN AM USA XVIII 

LIMITED PARTNERSHIP, KAN AM 

USA TIER II LIMITED 

PARTNERSHIP, KAN AM USA XV 

LIMITED PARTNERSHIP, KAN AM 

USA XX LIMITED PARTNERSHIP, 

and KAN AM USA XVII LIMITED 

PARTNERSHIP,

)

)

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)

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C.A. No. 8520-VCG

 Defendants / Counterclaim

 Plaintiffs.

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MEMORANDUM OPINION

Date Submitted: December 16, 2016

Date Decided: March 30, 2017
Donald J. Wolfe, Jr., Matthew E. Fischer, Timothy R. Dudderar, Berton W. Ashman, 

Jr., Matthew F. Davis, J. Matthew Belger, Jacqueline A. Rogers, Elizabeth H. Mellon, 

of POTTER ANDERSON & CORROON LLP, Wilmington, Delaware, Attorneys for

Plaintiffs. 

Jon E. Abramczyk, Matthew R. Clark, of MORRIS, NICHOLS, ARSHT & 

TUNNELL LLP, Wilmington, Delaware; OF COUNSEL: L. Joseph Loveland,

Letitia A. McDonald, Emily Shoemaker Newton, J. Andrew Pratt, of KING & 

SPALDING LLP, Atlanta, Georgia, Attorneys for Defendants.

GLASSCOCK, Vice Chancellor
1

This post-trial Memorandum Opinion involves interpretation of a series of 

contracts. The case presents a cautionary tale of strategic silence, or more charitably 

incomplete contractual terms, in structuring and negotiating complex economic 

relationships among sophisticated investors. This litigation arises from a series of 

Joint Venture Agreements (the “JV Agreements”), the parties to which include the 

Plaintiffs (collectively “Simon” or the “Simon Entities”) and the Defendants 

(collectively “KanAm” or the “KanAm Entities”). The JV Agreements permit 

Simon to purchase KanAm’s interests, at a time and for a price set out in the 

Agreements. The parties dispute the consideration that must be tendered in order 

for the Plaintiffs to exercise this call provision. The contract requires that 

consideration be paid in units of a specific partnership, Mills Partnership, but Mills 

Partnership, and its units (“Mills Units”), are defunct. The issue is whether the 

Plaintiffs’ inability to tender Mills Units gives the Defendants an effective veto 

power over the contractual call provision. That is, can the Defendants insist on 

receiving non-existent units under the contractual language, and thus frustrate

exercise of the call? Or, in the alternative, can the Plaintiffs pursuant to the contracts

and Delaware law effectively tender units similar to Mills Units, and thereby compel 

the Defendants to sell under terms to which it did not agree? 

The parties could have, but failed to, address this situation in the contractual 

language. My task, now, is to apply the contracts the parties did agree to, consistent 
2

with their intent as expressed in those contracts. The difficulty with this task is 

exacerbated in that the obligations seeking to be enforced under the JV Agreements 

arise out of several different contracts, negotiated at various times going back to the 

1990’s, with several different contractual parties involved. 

At first blush, this situation seems to call for an application of the implied 

covenant of good faith and fair dealing, which is inherent in every contact. The 

implied covenant is inapplicable here, however. Instead, it is my view, developed 

through the trial record, that the parties engaged in a strategic game of musical 

chairs, dancing around the contractual silence in the hope that the music would stop 

at a period of time advantageous to their own purposes. The music has stopped. 

I examined this matter on cross motions for summary judgment, and reached 

the conclusion in Simon I1that a full record was necessary to answer the questions 

presented here. The contractual language is clear; under the conditions here, the 

Plaintiffs had the right to call the Defendants’ interest in the joint ventures, but unless 

the Defendants chose to accept cash, the Plaintiffs could only complete the 

transactions by tendering contractually-compliant consideration, which here (with a 

single exception) meant Mills Units. Those units were unavailable to the Plaintiffs 

from the time it acquired the joint ventures. Thus, although the contract was not 

 

1

Simon-Mills II, LLC v. Kan Am USA XVI Ltd. P'ship, 2014 WL 4840443 (Del. Ch. Sept. 30, 

2014).
3

ambiguous, I required a record to examine whether the parties had a meeting of the 

minds that some other consideration could be tendered, or, conversely, as to whether 

the call right would be rendered nugatory. The parties have created such a plenary 

record.

The Plaintiffs seek relief on several grounds. First, they argue that a 

contractual agreement was reached, as demonstrated by the record, that units of the 

Plaintiffs’ entity (“Simon Units”) replaced Mills Units as tender. I read the record 

otherwise. The record makes it abundantly clear that both the Plaintiffs and the 

Defendants were aware that, once the Plaintiffs absorbed and dissolved the Mills 

Partnership, contractually-compliant Mills Units would become permanently 

unavailable. Rather than solve this issue by negotiation, however, both sides, for 

what must have been strategic reasons, elected to take their chances with the 

contracts as written rather than solve the obvious problem through negotiation. 

Having made that choice, the Plaintiffs are stuck with the contractual language, as it 

exists.

Next, the Plaintiffs argue that Simon Units are similar to Mills Units, and thus, 

in tendering Simon Units, they have not “materially breached” the contracts. But 

such an analysis itself is inapt. Under the contracts, the notice of exercise of the call 
4

right is conditioned on an ability to tender the appropriate consideration.2 Since the 

Plaintiffs are unable to do so, their notices are voidable under the contracts at issue, 

and KanAm has no obligation to perform. In other words, failure to tender Mills 

Units is not a “breach,” it simply renders the call ineffective. In any event, while the 

Simon Units have many characteristics identical to compliant Mills Units, they have 

differences as well. The extent of these differences, and the consequences thereof 

to the Defendants, should have been the subject of the negotiation that the parties 

eschewed.

Finally, as already briefly discussed, the Plaintiffs ask me to supply a term to 

the contract—substituting Simon Units for Mills Units—under the implied covenant 

of good faith and fair dealing. But the implied covenant exists to supply terms that 

were not anticipated and not considered by the parties, to avoid frustration of the 

intent of those parties. As I have stated, the parties were well aware of the issue, but 

declined to address it; the implied covenant is therefore inapplicable.

For all these reasons, the Plaintiffs’ request to enforce its call right is denied.

The Defendants, via counterclaim, seek damages. They note that the 

Plaintiffs, through attempting these calls, triggered contractual duties on the part of 

 

2

See, e.g., JX0152 § 11.6(e)(iv) (providing that “if at the time of Closing, either party fails to 

perform as required, then and in such event the non-breaching party shall have the right to void 

the Buy/Sell Notice attributable thereto or to pursue any rights at law or in equity (including 

without limitation, instituting a suit for specific performance)”) (emphasis added). 
5

the Defendants, which were expensive to comply with. They seek to recover these 

expenses, and allege that the unsuccessful call notices breached the parties’ 

agreements. In giving contractual notice of the exercise of the call, the Plaintiffs did 

not breach the Agreements. The Plaintiffs had the right to call, the Defendants had 

the right to elect cash or Mills Units. The Defendants elected units; the Plaintiffs are 

unable to tender, but this does not itself amount to a breach. 

I have found that the call rights in the JV Agreements require tender of Mills 

Units. One JV Agreement in particular tends to prove the rule. In the Orange City 

Mills Agreement (but no other JV Agreement), the parties defined “Mills” in such a 

way as to include its successor, Simon, and Simon Units are eligible to be 

contractually-compliant consideration. With respect to Orange City Mills, the 

Plaintiffs may have effectively called the Defendants’ interest. The Plaintiffs argue 

that this fact shows the parties must have intended their units to be acceptable tender 

in the other agreements as well; to me, in light of the fact that the parties to the 

Orange City Mills venture provided for Mills’ successor units to function as tender, 

the lack of such a provision in all other joint ventures demonstrates the opposite.

I note that construing the contracts as written does not work a forfeiture of a 

primary interest or destroy value here. The Plaintiffs cannot force the Defendants to 

sell their interests for appraised value, but they may negotiate for a sale, or proceed 

as they have as joint venturers.
6

My reasoning follows. 

I. FACTUAL BACKGROUND

The following are the facts as I find them following a seven-day trial spanning 

over nine hundred exhibits. Below I first describe the necessary background 

information underlying this dispute, including importantly the evolution of the 

parties’ relationship, before turning to my findings regarding what the extrinsic 

evidence at trial showed. 

A. The Parties and Relevant Non-parties3

The Plaintiffs (and Counterclaim Defendants), the Simon Entities, are a series 

of Delaware limited liability companies focused on retail shopping developments. 

They are Simon-Mills II, LLC, Arundel Mills Mezzanine GP, L.L.C., Grapevine 

Mills Operating Company, L.L.C., Concord Mills Mall GP, L.L.C., Katy Mills Mall 

GP, L.L.C., Colorado Retail Development Company, L.L.C., and Denver West 

Development Company, LLC. Each Plaintiff is wholly owned, either directly or 

indirectly, by Simon Property Group, L.P. (the “Simon Partnership”).4 The Simon 

Partnership “owns, develops, and manages retail real estate properties.”5 

The sole general partner of the Simon Partnership is a real estate investment 

trust (“REIT”), structured as an umbrella partnership real estate investment trust 

 

3 Unless the context requires a more specific designation, the Plaintiffs will be referred to as Simon, 

and the Defendants as KanAm. 

4 Pretrial Stip. 2, 6 (May 4, 2016). 

5

Id. at 6.
7

(“UPREIT”), the Simon Property Group, Inc. (“Simon Corp”).6 In addition to being 

the sole general partner of the Simon Partnership, all of Simon Corp’s “assets are 

owned, directly or indirectly, by its operating partnership, Simon Partnership.”7 

Simon Corp, however, owns a majority interest in Simon Partnership.8 Common 

stock of Simon Corp trades on the New York Stock Exchange (“NYSE”).9

The Defendants (and Counterclaim Plaintiffs), the KanAm Entities, are a 

series of nine “closed-end funds, structured as Delaware limited partnerships, with 

German investors as limited partners.”10 They are, Kan Am USA XVI Limited 

Partnership, Kan Am USA XII Limited Partnership, Kan Am USA XIV Limited 

Partnership, Kan Am USA XIX Limited Partnership, Kan Am USA XVIII Limited 

Partnership, Kan Am USA Tier II Limited Partnership, Kan Am USA XV Limited

Partnership, Kan Am USA XX Limited Partnership, and Kan Am USA XVII 

Limited Partnership.11 The Defendants are an investment vehicle for German 

investors to deploy capital in American-based retail-store development projects.12 

The KanAm Entities’ investments in America have been managed by James 

Braithwaite and Kent Hammond since the 1980’s.13 

 

6

Id. at 7.

7

Id. 

8

Id. 

9

Id.

10 Id. 

11 Id. at 2.

12 See Trial Tr. 845:6–846:8 (Braithwaite). 

13 See id. at 649:16–650:12 (Braithwaite); id. at 938:10–939:21 (Hammond). 
8

The parties have stipulated that Simon and KanAm hold interests in the 

following projects at issue here: Orange City Mills Mezzanine II Limited Partnership 

(“Orange City Mills”), Arundel Mills Mezzanine Limited Partnership (“Arundel 

Mills”), Grapevine Mills Limited Partnership (“Grapevine Mills”), Concord Mills 

Mall Limited Partnership (“Concord Mills”), Katy Mills Mall Limited Partnership 

(“Katy Mills”), Mills-Kan Am Colorado Limited Partnership (“Colorado Mills”), 

and Mills-Kan Am Denver West, L.P. (“Denver West”) (collectively the “JV 

Limited Partnerships”).14 All of the JV Limited Partnerships are “a limited 

partnership organized under the laws of the state of Delaware. Each of the JV 

Limited Partnerships is governed by a limited partnership agreement” (the “JV 

Agreements”).15

Non-party The Mills Limited Partnership (the “Mills Partnership”)16 and the 

Mills Corporation (“Mills Corp” and together with “Mills Partnership,” “Mills”) 

were also real estate investment vehicles.17 Mills Corp was a REIT “based in Chevy 

Chase, Maryland, which developed, owned, and managed retail real estate 

properties.”18 Mills Corp, like Simon Corp, was structured as an UPREIT.19 Mills 

 

14 Pretrial Stip. 9.

15 Id. 

16 Sometimes referred to in the original text of documents as “TMLP.”

17 Unless context requires a more specific designation Mills Partnership and Mills Corp will simply 

be referred to as “Mills.”

18 Pretrial Stip. 8.

19 Id. 
9

Partnership served as the operating partnership and “directly or indirectly owned all 

of Mills” Corp’s assets.20 Mills Corp served as the general partner to, and the 

majority owner of Mills Partnership.21 Mills Corp’s “stock formerly traded on the 

NYSE.”22 As discussed below, Mills was acquired and ultimately dissolved by a 

joint venture of Simon and an unrelated third-party in 2007. 

B. The Evolution of the Parties’ Relationship

1. Mills Corp’s IPO

In the mid-1980’s KanAm together with the Western Development 

Corporation (“Western”) started developing four “Mills” complexes (not at issue 

here) which were envisioned and marketed as a new shopping experience.23 This

shopping “experience” has been referred to as the “Mills Concept” which consisted 

of “race track” style retail spaces where pedestrians would come and shop “like 

walking down a street.”24 The Mills Concept shopping experience was styled to 

include a variety of price points for shoppers and a “larger entertainment component 

than you would typically find in a mall.”25 “Between 1983 and 1991, certain Kan 

 

20 Id. 

21 Id. 

22 Id. 

23 See Trial Tr. 839:7–839:22 (Braithwaite); JX0004 at 5, 8, 13 (advertising certain “Mills” as “The 

Next Generation of Retailing”). 

24 See Trial Tr. 842:20–843:20 (Braithwaite); id. at 844:1–844:10 (Braithwaite). 

25 See id. at 467:18–468:17 (Sokolov). 
10

Am limited partnerships provided [Western] with more than $210 million in equity 

to finance projects, including the first four ‘Mills’ shopping centers. . . .”26

The four “Mills Concept” properties that KanAm and Western developed 

were contributed to the Mills Partnership at the time of Mills Corp’s 1994 IPO.27 

KanAm held approximately 41% of the outstanding partnership units of the Mills 

Partnership at the time of the Mills Corp IPO.28 Mills Corp held a 51.3% interest in 

the Mills Partnership at the time of the IPO.29 Additionally, three principals of 

KanAm served as directors of Mills Corp from its inception through its financial 

problems in the mid-2000’s, and ultimate dissolution: James Braithwaite, Franz von 

Perfall, and Dietrich von Boetticher.30 Following the 1994 IPO, the Mills Corp 

Board and its shareholders approved a proposal in early 1995 that set out a 

framework whereby KanAm could contribute equity to certain projects going 

forward as joint ventures with Mills Corp (the “Shareholder Resolution”).31 Mills 

Corp Chairman and CEO, Herbert Miller, indicated that KanAm “was a likely party 

 

26 Pretrial Stip. 7. The four original “Mills” shopping centers, none of which are at issue in this 

litigation are Potomac Mills, Franklin Mills, Sawgrass Mills, and Gurnee Mills. See id. 

27 Trial Tr. 839:19–840:14 (Braithwaite); JX0004 at 8–9. See Pretrial Stip. 7–8 (“In 1994, Western 

Development and certain Kan Am limited partnerships jointly contributed the four Mills centers 

and other projects to The Mills Limited Partnership . . . in conjunction with the creation and 

formation of the Mills Corporation . . . , which went public in an IPO.”). 

28 JX0004 at 21. 

29 Id. 

30 Trial Tr. 854:6–16 (Braithwaite). 

31 See JX0011 at 10–11; Pretrial Stip. 9. 
11

to supply some of the required capital” due to the then “17-year relationship” 

between Mills Corp and its predecessors, and KanAm.32 

2. The Early JV Agreements 

The February 16, 1995 Shareholder Resolution of Mills Corp, discussed 

above, provided the “general terms” governing the future Joint Ventures (“JVs”) 

between Mills affiliates and KanAm.33 Among various other provisions,34 the 

“general terms” provided certain exit mechanisms including that each partner would 

have “a right of first refusal to purchase the other’s interest.”35 Importantly, the 

solicitation for the Shareholder Resolution provided the consideration for the put and 

call rights would include units of the Mills Partnership and stated that:

either partner will have the right to require the purchase by [Mills 

Partnership] of [KanAm’s] interest in the Partnership after the end of 

the fifth anniversary of the substantial completion of the Project . . . at 

a price to be determined by the amount [KanAm] would receive if the 

Project were sold at its appraised value. . . . The purchase price for 

[KanAm’s] interest may be paid for in any combination of cash or 

[Mills Units] as agreed to by the parties.36

The solicitation indicated that KanAm would “have significant consent rights . . . 

which could, in certain cases, prevent [the Mills Partnership] from selling a project 

when it wished or operating a project exactly as it desired . . . .”37 Mills Corp 

 

32 See JX0011 at 1–2.

33 Pretrial Stip. 9. 

34 Not discussed in detail here as they are less relevant to this litigation.

35 JX0011 at 12.

36 Id. (emphasis added). 

37 Id. at 13.
12

explained that the consents were acceptable because they were not greater than what 

similar investors would require, that the parties’ interests were “generally” aligned, 

and that if the consent rights became a problem, KanAm could be bought out for 

“appraised value once the project is mature.”38

The consideration required for the put/call of KanAm’s interest was to “be 

paid for in any combination of cash or [Mills Units] as agreed to by the parties.”39 

Mills Corp was structured as an UPREIT, and the limited partnership units of the 

operating partnership, Mills Partnership, were redeemable and could be converted 

into publicly traded stock of Mills Corp.40 This consideration structure had benefits 

in addition to liquidity; it would permit KanAm to secure non-recognition tax 

treatment pursuant to Internal Revenue Code Section 721.41

In September 1995, KanAm and Mills signed a JV Agreement for Ontario 

Mills (not at issue here).42 Prior to execution of that JV Agreement, Simon and Mills 

executed an agreement on August 16, 1995, providing the “principal terms and 

conditions” for “proposed joint venture” arrangements regarding certain future 

projects.43 This marked the beginning of Simon’s involvement in Mills projects. 

