Court Opinion

ID: 2968690
Source: CourtListenerOpinion
Date Created: 2015-09-22 07:53:02.406467+00
Date Added: 2024-06-11T15:28:50.879530
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                              No. 11-1685

GREENBELT VENTURES, LLC,

                 Plaintiff - Appellant,

           and

METROLAND DEVELOPERS, LLC,

                 Plaintiff,

           v.

WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY,

                 Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt.      Alexander Williams, Jr., District
Judge. (8:10-cv-00157-AW)

Argued:   March 23, 2012                      Decided:   May 11, 2012

Before WILKINSON, MOTZ, and DUNCAN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: David M. Sheehan, THOMAS & LIBOWITZ, PA, Baltimore,
Maryland,   for   Appellant.     Bruce  P.  Heppen, WASHINGTON
METROPOLITAN AREA TRANSIT AUTHORITY, Washington, D.C., for
Appellee. ON BRIEF: Carol B. O'Keeffe, General Counsel, Gerard
J.   Stief,   Senior   Associate  General  Counsel, WASHINGTON
METROPOLITAN   AREA   TRANSIT   AUTHORITY,   Washington,   D.C.,   for
Appellee.

Unpublished opinions are not binding precedent in this circuit.

                                  2
PER CURIAM:

             This case arises from a failed real estate transaction

concerning land near a metro station in Prince George’s County,

Maryland.          After      rejecting      plaintiff’s          tort,     contract,         and

quasi-contract claims, the district court dismissed the case.

For the reasons that follow, we affirm.

                                             I.

             The    Washington         Metropolitan            Area    Transit        Authority

(“WMATA”)     --     a      government    agency         created       by   an     Interstate

Compact     (the    “Compact”)         between     Maryland,          Virginia,        and    the

District of Columbia -- is responsible for the construction and

operation     of        a    transit     system      for        the    Washington,           D.C.

metropolitan area.            WMATA leases and sells real property located

at   or    near    its      metro   stations       for    construction           of   transit-

oriented     development          projects.        Under        the    Joint      Development

Policies and Guidelines adopted by the WMATA Board of Directors,

the Board alone is responsible for approving developer selection

and the terms of contracts with the designated developer.

             WMATA owns 78 acres of real estate in Prince George’s

County near the Greenbelt Metro Station.                         On December 21, 2000,

WMATA entered into a Joint Development Agreement (the “JDA”)

with      Metroland         Developers,      LLC     to        develop      the       Greenbelt

property.         The       JDA   required    WMATA       to    sell     the     property      to

                                              3
Metroland     for     $6.4        million,       contingent       on        Metroland’s

satisfaction of milestone dates and closing conditions, as well

as its construction of replacement parking facilities.                         The JDA

expressly provided that Metroland could not assign its rights

under the agreement without prior written approval from WMATA,

but that “approval shall not be unreasonably withheld.”

            Greenbelt        Ventures,         LLC   (“GV”)   is        a      Delaware

corporation established for the purpose of participating in the

Greenbelt project.          It was not a party to the JDA.                  In 2005, GV

and Metroland reached an agreement under which GV would acquire

a controlling interest in Metroland.                   GV then asked WMATA to

approve     the   acquisition        and       the   assignment        of    the    JDA.

According to GV, WMATA orally represented on several occasions

that it had already approved the change in Metroland’s ownership

and that written approval was forthcoming.                In reliance on these

statements, GV asserts, it expended time, effort, and money in

support of the development plans.

            On September 1, 2006, GV alleges, WMATA informed GV

that written approval had not yet been granted and would require

the Board’s endorsement of an amended JDA.                    According to GV,

WMATA conditioned approval of the assignment on an increase in

the   purchase      price    of    the     Greenbelt    property,           along   with

additional concessions from GV.                From February 2007 until April

2008, GV protested to various government officials that WMATA

                                           4
was    unreasonably      withholding        consent       for    the     transfer   of

ownership.

              WMATA staff then negotiated the terms of an amended

contract with both Metroland and GV, and the parties agreed to a

Revised JDA in June 2008.               The Revised JDA was placed on the

Board’s agenda for consideration at its July 24, 2008 meeting.

