Court Opinion

ID: 8877024
Source: CourtListenerOpinion
Date Created: 2022-11-26 19:25:55.036224+00
Date Added: 2024-06-11T17:06:25.140236
License: Public Domain

LUMBARD, Chief Judge
(dissenting) :
I dissent.
I would hold that the Memorandum Agreement requires the Gregory Group to supply the McFarland Group (and its successor lessees) as many parking spaces outside the leaseholds as the apartment buildings required in 1957 under Arlington County zoning regulations, as long as they are still required by those regulations.
The Gregory Group argues, and the majority holds, that the McFarland Group waived any claim to parking rights outside the leaseholds by its tender for and acquisition of the apartment buildings and leaseholds under paragraph 9 of the Memorandum Agreement. I would reject this argument for the same reasons that led us to reject the similar contention made in the companion appeal, that the August 1965 proceedings before Judge Dimock culminating in the paragraph 9 tender constituted a settlement of claims *16arising under the Memorandum Agreement. See McFarland v. Gregory, 373 F. 2d 393, 397-98 (2 Cir. Feb. 24, 1967).
The McFarland Group emphasized several times during the August 1965 proceedings that by making the tender it did not intend to “give up the rights that we have retained under the contract or under the judgments.” The same intent is manifested by the parties’ stipulation, whose wording was suggested by Judge Dimock, that they would accept the tender agreed on “as one which complies with and one having only the consequences of one which complies with paragraph 9.” The majority states that “there is nothing in the language of the stipulation which can be read as reserving the parking matter”; but the stipulation clearly provides that its only effect is that the Gregory Group must accept the McFarland Group’s tender. Moreover, the McFarland Group specifically stated on the first day of the August 1965 proceedings that one of the issues it intended to press after the paragraph 9 purchase was “the question of their obligation on parking.” The weakness of the Gregory Group’s argument that parking rights were waived is underscored by the fact that this was the only reference to parking rights during the August 1965 proceedings; the proposed contractual provision for such rights mentioned by the majority was put forward by the McFarland Group during the abortive negotiations of the previous months, which looked toward a complete settlement and exchange of releases. Thus the paragraph 9 tender and purchase were plainly not intended to work any waiver of the McFarland Group’s claims under the Memorandum Agreement, and we should not give them that effect.1
The Gregory Group next contends that the dismissal on demurrer of a suit brought against it by the McFarland Group, just after the paragraph 9 closing, in the Circuit Court of Arlington County, Virginia, is res judicata of the present claim. That suit sought a declaration that the Gregory Group was obligated to continue to provide free parking to Arlington Towers tenants on the so-called LaPorte and Lynn Street tracts, across the street from Arlington Towers. The complaint alleged that the defendants had allowed tenants to park on both lots without charge, and that the plaintiffs were beneficiaries or assignees of agreements between Arlington Towers Land Corporation (Arlington) and two of its subsidiaries, which bound Arlington to provide 200 free parking spaces on the LaPorte tract. It did not mention the Memorandum Agreement. Thus both the facts upon which the present claim is premised and the relief it seeks are different from those in the Virginia suit. The Virginia suit is accordingly not res judicata, especially in view of the considerations of judicial economy favoring determination of the present claim by a court familiar with the Memorandum Agreement and the prior litigation between the parties. Cf., e. g., Erbe v. Lincoln Rochester Trust Co., 3 N.Y.2d 321, 165 N.Y.S.2d 107, 144 N.E.2d 78 (1957); Eason v. Eason, 204 Va. 347, 131 S.E.2d 280 (1963); Developments in the Law — Res Judicata, 65 Harv.L. Rev. 818, 824-27 (1952).
Judge Dimoek’s finding that any reliance by the McFarland Group on the October 1962 statements of counsel for the Gregory Group was not to its detriment does not seem to me to be clearly erroneous.2 However, I would hold that *17the Memorandum Agreement imposes an implied obligation on the Gregory Group to furnish to a purchaser of the buildings and leaseholds under paragraph 9 as many parking spaces outside the leaseholds as the buildings required in 1957 under Arlington County zoning regulations, as long as they are still required by those regulations. This obligation seems to me to be measured by the number of parking spaces required after the conversion of certain garage spaces in the buildings into offices which were leased to the federal government, as the McFarland Group’s warranties attached to the sale agreement of April 15, 1957 stated that two such leases had been executed and that a third was planned. At least after these conversions Arlington Towers complied with the zoning regulations as to parking only because its tenants could park in the shopping center, C Ground, and the LaPorte tract, all owned by Arlington.3
I do not believe that the Memorandum Agreement contemplated that the Gregory Group should be able to withhold the parking necessary to comply with zoning regulations from a purchaser of the buildings and leaseholds under paragraph 9. If the Gregory Group were free to withhold the required parking, it could by doing so compel the payment of substantially more than the formula minimum price for the buildings and leaseholds under paragraph 9, which this Court has held the Memorandum Agreement did not require, McFarland v. Gregory, 363 F.2d 857 (2 Cir. 1966), and thus render the McFarland Group’s rights under paragraph 9 largely, if not wholly, meaningless. If, therefore, paragraph 9 was intended to provide meaningful rights — as I believe it was — it clearly implies that the Gregory Group must provide a paragraph 9 purchaser with the off-leasehold parking required by zoning regulations in 1957, as long as those regulations still require it.
The Gregory Group relies heavily upon the fact that the leases executed by Arlington and its subsidiaries in 1953 and 1954 bound the lessees in general terms “to comply with all lawful government requirements in connection with [their] use and occupancy.” As far as parking is concerned, these general provisions seem to me to be outweighed by the clear implication of the Memorandum Agreement. Moreover, the record does not suggest that either the McFarland or the Gregory Group required the subsidiaries to pay for any off-leasehold parking furnished by Arlington. On the contrary, Arlington bound itself in July 1957 to supply 200 free spaces for Arlington Towers tenants in the LaPorte tract. Thus the obligation to supply off-leasehold parking which seems to me to be imposed by the Memorandum Agreement is consistent with the parties’ conduct as reflected by the record.

. The Gregory Group has not contended that the McFarland Group waived its claims under the Memorandum Agreement by the paragraph 9 purchase as a matter of law, irrespective of the intent of the parties. Compare, e. g., High Knob, Inc. v. Allen, 205 Va. 503, 138 S.E.2d 49 (1964); Sale v. Figg, 164 Va. 402, 180 S.E. 173 (1935); Restatement, Contracts §§ 240(1) (b), 413 (1932).

. The majority concludes that “the trial judge construed the 1962 supplemental judgment to dispose of the plaintiffs’ claim to parking space.” Judge Dimock did not state expressly that he so construed the 1962 judgment; and the conclusion that he did seems to me inconsistent with his careful consideration of the McFarland Group’s claim of estoppel.

. Tlie Gregory Group contended below that the offices leased to the federal government were exempt from the parking requirements of the Arlington County zoning regulations. Judge Dimock did not pass upon this contention, and it has not been renewed upon appeal. Even if it were upheld, it would not eliminate the deficit of parking spaces under the zoning regulations in 1957.