KanAm and Mills added Simon as a partner to the Ontario Mills JV in December 

 

38 Id.

39 Id. at 12 (emphasis added).

40 See Trial Tr. 15:8–17:12 (Simon). 

41 See, e.g., id. at 941:3–9 (Hammond).

42 See JX0017. 

43 See JX0014 at 1; Pretrial Stip. 9.
13

1995 following the execution of the original agreement between Mills and KanAm.44 

This was the first JV including Simon, Mills, and KanAm.45 

The September 1995 Ontario Mills agreement between Mills and KanAm 

provided a buy/sell provision consistent with the February 1995 Mills’ Shareholder 

Resolution. Section 11.3 of the Ontario Mills JV Agreement, titled “Buy/Sell 

Arrangements of KanAm Partnership Interests” provided that after the project has

been open for five years,46 Mills or KanAm could trigger the buy/sell provisions.47 

If Mills exercised the call, KanAm “shall be paid in full in units of limited 

partnership in [the Mills Partnership] unless KanAm elects to receive cash.”48 If 

KanAm exercised its put the consideration was to be paid in cash, unless Mills 

elected to pay in Mills Units.49 Further, the original agreement provided that if 

KanAm were to receive Mills Units, those units “shall have the same rights 

(including redemption, conversion, registration and anti-dilution protection) as 

attached to Units issued in connection with the formation transactions of [the Mills 

Partnership].”50 Among other things, this provides that the units would be liquid and 

convey tax benefits. 

 

44 See JX0025. 

45 See Trial Tr. 163:23–164:3 (Barkley). 

46 JX0017 § 11.3(a). 

47 Id. at §§ 11.3(b), 11.3(c). 

48 Id. at § 11.3(d) (emphasis added).

49 Id.

50 Id. at § 11.3(f).
14

The Ontario Mills agreement was amended on December 29, 1995, to add 

Simon as a partner.51 Upon Simon joining Ontario Mills, the ownership break down 

was as follows: 50% by Mills, 25% by Simon, and 25% by KanAm.52 The 

amendment changed the buy/sell provision’s consideration clause to provide that if 

Mills exercised the call, “unless KanAm[] elects to receive cash, the Buy/Sell Price 

shall be paid in full as follow: two-thirds (2/3) in units of limited partnership in [the 

Mills Partnership] and one-third (1/3) in units of limited partnership in Simon.”53 

The amendment added a provision to protect KanAm regarding Simon Units, similar 

to that regarding Mills Units in the original agreement. Any Simon Units tendered 

to KanAm were required to have “the same rights” as units issued in connection with 

the formation of Simon.54 Additionally, the provision governing the buy/sell 

requirements was amended to add that any such exchange of units was “intended to 

be a tax-free transaction” under Section 721.55

From the late 1990’s to early 2000’s Simon reviewed each investment 

opportunity and elected not to participate in the development of three of the other 

projects at issue in this litigation: Katy Mills, Colorado Mills, and Orange City 

Mills.56 That is, Mills and certain KanAm parties formed Orange City Mills in 1996, 

 

51 See JX0025. 

52 See Trial Tr. 374:3–19 (Foxworthy). 

53 JX0025 § 11.3(d).

54 Id. at § 11.3(f).

55 Id. at § 11.3(d).

56 See JX0041; JX0050; JX0089. 
15

Katy Mills in 1998, and Colorado Mills in 2001.57 Simon eschewed initial 

investment; as discussed below, Simon’s interests in these three projects arose later, 

in 2007, as a result of its acquisition of Mills. The buy/sell provisions of these 

projects—Orange City Mills, Katy Mills, and Colorado Mills—never referenced 

Simon Units. 

Simon did, however, together with Mills and KanAm, participate in three 

other JVs at issue here from their inception: Grapevine Mills, Concord Mills, and 

Arundel Mills.58 Each of these projects consisted of two separate agreements; first, 

an LLC agreement between the Mills Partnership and the Simon Partnership 

governing their relationship (a “Simon-Mills LLC”),59 and second, a JV Agreement 

where a Simon-Mills LLC was the managing general partner, and the applicable 

KanAm party was a general and limited partner, while the Mills Partnership and the 

Simon Partnership were also limited partners.60 

Generally, the JV Agreements in Concord Mills, Grapevine Mills, and 

Arundel Mills tracked the amended JV Agreement for Ontario Mills providing 

KanAm call-right consideration in both Simon and Mills Units.61 There were, 

however, certain differences regarding the buy/sell provisions. Specifically, the 

 

57 Pretrial Stip. 10. 

58 See JX0027; JX0058; JX0071. 

59 See, e.g., JX0082; JX0063. 

60 See JX0027; JX0058; JX0071. 

61 See, e.g., Trial Tr. 680:5–11 (Braithwaite); id. at 942:24–943:7 (Hammond).
16

three later agreements provided a ten-year lock-out period instead of the five-year 

period provided for in Ontario Mills.62 Additionally, the buy/sell consideration 

provisions were somewhat different from that in Ontario Mills. First, rather than the 

specified two-thirds, one-third unit consideration set out in the Ontario Mills JV, the 

new agreements provided that unit consideration would be paid “ratably in 

proportion to the ownership interests” based on Simon and the Mills Partnership’s 

respective ownership interest.63 Consideration paid in Units remained the default in 

the event of a call, but KanAm continued to have the option to elect to be paid in 

cash.64 Additionally, KanAm contracted for the right to receive consideration 

partially in cash, and partially in units.65 Thus, implicitly, at the time these deals 

were struck, in case Mills was bought out by Simon, and then Simon called the 

KanAm interest, KanAm had bargained to accept, in that case, only Simon Units as 

non-cash consideration.

If the buy/sell consideration for KanAm’s interest in Concord, Arundel or 

Grapevine Mills was to be paid in units, those Simon Units and Mills Units were 

required to meet specific requirements.66 As with the agreement governing Ontario 

 

62 JX0027 § 11.3(a); JX0058 § 11.3(a); JX0074 § 11.3(a).

63 JX0027 § 11.3(d); JX0058 § 11.3(d); JX0074 § 11.3(d). I note there is evidence in the record 

that the parties had at one time planned to amend the Ontario Mills JV to change the fixed 

percentage provision to a proportional buy/sell consideration like those in Concord, Grapevine and 

Arundel Mills. See JX0024 at 3. 

64 See JX0027 § 11.3(d); JX0058 § 11.3(d); JX0074 § 11.3(d).

65 See id.

66 JX0027 § 11.3(f); JX0058 § 11.3(f); JX0074 § 11.3(f).
17

Mills, Mills Units were required to have “substantially the same rights (including 

redemption, conversion, registration and anti-dilution protection) as” units issued by 

the Mills Partnership at its initial formation.67 Simon Units had to meet a similar 

requirement but had the additional condition that “[i]f there exists more than one 

class of Simon Units, then any Simon Units received by [KanAm] pursuant to this 

Section 11.3 shall have the most favorable rights (including redemption, conversion, 

registration and anti-dilution protection) as are attached, as of the date of this 

Agreement, to the various classes of Simon Units issued to other limited partners of 

Simon . . . .”68 I note that the JV Agreements were later amended to allow KanAm 

to accelerate its put rights, that is, exercise them prior to the ten-year lockout, in the 

event of a change-in-control transaction involving Mills.69 A similar change for the 

call right was made in the Grapevine Mills agreement, but not in the agreements 

covering the other JVs.70

Simon points to prospectuses KanAm disseminated during this time period to 

German investors from whom KanAm sought to raise capital for each of these JVs.71 

Those prospectuses do not disclose any particular distinction between Mills Units 

 

67 See, e.g., JX0027 § 11.3(f).

68 See, e.g., id. (emphasis added). 

69 Compare JX0071 §§ 1.13, 11.3(a) with JX0058 § 11.3(a). See Trial Tr. 873:6–874:8 

(Braithwaite).

70 See JX0109.

71 See Simon’s Post-Trial Opening Br. 17 (citing JX0031; JX0037; JX0060; JX0070). 
18

and Simon Units, such as tax risks.72 Additionally, two prospectuses in the record 

make no mention of the currency to be used in the buy/sell transactions,73 and the 

two that do mention the buy/sell currency do not mention Simon Units.74

3. The 2002 “Shotgun” Exit

By 2002, disputes arose between Simon and Mills regarding the management 

of their JVs.75 The applicable LLC Agreements that governed Mills’ and Simon’s 

relationship in Ontario, Grapevine, Concord, and Arundel Mills contained a 

“shotgun” buy/sell mechanism which could be invoked to cure deadlocks.76 

Pursuant to the shotgun buy/sell provision, the party that triggered the shotgun was 

required to make an offer to the counterparty—the counterparty then either had a 

choice to buy at that price or sell at that price.77 Simon triggered the shotgun buy/sell 

provision, and Mills ultimately elected to purchase Simon’s interests.78 

However, before Mills bought Simon’s interest, Braithwaite of KanAm wrote 

a letter to Simon’s CEO, David Simon, on March 4, 2002 inquiring about the Ontario 

Mills buy/sell provision in Section 11.3 of the JV Agreement.79 Specifically, 

Braithwaite indicated KanAm “would be interested in discussing with [Simon] how 

 

72 See JX0031; JX0037; JX0060; JX0070. See also Trial Tr. 726:22–727:13 (Braithwaite).

73 See JX0031; JX0037. 

74 See JX0060 at 32; JX0070 at 44. 

75 Trial Tr. 386:1–387:11 (Foxworthy). 

76 See id.

77 See id. at 387:12–388:11 (Foxworthy).

78 See id. at 17:20–18:22 (Simon).

79 See JX0099 at 2. 
19

Section 11.3 of the Ontario Mills Agreement might be implemented if there has been 

a buy/sell between Mills and Simon of your interests in Ontario Mills, L.L.C.”80 

David Simon responded via letter on March 5, 2002, stating that following the 

removal of either Simon or Mills, KanAm’s rights under the Ontario Mills 

agreement would be to receive the appropriate units “of whichever of Mills or Simon 

[remained] your partner.”81 There was no direct objection by Braithwaite or KanAm 

to Simon’s explanation of what Section 11.3 would mean following the shotgun 

buy/sell.82 Braithwaite testified that even though he disagreed with Mr. Simon’s 

position in the letter at the time, he did not respond.83 According to Braithwaite, 

there was “no point” in taking issue with Simon’s statement because he ‘knew’ that 

Simon would be bought out.84 The record tends to support Braithwaite’s position 

that the response was unnecessary, as the general consensus at the time was that 

Mills would buy out Simon.85

 

80 Id.

81 JX0100 at 1. 

82 See Trial Tr. 23:20–24:13 (Simon).

83 See id. at 732:22–737:13 (Braithwaite).

84 See id.

85 See, e.g., id. at 389:4–23 (Foxworthy) (testifying that while Simon was willing to buy, and that 

it was possible they might have to be the buyer, “[w]e expected—I would have to say we expected 

to be the seller because for them to have lost the four assets that we were dealing with would have 

been a terrible infringement of their franchise”); JX0101 (indicating in a March 7, 2002, internal 

Mills Memorandum, which Braithwaite received, that Mills would continue negotiating in 

pursuing the acquisition and that the “benefits of such a transaction are numerous”). 
20

On April 29, 2002, affiliates of Simon executed an agreement to sell their 

interests in Ontario, Grapevine, Concord, and Arundel Mills to affiliates of Mills.86 

Shortly thereafter in 2002, certain KanAm entities acquired part of Simon’s former 

interests in Ontario, Grapevine, Concord, and Arundel Mills from Mills following 

its successful purchase of Simon’s interests.87 

Following Simon’s exit from the four JVs, Mills and KanAm amended the 

governing documents, to remove references to Simon.88 On May 31, 2002, the 

operative Ontario Mills JV agreement, a project not at issue here, was amended to 

delete references to Simon.89 Also on May 31, 2002, the Grapevine Mills JV 

Agreement was amended to delete references to Simon.90 On November 22, 2002, 

KanAm and Mills entered a new partnership agreement for Concord Mills.91 In the 

resulting agreement for Concord Mills, Section 11.3’s buy/sell provision only 

references Mills Units, and provides that they are the default consideration if Mills 

exercised its call right, unless KanAm elected to receive cash or a mix of cash and 

units.92 Additionally, the Arundel Mills JV underwent similar changes. On May 31, 

2002, the JV Agreement was amended to remove references to Simon.93 A new 

 

86 JX0104; Pretrial Stip. 10. 

87 Pretrial Stip. 10. See JX0111. 

88 See, e.g., JX0111 § 9(f). 

89 See JX0108 §§ 2(e), 10.

90 See JX0109 §§ 2(e), 13.

91 See JX0120. 

92 Compare JX0120 §§ 11.3(d), 11.3(f) with JX0058 §§ 11.3(d), 11.3(f). 

93 See JX0106 §§ 2(e), 15.
21

partnership document was executed for Arundel Mills on August 4, 2004, and like 

the new partnership agreement in Concord Mills, provided that Mills Units were the 

default buy/sell consideration, and contained no reference to Simon Units.94 Thus, 

either through deletion of references to Simon, or via new partnership agreements 

which do not provide for Simon Units, the default consideration for the buy/sell

provisions under each JV was modified to provide that consideration be paid in Mills 

Units meeting certain specifications. While Simon admits Mills and KanAm acted 

to delete references to it from the JV Agreements from which it exited, Simon argues 

the amendments were “ministerial.”95 As described below, Simon eschewed such 

amendments, ministerial or otherwise, when it acquired Mills’ interests a few years 

later. 

From 2003 to 2004 certain KanAm entities “distributed approximately 11 

million Mills Units to German investors in the respective KanAm limited 

partnerships.”96 These distributions presented certain logistical challenges, such as 

the language barrier between German-speaking investors and Mills as well as 

redemption and tax compliance challenges.

97

 In an attempt to streamline the 

administrative issues,98 KanAm and the Mills Partnership executed a services 

 

94 See JX0152 §§ 11.6(d), 11.6(f). 

95 Simon’s Post-Trial Opening Br. 20. 

96 Pretrial Stip. 10. 

97 See, e.g., Trial Tr. 1004:22–1007:15 (Hammond). 

98 See id. 
22

agreement on December 1, 2004.99 Under the services agreement KanAm provided 

certain administrative functions such as managing cash distributions, redemptions, 

and tax withholdings on behalf of investors, in exchange for a nominal fee.100 

Additionally, KanAm orchestrated a multi-step process that effectively allowed 

German investors to redeem Mills Units for Mills stock, a taxable event, and 

streamlined a rather winding process in order to meet all the regulatory and tax 

burdens.101 The redemption process alone required that over nineteen steps be taken 

on behalf of the investor.102 KanAm did not have a similar services agreement with 

Simon during Simon’s participation in the JVs. 

4. Mills Faces Trouble

While KanAm originally held 41.1% ownership in the Mills Partnership at the 

time of the 1994 IPO of Mills Corp, by March 2004 KanAm’s ownership had 

dropped to 2.17%.103 In February 2005, Mills Corp disclosed it would “would restate 

financial results for 2002 through 2004 to correct accounting errors primarily 

relating to its treatment of equity in earnings from joint ventures, the capitalization 

of interest and certain other costs, and the timing of gains on sales of partnership 

interests.”104 Following the February 2005 disclosure, Mills Corp announced in 

 

99 JX0171. 

100 See id. at §§ 2, 5.

101 See Trial Tr. 1009:13–1013:3 (Hammond).

102 See id.; JX0162. 

103 Pretrial Stip. 10. 

104 Id.
23

January 2006 that additional accounting problems were uncovered, and that it would 

restate its financial results from 2000 through 2004.105 By March 2006, the SEC 

informed Mills Corp “that it had commenced a formal investigation.”106

Due to these accounting issues, Mills Corp “never filed its 2005 annual report 

on Form 10-K or any subsequent annual report, and it never filed a quarterly report 

after its Form 10-Q for the third quarter of 2005.”107 The failure to file required SEC 

reports had the additional consequences of preventing Mills Corp from registering 

its common stock, and preventing holders of Mills Partnership Units from seeking 

conversion of their units into Mills Corp stock.108 This development was disclosed 

to certain KanAm investors by April 2006.109 Thus, because the units could not 

convert during this period if the buy/sell provisions were triggered, Mills would not 

have been able to provide Mills Units that were convertible into publicly-traded 

stock, a necessary quality of units to exercise the call. In other words, contractuallycompliant Mills Units were unavailable for exercise of any call right.

By August 2006, Mills Corp “announced that the accounting errors were 

expected to reduce stockholders’ equity . . . by $296 million and reduce . . . net 

income for 2003, 2004, and the first three quarters of 2005 by $210 million.”110 The 

 

105 Id. at 11. 

106 Id. 

107 Id.

108 See Trial Tr. 765:16–766:8 (Braithwaite).

109 See JX0220 at 4. 

110 Pretrial Stip. 11.
24

price of Mills Corp stock declined significantly,111 almost 75% from February 2005 

to January 2007.112 During this time period it was unclear whether Mills Corp could 

continue operating as a going concern.113 Also in August 2006, Mills Corp 

“announced that its auditor believed that there was ‘substantial doubt’ that Mills 

Corp could stay in business because of looming deadlines for repayment of 

approximately $2 billion in debt.”114

5. Mills Markets Itself 

Due to the accounting scandal and the financial difficulty it was facing, Mills 

announced in February 2006, “that its board had decided to explore strategic 

alternatives and had retained financial and legal advisors to assist in that process.”115 

Mills would sell either the entire company or carve out portions of its assets.116 In 

the interim, before any sale occurred, Mills secured a “rescue loan of about $2 

billion” from Goldman Sachs, which Mills would likely not have the ability to 

repay.117 In addition to obtaining the rescue loan, Mills continued to consider its 

strategic options.118 Mills ultimately divested several “problem” assets including the 

 

111 See Trial Tr. 764:14–765:3 (Braithwaite).

112 JX0615 ¶ 49. See id. at Ex. 7. 

113 Pretrial Stip. 11. See JX0237. 

114 Pretrial Stip. 11.

115 Id.

116 See, e.g., Trial Tr. 602:5–603:1 (Ordan) (testifying that from Mills’ perspective, the “goal of 

the [strategic] process was to sell the company, either to one buyer or to multiple buyers”).