However, it was later pulled from that agenda and scheduled for

September 2008, only to be removed again after the Washington

Post    published       an    article     indicating         that      the   FBI    was

investigating corruption in the project.                   Since then, no action

has    been   taken     to    adopt   the       Revised   JDA.         Following    the

termination     of    Metroland’s       agreement     with      GV,    Metroland    and

WMATA entered into an amended JDA, which was approved by the

WMATA Board on March 24, 2011 and executed on May 2, 2011.

              GV sued WMATA for breach of contract, fraud, breach of

fiduciary       duty,        tortious       interference          with       contract,

interference     with    prospective        advantage,      promissory       estoppel,

and unjust enrichment.           On August 31, 2010, the district court

granted WMATA’s motion to dismiss as to the tort, promissory

estoppel, and unjust enrichment claims, finding that they were

barred by WMATA’s sovereign immunity, but allowed the contract

claim to proceed.            The court reasoned that equitable estoppel

and part performance of the JDA constituted exceptions to the

Statute of Frauds.            WMATA moved for reconsideration, claiming

                                            5
that   its     sovereign         immunity     precluded         GV’s     defenses        to   the

Statute of Frauds.            On June 1, 2011, the district court agreed

with   WMATA,        dismissing        GV’s    breach          of     contract     claim      and

ordering the case to be closed.                 This appeal followed.

                                              II.

                                              A.

             GV raises a number of arguments in this appeal.                                   We

begin with GV’s breach of contract claim.                              Relying on alleged

oral statements by WMATA staff, GV argues that “WMATA consented

to     [its]        acquisition         of         the     ownership           interest        in

Metroland . . . .”           Appellant’s Br. at 5.                  However, the JDA -- a

contract between WMATA and Metroland -- makes clear that it is

not assignable to a third party “without WMATA’s prior written

approval”      (emphasis           added).           It        further        provides        that

“[w]henever this Agreement . . . requires consent or approval,

such consent or approval shall . . . not be effective unless in

writing,”      and    that       the   Agreement         “shall       not     be   amended     or

modified     in     any     manner     except       by    an    instrument         in    writing

executed by the parties as an Amendment.”

             It      is    not     surprising        that       the     JDA    requires       any

assignments to be in writing.                      The Greenbelt project involves

millions       of         dollars      in      renovations,              and       contractual

relationships        of     this    magnitude        and    complexity         are      normally

                                               6
governed by written contracts, not oral agreements.                                   Written

instruments      allow      parties     to   avoid     the      potential      evidentiary

problems     involved        in     establishing          the     terms       of     an     oral

agreement.        The      JDA   thus   gives      WMATA     discretion        to    withhold

endorsement of potential assignees -- allowing it to protect the

public fisc, maintain quality controls, and safeguard against

corruption -- and the written approval requirement ensures that

WMATA has in fact approved an assignment.

             As GV does not dispute, WMATA never provided it with

written approval of the proposed assignment of the JDA.                                   WMATA

staff negotiated with Metroland and GV in order to resolve the

terms by which the proposed assignment would be submitted for

approval   to     the      WMATA    Board,    but     this      item   was    subsequently

removed    from       the    Board’s        agenda,       and    it     has    never        been

considered      by    the    Board.         Because    WMATA         never    gave    written

approval for the assignment of Metroland’s ownership interest,

GV was never a party to any contract with WMATA.

           Moreover, under WMATA’s Joint Development Policies and

Guidelines,      the    Board       itself    --    and    not       WMATA    staff       --    is

responsible for approving developer selection and the terms of

final contracts.            Thus, even accepting GV’s allegations that

WMATA staff orally agreed to assign the JDA to GV, those staff

members    did       not     have     the    authority          to     approve       such       an

assignment.          GV’s    failure    to    obtain      written       approval      of       the

                                              7
proposed assignment from the Board itself defeats its breach of

contract claim.

                                      B.

