United States District Court, E.D. Virginia, Norfolk Division
OPINION & ORDER
Coke Morgan, Jr. Senior United States District Judge
matter is before the Court following a bench trial held April
17, 2018, at which Plaintiff Parkway 1046, LLC
("Plaintiff or "Parkway") and Defendant U.S.
Home Corporation ("Defendant" or "U.S.
Home") presented evidence and argument. After the trial,
the Court FOUND the Defendant liable to
Plaintiff and entered Judgment in the amount of $2, 249, 999.
See Doc. 41. The Court instructed the Parties to
submit briefs to the Court on the appropriate measure of
interest as well as whether Plaintiff is entitled to
attorneys' fees and if so in what amount. The following
findings of fact and conclusions of law explain the
Court's reasoning as to liability.
FINDINGS OF FACT
November 15, 2005, Defendant entered into an Agreement of
Purchase and Sale of Membership Interests ("Land
Transfer Agreement") with Settlers Crossing, LLC
("Settlers Crossing"), a Virginia limited liability
company whose sole members are Steven B. Sandler and Arthur
B. Sandler ("the Sandler Brothers"), and Washington
Park Estates, LLC ("WPE"), a Maryland limited
liability company whose sole member was Settlers Crossing.
Pl.'s Ex. 1. On the same date, Defendant entered into a
Contract for Services ("Development Contract") with
Bevard Development Company ("Bevard"), an entity
owned 51% by the Sandler Brothers and 49% by Daniel Colton.
Pl.'s Ex. 2. Plaintiff is a Virginia limited liability
company whose sole members are the Sandler Brothers.
Plaintiff is not a signatory to either the Land Transfer
Agreement or the Development Contract; however, Plaintiff has
brought the instant breach of contract action as a
third-party beneficiary under the Development Contract.
time of the Land Transfer Agreement, WPE held title to 1, 250
acres of land in Prince George's County, Maryland. In the
Land Transfer Agreement, Defendant promised to pay Settlers
Crossing $160, 000, 000 for its 100% interest in WPE.
Defendant planned to use the land owned by WPE for a large
residential development project (the "Project"). In
the Development Contract, Defendant promised to pay Bevard a
fee of $40, 000, 000 for Bevard's provision of certain
development services related to the Project. Also in the
Development Contract, Defendant promised to "reimburs[e]
Parkway 1046, LLC for the acquisition costs for the two (2)
properties identified on Exhibit A in the
approximate amount of $2, 249, 999 ('Right of Way
Acquisition Reimbursement')." Pl.'s Ex. 2 ¶
4. Defendant promised to pay the Right of Way Acquisition
Reimbursement ("Reimbursement") to Plaintiff
"at the time of Settlement under the [Land Transfer]
Agreement." Id. "Settlement" is
defined in the Land Transfer Agreement to mean the
"consummation of the purchase and sale" under that
Agreement. Pl.'s Ex. 1 ¶ 5. At the time of the Land
Transfer Agreement, the Settlement Date was June 30, 2006,
and if certain conditions precedent were not satisfied by
that date, the Settlement Date would be extended to September
December 31, 2005, the parties to the Land Transfer Agreement
executed an amendment to that Agreement. The first amendment
did not change the definition of Settlement, nor did it
change the Settlement Date. On May 16, 2007, the parties
executed a second amendment to the Land Transfer Agreement.
Among other changes, the second amendment reduced the
purchase price from $160, 000, 000 to $103, 000, 000, and
extended the Settlement Date to December 5, 2007, or, if
certain conditions precedent were not satisfied by that date,
to March 15, 2009 at the latest. The second amendment also
modified Settlers Crossing's remedies in the event of
U.S. Home's default, to include "specific
performance and injunctive relief against" U.S. Home,
which would require U.S. Home "to complete the
Settlement in accordance with the [Land Transfer] Agreement
and pay the Purchase Price to Settlers Crossing."
Pl.'s Ex. 5 ¶ 27. At the same time, the parties to
the Development Contract executed an amendment reducing the
development fee from $40, 000, 000 to $26, 000, 000.
19, 2007, the parties executed a third amendment to the Land
Transfer Agreement. On the same date, iStar Financial, Inc.