117 Id. at 593:19–594:18 (Ordan).

118 See, e.g., JX0256. 
25

Meadowlands Project in New Jersey, its international properties, and certain other 

investments.119 

KanAm was involved in the sales process of Mills via its directors on the Mills 

Board along with the advisors KanAm retained. KanAm retained its own financial 

advisor, and also considered selling its interests in the JVs.120 KanAm’s advisors 

spoke directly with certain potential purchasers, including Simon.121 Ultimately, the 

three KanAm representatives on the Mills Corp board, Messrs. Braithwaite, von 

Boetticher, and von Perfall, were asked to recuse themselves from the Mills sales 

process due to alleged conflicts of interest.122 The KanAm representatives resisted 

the request.123 KanAm’s representatives on Mills’ board did step out of the room

when they believed it appropriate, and abstained from voting on the ultimate 

transaction, however they remained involved in the strategic process.124

Early in the sales process, in April 2006, Mills Corp, together with Goldman 

Sachs and J.P. Morgan, assembled a “Descriptive Memorandum” which was 

transmitted to “a limited number of parties who have expressed an interest in 

submitting proposals” to enter a deal with Mills Corp.125 Simon received the 

 

119 See Trial Tr. 436:14–437:1 (Sokolov). 

120 See id. at 767:12–768:3 (Braithwaite).

121 See id. at 894:11–896:2 (Braithwaite).

122 JX0222 at 3. 

123 See JX0226. See also Trial Tr. 590:7–592:15 (Ordan).

124 See Trial Tr. 615:4–17 (Ordan).

125 See JX0293 at 1, 3. 
26

Descriptive Memorandum, and it was circulated by certain Simon employees, 

including senior legal officers.126 Under the heading “KanAm joint venture key 

terms and rights summary,” the Memorandum described that the “Put-call rights 

enable . . . Mills to require KanAm to sell its interests to Mills for cash or partnership 

units of Mills LP, the choice of consideration to be made in KanAm’s sole discretion 

. . . .”

127

Along with other potential buyers, Mills entered discussions with Brookfield 

Asset Management Inc. (“Brookfield”) regarding a potential purchase.128 This 

discussion led to an (ultimately-unconsummated) merger agreement. “Brookfield 

was not a publicly traded REIT.”129 Because of its entity structure, Brookfield 

clearly did not have partnership units which would be convertible into publicly 

tradable stock. Brookfield recognized the specified currency in the buy/sell 

provisions would not work.130 Braithwaite, on behalf of KanAm, agreed with 

Brookfield to negotiate in good faith the means to effectuate the put-call currency 

were Brookfield to acquire Mills.131 Even though Braithwaite was on Mills Corp’s 

Board, the agreement to further negotiate that he reached with Brookfield on behalf 

 

126 See id.

127 Id. at 88. 

128 Pretrial Stip. 12.

129 Id. 

130 See Trial Tr. at 776:7–18 (Braithwaite). I note that Mr. Braithwaite also testified that they “had 

been questioned by a number of other potential buyers about the subject.” Id. at 782:9–23 

(Braithwaite).

131 Id. at 773:18–776:18 (Braithwaite).
27

of KanAm was never disclosed to Mills Corp.132 This is in spite of the fact that Mills 

and Brookfield had executed a merger agreement.133 Simon also negotiated to 

acquire, and ultimately, as described below, did (with a partner) acquire, Mills. 

Despite this issue of consideration of call right currency having been the subject of 

a discussion between Braithwaite and Brookfield, it was not raised by Braithwaite 

in his discussions with Simon, allegedly because “Simon chose to have very limited 

discussions with [KanAm] before the merger.”134 There are no contemporaneous 

documents from this 2007 sales period by KanAm evincing a specific concern about 

receiving Simon Units. 

Mills Corp’s outside counsel, Willkie Farr & Gallagher, recognized that the 

unavailability of Mills Units could present a challenge for future acquirers trying to 

exercise a call of KanAm’s interest.135 Mills Corp’s outside counsel indicated, in a 

memorandum to Mills, that “[o]f note, the joint venture agreements strictly call for 

the OP Units to be those of [the Mills Partnership], and do not contain language 

authorizing the use of similar OP-type securities in the event [the Mills Partnership] 

no longer issues Units or ceases to exist as the result of a Mills corporate 

restructuring or corporate-level transaction.”136 Mills Corp’s outside counsel

 

132 Id. at 777:13–778:23 (Braithwaite).

133 See id. 

134 Id. at 778:6–780:20 (Braithwaite).

135 JX0193 at 2; JX0241 at 3–4.

136 JX0241 at 4 (emphasis added).
28

recognized the risk that KanAm may insist that it must receive the Mills Units it 

bargained for, and thus the call right would be frustrated.137 Mills’ counsel presented 

alternatives to deal with this situation. One was to make Mills’ successors agree that 

they may not exercise the call due to the unavailability of Mills Units, “however,

deletion of this ability to buy-out KanAm presumably will be unattractive to 

potential buyers and will negatively impact pricing for Mills’ interests.”138

Similarly, Simon’s general counsel testified that its due diligence process 

recognized that Mills and KanAm had deleted references to Simon from the JV 

Agreements, and had included that the only non-cash consideration for the call was 

Mills Units.139 Both the internal legal team at Simon, and its outside counsel were 

aware that the specified (default) consideration was Mills Units, but the general 

counsel testified that they were not concerned because KanAm had accepted call 

provisions which included Simon Units in the past.140 Simon’s general counsel 

directly discussed the issue with Mr. Simon during due diligence, but Simon decided 

not to raise and discuss the issue with KanAm at the time.141

 

137 Id. See JX0192 at 2. 

138 JX0241 at 4.

139 Trial Tr. 291:7–292:18 (Barkley).

140 Id. at 292:16–293:7 (Barkley); id. at 302:22–306:17 (Barkley) (testifying that “we weren't 

concerned so much about the legal point because we knew KanAm had accepted a call provision 

with our units in the past. Our units had not changed.”).

141 Id. at 311:16–312:14 (Barkley). 
29

6. Simon-Farallon Joint Venture Buys Mills

Mills received several offers from potential acquirers. On January 15, 2007, 

Farallon Capital Management (“Farallon”), who like Brookfield was not a publicly 

traded REIT, submitted a proposal for a recapitalization transaction whereby 

Farallon would buy $499 million in additional Mills Corp shares at $20.00 per 

share.142 At the time, Farallon owned 10.9% of Mills Corp’s outstanding shares.143 

Shortly thereafter, on January 17, 2007, Mills Corp announced that a merger 

agreement with Brookfield had been reached “pursuant to which Brookfield would 

acquire Mills Corp. and the Mills Partnership for cash at a price of $21.00 per 

share.”144 A joint venture of Simon Corp and Farallon then submitted an unsolicited 

topping proposal to acquire Mills Corp for $24.00 cash per share.145 Brookfield 

countered, but Simon/Farallon ultimately submitted a successful bid of $25.25 per 

share.146 

SPG-FCM Ventures LLC (the “Simon-Farallon JV”), a 50/50 joint venture 

between a Simon Corp subsidiary and certain Farallon funds, executed a merger 

agreement with Mills Corp on February 16, 2007.147 A subsidiary of the SimonFarallon JV merged into the Mills Partnership, with the Mills Partnership being the 

 

142 Pretrial Stip. 12.

143 Id. 

144 Id. at 13.

145 Id. 

146 Id. 

147 Id. at 13–14. 
30

surviving entity and the Simon-Farallon JV indirectly owning the Mills 

Partnership.148 Mills did not merge into Simon, but, due to the structure of the 

transaction, following the merger Mills Units convertible into common publicly 

tradable stock—that is, Mills Units suitable as consideration for a call on KanAm—

remained unavailable, as they had been since trading was suspended on Mills Corp’s

stock.149 The transaction closed on April 3, 2007.150 I note that pursuant to the 

merger agreement, “180 German KanAm investors holding approximately 3.4 

million Mills Units were eligible to exchange their Mills Units for either cash or 

Simon Units” in this transaction.151 Of these, however, only “[f]ive investors 

holding approximately 53,000 Mills Units, which represented approximately 1.6 

percent of the 3.4 million eligible units, chose to convert to Simon Units.”152 Mills 

Corp was later dissolved in August 2007.153 The Mills Corp liquidation had been 

provided for in the merger deal structure,154 and Mills Partnership Units convertible 

into Mill Corp common stock were permanently unavailable, thereafter. 

At the time of the transaction with the Simon-Farallon JV, KanAm executives, 

including Braithwaite, did not voice a concern about the transaction with Simon.155 

 

148 Id. at 14.

149 See, e.g., Trial Tr. 832:11–18 (Braithwaite).

150 Pretrial Stip. 14–15.

151 Id. at 14.

152 Id. 

153 Id. at 14–15.

154 See JX0275.

155 Trial Tr. 781:7–23 (Braithwaite); id. at 973:15–19 (Hammond). 
31

Similarly, prior to the Simon-Farallon JV transaction, KanAm insiders, such as Mr. 

Hammond, were not able to identify any instance of KanAm suggesting to Simon or 

Farallon the need to amend the buy/sell consideration provisions in the JV 

Agreements.156 KanAm did not notify Mills’ CEO, Mark Ordan, either; Ordan does 

not specifically recall the buy/sell consideration being raised by KanAm, but 

testified that if it were raised he “would have alerted [Mills’] attorneys” and taken it 

“very seriously” and would have “absolutely” disclosed such information to the 

SEC.157 However, as described above, Simon along with its outside counsel, was 

already aware of the consideration issue. They independently identified the issue 

and raised it to Mr. Simon. Simon decided not to raise or discuss it with KanAm, 

however.158 This is despite the fact that the Simon-Farallon JV Agreement went as 

far as to address the situation in which either Simon or Farallon sought to exercise 

call rights in a project against the wishes of the other.159 

KanAm represented to investors during this time that as a result of the Mills 

sale “[n]othing has changed either for the economic or the legal situation” of the 

KanAm funds.160 KanAm representatives, including Braithwaite, met with Simon 

to confirm that each side would honor the obligations under the contracts and “live 

 

156 Id. at 974:6–14 (Hammond). 

157 See id. at 611:20–614:22 (Ordan).

158 Id. at 311:23–312:14 (Barkley).

159 See JX0297 §§ 5.12, 1.6. 

160 JX0311 at 2. 
32

by the contracts.”161 According to Mr. Simon, the Simon-Farallon JV at the time 

believed that despite the language of the contracts, the call right continued to be 

viable.162 Braithwaite, for his part, testified that KanAm chose not to inform Simon 

of its understanding that the call right was subject to KanAm’s discretion to elect 

Mills Units, because the lockout periods had not run, and thus the discussion was 

not yet “ripe.”163

Between Simon’s exit in 2002 until the Simon-Farallon JV’s acquisition of 

Mills in 2007 the Simon Entities were not involved in the joint ventures subject to 

the present dispute. The 2007 acquisition, however, caused the Simon-Farallon JV 

to become counter-parties to KanAm in three of the original JVs which the Simon 

Entities had invested in with KanAm, and then exited: Grapevine, Concord and 

Arundel Mills. Additionally, with the acquisition of Mills, the Simon-Farallon JV 

became parties to JVs in which Simon had never before had an interest, that is, those 

developed by Mills and KanAm without Simon’s involvement, but acquired by the 

Simon-Farallon JV as a result of the sale of Mills. Those projects, at issue here, are 

Orange City, Katy, and Colorado Mills. The buy/sell consideration provisions were 

not renegotiated even though Mills Units meeting the specifications set out in the JV 

Agreements were no longer available, as all parties were aware. Similarly, the JV 

 

161 See Trial Tr. 795:10–23 (Braithwaite). 

162 See id. at 36:22–38:20 (Simon).

163 Id. at 792:9–793:4 (Braithwaite).
33

Agreements were not updated to reflect, in any way, the unavailability of Mills 

Units.

7. Denver West

In October 2007 the Simon-Farallon JV, following its acquisition of Mills, 

and a KanAm entity entered into a new JV known as Denver West.164 Denver West, 

like the other projects at issue in this litigation, was a retail development project. It 

was located adjacent to a property covered by a separate JV Agreement at issue here, 

Colorado Mills. Denver West was the only JV entered between KanAm and Simon 

following the Simon-Farallon JV’s acquisition of Mills.165 Additionally, it was the 

first new JV entered since Mills Units became unavailable.166

The starting point for the negotiations of the Denver West JV Agreement was 

the Colorado Mills JV Agreement; the Denver West JV Agreement initial drafts 

were red-lines of the Colorado Mills document.167 An early draft of the agreement 

circulated by Simon Senior Staff Attorney, Melissa Breeden, changed various terms 

of the contract, but kept in place Mills Units as the default buy/sell consideration in 

the event the call was exercised, despite the fact that compliant Mills Units were 

unavailable.168 Breeden later circulated a revised draft of the Denver West 

 

164 Pretrial Stip. 15. The KanAm participant was KanAm USA XX Limited Partnership. Id. 

165 See Trial Tr. 190:2–11 (Barkley).

166 Id.

167 See JX0324.

168 See id. at 53. 
34

agreement and included a comment from Brian Warnock, Simon’s Senior Vice 

President for Acquisitions regarding Section 11.3’s buy/sell provision, stating that 

“Simon and Farallon would like the Buy/Sell Price to be paid in cash only, since 

upon the dissolution of Mills Corp. payment in [Mills Partnership] units no longer 

works.”169 Thus, Simon initially took the position that the buy/sell consideration 

should only be paid in cash, and, implicitly, that the consideration prescribed, Mills 

Units, could not be tendered.170

The negotiations continued, involving a number of issues. Eventually, Rick 

Zeckel, Simon’s Vice President of Property Management, intervened due to delays 

in the negotiation process and reached out to Braithwaite at KanAm on October 2, 

2007.171 Zeckel expressed his opinion that the attorney reviewing the agreement for 

KanAm was holding up the deal through the “attorney’s desire to put his fingerprints 

on all the documents . . . .”172 Zeckel also shared his “understanding that [KanAm 

has] agreed that there is no need to retain the concept of Mills Units in the buy-sell 

provisions, yet [the KanAm attorney] has insisted this remains.”173 The same day, 

Braithwaite responded that while “Denver West is a relatively simple transaction[, 

 

169 JX0328 at 1 (emphasis added). 

170 See id. 

171 See JX0330 at 1–2. 

172 Id. at 1. 

173 Id. 
35

it] has raised some broader issues between Kan[A]m and Simon/Farallon that have 

not previously been addressed.”174 Braithwaite continued that he had:

two or three conversations with Brian Warnock about these issues and 

we are trying to keep these much broader and significant issues from 

complicating this simpler trans[ac]tion. The Simon attorneys did not 

seem to understand these issues and drafted the documents in an 

unacceptable manner. We are . . . trying to draft documents around 

these issues in a manner that will be acceptable to both sides that will 

leave the issues open without compromising either side[’s] position. 

Therefore it is not as simple as it would initial[ly] seem.175

Braithwaite added that “[i]t might be helpful if someone on your side could explain 

to your attorneys that these are not insignificant issues and that it would be helpful 

if they could understand what we are trying to achieve for all parties.”176 The next 

day, October 3, 2007, Melissa Breeden of Simon circulated a revised draft agreement 

that again included the reference to Mills Units as the consideration for the buy/sell 

provision.177 KanAm’s position was that it wanted the language to track that of other 

partnership agreements, specifically Colorado Mills.

178

 

Due to time pressures and an impending deadline, the parties executed a JV 

Agreement for Denver West effective as of October 10, 2007, which provided that 

cash would be the sole currency for payment of the buy/sell consideration in the 

 

174 Id. 

175 Id. 

176 Id. 

177 JX0333 at 1, 52. 

178 Trial Tr. 800:17–801:11 (Braithwaite).
36

event the call was triggered.179 On October 9, 2007, a draft of a “side letter” was 

circulated by Hammond of KanAm to Warnock of Simon.180 The side letter was 

directly targeted at Section 11.3’s required buy/sell consideration.181 This initial 

draft proposed that KanAm’s rights would be the same as they were in the Colorado 

Mills JV Agreement, which provided for Mills Units as the default consideration.182 

The initial draft side letter indicated that the acquisition of Mills by Simon created 

“a disagreement as to the form of the non-cash consideration under Section 11.3” 

including “whether the units are to be units of [the Simon Partnership] instead of 

units of [the Mills Partnership] . . . .”183 Additionally, it sought to affirm that 

KanAm, by entering the Denver West Agreement, would be deemed “not [to have] 

waived any of its rights or claims as to the form of non-cash consideration under 

Section 11.3 of any of the Limited Partnership Agreements or the Denver West 

Agreement.”184 The draft concluded that “[t]he parties hereby agree to engage in 

good faith negotiations to resolve the disagreement as to the form of non-cash 

consideration.”185 

 

179 See JX0342 § 11.3(d). 

180 JX0340.

181 Id. at 2–3. 

182 Id. 

183 Id. at 2. 

184 Id. at 2–3.

185 Id. at 3.
37

The parties continued to revise the side letter, and a revised draft was 

circulated by Breeden of Simon on October 11, 2007,186 followed by subsequent 

negotiations and revisions by KanAm individuals.187 The final version of the side 

letter was executed on October 17, 2007, and removed the reference that the parties 

would “agree to engage in good faith negotiations to resolve the disagreement as to 

the form of non-cash consideration” which was in the earlier circulated draft.188 The 

executed version provided that “if the parties agree, or it is later determined, that 

non-cash consideration may be paid under the payment provision” of the Colorado 

Mills agreement, then that same consideration would be applied to the Denver West 

agreement.189 In other words, the parties identified the non-cash consideration issue, 

negotiated over it, but ultimately avoided reaching a resolution of it in entering the 

Denver West JV. They punted.

As discussed further in the extrinsic evidence analysis section below, the 

parties heavily disputed at trial the meaning and relevance of the Denver West 

negotiations and the side letter, along with certain non-contractual statements made 

by KanAm representatives to investors. 

 

186 See JX0344. 

187 See JX0345.

188 Compare JX0348 with JX0340. 

189 JX0348 at 5 (emphasis added). 
38

8. Grapevine Mills

A refinancing was required in the Grapevine Mills project, a JV at issue here, 

in 2008. In connection with that refinancing Breeden of Simon prepared and had 

circulated a draft of an amendment to the Grapevine Mills JV.190 Simon’s September 

9, 2008 draft amendment deleted references to Mills Units in the buy/sell 

provisions.191 Breeden indicated that Simon’s position was “[w]e want to have all 

cash here as well” like in Denver West.192 The parties successfully amended the 

Grapevine Mills agreement in light of the refinancing, but the buy/sell consideration 

of Mills Units was not changed.193 There appears to be no documentary evidence at 

the time of the Grapevine refinancing and amendment that Simon offered to, or 

sought to, change the non-cash consideration in Grapevine to Simon Units.194

9. Simon-Farallon Break-up

In March of 2012, Simon acquired Farallon’s interests in the Mills 

Partnership.195 Following the transactions, the JV “interests that were previously 

directly or indirectly owned by the Mills Partnership were indirectly owned by 

 

190 See JX0366. 

191 See id. at 66–70.

192 JX0367.

193 See JX0369. 

194 See, e.g., Trial Tr. 258:1–20 (Barkley). I note one potential difficulty Simon faced at the time 

with agreeing to provide Simon Units is that they were involved in these properties with KanAm 

in conjunction with their JV Partner, Farallon, who could not clearly offer units with the 

characteristics of Mills Units. See id. 258:21–263:1 (Barkley); id. at 38:17–39:9 (Simon).