             GV’s contract claim is further barred by the Maryland

Statute of Frauds.        Under Maryland law, which applies to this

diversity case, “No action may be brought on any contract for

the   sale   or   disposition   of   land   or   of   any     interest    in   or

concerning     land   unless   the   contract    on   which    the   action    is

brought, or some memorandum or note of it, is in writing and

signed by the party to be charged or some other person lawfully

authorized by him.”      Md. Code Ann., Real Prop. § 5-104.              Because

any contractual relationship between WMATA and GV involves the

sale of an “interest in or concerning land,” and because GV has

failed to allege the existence of any written agreement signed

by WMATA, its breach of contract claim fails under the Statute

of Frauds. *

      *
       GV asserts that it should have been allowed to pursue
discovery in order to locate a writing that would satisfy the
Statute of Frauds.    It speculates that such a writing must
exist, but provides no colorable basis for this conclusion.
Consequently, the district court properly denied GV’s discovery
request, which is nothing but a fishing expedition. See, e.g.,
Susko v. City of Weirton, No. 5:09-CV-1, 2011 WL 98557, at *4
(N.D. W. Va. Jan. 12, 2011) (noting that “mere speculation that
documents exist is not a sound basis” for permitting discovery
to go forward).

                                      8
            GV    argues      that     its     claim       is     not    governed     by     the

Statute    of    Frauds      because     “the      JDA     and    the    Revised      JDA    are

simply agreements concerning the ownership percentages of the

entities, not the direct transacting of transfers of the real

property.”          Appellant’s          Br.       at      25-26.             However,      this

characterization        is    at     odds      with       GV’s    own     pleading,       which

describes the benefit of its bargain with WMATA as “the right to

obtain    legal    title     to    the   Property,”          J.A.       41,    and   with    the

language of the JDA itself, which states, “Subject to the terms

and conditions set forth in this Development Agreement, WMATA

agrees to sell and convey to [Metroland], and [Metroland] agrees

to buy from WMATA, the Property,” J.A. 67.                                Moreover, GV is

seeking a controlling interest in Metroland, whose chief asset

is the potential interest in the realty.                          As contracts for the

sale of 78 acres of real estate, the JDA and Revised JDA plainly

involve the disposition of an “interest in or concerning land,”

and therefore fall within the scope of the Statute of Frauds.

            GV     further        contends         that     the     doctrines        of     part

performance       and   promissory        estoppel          bar    WMATA’s       Statute      of

Frauds defense.         Under certain conditions, part performance and

promissory       estoppel     allow      one       party     to    estop       another      from

invoking the Statute of Frauds.                    See Harrington v. M.C. Fuhrman

& Assocs., LLC, No. WDQ-10-1258, 2011 WL 90234, at *2 (D. Md.

Jan. 10, 2011); Kline v. Lightman, 221 A.2d 675, 684 (Md. 1966)

                                               9
(citations        omitted).         The   contracts     here   fall      within    these

exceptions to the Statute of Frauds, GV argues, due to the time,

energy, and money that it devoted to the Greenbelt project based

on WMATA’s oral representations.

                 In response, WMATA argues that its sovereign immunity

prevents GV from asserting the exceptions in this case.                              The

Compact,         which   was    adopted     by    Maryland,    Virginia,     and    the

District of Columbia, grants WMATA the same privileges as that

of    a    state,    including      sovereign     immunity.       See,    e.g.,    Delon

Hampton & Assocs. v. WMATA, 943 F.2d 355, 359 (4th Cir. 1991).

Thus, WMATA is generally immune from suit unless it has waived

its immunity.

                 According     to   GV,   however,    WMATA    broadly     waived    its

immunity through § 80 of the Compact, which provides:

          The Authority shall be liable for its contracts and
          for its torts and those of its directors, officers,
          employees and agents committed in the conduct of any
          proprietary function, in accordance with the law of
          the applicable signatory (including rules on conflict
          of laws), but shall not be liable for any torts
          occurring   in  the performance   of  a   governmental
          function.    The exclusive remedy for such breach of
          contracts and torts for which the Authority shall be
          liable, as herein provided, shall be by suit against
          the Authority . . . .

Md.       Code   Ann.,   Transp.     §    10-204(80).     GV     asserts    that    “the

express terms of the WMATA Compact incorporate both the Statute

of    Frauds      and    the   appellate     decisional    law    interpreting      and

applying it, including the case law relating to the exceptions

                                             10
of ‘part performance’ and ‘estoppel.’”                           Appellant’s Br. at 30.