("iStar") made a $100, 000, 000 loan to affiliated
Sandler entities that was secured by the real estate
underlying the Land Transfer Agreement, as well as Settlers
Crossing's and Bevard's interests in that Agreement
and the Development Contract. The third amendment to the Land
Transfer Agreement specified that if iStar foreclosed on the
loan, the Land Transfer Agreement would convert from a
purchase and sale of membership interest in WPE to a purchase
and sale of the underlying property. The third amendment was
executed in conjunction with a Consent and Estoppel
Agreement. See Pl.'s Ex. 7. The third amendment did not
change the definition of Settlement, nor did it extend the
The Maryland Litigation
parties to the Land Transfer Agreement did not close. On July
17, 2008, U.S. Home filed suit in the United States District
Court for the District of Maryland against Settlers Crossing,
WPE, Bevard, Steven B. Sandler, and iStar. U.S. Home v.
Settlers Crossing. LLC, et ah, No. 8:08-cv-01863. U.S.
Home alleged that the sellers had breached the environmental
representations and warranties of the Land Transfer
Agreement, and that they had materially breached that
Agreement by denying U.S. Home access to the property upon
request. On June 30, 2009, Settlers Crossing, WPE, Bevard,
and iStar filed a joint counterclaim against U.S. Home,
asking for a declaratory judgment and specific performance of
both the Land Transfer Agreement and Development Contract.
SeeDef.'s Ex. 18. On November 17, 2009, WPE conveyed its
interest in the property underlying the Land Transfer
Agreement, pursuant to the terms of iStar's loan in event
of default. In accordance with the third amendment to the
Land Transfer Agreement and the Collateral Estoppel
Agreement, iStar also acquired all of WPE's,
Settler's Crossing's, and Bevard's interests in
the Land Transfer Agreement and Development Contract.
two-week bench trial in 2014, the district court concluded
that U.S. Home had not met its burden as to its
breach-of-contract claims against WPE, Settler's
Crossing, and Bevard. See U.S. Home Corp. v. Settlers
Crossing. LLC. 33 F.Supp.3d 596 (D. Md. July 18, 2014).
The court further held that iStar was entitled to specific
performance, in accordance with the terms of the second
amendment to the Land Transfer Agreement, and was also
entitled to judgment in its favor with respect to the
Development Contract. See Id. The district court
entered its final judgment on January 22, 2015. See Pl.'s
to the district court's final judgment, U.S. Home was
declared to be in default of the Land Transfer Agreement
"for wrongfully failing to proceed to settlement on May
27, 2008." See Pl.'s Ex. 19 ¶ 2.
Accordingly, the district court ordered U.S. Home "to
proceed to Settlement within 30 days and pay the amounts due
under the terms of the [Land Transfer Agreement] and
[Development Contract] and as detailed in the foregoing
Memorandum Opinion." Id. ¶ 4. The Fourth
Circuit affirmed the district court's ruling on April 12,
2017. U.S. Home Corp. v. Settlers Crossing. L.L.C..
685 Fed.Appx. 173 (4th Cir. Apr. 12, 2017) (unpublished per
curiam opinion). On April 21, 2017, U.S. Home satisfied the
district court's final judgment, which amounted to the
payment of $114 million for breach of the Land Transfer
Agreement and the Development Contract, plus interest and
real estate taxes, totaling $237, 401, 901.95. See Pl.'s
Ex. 18 at 43-45; Doc. 35 ¶ 35. This entire payment went
to iStar, since at the time of the judgment the
Sandier-affiliated entities and Bevard had forfeited all of
their interests in the Land Transfer Agreement and
Development Contract by virtue of their inability to repay
the June 19, 2007 loan.
The Right of Way Reimbursement
to the instant litigation, pursuant to the Development
Contract, U.S. Home agreed to reimburse Parkway for its
acquisition of "the two (2) properties identified on
Exhibit A in the approximate amount of $2, 249, 999
('Right of Way Acquisition Reimbursement')."
Pl.'s Ex. 2 ¶ 4. The Parties stipulated in the Final
Pretrial Order to the following relevant facts:
• On or about November 28, 2005, Parkway acquired the
parcel located at 9104 Brandywine Road from Yong K. Yoon and
Hae Sook Yoon (the "Yoon Parcel"). The deed
reflects the consideration was $999, 000.00 for the Yoon
• On or about January 4, 2006, Parkway acquired the
parcel located at 9100 Piscataway Road from Ernest A.
Loveless, Jr. and Margaret B. Loveless (the "Loveless
Parcel"). The deed reflects the consideration was $1,
250, 000.00 for the Loveless Parcel.
• The total consideration reflected on the deeds for the
Yoon Parcel and the Loveless ...