Opinion ID: 1995369
Heading Depth: 1
Heading Rank: 2

Heading: the boston house dispute

Text: In 1958, Synanon was registered in California as a tax-exempt, nonprofit organization. Its avowed purposes were to rehabilitate drug and alcohol abusers and to engage in research, public education and charitable distribution. Two decades later, when the events giving rise to this litigation began, Synanon had become a highly controversial organization. National coverage, including a December 1977 story in TIME magazine, reported that Synanon had been transformed by its founder and leader, Charles Dederich, into a violent cult. In April 1978, in search of a national headquarters and a residence for its members, Synanon approached appellee Coldwell Banker and Company, a real estate broker. One of Coldwell Banker's listings was the Boston House, 1711 Massachusetts Avenue, N.W., an apartment building owned by appellees Stuart Bernstein and Samuel Kushner. Appellee James Kabler, Coldwell Banker's sales agent, suggested that the Boston House would suit Synanon's purposes. An Agreement of Sale was signed on April 28, specifying a purchase price of $5,600,000. Synanon paid a down payment of $250,000, which Bernstein and Kushner were allowed to keep if Synanon defaulted on the purchase agreement, and Synanon was permitted to occupy two floors of the building pending settlement. It was the failure of the Boston House deal that led to the present dispute. The Boston House Tenants' Association opposed the sale. Together with an Advisory Neighborhood Council, it lobbied the District of Columbia Zoning Commission to change the zoning laws, so that Synanon would no longer have an automatic right to convert some of the existing apartment units into offices for nonprofit use. Their lobbying succeeded. That same week, an evening TV news show ran a four-part series on the cult aspects of Synanon and its proclivity for violence. By mid-June, Synanon was facing ever-increasing problems with the purchase. All in the one day, three critical events occurred. First, the Chief of Zoning Inspection informed Synanon that conversion of the building to office use would require a special exception under a recent emergency order. Second, Bernstein notified Synanon that he was treating allegations of harassment, made by the original Boston House residents against their new Synanon neighbors, as a breach of the Agreement of Sale. And, third, Kabler, Coldwell Banker's sales agent, revealed to Synanon that the floor load capacity of the Boston House might not be sufficient to meet the minimum requirements for office use under the District's building code. Kabler had apparently known this when he suggested the Boston House to Synanon, because another potential purchaser had withdrawn his interest about a week previously when Coldwell Banker, at the potential purchaser's request, obtained an unfavorable floor load capacity report from a building inspector. Armed with this information, Kabler allegedly attended three meetings with Synanon representatives, before the purchase agreement was signed, without disclosing the possible floor load capacity problem. On June 17 or 18, Synanon decided to move out. At that point, Synanon insisted that the obligation was on Bernstein and Kushner to do whatever was needed to render the building suitable for office use. Bernstein and Kushner put that onus on Synanon. Eventually, a structural engineer reported that the building code would not permit the Boston House to be used for offices. On July 6, Bernstein and Kushner declared Synanon in default under the Agreement of Sale; the next day, Synanon made the same accusation against Bernstein and Kushner.