195 See JX0440. 
39

Simon Partnership.”196 In connection with the acquisition, Simon and KanAm 

executed the “Agreement and Indemnity.”197 The Agreement and Indemnity (the 

“2012 Agreement”) was initially presented to KanAm by Mr. Barkley, Simon’s 

General Counsel, with the representation that “[t]here would be no changes required 

to existing venture agreements at property level companies . . . .”198 

Shortly thereafter the parties executed the 2012 Agreement.199 The 2012 

Agreement affirmed that Simon had stepped into the shoes of the Mills Partnership 

together with all rights the Mills Partnership had.200 The Agreement also confirmed 

that it “shall not be construed as a modification of such organizational documents, 

nor be construed to diminish, enlarge or in any way affect such rights, if any, which 

. . . shall remain in full force and effect in accordance with their terms.”201 Once 

again, the parties failed to raise the issue of call consideration during the 2012 

Agreement negotiations—that is, KanAm did not affirmatively disclose its position 

that despite Simon stepping into the shoes of Mills Partnership, Simon would not be 

able to exercise the call provision due to the unavailability of contractuallycompliant Mills Units.202

 Simon, for its part, recognized that the 2012 Agreement 

 

196 Pretrial Stip. 16.

197 Id. 

198 JX0430 at 1; Trial Tr. 216:4–23 (Barkley); id. at 225:1–5 (Barkley).

199 JX0450. 

200 See id. at §§ 1(b), 1(d). See also Trial Tr. 210:13–211:7 (Barkley).

201 JX0450 § 1(d).

202 Trial Tr. 211:8–20 (Barkley).
40

did not change any of the rights or obligations that the Mills Partnership owed 

KanAm.203 Similarly, prior to the commencement of this litigation, Simon admits 

that it did not discuss with KanAm its position, advanced in this litigation, that an 

intended purpose or effect of the 2012 Agreement was to modify the buy/sell 

currency in the JV Agreements or permit the substitution of Simon Units.204

C. Simon Triggers the Call

In April 2012 Braithwaite and Hammond of KanAm visited Simon’s 

headquarters to meet with several high-level Simon officials.205 At the April 

meeting, the possibility of Simon exercising its call right in certain JVs at issue in 

this litigation was raised.206 KanAm purportedly was “surprised” by this discussion, 

but did not inform Simon at that time of its view that KanAm could thwart Simon’s 

ability to consummate the call by the election of Mills Units.207

Pursuant to the buy/sell provisions of the JV Agreements there was a ten-day 

buy/sell notice period which would open on May 1, 2012.208 The parties negotiated 

and executed two letter agreements extending the window for 2012.209 The first 

agreement executed on May 3, 2012, extended the start of the ten day period until 

 

203 See, e.g., id. at 220:16–221:21 (Barkley). 

204 See, e.g., JX0684 at Resp. Nos. 2, 3. 

205 See Trial Tr. 40:21–41:15 (Simon); Pretrial Stip. 16. 

206 See Trial Tr. 813:6–814:16 (Braithwaite).

207 See id. at 990:11–991:4 (Hammond).

208 See JX0456 at 1. 

209 Id.; JX0462. 
41

June 1, 2012 and the second agreement dated June 4, 2012 extended the ten-day 

window until June 19, 2012.210 During these initial extension negotiations, KanAm 

did not raise its ability to defeat the call provisions by electing Mills Units.211 Simon 

ultimately agreed to not trigger the buy/sell provisions in 2012.212

The record reflects that on June 21, 2012, Braithwaite of KanAm sent von 

Perfall and other KanAm principals a legal memorandum, prepared by KanAm’s 

litigation counsel, regarding the put/call consideration issue.213 A later memo 

distributed internally at KanAm on June 27, 2012, from KanAm’s litigation counsel 

indicates that Simon “must offer us Mills Units and that they cannot substitute” 

Simon Units.214 The remaining substance of these memoranda was redacted to 

protect attorney-client privilege.215

On June 27, 2012, Braithwaite circulated an email to Simon, which advised 

Simon that, in exercising the call, it “is required to deliver” Mills Units in accordance 

with the JV Agreements.216 Braithwaite opined in the email that KanAm “does not 

believe that Simon can perform such obligation and deliver the specified and 

required” Mills Units.

217

 Braithwaite communicated KanAm’s willingness to 

 

210 JX0456 at 1; JX0462 at 1–2.

211 See Trial Tr. 45:2–7 (Simon).

212 Id. at 45:8–14 (Simon).

213 See JX0469 at 1. 

214 JX0470. 

215 See JX0469; JX0470. 

216 JX0471 at 1.

217 Id. 
42

negotiate with Simon acceptable non-cash consideration; Simon indicated that it 

would get back to KanAm regarding renegotiation.218 It appears this was the first 

documented notice from KanAm to Simon that it was taking this position regarding 

the contractual language.219 During the time this disclosure was made by 

Braithwaite, the parties were attempting to negotiate a letter agreement to resolve 

several administrative disputes arising under the JVs.220 Part of the consideration 

for the executed letter agreement in late June was that Simon would not trigger the 

buy/sell provisions that year.221 In delivering the executed copy of the June 28, 2012 

letter agreement, KanAm indicated in its cover letter that the buy/sell consideration 

issues had not been resolved.222

Later that year, in October 2012, KanAm and Simon amended the Concord 

Mills JV Agreement.223 This amendment did not change the buy/sell consideration 

under Section 11.3 of the JV Agreement.224 Additionally, the amendment ratified 

and affirmed all the pre-existing agreements except as modified—thus it ratified and 

affirmed the unchanged consideration portion of Section 11.3.225

 

218 See Trial Tr. 834:15–23 (Braithwaite).

219 See id. at 822:3–824:3 (Braithwaite).

220 See JX0474. 

221 See id. at 5.

222 See id. at 2.

223 JX0488. 

224 See id.; Trial Tr. 346:21–347:11 (Barkley).

225 See JX0488 at ¶ 40; Trial Tr. 346:21–347:11 (Barkley).
43

In 2013, Braithwaite of KanAm again communicated with Simon, this time 

directly to Mr. Simon at an in-person meeting on April 15, 2013, regarding KanAm’s 

willingness to negotiate non-cash consideration.226 Similarly, Braithwaite sent a 

follow-up letter to Mr. Simon reflecting the same position.227 This April 16, 2013 

letter states that KanAm had a “long history, familiarity and special relationship” 

with Mills and that Mills Units were “a material reason” that KanAm entered the JV 

Agreements and agreed to the put/call consideration.228 The letter concluded that 

KanAm remained open to negotiate amendments to the put/call consideration.229 

Mr. Simon indicated that he would follow up, but after two extensions rather than 

negotiating, Simon initiated this action.230 The same day this action was filed, Simon 

sent notices that it was triggering the call for four of the JVs on May 2, 2013.231 

KanAm in response insisted on the specified default consideration, Mills Units, and 

refused to close.232 In 2014, Simon sent KanAm notices with respect to the three 

remaining JVs at issue here.233 KanAm again insisted on Mills Units and declined 

 

226 Trial Tr. 835:7–836:10 (Braithwaite).

227 JX0500. 

228 Id. at 1. 

229 Id. at 2. 

230 Trial Tr. 835:7–836:10 (Braithwaite).

231 JX0504; JX0508.

232 JX0811.

233 See JX0557; JX0558; JX0559.
44

to close.234 The pleadings were amended to add these three additional JVs to the 

present action. 

II. PROCEDURAL HISTORY

Simon initiated this action on May 3, 2013. Shortly thereafter, KanAm moved 

for judgment on the pleadings. Significant motion practice ensued, which is 

discussed elsewhere. The parties subsequently cross-moved for summary judgment 

on March 28, 2014. Those motions were then briefed and, following oral argument, 

I denied both motions by Memorandum Opinion of September 30, 2014 for reasons 

I briefly revisit in the analysis section below. This first period of litigation involved 

only four JVs for which notice was given in 2013—Orange City Mills, Arundel 

Mills, Grapevine Mills, and Concord Mills. 

Following the summary judgment decision, the Plaintiffs filed a Second 

Amended Complaint (the “Amended Complaint”).235 The Amended Complaint 

added three additional JVs—Katy Mills, Colorado Mills, and Denver West—for 

which Simon attempted to exercise its call rights on in May 2014. The Amended 

Complaint pleads four counts. First, through Count I, the Plaintiffs seek declaratory 

judgments on a number of issues regarding the JV Agreements and the Defendants 

purported breaches. Second, through Count II, the Plaintiffs assert a breach of 

 

234 JX0813.

235 See Dkt. No. 119.
45

contract claim alleging that by failing to close on the transactions after Simon 

provided notice and offered Simon Units, KanAm breached the JV Agreements. 

Next, through Count III, the Plaintiffs assert a claim that KanAm breached the 

implied covenant of good faith and fair dealing through its conduct in refusing to 

accept Simon Units and insisting on delivery of the call consideration in Mills Units. 

Finally, Count IV seeks specific performance of the applicable JV Agreements. 

Along with the remedy of specific performance, the Plaintiffs seek damages for the 

Defendants alleged breaches including the purported improper distributions paid to 

the Defendants after the call was triggered. Additionally, the Plaintiffs seek costs,

expenses and attorneys’ fees pursuant to the JV Agreements, along with an award of 

interest. 

The Defendants, through their Supplemental Verified Counterclaim (the 

“Counterclaim”) assert two counts.236 Count I asserts a breach of contract by Simon 

for triggering the call with knowledge that the default consideration was not 

available, and that by failing to provide valid buy/sell notices Simon breached the 

JV Agreements. Count II seeks a declaratory judgment that the required 

consideration in the applicable JV Agreements is Mills Units, and that Simon cannot 

force KanAm to accept Simon Units. KanAm seeks damages arising from Simon’s 

 

236 See Dkt. No. 110. 
46

alleged breaches, litigation costs including attorneys’ fees pursuant to the JV 

Agreements, and interest. 

I tried this matter over seven days, with the first five days occurring on May 

16 through May 20, 2016, and the remaining two days on August 16, and August 

17, 2016. The parties engaged in post-trial briefing, and a post-trial oral argument 

was held on December 16, 2016. What follows is my analysis of the merits of the 

parties’ claims in light of the proof shown at trial. 

III. ANALYSIS 

Several issues remain to be decided in this post-trial decision. This is a 

contract action. Therefore, the threshold inquiry is what are the terms of the 

applicable contracts—the parties’ JV Agreements? Specifically, what are the terms 

of the buy/sell provisions? 

These terms have previously been reviewed in this case. When ruling on the 

parties’ cross-motions for summary judgment I found that:

[t]he JV Agreements unambiguously provide that the default 

consideration when exercising the call is Mills Units meeting certain 

criteria. However, these Agreements do not address the unavailability 

of Mills Units due to a change in control or restructuring transaction. 

Accordingly, I cannot conclude from this unambiguous language

whether the parties intended the call right to lapse if and when Mills

Units satisfying the contractual criteria became unavailable. Instead, I 

must resort to extrinsic evidence to determine how the parties intended 

to proceed in the circumstances in which they now find themselves.237

 

237 Simon I, 2014 WL 4840443, at *14 (citations omitted).
47

I denied summary judgment because there was some evidence in the record that 

KanAm considered Simon Units as contractually-compliant. Thus, I was not able to

“conclude that the Defendants intended only to accept Mills Units, and, accordingly, 

that the call right was meant to lapse when those Units became unavailable.”238 I 

found that this, and other issues raised by the parties’ cross-motions for summary 

judgment “require[d] further factual development to ascertain the parties' intent.”239 

I explained that “where the contract does not address the matter in dispute, the Court 

may resort to extrinsic evidence to ascertain the parties’ intent, such as the overt 

statements and acts of the parties, the business context, prior dealings between the 

parties, and other business customs and usage in the industry.”240 Similarly, the 

summary judgment decision in this matter left open Simon’s claim for breach of the 

implied covenant of good faith and fair dealing for further factual development.241

The parties have created a full record at trial. The determinative question here 

is whether there was ever a meeting of the minds between the parties about whether 

Simon Units were a contractual substitute for Mills Units in the present 

circumstances. 

 

238 Id.

239 Id. Those other issues included, at the time, whether KanAm demonstrated a contractual 

indifference to the type of units it would receive, whether there was a special relationship between 

KanAm and Mills such that Mills Units are unique and whether Mills and Simon Units are 

materially different in terms of tax treatment and other risks. See id. 

240 Id. at *15 (internal quotations omitted). 

241 Id. at *14.
48

This Memorandum Opinion first reviews the relevant extrinsic evidence in an 

attempt to derive the parties’ intent and determine whether there was a meeting of 

the minds regarding the unavailability of Mills Units. Next, I examine the arguments 

raised under the substantial performance doctrine before turning to the equitable 

issues raised by the parties. Finally, I address KanAm’s Counterclaims and the 

appropriate relief under the circumstances present here.

A. The Contractually Required Buy/Sell Consideration

1. General Principles 

I first examine the general legal principles applicable here. Plaintiffs (and, 

with respect to the Counterclaim, Defendants/Counterclaim Plaintiffs) bear the 

burden of proof, to demonstrate entitlement to relief by a preponderance of the 

evidence.242 Thus, “Plaintiffs, as well as Counterclaim-Plaintiffs, have the burden 

of proving each element, including damages, of each of their causes of action against 

each Defendant or Counterclaim-Defendant, as the case may be, by a preponderance 

of the evidence.”243 “Proof by a preponderance of the evidence means proof that 

something is more likely than not.”244 The burden with respect to the remedy of 

 

242 See, e.g., In re Mobilactive Media, LLC, 2013 WL 297950, at *9 (Del. Ch. Jan. 25, 2013).

243 inTEAM Assocs., LLC v. Heartland Payment Sys., Inc., 2016 WL 5660282, at *13 (Del. Ch. 

Sept. 30, 2016) (citation omitted). 

244 Id. (citation omitted).
49

specific performance of a contract is that a plaintiff must make a showing by clear 

and convincing evidence.245

Delaware follows the objective theory of contracts. “Because Delaware 

adheres to the objective theory of contract interpretation, the court looks to the most 

objective indicia of that intent: the words found in the written instrument.”246

Therefore, “[a] contract’s express terms provide the starting point in approaching a 

contract dispute.”247 Further, Delaware law requires that contracts are to be read as 

a whole.248

I have already determined that the JVs unambiguously provide that Mills 

Units—defined as Units of Mills Partnership with certain characteristics—are the 

contractually required default consideration.249 However, where a contract is silent 

on an issue, such as what was to happen upon the unavailability of Mills Units, the 

Court “may resort to extrinsic evidence to ascertain the parties' intent.”

250

 Even

when reviewing extrinsic evidence, the text remains important. This Court will 

 

245 See In re IBP, Inc. Shareholders Litig., 789 A.2d 14, 52 (Del. Ch. 2001) (observing Delaware 

law “requires that a plaintiff demonstrate its entitlement to specific performance by clear and 

convincing evidence”). 

246 Sassano v. CIBC World Markets Corp., 948 A.2d 453, 462 (Del. Ch. 2008) (citations omitted). 

247 Ostroff v. Quality Servs. Labs., Inc., 2007 WL 121404, at *11 (Del. Ch. Jan. 5, 2007).

248 Salamone v. Gorman, 106 A.3d 354, 368 (Del. 2014) (“When interpreting a contract, this Court 

‘will give priority to the parties' intentions as reflected in the four corners of the agreement,’ 

construing the agreement as a whole and giving effect to all its provisions.”) (quoting GMG Capital 

Inv., LLC. v. Athenian Venture Partners I, L.P., 36 A.3d 776, 779 (Del. 2012)).

249 Simon I, 2014 WL 4840443, at *14. 

250 Id. at *15 (citing Senior Hous. Capital, LLC v. SHP Senior Hous. Fund, LLC, 2013 WL 

1955012, at *41 (Del. Ch. May 13, 2013)). 
50

enforce contracts to effectuate the intent of the parties as demonstrated through the 

text, that is, “the introduction of extrinsic, parol evidence does not alter or deviate 

from Delaware's adherence to the objective theory of contracts.”251 When reviewing 

the extrinsic evidence submitted, it should be reconciled, to the extent possible, with 

the text of the contract. Generally, the parties’ undisclosed and private views of a 

contract’s meaning “are irrelevant and unhelpful to the Court's consideration of a 

contract's meaning, because the meaning of a properly formed contract must be 

shared or common.”252 Similarly, when “considering extrinsic evidence, the Court 

should uphold, to the extent possible, the reasonable shared expectations of the 

parties at the time of contracting.”253 Further, “[i]n giving effect to the parties' 

intentions, it is generally accepted that the parties' conduct before any controversy 

has arisen is given great weight.”254

Where there is an ambiguity or contractual silence on an issue the Court will 

examine the extrinsic evidence presented by the parties “which may include 

statements and conduct of the parties, business circumstances surrounding the 

execution of the contract, any course of dealing between the parties, and any usage 

 

251 United Rentals, Inc. v. RAM Holdings, Inc., 937 A.2d 810, 835 (Del. Ch. 2007) (citation 

omitted). 

252 Id. (citations omitted). 

253 Shareholder Representative Services LLC v. Gilead Sciences, Inc., et al., 2017 WL 1015621, 

at *16 (Del. Ch. Mar. 15, 2017) (internal quotations omitted). 

254 Ostroff, 2007 WL 121404, at *11 (internal quotations omitted). 
51

of trade or industry custom.”

255

 Finally, the Court should, “where possible, avoid an 

interpretation that would render any provision illusory or meaningless.”

256

 

2. The Parties’ Contentions

Simon’s position, based on the evidence developed at trial, is that evidence 

extrinsic to the JV Agreements demonstrates that by “Mills Units” the contracts

really mean “Mills Units or similar, including Simon Units.” Further, Simon argues 

that its ability to call KanAm’s interest is a “fundamental right” that the parties did 

not intend to lapse.257 Simon observes that qualifying Mills Units became 

unavailable due to Mills’ own financial difficulties,

258 and questions why KanAm 

waited five years to “first communicate its current position.”259 Simon argues that 

“KanAm’s interpretation effectively nullifies Simon’s call right, a result no party to 

the JV Agreements intended.”260 Further, Simon argues that there is no evidence 

that the call right, and buy/sell provisions which are a “fundamental aspect of the JV 

Agreements,” were intended to “simply lapse if Mills Units became unavailable.”261

KanAm relies heavily on the plain and unambiguous provisions in the JVs

specifying that Mill Units meeting certain requirements are the default currency. 

 

255 Delaware Exp. Shuttle, Inc. v. Older, 2002 WL 31458243, at *6 (Del. Ch. Oct. 23, 2002) 

(citations omitted).