Thus, GV claims, “[t]here are simply no grounds for WMATA to

invoke      the    Statute    of     Frauds         as    a     defense       to   Greenbelt’s

contract action and then claim the cloak of sovereign immunity

to   the    exceptions       to    the    Statute         of     Frauds       under   Maryland

decisional law.”        Id.

             GV’s argument misfires.                 GV has failed to provide any

specific basis for concluding that WMATA waived its immunity as

to part performance and estoppel claims in § 80.                                   A waiver of

sovereign     immunity,       like       that       contained       in    §    80,    must    be

“‘unequivocally expressed’ in the statutory text” and “strictly

construed, in terms of its scope, in favor of the sovereign.”

Dep’t of the Army v. Blue Fox, Inc., 525 U.S. 255, 261 (1999).

It is anything but clear that WMATA has waived its sovereign

immunity as to part performance and estoppel claims, see Martin

v. WMATA, 273 F. Supp. 2d 114, 119 (D.D.C. 2003), but GV could

not recover on these exceptions to the Statute of Frauds in any

event.       For    “[e]quitable         estoppel         against       the    government     is

strongly disfavored, if not outright disallowed . . . .”                                   Volvo

Trucks of N. Am., Inc. v. United States, 367 F.3d 204, 211 (4th

Cir. 2004).         In Office of Personnel Management v. Richmond, 496

U.S. 414 (1990), for instance, the Supreme Court stated, “we

have reversed every finding of estoppel [against the government]

that   we    have    reviewed.”          Id.    at       422.      If    estoppel     is     ever

                                               11
allowed against a government agency, it is only available where

a    government      agent    engages         in    “affirmative        and   egregious

misconduct” that goes beyond mere “unprofessional and misleading

conduct.”     Kone v. Ashcroft, No. PJM 04-1996, 2004 WL 2944186,

at *2 (D. Md. Nov. 16, 2004); see also Dawkins v. Witt, 318 F.3d

606, 611 (4th Cir. 2003).

             Here,    GV     does       not    identify     any   “affirmative       and

egregious misconduct” on WMATA’s part.                    WMATA’s assertion of its

contractual right to withhold approval of an assignment cannot

be characterized as misconduct.                    At worst, WMATA declared that

it   would    approve      the    proposed         assignment     and    that   written

approval would be forthcoming.                 As the district court concluded,

“while   Plaintiff      may      have    offered     facts   to    demonstrate       that

Defendant’s       conduct     was       deceptive,      there     is     certainly    no

affirmative misconduct that has been alleged.”                     Consequently, GV

cannot estop WMATA from invoking the Maryland Statute of Frauds,

which bars GV’s breach of contract claim.

                                              C.

             Nor can GV be labeled a third-party beneficiary of the

contract between Metroland and WMATA. Under Maryland law, “a

third party beneficiary contract arises when two parties enter

into an agreement with the intent to confer a direct benefit on

a third party, allowing that third party to sue on the contract

                                              12
despite his or her lack of privity.”                   Lovell Land, Inc. v. State

Highway Admin., 952 A.2d 414, 429 (Md. Ct. Spec. App. 2008),

rev’d,   969   A.2d     284   (Md.       2009)    (reversing     the    lower   court’s

decision but not its statement of the law).                            “An incidental

beneficiary    .    .    .    has    no     rights     against    the    promisee    or

promisor,” and a third-party beneficiary “must show that the

parties to the contract clearly intended that the third party

benefit from it.”         Parlette v. Parlette, 596 A.2d 665, 670 (Md.

Ct. Spec. App. 1991).            GV has not made such a showing.                As the

district court noted, GV’s complaint provides no indication that

Metroland and WMATA entered into the JDA in order to benefit GV.

In fact, the complaint signals that GV was not even involved

with the Greenbelt project until a few years after Metroland and

WMATA entered into the JDA in December 2000.                     Thus, GV’s third-

party beneficiary claim must fail.

                                           III.

                                            A.

           Faced      with    the        defeat   of   its   contract     claims,     GV

presents arguments based on a variety of other theories.                         First,

GV attempts to transmute its contract claims into tort claims by

alleging   fraud,       breach      of    fiduciary     duty,    interference       with

contract, and interference with prospective advantage.                           But a

breach of contract is not a tort, and there is nothing tortious

                                            13
about asserting one’s contractual rights.                            Thus, tort law does

not govern here.

