UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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
16