256 Id. (citations omitted). 

257 Simon’s Post-Trial Opening Br. 55. 

258 Id. at 57 n.20.

259 Id. at 61. 

260 Id. at 62.

261 Id. at 63.
52

KanAm attempts to focus the scope of extrinsic evidence by pointing to the 

“operative JV Agreements” and pointing out that only one of such “operative” 

agreements ever included a reference to Simon Units.262 KanAm officials have 

testified that their position is that Simon could exercise the call right but could not 

“consummate the transaction” if KanAm chooses to receive Mills Units.263 That is, 

it is KanAm’s position that the call right has not entirely lapsed; their position, 

however, leads to the conclusion that the “call right” is no right, but only an 

opportunity to seek KanAm’s agreement to sell its interest for cash. KanAm 

contends that the parties are free to renegotiate the applicable buy/sell consideration, 

and that the sole reason there has been no agreement as to “substitute non-cash 

consideration [is] because Simon refused to address the issue.”264 

Ultimately, KanAm asserts that the factual record developed at trial 

demonstrates that “these sophisticated parties never mutually agreed to substitute 

Simon Units for Mills Units.”265 For the reasons below, I agree.

3. The Extrinsic Evidence

I now turn to an examination of the most relevant extrinsic evidence presented 

by the parties. I find it helpful to group the extrinsic evidence presented in this 

 

262 See KanAm’s Post-Trial Sur Reply Br. 8–11.

263 See Trial Tr. 822:3–19 (Braithwaite). 

264 KanAm’s Post-Trial Sur Reply Br. 2 (emphasis removed). 

265 Id. at 6.
53

litigation into four general time periods: first, the 1990’s and the initial agreements;

second, the events surrounding Simon’s exit in 2002; third, the events surrounding 

Mills’ financial trouble and Simon’s return via its JV with Farallon in 2007; and 

finally Farallon’s exit from the JV in 2012. Each will be reviewed in turn. When 

reviewed as a whole the extrinsic evidence shows that the Plaintiffs have failed to 

establish by a preponderance of the evidence that the parties mutually agreed to the 

substitution of Simon Units for Mills Units—that is, they have failed to show there 

was ever a meeting of the minds.266

a. The 1990’s through 2002

As discussed in the factual background section, Ontario Mills, while not at 

issue in this litigation, was the original template for certain of the JV Agreements at 

issue here, including the original three JV Agreements where Simon and KanAm 

were counter-parties: Arundel Mills, Concord Mills, and Grapevine Mills. 

Additionally, three other JVs at issue in this litigation were formed during this period

between Mills and KanAm, in which Simon did not participate: Orange City Mills 

in 1996, Katy Mills in 1998 and Colorado Mills in 2001.267 

 

266 While certain portions of the record are analyzed in more detail below, I also rely in this 

determination on the factual background that I have laid out previously in this Memorandum 

Opinion. 

267 I note Simon admits the buy/sell provision in the agreements governing these three JV 

Agreements generally mirror those in Grapevine, Arundel and Concord Mills and only reference 

Mills Units. See, e.g., Simon’s Post-Trial Presentation Slide 36. See also JX0041 § 11.3(d); 

JX0050 § 11.3(d); JX0089 § 11.3(d). 
54

KanAm initially entered the Ontario Mills agreement with Mills as a counterparty; when Simon was later added to the Ontario Mills JV, the JV Agreement was 

amended to reflect that circumstance.

268 The amendment revised the buy/sell 

consideration section to provide that the default consideration was to be two-thirds 

Mills Units, and one-third Simon Units in the event the call was exercised.269 

Additionally, the amendment added the description that such an exchange of units 

was intended to be tax free under Section 721. The reason for the amendment to the 

buy/sell consideration to include Simon Units was made clear by trial testimony: 

Simon Units were required consideration in order for the Section 721 tax deferral

feature to function.270 Braithwaite and Hammond, KanAm’s principal negotiators,

testified that at the time of these negotiations the only real tax concern about 

receiving Simon Units was to ensure that the transaction “would get the same sort 

of tax deferral.”271 Nonetheless, the fact of the amendment demonstrates that, at this 

stage at least, the parties did not intend the term “Mills Units” to mean “partnership 

units similar to Mills, including Simon Units.”

While the Ontario Mills JV Agreement contained a fixed percentage of Simon 

to Mills Units as the call consideration, the subsequent agreements in Concord Mills, 

 

268 See JX0025. 

269 See id. at § 11.3(d).

270 Trial Tr. 945:19–946:14 (Hammond). See id. at 693:7–694:8 (Braithwaite).

271 Id. at 949:9–18 (Hammond). See id. at 679:13–23 (Braithwaite). 
55

Grapevine Mills, and Arundel Mills provided that unit consideration would be paid 

“ratably in proportion to the ownership interests.”

272 The three agreements at issue 

during this time period, however, did draw certain distinctions between Simon and 

Mills Units, including the extra requirement that contractually-compliant Simon 

Units must “have the most favorable rights (including redemption, conversion, 

registration and anti-dilution protection) . . .” of any units of Simon.273 However, 

KanAm negotiators do not recall expressing any particular concern about receiving 

Simon Units at that time.274 Similarly, no convincing evidence exists about why the 

“most favorable rights” provision was inserted only for Simon Units and not for 

Mills Units. In other words, the inclusion of the most favorable rights provision for 

Simon Units only indicates that the parties considered that Simon and Mills Units

were not necessarily equivalent, but does not explain why. The evidence also shows 

that KanAm was willing to take solely the “best” Simon Units if Simon bought out 

Mills.

Simon makes much of the fact that KanAm, at the time, impliedly agreed to 

potentially accept only Simon Units; if Simon had bought out Mills, Simon Units 

would have been the operative consideration. Additionally, Simon points to 

prospectuses distributed by KanAm to investors during this time that either do not 

 

272 See JX0027 § 11.3(d); JX0058 § 11.3(d); JX0074 § 11.3(d). 

273 See, e.g., JX0027 §§ 11.3(d), (f). 

274 See Trial Tr. 694:11–14 (Braithwaite). 
56

mention the buy/sell currency at all,275 or, when they do so, do not draw a particular 

distinction between Simon and Mills Units.276 KanAm asserts that any early 

evidence of relative contractual indifference towards Simon Units is less relevant as 

it was at the “infancy” of the REIT industry.277 Similarly, KanAm observes that the 

contracts themselves show KanAm took care to specify only certain units of Simon 

or Mills with specific qualities “would pass muster.”278 

I find that the parties’ course of conduct and other extrinsic evidence from this 

period is largely unpersuasive. Simon has shown that there was, early on and at a 

general level, contractual indifference by KanAm to receiving either Simon or Mills 

Units. However, KanAm has also shown that when it agreed to accept Simon Units

during this time period, the parties modified the contracts to expressly so state, and 

to provide what qualities the Simon Units had to have, including the most favorable 

rights provisions. That is, the record from this period does not support the idea that 

KanAm agreed to automatic substitution of any successor operating partner units, or

that the parties meant “Mills Units or similar” when they specified Mills Units.

 

275 See JX0031; JX0037. 

276 See JX0060 at 31; JX0070 at 44. 

277 KanAm’s Post-Trial Answering Br. 30. 

278 KanAm’s Post-Trial Sur Reply Br. 14. 
57

b. Simon’s 2002 Exit and the Subsequent Amendments

As discussed in the factual background section, in 2002 Simon exited three 

JVs at issue here, Grapevine Mills, Concord Mills and Arundel Mills, after it reached 

an impasse with Mills. These were the only KanAm/Mills JVs in which Simon had 

an interest at the time. The exit was achieved via a “shotgun” exit mechanism. 

When Simon triggered the exit, it was not contractually clear who would remain in 

the JVs—that is, Simon named the price at which it would either buys Mills out or

sell its interest to Mills, at Mills’ option.279

In the interim, before it became clear who would remain in the JVs,

Braithwaite of KanAm sent Simon’s CEO, David Simon, a letter on March 4, 2002,

to inquire about the buy/sell consideration in the Ontario Mills JV Agreement.

280

 

Braithwaite indicated KanAm “would be interested in discussing with [Simon] how 

Section 11.3 of the Ontario Mills Agreement might be implemented if there has been 

a buy/sell between Mills and Simon of your interests in Ontario Mills, L.L.C.”281 

The Ontario Mills agreement, unlike the other JVs actually at issue here, provided 

for a fixed consideration ratio of one-third Simon Units and two-thirds Mills Units 

upon exercise of the call. David Simon responded on March 5, 2002, stating that 

following the exit of Simon or Mills, KanAm’s right under the Ontario Mills 

 

279 See Trial Tr. 387:18–388:11 (Foxworthy). 

280 See JX0099. 

281 Id. at 2 (emphasis added). 
58

agreement was to receive the appropriate units “of whichever of Mills or Simon 

[remained] partner.”282 Neither Braithwaite nor anyone else at KanAm responded

to Simon’s explanation of what Section 11.3 would mean for Ontario Mills 

following the shotgun buy/sell, nor was there further discussion.

283

 

KanAm argues it did not respond because the issue, to Braithwaite’s mind, 

was mooted shortly after the letter exchange when he learned that Mills’

management had recommended Mills acquire Simon’s interests.284 KanAm also 

points out that, had the parties had a pre-existing understanding that Simon Units 

would be automatically substituted for Mills Units, Braithwaite’s letter to Simon 

would have been unnecessary, and the question would never have been asked.

285

 

Simon points to the exchange regarding Ontario Mills, and KanAm’s silence in 

response to Mr. Simon’s assertion that Simon Units would serve as currency, as 

strong evidence that KanAm was indifferent to the units it received so long as they 

provided for non-recognition tax treatment.286 I find this exchange less helpful than 

Simon does with respect to showing a meeting of the minds regarding the present 

issues before me. First, Ontario Mills features a unique JV Agreement, with a fixed 

exchange ratio not at issue in the JV Agreements here. I note that, with respect to 

 

282 JX0100 at 1. 

283 See Trial Tr. 23:20–24:13 (Simon).

284 See JX0101; Trial Tr. 735:16–737:18 (Braithwaite). 

285 See KanAm’s Post-Trial Sur Reply Br. 16. 

286 See Simon’s Post-Trial Opening Br. 59. 
59

the JV Agreements in issue, all references to Simon Units were subsequently 

removed, as discussed below. Second, with respect to Simon’s argument that 

KanAm’s silence—in response to Simon’s written assertion that Simon Units would 

substitute for Mills Units—connotes KanAm’s agreement with or indifference to the 

assertion, I am unpersuaded. The record tends to support KanAm’s mootness 

point—that no response was necessary in light of Braithwaite’s awareness that Mills 

would acquire Simon’s interest. 

Instructive to the issue before me—whether there was a meeting of the minds 

regarding the effect of the unavailability of Mills Units—is what happened once 

Simon exited the JVs. Mills and KanAm amended the governing documents to 

remove references to Simon.287 On May 31, 2002, the Ontario Mills JV Agreement, 

a project not at issue here, and the Grapevine Mills JV Agreement were amended to 

delete references to Simon.288 Similarly, later in 2002, KanAm and Mills formed a 

new partnership for Concord Mills.289 The Concord Mills JV Agreement, thereafter,

only makes reference to Mills Units, and provides that they are the default 

consideration except if KanAm elected to receive cash or a mix of cash and units.290 

The Arundel Mills JV Agreement underwent similar changes: first, the JV 

 

287 See, e.g., JX0111 § 9(f). 

288 See JX0108 §§ 2(e), 10; JX0109 §§ 2(e), 13.

289 See JX0120. 

290 Compare JX0120 §§ 11.3(d), 11.3(f) with JX0058 §§ 11.3(d), 11.3(f). 
60

Agreement was amended to remove references to Simon,291 second a new 

partnership document was executed for Arundel Mills in August 2004, and as with

Concord Mills, explicitly provided that Mills Units were the default buy/sell 

consideration, and contained no reference to Simon Units.292 

In sum, Simon was written out of all JV Agreements to which they were 

previously counter-parties to KanAm, either through deletion of references to 

Simon, or by new partnership agreements which do not provide for Simon Units. 

The default consideration for each JV became Mills Units meeting certain 

specifications. Unsurprisingly, Simon and KanAm disagree as to the significance of 

these amendments. Simon admits Mills and KanAm acted to delete references to it 

from the JV Agreements during this time period but asserts that the amendments 

were simply “ministerial.”293 Simon further argues that “there is no evidence in the 

record regarding the amendments to the JV Agreements in 2002 other than that they 

occurred” and that “KanAm is not entitled to a post-trial inference that these 

amendments were intended to do anything more than remove references to Simon to 

reflect its recent exit from the JVs.”294 KanAm’s view, as stated through the 

testimony of Braithwaite, is that the amendments took the issue of Simon Units as 

 

291 See JX0106 §§ 2(e), 15.

292 See JX0152 §§ 11.6(d), 11.6(f). 

293 Simon’s Post-Trial Opening Br. 19–20. 

294 Simon’s Post-Trial Reply Br. 13. 
61

consideration off “the table.”

295

 Further, Braithwaite testified that the amendments 

reflect a decision post-2002 to not accept Simon Units.296 Similarly, KanAm asserts 

the amendments and restated JV Agreements were not ministerial changes as they 

evince a conscious choice to limit the appropriate consideration to Mills Units 

meeting certain qualifications—that is, they address (in KanAm’s view) an 

“essential element” of the contract and “they reflect in the clearest way possible that 

Mills and KanAm intended to limit the non-cash consideration to Mills Units.”297

I find that the record tends to support KanAm’s position regarding the post2002 amendments, though not to the extent KanAm contends. To the extent those 

contractual revisions shed light on the meaning of “Mills Units” as the default 

contractual consideration, and whether there was a meeting of the minds to accept 

alternative consideration, the amendments tend to show the unambiguous language 

means exactly what it says—Mills Units meeting specified requirements are the 

proper consideration. To the extent these rather stale events are persuasive regarding 

the JV Agreements in question, they indicate that KanAm thought it important to 

denote what units could evoke its obligations in the event of a call. I note, in support 

 

295 Trial Tr. 758:20–759:13 (Braithwaite). 

296 See id. at 758:11–19 (Braithwaite) (“QUESTION: Okay. But there was no feeling internally at 

KanAm that we would no longer accept Simon units post-2002? ANSWER: There certainly was 

that decision as it applied to these partnerships [Ontario, Arundel, Concord, and Grapevine Mills]. 

And since it didn't exist in any other circumstance, we didn't think about it. It wasn't something 

we spent a lot of time thinking about because it wasn't a real-world circumstance.”). 

297 KanAm’s Post-Trial Answering Br. 34. 
62

of this interpretation of the evidence, that in 2006, in negotiating an unrelated 

project, Mills requested that KanAm amend the buy/sell provision to allow for units 

of any future UPREIT operating partner to substitute for Mills Units, a request which 

KanAm declined.298

c. Simon’s 2007 Return 

Following Mills’ financial struggles, the Simon-Farallon JV acquired Mills. 

Simon, through its JV with Farallon, returned to the three projects at issue discussed 

above. The parties failed to renegotiate or alter the buy/sell consideration provisions 

to account for Simon-Farallon’s entry, and Mills’ exit. Thus, there are three JVs at 

issue here—Grapevine, Concord, and Arundel Mills—for which Simon Units were 

(1) identified as tender for the call right and (2) then removed by amendment as 

tender in favor solely of Mills Units when Simon exited. Those JVs, however, 

retained Mills Units as tender when Mills dissolved and Simon, with Farallon,

became the counterparty. The Simon-Farallon JV’s acquisition of Mills also 

included three JVs at issue here to which Simon was not an original party,

299 that is, 

the projects which Simon declined to invest in originally—Colorado, Katy, and 

Orange City Mills. The buy/sell consideration provisions in these agreements also 

 

298 See Trial Tr. 770:16–772:1 (Braithwaite); JX0206 at 18 (proposing revisions to Section 11.3 of 

the Meadowlands agreement to state that Mills’ successor so long as it was structured as an 

UPREIT, with publicly traded stock “may deliver its operating partnership units or other available 

securities instead of TMLP Units as consideration . . .”). 

299 See JX0170; JX0122; JX0155. 
63

called for Mills Units and were not revised despite the entry of the Simon-Farallon 

JV—there was silence regarding this issue. While there is no smoking gun 

demonstrating why such changes were not made, common sense, commercial 

realities, and experience tends to support that such a negotiation of these provisions 

could have been costly, time consuming, and uncertain—therefore, the parties 

consciously decided to avoid it. If the alterations were merely “ministerial” as 

Simon argues the 2002 deletions were, they could have been performed by a stroke 

of a pen with no negotiation necessary; if this is true it is hard to understand why the 

alterations failed to occur. I find the former proposition—that both parties made 

strategic decisions to avoid the issue—more plausible. 

The parties point to additional facts from this period as persuasive. Simon 

points to Braithwaite’s negotiations with an alternative potential acquirer, 

Brookfield, as evidence that KanAm was content accepting Simon Units.300 In 

support of this argument Simon observes that Braithwaite affirmatively reached out 

to Brookfield, an entity with which Mills reached a merger agreement before the 

Simon-Farallon JV submitted a topping bid, and agreed to negotiate the issue of 

successor consideration for the call right. Braithwaite admits to reaching an 

“agreement in principle” on behalf of KanAm to negotiate in good faith with 

 

300 See Simon’s Post-Trial Reply Br. 15–16. 
64

Brookfield on this issue.

301 Simon argues the reason for this negotiation was clear:

Brookfield, due to its entity structure (not an UPREIT), could not offer partnership 

units in a tax-deferred way.302 According to Simon, KanAm’s failure to reach out to 

Simon in a similar way is telling. To me, nothing about KanAm’s willingness to 

negotiate with Brookfield indicates an indifference to the consideration it would 

receive, however. Next, in an appeal to equity, Simon points to KanAm’s thensilence about what it now maintains was its position—that only Mills Units, and not 

successor units, would evoke the call right—and Simon asserts that the “multibillion dollar transaction was priced” on the basis that the purchaser had an operative 

call right.303

Braithwaite and KanAm were not the only parties with knowledge who were 

silent, however. Mills’ outside counsel, Willkie Farr & Gallagher, produced a 

memorandum during this time period which indicated: 

[o]f note, the joint venture agreements strictly call for the OP Units to 

be those of [the Mills Partnership], and do not contain language 

authorizing the use of similar OP-type securities in the event [the Mills 

Partnership] no longer issues Units or ceases to exist as the result of a 

Mills corporate restructuring or corporate-level transaction.304

 

301 See Trial Tr. 775:10–776:18 (Braithwaite).

302 See Simon’s Post-Trial Reply Br. 15–16.

303 Id. at 15.

304 JX0241 at 4 (emphasis added).
65

Despite the plain language of the contract which resulted in this analysis, Mills did 

not raise the issue directly with Simon. However, a Descriptive Memorandum

created by Mills, together with Goldman Sachs and J.P. Morgan and distributed to 

potential acquirers (including Simon), provided that the “Put-call rights enable . . . 

