Submitted: July 25, 2017
Michael C. Hochman, Esquire Monzack Mersky McLaughlin and
A. O'Brien, Esquire Venable LLP.
letter constitutes the Court's decision on the motion of
defendant CWCapital Asset Management LLC ("CWCAM")
to dismiss the Complaint for Specific Performance,
Injunctive, and Other Equitable Relief (the
"Complaint") filed by plaintiff Windsor I, LLC
("Windsor"). For the reasons explained below, the
motion to dismiss is granted.
is the owner of a commercial property located at 2201 Farrand
Drive, Wilmington, Delaware (the "Property"). CWCAM
is a special servicer that handles the default side of loan
servicing for its affiliate, CWCapital LLC.
about December 27, 2006, Windsor and CWCapital entered into a
Mortgage and Security Agreement in the principal amount of
$7.4 million (the "Loan") to refinance the existing
debt on the Property. The maturity date of the Loan was
January 1, 2017.
20, 2015, Windsor sent a letter to CWCapital, requesting that
the Loan be transferred to special servicing because
"Windsor is currently facing imminent default and will
be unable to support its own debt service
requirements." Windsor was anticipating a default because
the sole tenant for the Property for the past twenty years, a
Best Buy store, was expected to leave the Property. On August
31, 2015, Windsor was notified that the Loan had been
transferred to CWCAM as special servicer.
November 21, 2015, to February 9, 2016, Windsor and CWCAM
negotiated the terms of a pre-negotiation agreement, the
final version of which is dated February 9, 2016, and which
was fully executed by March 23, 2016 (the
"Pre-Negotiation Agreement"). From March to
November 2016, Windsor and CWCAM engaged in a series of email
exchanges, during which CWCAM requested certain information
from Windsor and Windsor made two offers to purchase the
Loan. On November 28, 2016, CWCAM rejected
Windsor's most recent offer and made a
December 12, 2016, Windsor filed the Complaint asserting two
claims. Count I seeks specific performance of the
Pre-Negotiation Agreement. Count II seeks injunctive relief
to enjoin CWCAM from foreclosing on the Property "until
after meaningful, good faith negotiations" occur under
the Pre-Negotiation Agreement.
February 3, 2017, CWCAM filed a motion to dismiss the
Complaint in its entirety under Court of Chancery Rule
12(b)(6) for failure to state a claim for relief. Oral
argument was held on July 25, 2017.
standards governing a motion to dismiss for failure to state
a claim for relief are well settled:
(i) all well-pleaded factual allegations are accepted as
true; (ii) even vague allegations are
"well-pleaded" if they give the opposing party
notice of the claim; (iii) the Court must draw all reasonable
inferences in favor of the non-moving party; and (iv)
dismissal is inappropriate unless the "plaintiff would
not be entitled to recover under any reasonably conceivable
set of circumstances susceptible of proof.
Court is not required, however, to accept mere conclusory
allegations as true or make inferences unsupported by
well-pleaded factual allegations. The Court also "is not
required to accept every strained interpretation of the
allegations proposed by the plaintiff."
Pre-Negotiation Agreement contains a Maryland choice of law
provision. Accordingly, as the parties agree,
Maryland law governs the substantive aspects of the claims in
courts follow the law of objective interpretation of
contracts, giving effect to the clear terms of the contract
regardless of what the parties to the contract may have
believed those terms to mean." As the Court of Appeals
of Maryland has stated:
A court construing an agreement under [the objective theory]
must first determine from the language of the agreement
itself what a reasonable person in the position of the
parties would have meant at the time it was effectuated. In
addition, when the language of the contract is plain and
unambiguous there is no room for construction, and a court
must presume that the parties meant what they expressed. In
these circumstances, the true test of what is meant is not
what the parties to the contract intended it to mean, but
what a reasonable person in the position of the parties would
have thought it meant.
fails to state a claim for relief for three separate reasons.
contrary to Windsor's contention, there is no
"obligation to negotiate" under the Pre-Negotiation
Agreement, and thus no obligation for CWCAM to specifically
perform. Windsor identifies the following provision in the