             Even if it did, however, these tort claims are barred

by WMATA’s sovereign immunity.                      To determine whether a given

WMATA     activity    qualifies         for        immunity         requires       a    two-step

analysis.       James v. WMATA, 649 F. Supp. 2d 424, 430 (D. Md.

2009)    (citing     Smith    v.    WMATA,         290       F.3d    201,    207       (4th    Cir.

2002)).      “First, . . . if [WMATA] is engaged in a quintessential

governmental function, its activities fall within the scope of

its    immunity.”       Id.     “If      [WMATA]         is    not       engaged   in        such    a

governmental function” -- as defendant concedes is the case here

-- a court must “determine whether the challenged activity is

discretionary or ministerial.”                     Id.        “‘Generally speaking, a

duty    is   discretionary      if      it    involves         judgment,       planning,            or

policy decisions.         It is not discretionary [i.e., ministerial]

if it involves enforcement or administration of a mandatory duty

at the operational level, even if professional expert evaluation

is required.’”        Monument Realty LLC v. WMATA, 535 F. Supp. 2d

60, 76 (D.D.C. 2008) (citation omitted).                            Where the activity is

discretionary,        WMATA        is        immune          from        claims        affecting

governmental functions.            James, 649 F. Supp. 2d at 430.

             In deciding whether an activity is discretionary, the

court    must   first    look      to   whether          a    statute,       regulation,            or

policy    specifically        prescribes       a     course         of    action       for    WMATA

                                              14
staff to follow.             Monument Realty, 535 F. Supp. 2d at 76.                      Here,

no such statute, regulation, or policy exists.                               GV disagrees,

asserting that the JDA -- which was negotiated in accordance

with WMATA’s Procurement Procedures Manual and Section 12 of the

Compact -- is equivalent to a regulation or policy that makes

WMATA’s     act        of     withholding         consent        ministerial        and    not

discretionary.            Citing Section 20.02 of the JDA, which prohibits

WMATA from “unreasonably” withholding consent to an assignment,

GV   asserts     that       “WMATA    had    no    discretion      to    simply      withhold

written approval for years.”                  Appellant’s Br. at 46.                 However,

GV’s argument is directly contradicted by Monument Realty, in

which the court held that “an agreement is not the equivalent of

a    statute,     regulation         or   policy,”     and       that   no    identifiable

provision       of     the    Compact       “specifically         prescribe[s]        WMATA’s

course of conduct while engaging in negotiations for the sale of

real estate.”          535 F. Supp. 2d at 78.               Moreover, the fact that

Section   20.02        prevents      WMATA     from    “unreasonably”            withholding

consent suggests that WMATA might have legitimate reasons for

doing so and that it retains discretion to decide who can be

trusted     to       develop       public     property.            Thus,      no     statute,

regulation,       or      policy     compels      WMATA     to    follow     a     particular

course of action here.

            In the absence of a prescribed course of action, WMATA

is    entitled       to     exercise      discretion      to     the    extent      that   its

                                              15
decision is grounded in social, economic, or political goals.

Monument Realty, 535 F. Supp. 2d at 76-77.              As the district

court concluded, and as GV does not dispute on appeal, such was

the case here.    The Greenbelt project “involves the ‘interests

of many stakeholders and governments, representing millions of

dollars and tens of thousands of people with a stake in transit

oriented   development’    who   will   be   affected   by   the    design

elements of the plan,” and WMATA must “weigh all of these social

and economic considerations in the selection of the developer

who will be responsible for completing the Project.”           Greenbelt

Ventures, LLC v. WMATA, No. AW-10-00157, 2010 WL 3469957, at *6

(D. Md. 2010).       Accordingly, given that GV’s tort claims are

based on discretionary acts of WMATA and are grounded in social,

economic, and policy considerations, they are barred by WMATA’s

sovereign immunity.

                                  IV.

           We have reviewed with care GV’s claims which we find

to be without merit.      Accordingly, the judgment of the district

court is affirmed.

                                                                   AFFIRMED

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