Mills to require KanAm to sell its interests to Mills for cash or partnership units of 

Mills LP, the choice of consideration to be made in KanAm’s sole discretion . . . .”

305

 

Importantly, Simon’s general counsel also recognized that the JV Agreements

did not refer to Simon Units, and provided that the only non-cash consideration was 

Mills Units.306 The internal legal team at Simon, and its outside counsel, knew that 

the specified default consideration was Mills Units. Simon’s current explanation for 

why it chose to proceed without resolution of this issue is, to me, unsatisfying;

Simon’s general counsel, Mr. Barkley, testified that Simon was not concerned, 

because KanAm had agreed to accept Simon Units in the past.307 If true, this was 

unwise. I also note that Barkley directly discussed the issue with Mr. Simon during 

the due diligence process surrounding the Simon-Farallon JV, but Simon still 

decided not to raise and discuss the issue with KanAm at the time.308 In short, it 

appears each legal eye which read these contracts identified the issue. The decision 

 

305 JX0293 at 1, 88 (emphasis added). 

306 Trial Tr. 291:7–292:18 (Barkley).

307 Id. at 292:16–293:7 (Barkley); id. at 302:22–306:17 (Barkley).

308 Id. at 311:16–312:14 (Barkley). 
66

to leave the issue open by all involved appears strategic and does not support a 

finding of a meeting of the minds regarding an automatic substitution of Simon 

Units. 

The negotiation surrounding the Denver West JV Agreement, the only 

agreement executed following Simon’s re-entry, is instructive. Simon initially 

insisted that the buy/sell consideration be paid only in cash.309 A senior staff attorney 

at Simon, Breeden, circulated an email with comments that cash needed to be paid 

since “payment in [Mills] units no longer works.”

310

 This comment appears to have 

originated from Brian Warnock, Simon’s Senior Vice President for Acquisitions.311 

Thus, at this time it is clear that there was no widespread or absolute understanding 

within Simon itself that a reference to Mills Units in a JV Agreement’s buy/sell 

provision actually meant Simon Units. During the discussion of the JV, KanAm 

continued to negotiate the terms and seek some form of non-cash consideration, until

Rick Zeckel, Simon’s Vice President of Property Management, expressed his

frustration with delays over the negotiations regarding the buy/sell provisions.312 

Braithwaite responded that these negotiations raised “much broader and significant 

issues” that the parties were trying to avoid for the “simpler” deal that Denver West 

 

309 Simon also initially took this position in 2008 during the Grapevine Mills refinancing. 

310 JX0328 at 1. 

311 See id. 

312 JX0330 at 1–2.
67

represented.313 Due to time pressures the Denver West agreement was signed with 

cash as the only currency.

However, the parties ultimately executed a unifying side letter qualifying the 

cash currency. The executed side letter provides that “if the parties agree, or it is 

later determined” that non-cash consideration would be payable with respect to an 

existing JV, Colorado Mills, then that same non-cash consideration would apply to 

Denver West.314 Prior to execution of the side letter, several drafts were circulated. 

Early KanAm drafts included the following language: “a disagreement as to the form 

of the non-cash consideration under Section 11.3” exists including “whether the 

Units are to be units of [the Simon Partnership] instead of units of [the Mills 

Partnership] . . . .”315 Further, the draft provided that by entering the Denver West 

Agreement KanAm “has not waived any of its rights or claims as to the form of noncash consideration under Section 11.3 of any of the Limited Partnership Agreements 

. . . .”316 Finally, the draft stated that “[t]he parties hereby agree to engage in good 

faith negotiations to resolve the disagreement as to the form of non-cash 

consideration.”317 The executed side letter, however, removed the reference that the 

 

313 Id. at 1.

314 JX0348 at 5. The parties do not dispute that this language simply means that if non-cash 

consideration is payable in Colorado Mills, then that same non-cash consideration applies to 

Denver West. See, e.g., Simon’s Post-Trial Opening Br. 33–34.

315 JX0340 at 2. 

316 Id. at 2–3.

317 Id. at 3.
68

parties would “agree to engage in good faith negotiations to resolve the disagreement 

as to the form of non-cash consideration” which was in the earlier circulated draft

and, as set forth above, pegged the issue to resolution of the same issue in the 

Colorado Mills JV.

318

The reference in the final side letter to the consideration in the Colorado Mills 

JV is telling, and the Denver West negotiations indicate strongly that there was not 

a definitive agreement or common understanding reached between Simon and 

KanAm regarding a substitute for Mills Units as non-cash consideration.319 As I 

noted in the summary judgment opinion in this matter, the side letter suggests that 

further negotiations were contemplated.320 There would be nothing to later “agree”

upon or “later determine” if the parties understood at that time that the units called 

for under the Colorado Mills agreement, to which the side letter was pegged, and 

which, like all of the other JVs here provided for Mills Units, simply meant 

“successor units” or “units similar to Mills Units.” Further supporting the absence 

of a meeting of the minds during this period, as Simon’s General Counsel testified, 

 

318 Compare JX0348 at 5 with JX0340. See JX0170. 

319 See Trial Tr. 909:18–910:19 (Braithwaite). It is difficult to see what non-cash consideration 

KanAm would be seeking at this time other than Simon Units. It is an irony of this case that in 

this negotiation KanAm appears to have sought a modification to let it elect Simon Units, while 

Simon sought to modify the call right to specify cash. If in fact KanAm was seeking Simon Units, 

I find it nonetheless unhelpful to Simon. Simon declined to agree to provide Simon Units, rather 

leaving the issue open by entering a side letter pegged to non-existent Mills Units.

320 Simon I, 2014 WL 4840443, at *16–17. 
69

there are no internal Simon communications indicating that Simon would provide 

its units to KanAm if it exercised a call right under the JV Agreements.321

I next briefly address the non-contractual statements by KanAm during this 

time period to investors and in audited financial statements, upon which Simon relies 

in an attempt to show the parties intended and understood that Simon Units were 

automatically substituted as consideration. Simon points to an October 9, 2007, 

meeting in Dusseldorf, Germany (the “Dusseldorf Meeting”) where according to 

Simon, KanAm communicated to certain investors and sales people that Simon Units 

were the required non-cash currency following Mills’ exit.322 The deposition

testimony of three investors and sales partners at the Dusseldorf Meeting supports

Simon’s assertion.323 Each alleges that Mr. von Boetticher, a KanAm principal and 

former Mills board member, informed those at the Dusseldorf Meeting, essentially, 

that there would be no changes to the exit mechanisms and that Simon Units would 

be substituted.324 At trial, Mr. von Boetticher did not recall making such statements 

to investors or any specifics of the meeting itself.325

 

321 Trial Tr. 258:12–258:20 (Barkley) (“QUESTION: And isn't it the case, sir, as we've talked 

about in your deposition, that you cannot identify a single internal memorandum or e-mail at Simon 

where Simon people said to each other during this period of time, from 2007 through and including 

2012, ‘Simon units will be provided to KanAm under the joint venture agreements’? ANSWER: 

I don't recall there being anything like that, yes.”); id. at 285:2–9 (Barkley). 

322 See Simon’s Post-Trial Opening Br. 36–39. 

323 See id. (quoting depositions of Norbert Geisen, Reiner Michael Cramer, Jeorg Dudel). 

324 See id. 

325 See Trial Tr. 532:8–536:8 (von Boetticher). 
70

Next, Simon points to communications between Juergen Goebel, a KanAm 

employee, and a KanAm investor, Albert Hoeller.326 Hoeller contacted Goebel and 

inquired about the procedure for liquidation in the future in light of Simon’s entry.327 

Goebel replied via email explaining, essentially, that nothing had changed, and that 

if the buy/sell provisions were triggered “the countervalue [would] be paid out in 

cash or in the form of Simon units.”328 Simon argues this email is strong 

contemporaneous evidence of KanAm’s understanding of the buy/sell provisions.329

Additionally, Simon points to KanAm’s audited financial statements 

following Simon’s return,

330 which indicated that there was no impact on the KanAm 

partnership and that the JV Agreements “under certain conditions may require the 

sale of [KanAm’s] interests.”331 KanAm made similar disclosures for several years, 

from 2008 through 2012, before later updating the financial statements.332 KanAm 

asserts that the above language simply reflects that Simon could still exercise the 

call but KanAm retained the discretion to select units, and that it was simply a 

“conservative position about what might be ‘required.’”333

 

326 See Simon’s Post-Trial Opening Br. 40–41 (citing JX0352). 

327 See JX0352 at 3. 

328 Id. at 1. 

329 See Simon’s Post-Trial Opening Br. 60 (citing JX0352); Simon’s Post-Trial Reply Br. 21 

(arguing “[t]he information conveyed in Mr. Goebel’s email reflected KanAm’s contemporaneous 

understanding”). 

330 See Simon’s Post-Trial Reply Br. 21–22.

331 See, e.g., JX0392 at 8–9.

332 See, e.g., JX0370; JX0392; JX0399; JX0419; JX0467; JX0521 at 13. 

333 See KanAm’s Post-Trial Sur Reply Br. 30. 
71

The evidence Simon has put forward regarding the Dusseldorf Meeting, the 

Goebel email, and KanAm’s financial filings is some evidence that KanAm expected 

that Simon could successfully call based on a tender of Simon Units. It does create

conflict in the record about whether it was mutually understood that Simon Units 

were a viable tender in place of Mills Units. KanAm has asserted that these are 

“random comments gleaned from non-contractual documents” and that “[t]he 

contracts, at all times, spoke for themselves and should be enforced as written.”334 

While “random comments” is an overstatement, the references are not so widespread 

within KanAm as to convince me that KanAm had a corporate understanding that 

Simon Units were acceptable tender, in light of the other evidence cited above. 

Importantly, as KanAm observes, this information does not present a course of 

dealing between two contractual parties,

335 and there is no evidence in the record 

that this information was relied on by Simon. Rather, during this time period, there 

were no internal communications at Simon reflecting their understanding that Simon 

Units were appropriate,

336 let alone a reliance on the above statements. I find that 

when viewed as a whole the extrinsic evidence during this time period, in light of

the unambiguous contractual terms, is insufficient to demonstrate that there was a 

 

334 KanAm’s Post-Trial Answering Br. 6. 

335 See KanAm’s Post-Trial Sur Reply Br. 27–28 (quoting Restatement (Second) of Contracts, § 

223(1) “[a] course of dealing is a sequence of previous conduct between the parties to an agreement 

which is fairly to be regarded as establishing a common basis of understanding for interpreting 

their expressions and other conduct”). 

336 See, e.g., Trial Tr. 258:12–258:20 (Barkley); id. at 285:2–9 (Barkley).
72

mutual intent, or meeting of the minds, between KanAm and Simon regarding the 

automatic substitution of Simon Units. 

d. Farallon’s Exit and Simon’s Attempt to Call 

Following Simon’s break up with Farallon, the 2012 Agreement and 

Indemnity was reached between KanAm and Simon. Simon points to the 2012 

Agreement as supportive of its position that Simon Units were substituted as the 

appropriate buy/sell consideration despite the language of the contracts.337 KanAm 

points out this agreement arose when Simon asked for KanAm’s consent regarding 

its acquisition of Farallon, and in exchange agreed to indemnify KanAm against 

losses. KanAm observes that there is no mention of the buy/sell provisions in the 

indemnity agreement nor is there any evidence that the parties intended this 

agreement to work such a change.338

I find the record supports KanAm regarding the 2012 Agreement. First, the 

Agreement was presented initially to KanAm by Simon’s General Counsel, who 

advised that “[t]here would be no changes required to existing venture agreements 

at property level companies . . . .”339 Similarly there is no testimony in the record 

that the parties understood or intended for such a substantial change to be worked to 

the buy/sell consideration by the 2012 Agreement. In other words, the 2012

 

337 See Simon’s Post-Trial Opening Br. 60–61. 

338 See KanAm’s Post-Trial Answering Br. 36–37.

339 JX0430 at 1; Trial Tr. 216:4–23 (Barkley); id. 225:1–5 (Barkley).
73

Agreement preserved existing contract rights, including KanAm’s right to insist on 

a tender of Mills Units. The 2012 Agreement did not create new rights regarding 

the call.

I next briefly address the circumstances surrounding the agreements under 

which KanAm agreed to an extension of the buy/sell exercise period, and Simon’s

eventual attempted call. When Simon first indicated its interest in exercising the 

call, KanAm did not immediately raise its current position that it could insist on 

Mills Units, and could thus thwart the call’s operation. KanAm did not raise this 

issue to Simon until after it signed two extensions to the buy/sell window in 2012. 

The call was not triggered that year, and in the fall of 2012 the Concord Mills JV 

Agreement was amended; however, no change was made to the buy/sell provision. 

During this period KanAm offered to renegotiate the buy/sell consideration—

including at an in-person meeting with Mr. Simon in 2013. Simon declined, and 

ultimately initiated this suit while triggering the call provisions. I take from these 

facts that KanAm, like Simon, was unsure of its ability to insist on Mills Units; it 

does not demonstrate to me that the parties understood that Simon Units were an 

agreed to substitute, therefore. 

e. The Contractual Terms

In sum, the JV Agreements unambiguously provide for Mills Units meeting 

certain specifications. There is insufficient extrinsic evidence to demonstrate, by a 
74

preponderance of the evidence, that Simon and KanAm shared a mutual intent or 

reached a meeting of the minds that, despite this unambiguous language, Simon 

Units could satisfy the call right. No doubt, there has been gamesmanship and

strategic silence by both sides spanning their long relationship. While Simon Units 

were initially contractually-compliant in the three original JVs to which KanAm was 

an original partner with Simon and Mills, those agreements were amended or 

restated to remove references to Simon Units. The three other JVs to which Simon 

was not an original investor never mentioned Simon Units. When the SimonFarallon JV acquired Mills there was contractual silence regarding these provisions. 

All sides knew consideration for the call was an unresolved issue, but failed to 

bargain for a substitute tender. Compounding the problem, in the best chance to 

address and fully settle the issue, Denver West—the only post-Simon-return JV—

Simon as well as KanAm punted on the issue. Unfortunately for Simon, I must 

therefore enforce the Agreements as written. Absent a showing of mutual intent 

regarding the substitution of Simon Units, I cannot add an additional term to the 

unambiguous contractual provisions. 

Before leaving a discussion on the meaning of the Agreements, I note that one 

of the JV Agreements at issue here, Orange City, includes what the parties have 

identified as unique language relating to successor interests and the substitution of 
75

successor units as the proper buy/sell consideration.340 Simon was not an initial party 

to the Orange City JV,341 but became a party following its acquisition of Mills. Like 

the other JVs at issue, Orange City provides that the default consideration in the 

event of a call is Mills Units meeting certain specifications.342 However, the 

definition of “Mills” or “TMLP”343 in this JV Agreement was not like the others. 

Specifically, Section 11.2 of the Orange City JV Agreement contains a clause that 

defines Mills as follows: “[Mills] (which term, for purposes of this Section 11.2 and 

Section 11.3 shall be deemed to include Mezz II GP LLC and any other Mills 

Partners).”344 The JV further defines Mills Partners as follows: “Mills Partner(s): 

Collectively, [Mills] and Mezz II GP LLC and their respective Affiliates, successors 

and/or assigns who or which become Partners in accordance with this 

Agreement.”345 Finally, the buy/sell consideration provision in Section 11.3 

provides that: “[i]f [Mills] is the Offeror . . . unless [KanAm] elects to receive cash, 

 

340 See Post-Trial Oral Argument Tr. 96–97 (arguing on behalf of KanAm that “the fact that it's in 

one and not in the others doesn't mean I take it from this one and read it into all the others. It tells 

me that they agreed in this one to this provision and affirmatively did not agree in any other 

agreement to that term. . . . the language that exists in Orange that does not exist in any of the other 

joint ventures, and Simon never asked to have it included”); Simon’s Post-Trial Opening Br. 17 

n.9 (identifying the unique language in the Orange City JV Agreement). 

341 See JX0155. 

342 Id. at §§ 11.3(d), 11.3(f). 

343 The Orange City JV Agreement’s short term for The Mills Partnership is “TMLP”—for clarity 

I have substituted “[Mills]” for “TMLP” when quoting the JV Agreement. 

344 JX0155 § 11.2(a) (emphasis added). 

345 Id. at § 1.39 (emphasis added); id. at § 1.2 (defining Affiliate, “[w]ith respect to any Person, a 

Person who, directly or indirectly, controls, is under common control with, or is controlled by, that 

Person,” with control meaning “the possession, directly or indirectly, of the power to direct or 

cause the direction of the management and policies of such Person”).
76

the Buy/Sell Price shall be paid in full in [Mills] [U]nits of limited partnership . . . 

.”346 Mills Units is not a separately-defined term. In other words, uniquely with 

respect to the JV Agreements at issue, under this Orange City Agreement,successors 

of Mills—like Simon—are specifically included in the definition of Mills, and thus 

“TMLP [Mills] Units” includes units of any successor of Mills (so long as they 

otherwise possess the requisite characteristics, including liquidity and tax avoidance, 

required of compliant Mills Units).

Under this contractual language, Simon points out that, as the successor to 

Mills, and via Section 11.2’s modifier of the definition of “[Mills]” for Sections 11.2 

and 11.3, its units are eligible to be explicitly contractually-compliant. As a result,

Simon attempts to make a universal point; it asserts that, since KanAm appears to 

have been indifferent to accepting successor operating partnership units in the 

Orange City Mills JV, it must be indifferent generally, and I should construe all of 

the JV Agreements consistent with Orange City Mills. I find the opposite. The fact 

that KanAm and Mills bargained for successor units to be tender in one JV 

Agreement makes more significant the fact that they omitted the same provision in 

the other Agreements. Moreover, in another JV negotiation not at issue here, Mills 

sought a similar provision, which KanAm rejected.347

 

346 Id. at § 11.3(d).

347 See Trial Tr. 770:16–772:1 (Braithwaite); JX0206 at 18. 
77

KanAm, for its part, argues that the definition of Mills to include successors 

“means only that Simon as a successor to [the Mills Partnership] can exercise the 

rights that [the Mills Partnership] had; it does not change the specified consideration 

from Mills Units to Simon Units.”348 I disagree. The parties to the Orange City JV 

could have, but did not, separately define Mills Units. They could have, but did not, 

provide that, notwithstanding that Mills is defined as Mills and any successors for 

the purposes of the buy/sell provision, “Mills Units” excluded successor units.349 

I construe the Orange City JV Agreement as follows: Simon as a successor is 

to be construed as “TMLP” [“Mills”]; and its units, if otherwise contractuallycompliant, are effective Mills Units, which are contractual tender for the call for 

KanAm’s interest in this JV. In support of this finding I note the broad modifier to 

the Mills definition is located directly within the Article of the JV Agreement 

covering transfers. The only question remaining is whether Simon, once read into 

the agreement per the definition, can offer compliant units pursuant to Section 

11.3(f). Section 11.3(f) provides that: “[a]ny Units received by [KanAm] pursuant 

 

348 KanAm’s Post-Trial Answering Br. 56 n.204. See Post-Trial Oral Argument Tr. 96 (arguing

on behalf of KanAm that “the language doesn’t track” to a substitution of Simon Units for Mills 

Units). 

349 I note that certain other JV Agreements without the broader definition present in Orange City 

provide in their corresponding payment provisions that “[a]ny TMLP Units received . . . .” rather 

than the “[a]ny Units received . . . .” language present in the Orange City JV. Compare JX0155 § 

11.3(f) with JX0152 § 11.6(f); JX0170 § 11.3(f). That is, unlike with other JVs, the payment 

provision in Section 11.3(f) of Orange City omits the direct reference to TMLP Units, indicating 

that successor units were contemplated. 
78

to this Section 11.3 shall have substantially the same rights (including redemption, 

conversion, registration and anti-dilution protection) as attached to units issued in 

connection with the formation transactions of [Mills Partnership] and Mills Corp . . 

. .”350 The majority of the briefing in this matter did not focus on this narrow issue. 

The evidence at trial made clear that there are differences, from KanAm’s 

perspective, between Simon and Mills Units. The parties differ as to the materiality 

of those differences. To be compliant, however, successor units in the Orange City 

JV need not be identical to any particular Mills Units; they only need to provide 

substantially the same rights in the four delineated areas. 

Simon asserts that both parties agree these narrower requirements are met with 

respect to Simon Units.351 While the record as it has been presented tends to support 

this assertion,352 in light of the absence of an explicit focus on this issue I will permit 

the parties to submit supplemental memoranda referencing the record on this issue 

if a stipulation cannot be reached as to whether compliant successor units have been 

tendered with respect to the Orange City JV.

353

 

350 JX0155 § 11.3(f). 

351 See Simon’s Post-Trial Reply Br. 33 (asserting that “[t]he parties agree that Simon Units satisfy 

[the tax deferral] central purpose and are indistinguishable with respect to redemption, conversion, 

registration, and anti-dilution – the only other characteristics of units identified in the buy/sell 

provisions”). 

352 See, e.g., Trial Tr. 1168:4–1169:15 (Fick); id. at 1275:10–1276:1 (Croker). 

353 I note my commentary here is limited only to these particular factors.
79

B. The Material Breach Doctrine

I next turn to a discussion of the doctrine of material breach. Simon argues 

that “[e]ven if the Court were to find that the extrinsic evidence does not show that 

the parties intended for the call right to be operative under the present circumstances, 

KanAm’s effort to escape its obligations independently fails because Simon’s 

willingness to deliver the buy/sell price in cash or Simon Units is not a material 

breach of the JV Agreements that would excuse KanAm’s performance.”354 Simon’s 

argument is perhaps better stated as that it stands ready to substantially perform, and 

thus I should specifically enforce KanAm’s reciprocal obligation to sell. 

Nonetheless, I will in this discussion refer to Simon’s position as one of “nonmaterial breach.” KanAm, for its part, asserts that the buy/sell provisions are 

contractual options to purchase and pursuant to Delaware law are to be strictly 

construed.355 Further they assert that specific contractual “default provisions” in the 

JV Agreements bar the doctrine of substantial performance.356

I first note that the call provision operates as an option; Simon has the right to 

purchase KanAm’s interest in each JV at certain contractually-provided times. The 

price to be paid is pegged to appraised value, and must be paid (absent an election 

by KanAm to take cash) in the equivalent value of units of the Mills Partnership. In 

 

354 Simon Post-Trial Opening Br. 64. 

355 KanAm’s Post-Trial Answering Br. 51–52.

356 Id. at 52–53.
80

order to trigger its right to purchase, Simon must comply with the conditions set 

forth in the contract. Specific performance of an option contract requires strict 

adherence to these conditions. I find Simon’s argument that it is not in material 

breach to be inapposite. Having failed to satisfy the conditions for the call, it cannot 

enforce the contract, as contractual provisions in option contracts are construed 

strictly. Moreover, specific contract language reinforces the point—the notice of the 

call, per the JV Agreements, is voidable absent compliance with the conditions 

necessary to compel the sale. My reasoning is explained in more detail below.

Simon’s argument that it is not in material breach turns on a doctrine designed 

to prevent a non-material deviation from the requirements of a contract from 

depriving a party of its expectations thereunder. Stated simply, it is a doctrine to 

prevent oppression through fortuity. Generally, under Delaware law, a breach will 

be deemed material if “touches the fundamental purpose of the contract and defeats 

the object of the parties in entering into the contract.”357 If a breach is not material, 

performance by the injured party is generally not excused and refusal to perform by 

the injured party may itself constitute a breach.358 That is, “a slight breach by one 

party, while giving rise to an action for damages, will not necessarily terminate the 

 

357 Preferred Inv. Servs., Inc. v. T & H Bail Bonds, Inc., 2013 WL 3934992, at *11 (Del. Ch. July 

24, 2013) (citations omitted). 

358 See BioLife Sols., Inc. v. Endocare, Inc., 838 A.2d 268, 278 (Del. Ch. 2003).
81

obligations of the injured party to perform under the contract.”359 The question of 

whether a breach is material sufficient to justify non-performance entails a factspecific weighing analysis.360

 To determine whether a breach is material, Delaware 

courts have looked to the factors provided by Section 241 of the Restatement 

(Second) of Contracts.361 The Restatement factors are as follows: 

(a) the extent to which the injured party will be deprived of the benefit 

which he reasonably expected; 

(b) the extent to which the injured party can be adequately compensated 

for the part of that benefit of which he will be deprived; 

(c) the extent to which the party failing to perform or to offer to perform 

will suffer forfeiture;

(d) the likelihood that the party failing to perform or to offer to perform 

will cure his failure, taking account of all the circumstances including 

any reasonable assurances; and 

(e) the extent to which the behavior of the party failing to perform or to 

offer to perform comports with standards of good faith and fair 

dealing.362

The parties spent much time at trial on this issue, establishing by evidence the 

similarities and differences between Mills and Simon Units, which I summarize 

briefly below. As stated above, among the prime concerns of KanAm is that the 

consideration provide tax benefits as well as liquidity for its members. Simon Units, 

 

359 Id. (citations omitted). 

360 See id. 

361 See, e.g., id. 

362 Restatement (Second) of Contracts § 241 (1981).
82

I note, do provide liquidity and are congruent, but not identical, with respect to tax 

consequences and risks.

Both Simon and Mills were structured as umbrella partnership real estate 

investment trusts (“UPREITS”). This entity structure, for both Simon and Mills, 

facilitated liquidity and tax benefits. As an UPREIT, Simon could provide limited 

partnership units of the Simon Partnership (Simon Units) that were redeemable for 

cash or stock. The assets themselves, the interests in the properties, were held at the 

partnership level. Upon redemption, the distributed Simon Units could convert into 

either cash or publicly traded stock of the parent REIT—Simon Corp. This process 

would generally permit a counterparty in a JV to secure non-recognition tax 

treatment—that is, generally speaking, an exchange of an interest in a JV for such 

units is not a taxable event under the United States tax code.363 Mills’ entity structure 

generally mirrored that of Simon, it offered units of Mills Partnership (Mills Units) 

that were redeemable and upon redemption could convert into publicly traded shares 

of Mills Corp.364 Thus, at a general level the operation and purpose of Mills Units 

and Simon Units was similar. 

 

363 See Trial Tr. 154:5–155:3 (Simon). 

364 See id. 
83

Simon and Mills as entities, however, were distinct in terms of size, portfolio 

composition,365 and their historical relationship to KanAm. The record supports that 

KanAm investors had a level of familiarity with Mills which they did not possess 

with Simon. KanAm contributed assets to Mills at Mills’ inception. Historically, 

KanAm had a large ownership stake in Mills—up to 41% at the time of the original 

Mills IPO; thus, the record supports a finding that when KanAm bargained to receive 

Mills Units, it had some reasonable expectation that it could influence the actions of 

Mills. Additionally, for almost two decades KanAm had three representatives on 

Mills’ Board, which evinces a special ability to monitor and participate in Mills that

did not exist with Simon. Mills, as a smaller entity, had a higher proportion of 

projects that were core to its business and unlikely to be sold, which sales themselves 

could trigger negative tax consequences.366 Simon, on the other hand, had a strategy 

of “aggressively recycling capital” which means they were more likely to exit JV 

projects, an event which could trigger tax consequences.367 Further, empirically, 

when given the chance upon Simon’s re-entry, only a small minority of KanAm 

investors elected to exchange their Mills Units for Simon Units.368 KanAm asserts 

 

365 I note that the investments were generally in specific projects, however, upon conversion the 

broader portfolio would be relevant because a particular unit or stock’s value would be tied to the 

broader portfolio. 

366 See Trial Tr. 389:14–17 (Foxworthy) (testifying that were Mills to lose certain of the JVs at 

issue here, it would have been “a terrible infringement of their franchise”); JX0613 at 47. 

367 See Trial Tr. 107:8–108:14 (Simon). 

368 See Pretrial Stip. 14; Trial Tr. at 1016:23–1018:24 (Hammond). 
84

that its contracts did not reflect an agreement to put its tax and economic destiny in 

the hands of the larger, and less familiar, Simon Entities. Simon points out, however,

that none of this alleged unique relationship was disclosed contemporaneously to 

KanAm investors when it entered certain JVs that provided for both Mills and Simon 

Units.369

The evidence indicates that payment in Simon Units could result in 

administrative and tax consequences for KanAm and its investors, beyond those 

inherent in Mills Units.

370

 If so, the injury to KanAm, for the most part, is not 

calculable ex ante, as the tax consequences are in the form of heightened tax risks 

that would depend on later determinations by regulatory authorities or actions by 

Simon.371 For example, German regulators would look to Simon’s approximately 

600 US based LLCs and apply a multi-factor test to each LLC for “opacity,” a 

finding of which would trigger additional tax consequences.372 KanAm observes 

that German tax authorities have already reviewed certain joint tax filings of KanAm 

and Mills, on the other hand, and accepted the classifications of taxation provided.373 

 

369 See Simon’s Post-Trial Reply Br. 34–35. KanAm chalks this up to being a “simple omission” 

and asserts these “1990s statements do not relate to the operative JV Agreements.” KanAm’s PostTrial Sur Reply Br. 38. 

370 I note that there was not a similar services agreement reached between Simon and KanAm, in 

contrast to the services agreement between KanAm and Mills discussed in the factual background 

section. See Trial Tr. 1018:15–22 (Hammond).

371 See generally JX0614. 

372 See, e.g., Trial Tr. 1358:10–1359:16 (Riha); id. at 1366:7–1368:8 (Riha).

373 See JX0614 at 19. 
85

Similarly, KanAm argues that if Simon were to add 6,000 German investors as 

limited partners further tax risks—arising from potential classification as a publiclytraded-partnership—would be triggered.374

 

In rebuttal, Simon points out that the only relevant tax protection actually 

contained in the JV Agreements is non-recognition tax treatment pursuant to Section 

721, and argues that KanAm’s professed current concern about these additional tax 

risks is litigation-driven.375 Simon observes that none of the tax risks now raised in 

litigation were communicated to KanAm investors via the prospectuses issued when 

Simon was a counter-party, and that KanAm did not bargain for the protections they 

now seek.376 Simon also observes that its units provide the requisite liquidity, 

conversion, and redemption qualities specified in the JV Agreements.

Finally, for the reasons laid out in painful detail in the factual background and 

extrinsic evidence analysis above, the record is unhelpful to Simon with respect to 

the equitable considerations under the Restatement analysis. Simon will not be 

deprived of a reasonable expectation of a benefit; the problem of the appropriate 

call-right tender was known by Simon from the time of the Simon-Farallon JV, and 

 

374 See KanAm’s Post-Trial Answering Br. 70 (citing JX0613 at 71–80). 

375 See Simon’s Post-Trial Reply Br. 33 (arguing Simon Units satisfy the tax deferred central 

purpose and are “indistinguishable” with respect to the other listed characteristics). 

376 Id. at 34. Simon also denies that such tax risks are legitimate. 
86

it chose to roll the dice rather than negotiate the issue. For similar reasons, KanAm’s 

position is equitably weak.

The foregoing recitation should demonstrate that a determination of the 

materiality of the difference between Simon and Mills Units, from the point of view 

of the parties under the factors discussed above, is an issue both fact-intensive and 

difficult. Here, however, I need not reach a conclusion under the material breach 

doctrine, as under the terms of the contracts, I find the analysis inapt.377 

The call right functions as an option. KanAm has contractually agreed to sell 

its interest in each JV to Simon, at Simon’s option, in exchange for a number of 

Mills Units to be determined by the appraised value of KanAm’s interest at the time 

sold. Regarding option contracts, the treatises indicate that precise compliance with 

the terms of the option is required before the sale is enforced. The doctrine of nonmaterial breach (or substantial compliance) is generally inapplicable to option 

contracts because a true forfeiture is not involved—each party retains its original 

interest—and the one–sided nature of such contracts, if not strictly construed, could 

allow, in effect, unilateral modification. As Williston on Contracts states: 

[w]hen the optionee decides to exercise its option, it must act 

unconditionally and according to the terms of the option . . . . Nothing 

 

377 I note, in any event, were I to invoke the doctrine, it is exceedingly difficult for me to see how 

providing consideration not in the form bargained for under the terms of the applicable contracts, 

between sophisticated parties, would not be a material breach. With respect to the buy/sell 

provisions, the nature of the consideration is naturally material; it is the gravamen of the 

agreement.
87

less than an unconditional and precise acceptance will suffice unless 

the optionor waives one or more of the terms of the option. . . . Because 

the option itself affords the offeree protection against the offeror's 

inconsistent action, the general attitude of the courts is to construe the 

attempt to accept the terms offered under the option strictly. The 

problem of a potential forfeiture does not enter into the matter.378 

The Restatement (Second) of Contracts is similar:

[d]espite equity's dislike of forfeitures, . . . requirements governing the 

time and manner of exercise of a power of acceptance under an option 

contract are applied strictly. It is reasoned that any relaxation of terms 

would substantively extend the option contract to subject one party to 

greater obligations than he bargained for.379

Here, KanAm bargained for Mills Units. To the extent I treat the call right as 

an option, deviation from the terms of the offer cannot be excused as a non-material 

breach. Simon argues strenuously that it would be unfair to treat the call right as a 

simple option. It rightly points out that I must read contracts as a whole, and that 

the call right is but a bargained-for portion of a larger contract; it argues that it has 

already performed under the contract and that it will be denied the full benefit of its 

bargain if the call can only be consummated with non-existent Mills Units. Treating 

a call right imbedded in a larger contract with other reciprocal obligations as an 

option is problematic, as Simon points out. The record indicates that the right to buy 

out counterparties as the projects mature was an important part of the JVs. Simon’s 

 

378 1 WILLISTON ON CONTRACTS § 5:18 (4th ed. 2006) (footnotes omitted). 

379 Restatement (Second) of Contracts § 25, Rpt. Note cmt. d (2008). See Liberty Prop. Ltd. P'ship 

v. 25 Massachusetts Ave. Prop. LLC, 2008 WL 1746974, at *17 n.75 (Del. Ch. Apr. 7, 2008) 

(quoting id.). 
88

contentions would be more persuasive here, however, if a reasonable expectation of 

Simon was that Simon Units would be accepted by KanAm. The record, however, 

shows that Simon was aware that at least an issue existed with respect to proper 

consideration, yet elected to proceed with the JVs regardless.

Treatment of the call under these particular JV Agreements as an option—

acceptance of which must be strictly construed—finds support in the provisions of 

the JV Agreements themselves. The contracts at issue require strict compliance with 

the buy/sell provisions in order to consummate the call. The “default provision,” 

which is contained in each agreement at issue,380 provides that “if at the time of 

Closing, either party fails to perform as required, then and in such event the nonbreaching party shall have the right to void the Buy/Sell Notice attributable thereto

or to pursue any rights at law or in equity (including without limitation, instituting a 

suit for specific performance).”381 As I have already found, the Plaintiffs have failed 

to show by a preponderance of the evidence that there was a meeting of the minds 

with respect to Simon Units being contractually-compliant substitute units. Rather, 

the contracts unambiguously require tender of Mills Units meeting certain 

 

380 See JX0027 § 11.3(e)(iv); JX0122 § 11.3(e)(iv); JX0120 § 11.3(e)(iv); JX0152 § 11.6(e)(iv); 

JX0155 § 11.3(e)(iv); JX0170 § 11.3(e)(iv); JX0342 § 11.3(e)(iv).

381 JX0152 § 11.6(e)(iv) (emphasis added). I note that while Simon asserts that this section alone 

is insufficient to void the buy/sell notices absent a showing of material breach, it relies on the 

second clause of this section in support of its argument that this contractual provision “alone is 

sufficient” to grant specific performance. See Simon’s Post-Trial Opening Br. 75; Simon’s PostTrial Reply Br. 47. 
89

specifications. The Plaintiffs are trying to perform the contract by offering noncompliant Simon Units. Simon has therefore failed to perform as required under the 

JV Agreements, and the bargained-for provision that if “at the time of Closing, either 

party fails to perform as required, then and in such event the non-breaching party 

shall have the right to void the Buy/Sell Notice attributable thereto . . .” has been 

triggered.382

KanAm has a contractual right to void non-compliant notices pursuant to the 

JV Agreements. Enforcement of the call right under the doctrine of non-material 

breach would render this bargained-for contractual right surplusage. Stated another 

way, the non-breaching party always has a right to avoid performance in the event 

of a material breach. If the contractual right to void the buy/sell notice simply meant 

KanAm may avoid closing only in the event of a material breach, it would do no

actual work in the contract. A fair reading of this provision is that in the event a 

party fails to comply with the requirements to exercise the buy/sell provision, the 

non-breaching party can void the notice. I find KanAm’s assertion that such a 

provision was put into these contracts, at least in part, to avoid a “close enough” 

argument persuasive.

Finally, I pause to briefly address Simon’s requested relief. The agreements 

in question were to conduct joint ventures. The call right gives Simon the right to 

 

382 See JX0152 § 11.6(e)(iv) (emphasis added).
90

buy out its counterparty for a specific consideration at a specific time. Simon seeks 

specific performance of that contractual right to purchase the KanAm interests, with 

Simon Units or cash, thereby forcing KanAm out of the JVs.383 

In order for equity to force KanAm to sell, Simon must demonstrate that it has 

complied with the contract and is able to perform. Delaware courts will specifically 

enforce a contract only if the party seeking relief establishes that “(1) a valid, 

enforceable, agreement exists between the parties; (2) the party seeking specific 

performance was ready, willing, and able to perform under the terms of the 

agreement; and (3) a balancing of the equities favors an order of specific 

performance.”384 Further, “[t]he decision as to the availability of specific 

performance rests within the sound discretion of this Court.”385 Additionally, 

“specific performance [is] an extraordinary remedy, not to be awarded lightly,” and 

a “party seeking specific performance must prove by clear and convincing evidence

that she is entitled to specific performance and that she has no adequate remedy at 

law.”386

 

383 While enforcement of the contract specifically is the primary relief requested, I note that Simon 

has also pursued damages on the theory that Simon Units are contractually-compliant and that by 

refusing to accept them and exit the JVs, KanAm breached—it seeks restitution for distributions 

after the attempted exercise of the call. 

384 BAE Sys. Info. & Elec. Sys. Integration, Inc. v. Lockheed Martin Corp., 2009 WL 264088, at 

*7 (Del. Ch. Feb. 3, 2009) (citations omitted). 

385 Id. (citation omitted). 

386 Halpin v. Riverstone Nat'l, Inc., 2015 WL 854724, at *5 (Del. Ch. Feb. 26, 2015) (citations 

omitted) (emphasis added).
91

As detailed above, Simon was not capable of performing under the terms of 

the agreements—it failed to provide the contractually required currency. Further, in 

light of its knowledge of, but failure to address, the issue of consideration in the JV 

Agreements, Simon would find difficult its burden to show by clear and convincing 

evidence that equity would favor specific performance even if I had found that

Simon Units were contractually-compliant. 

C. The Implied Covenant of Good Faith and Fair Dealing

I next turn to Simon’s claim arising under Count III of its Complaint, which 

asserts that KanAm violated the implied covenant of good faith and fair dealing by 

demanding non-existent Mills Units. This Court’s summary judgment opinion 

briefly addressed this issue stating that “as the JV Agreements do not address the 

unavailability of Mills Units, the Plaintiffs' allegation that the Defendants have 

breached their implied duty of good faith and fair dealing is not precluded by our 

case law.”387 I now revisit this issue in light of the fully developed factual record 

from trial.

As our Supreme Court has explained the implied covenant “is a limited and 

extraordinary legal remedy.”

388

 Generally, “the implied covenant requires a party in 

a contractual relationship to refrain from arbitrary or unreasonable conduct which 

 

387 Simon I, 2014 WL 4840443, at *14. 

388 Nemec v. Shrader, 991 A.2d 1120, 1128 (Del. 2010). 
92

has the effect of preventing the other party to the contract from receiving the fruits 

of the bargain.”389 The implied covenant, however, is limited to a gap filling role. 

The “implied covenant of good faith and fair dealing involves . . . inferring 

contractual terms to handle developments or contractual gaps that . . . neither party 

anticipated.”

390

 However, “[i]t does not apply when the contract addresses the 

conduct at issue.”

391

 In the same vein, “[t]he implied covenant only applies to 

developments that could not be anticipated, not developments that the parties simply 

failed to consider . . . .”392 Additionally, the covenant is “not an equitable remedy 

for rebalancing economic interests after events that could have been anticipated, but 

were not, that later adversely affected one party to a contract.”

393

 Finally, “[a] party 

does not act in bad faith by relying on contract provisions for which that party 

bargained where doing so simply limits advantages to another party.”

394

Simon asserts “that KanAm has violated the implied covenant of good faith 

and fair dealing by attempting to defeat Simon’s exercise of the call right by 

purporting to ‘choose’ payment in non-existent Mills Units.”395 Simon argues that 

 

389 Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434, 442 (Del. 2005) (internal quotations 

omitted).

390 Nationwide Emerging Managers, LLC v. Northpointe Holdings, LLC, 112 A.3d 878, 896 (Del. 

2015) (quoting Nemec, 991 A.2d at 1125) (alterations provided by the Supreme Court in 

Northpointe Holdings). 

391 Id. (citation omitted). 

392 Nemec, 991 A.2d at 1126.

393 Id. at 1128. 

394 Id. 

395 Simon’s Post-Trial Opening Br. 69. 
93

“KanAm has intentionally frustrated Simon’s fundamental rights” to exercise the 

call by voiding the buy/sell notices arbitrarily and unreasonably.396 Simon alleges 

that KanAm’s interpretation is “especially unreasonable given KanAm’s position 

that its put right remains fully intact” and that “the parties did not and never would 

have agreed to such an unfair arrangement had they thought to negotiate with respect 

to the matter.”

397

 KanAm counters that there is no gap to be filled here—that the 

parties expressly were aware that the JV Agreements required tender of Mills Units,

and yet there was a decision on both sides to not address a replacement currency. 

Simon’s position, in my view, is not supported by our law or the facts of this 

matter. This is not a case where the parties never considered that exercise of an 

option would be frustrated by an unexpected happenstance. Dispositive, I think, of

Simon’s claim is the fact that while there was contractual silence on this issue from 

both sides, the issue was not unknown to the parties—each side independently 

identified the potential issue, attempts were made to negotiate it, but no agreement 

was ever reached. That is, the circumstances the parties found themselves in—a call 

provision that explicitly provides the seller the option to require unavailable units as 

consideration—was recognized by all, but no agreement was reached. A party, after 

 

396 Id.

397 Id. at 70. I note, in light of my findings, which effectively render the call right unenforceable, 

it remains to be determined whether KanAm’s put right remains operative, and whether, in equity, 

it could enforce such a right. The put and call were obviously negotiated to be reciprocal, and the 

continued vitality of the put is problematic.
94

consciously avoiding an issue, cannot seek rescue through the implied covenant, and 

I may not provide through equity what the parties failed knowingly to provide for 

themselves. Further, nothing in the record supports the implication that the parties 

would have agreed to the automatic substitution that Simon seeks through the 

implied covenant. Since I cannot know what resolution the parties would have 

reached through negotiation, relief via the implied covenant is unavailable.

D. Waiver/Estoppel 

1. Waiver

Simon asserts that KanAm waived any right it had to insist on Mills Units via 

its words or conduct over the course of several years, during which, according to 

Simon, KanAm demonstrated an understanding that Simon Units were acceptable 

non-cash consideration. KanAm observes that Simon was aware of the JV 

Agreements’ terms and that KanAm “had no duty to tell Simon that the contractual 

Buy/Sell Provisions meant what they say.”398

It is well-settled that a party may waive her contractual rights; as our Supreme 

Court has explained, “[w]aiver is the voluntary and intentional relinquishment of a 

known right.”

399

 Delaware Courts will find a waiver upon a showing “(1) that there 

is a requirement or condition capable of being waived, (2) that the waiving party 

 

398 KanAm’s Post-Trial Answering Br. 79. 

399 Realty Growth Inv'rs v. Council of Unit Owners, 453 A.2d 450, 456 (Del. 1982) (citations 

omitted). 
95

knows of that requirement or condition, and (3) that the waiving party intends to 

waive that requirement or condition.”400 Waiver involves “knowledge of all material 

facts and an intent to waive, together with a willingness to refrain from enforcing 

those contractual rights.”401 The standard for demonstrating waiver is “quite 

exacting;” because waiver is redolent of forfeiture, “the facts relied upon to 

demonstrate waiver must be unequivocal.”

402

 

In support of its waiver claim, Simon points to statements allegedly made at 

the Dusseldorf Meeting and the Goebel email exchange, as both representing 

“unequivocal expression of KanAm’s intent to waive any right to insist on receiving 

non-existent Mills Units.”403 Additionally, Simon points to KanAm’s dealings with 

Brookfield, including Braithwaite’s undisclosed agreement in principle, to negotiate 

in good faith the buy/sell consideration, despite his service on the Mills board.404 

Simon asserts that “KanAm had an obligation in good faith to raise” the issue in 

connection with the Simon-Farallon JV’s acquisition of Mills.405

 

400 Amirsaleh v. Bd. of Trade of City of N.Y., 27 A.3d 522, 530 (Del. 2011) (citation omitted).

401 AeroGlobal Capital Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428, 444 (Del. 2005) (citation 

omitted). 

402 Amirsaleh, 27 A.3d at 529 (internal quotations omitted). See Kallop v. McAllister, 678 A.2d 

526, 532 (Del. 1996) (“Waiver, however, requires more than mere inaction. To substantiate his 

waiver defense, [the defendant] needed to show that [the plaintiff] intentionally relinquished his 

right to rely on the Letter Agreement.”) (citations omitted). 

403 Simon’s Post-Trial Reply Br. 44–45.

404 Simon’s Post-Trial Opening Br. 71. 

405 Id. at 72.
96

Simon has failed to demonstrate KanAm’s knowing and unequivocal waiver 

of the right to insist on receiving Mills Units; that is, the facts relied upon in an 

attempt to prove waiver are not unequivocal in nature. While the allegations 

surrounding the Dusseldorf Meeting and the Goebel email do indicate that certain 

individuals at KanAm thought it might be compelled to accept Simon Units, they do 

not demonstrate an intentional and knowing relinquishment of a right. These 

statements were not made directly to Simon—there were no such communications

by KanAm to Simon. However, during the general time period of the Goebel email 

and Dusseldorf Meeting, in late 2007,

406 the Denver West negotiations occurred 

where Simon itself refused to provide Simon Units and insisted on cash 

consideration for the buy/sell agreement. KanAm informed Simon there were 

broader issues at play arising under the buy/sell provisions awaiting resolution. 

Similarly, the executed Denver West side-letter was pegged to resolution of an 

existing dispute, that is, what the parties might later “agree” or “determine” would

apply to the Colorado Mills JV Agreement, which itself provided for Mills Units. 

The Denver West negotiation clearly reveals that the parties were aware that the 

consideration issue was unsettled and required “agreement,” or judicial 

“determination,” and cuts strongly against a clear and unequivocal waiver. 

 

406 The Goebel email exchange occurred in December 2007. JX0352. The Dusseldorf meeting 

was held on October 9, 2007. See Simon’s Post-Trial Opening Br. 36. The Denver West side 

letter was executed on October 17, 2007. JX0348. 
97

Following Denver West, Simon simply points to several years of silence on the issue. 

This is insufficient to demonstrate waiver. I note that the condition to be waived—

payment in Mills Units—would not arise until the buy/sell was triggered, making 

KanAm’s silence on this issue less persuasive. I find Simon has failed to make a 

sufficient showing of the required elements of waiver. 

2. Quasi-Estoppel 

Simon has also asserted that KanAm is estopped from insisting on the 

contractually required default consideration.407 Specifically, Simon argues that the 

doctrine of quasi-estoppel prevents KanAm from asserting a position “inconsistent 

with a position it has previously taken.”408 Generally, quasi-estoppel “precludes a 

party from asserting, to another's disadvantage, a right inconsistent with a position 

it has previously taken.”

409

 Importantly, unlike traditional estoppel, this Court has 

explained that a “party does not need to show reliance for quasi-estoppel to apply.”

410

 

However, the standard remains high, as our Supreme Court has explained “the 

doctrine of quasi-estoppel applies when it would be unconscionable to allow a person 

 

407 See Simon’s Post-Trial Opening Br. 73–75; Dkt. No. 115. While the doctrine of equitable 

estoppel was specifically pled, it was not clearly pursued in post-trial briefing and to the extent it 

is not deemed waived, the elements have not been proven. Reasonable reliance, an element of 

equitable estoppel, is lacking under the facts here.

408 Simon’s Post-Trial Opening Br. 73. 

409 Pers. Decisions, Inc. v. Bus. Planning Sys., Inc., 2008 WL 1932404, at *6 (Del. Ch. May 5, 

2008) (internal quotations omitted). 

410 Barton v. Club Ventures Investments LLC, 2013 WL 6072249, at *6 (Del. Ch. Nov. 19, 2013)

(citation omitted). 
98

to maintain a position inconsistent with one to which he acquiesced, or from which 

he accepted a benefit.”411 Further, quasi-estoppel requires a showing that the “party 

against whom the estoppel is sought must have gained some advantage for himself 

or produced some disadvantage to another.”

412

In support of its quasi-estoppel argument, Simon again points to the Goebel 

email exchange and the Dusseldorf Meeting.413 Again, Simon’s reliance is not at 

issue, so the fact that these representations were not made to Simon is of little 

moment. The record, including the Denver West negotiation, shows, however, that 

there was a legitimate disagreement at the time, between these parties, regarding 

non-cash consideration. I decline to find that KanAm’s conduct here, via certain 

statements to investors, rises to the level of unconscionability needed to invoke the 

doctrine of quasi-estoppel. KanAm, while strategically silent at certain points, has 

not engaged in a shocking shift in position amounting to unconscionable action; in 

other words, a decision to stand on the bargained-for language of the contracts does 

not shock the conscience. I find there is an absence of the type of “self-interested 

180 degree turn” which has led to the application of the doctrine in prior cases.414

Enforcing the contracts as written here would not offend equitable principles. 

 

411 RBC Capital Markets, LLC v. Jervis, 129 A.3d 816, 872–73 (Del. 2015) (internal quotations 

omitted) (emphasis added). 

412 Id. at 873 (internal quotations omitted). 

413 See Simon’s Post-Trial Opening Br. 74.

414 See Pers. Decisions, Inc., 2008 WL 1932404, at *7. 
99

E. KanAm’s Counterclaim

I now turn to KanAm’s Counterclaim.

415 The Counterclaim alleges breach of 

contract by Simon for knowingly providing invalid buy/sell notices in breach of the 

buy/sell provisions of the JV Agreements and seeks a declaratory judgment.

416

 

KanAm seeks damages arising from this purported breach, including but not limited 

to the cost of the appraisal process that was triggered following Simon’s delivery of 

the notices.417 Finally, in addition to a request for damages, KanAm seeks fees 

pursuant to the JV Agreements along with pre- and post-judgment interest.418 Each 

remaining aspect of the Counterclaim is briefly addressed below. 

1. Breach of Contract and Damages

KanAm bears the burden of proving every element of its breach of contract 

claim, including damages, by a preponderance of the evidence. KanAm’s theory for 

breach appears to be as follows: the buy/sell notices were defective because Simon 

could not tender the default consideration, the notices still triggered the mandatory 

appraisal process, and KanAm incurred the costs of that appraisal process.

419 But 

KanAm has not demonstrated breach of the agreement. KanAm acknowledges that 

Simon had the right to call, which it did. A contractual appraisal of KanAm’s interest 

 

415 I need not address KanAm’s affirmative defenses in light of my findings above. 

416 See Dkt. No. 110 ¶¶ 44–54. I note the timeliness of the Concord Mills notice was not pursued 

in post-trial briefing.

417 See id. at ¶ 50.

418 Id. at Prayer For Relief; Pretrial Stip. 33. 

419 See KanAm’s Post Trial Sur Reply Br. 51. 
100

resulted. At that point, KanAm had the option to accept cash or demand Mills Units. 

It elected the latter. Simon was unable to perform, triggering KanAm’s right to void 

the call. No breach occurred. Similarly, the costs of the appraisal are not “damages” 

but rather an expense of the JV triggered pursuant to contract. 

While this is a legal, not an equitable, claim, I note that KanAm, like Simon, 

avoided bringing the consideration issue to a head by its strategic silence; it can 

hardly complain equitably that Simon sought to tender Simon Units.

Finally, the Counterclaim seeks declaratory relief on two remaining points 

which were litigated to conclusion:420 first, that the JV Agreements require Simon to 

pay in Mills Units unless KanAm elects cash, and second, that Simon cannot enforce 

its call right by tendering Simon Units.421 In light of my discussion above, and 

setting aside the Orange City JV, KanAm’s request for declaratory relief is granted.

2. Fees and Interest 

Each side has sought fees in connection with this action pursuant to the fee 

shifting provisions in the JV Agreements.422 The fee provision both parties rely on 

provides “[i]n the event the Partnership or any Partner (or its Affiliates) institutes 

litigation” which asserts a claim arising out of the JV Agreements or relating to the 

project, or the partnerships, “the parties hereto agree that the prevailing party in such 

 

420 See Dkt. No. 110 at ¶ 54.

421 Id.

422 See Simon’s Post Trial Opening Br. 76–77; KanAm’s Post Trial Sur Reply Br. 52–53. 
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litigation or administrative action shall be entitled to recover its out-of-pocket costs 

and expenses of defending or maintaining such litigation or administrative action, 

including without limitation, attorneys’ fees.”423

The JV Agreements thus provide a broad fee-shifting provision to a covered 

party who is successful in litigating issues arising out of the JV Agreements. Both 

sides assert that the present litigation is covered by the provision.424 Our Supreme 

Court has explained that: 

[u]nder the American Rule and Delaware law, litigants are normally 

responsible for paying their own litigation costs. An exception to this 

rule is found in contract litigation that involves a fee shifting provision. 

In these cases, a trial judge may award the prevailing party all of the 

costs it incurred during litigation. Delaware law dictates that, in fee 

shifting cases, a judge determine whether the fees requested are 

reasonable.425

KanAm, as the prevailing party, is entitled to fees with respect to the bulk of Simon’s 

claims. Simon, in turn, prevailed on the Counterclaim and may yet prevail on the 

Orange City claim. If, after resolution of the Orange City matter, the parties cannot 

agree on a fee award, they should so inform me, and I will address the issue. 

 

423 See JX0066 § 14.9 (emphasis added). See also Simon’s Post Trial Opening Br. 77 (citing 

JX0066 § 14.9). Because the parties have not differentiated the fee provisions in the JV 

Agreements, I assume they are sufficiently similar to the above cited language by the Plaintiffs. 

424 See Simon’s Post Trial Opening Br. 76–77; KanAm’s Post Trial Sur Reply Br. 52–53.

425 Mahani v. Edix Media Grp., Inc., 935 A.2d 242, 245 (Del. 2007) (citations omitted). 
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IV. CONCLUSION 

For the reasons set forth above, I find that the Plaintiffs’ request to enforce its 

call right (setting aside the Orange City JV) is denied; that the Defendants’ request 

for declaratory judgment is granted, and that the Counterclaim is otherwise 

dismissed. The parties should confer and agree on a method to address the 

outstanding issues regarding the Orange City JV, as well as fees and costs.