Kalorama Citizens Ass'n v. Suntrust Bank Co.

KALORAMA CITIZENS ASSOCIATION,andADAMS MORGAN FOR REASONABLE DEVELOPMENT, Plaintiffs, v. SUNTRUST BANK COMPANY, Defendant.

Civil Action No. 18-528 (BAH)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

September 23, 2020

Chief Judge Beryl A. Howell

MEMORANDUM OPINION

Plaintiffs Kalorama Citizens Association ("KCA"), an incorporated nonprofit membership association, and Adams Morgan for Reasonable Development ("AMRD"), an unincorporated nonprofit association, move for summary judgment to enforce an alleged common law easement by public dedication that they claim gives the public the right to use, in perpetuity, a 4,000 square foot plaza located at 1800 Columbia Road N.W., in the Adams Morgan neighborhood of Washington, D.C. Pls.' Mot. Summ. J. ("Pls.' Mot.") at 2, ECF No. 24. Defendant Truist Bank, successor by merger to named defendant SunTrust Bank Company ("SunTrust"), has cross-moved for summary judgment, contending that plaintiffs lack standing to assert enforcement of the alleged easement and, in any event, fail to establish an easement by public dedication. Def.'s Renewed Mot. Summ. J. ("Def.'s Mot.") at 2-3, ECF No. 25. This dispute was extensively litigated for almost one year in the Superior Court of the District of Columbia and removed, in March 2018, to this Court, with the pending cross-motions for summary judgment unresolved and subsequently re-filed here. For the reasons explained below, this Court lacks subject matter jurisdiction over plaintiffs' claim and therefore this case must be remanded to the Superior Court of the District of Columbia.

I. BACKGROUND

A. Factual Background

The two plaintiff nonprofit membership associations, KCA and AMRD, share similar missions. KCA's mission is to "promote particularly the interests of the residents of the District of Columbia," particularly of the Adams Morgan neighborhood, and to "preserve the historic, architectural and aesthetic character" of that area. Pls.' Mot., Ex. 16, Kalorama Citizens Association Constitution at 1 art. II, ECF No. 24-2; id., Ex. 17, Dep. of Denis James at 13:12-17, ECF No. 24-2. AMRD "seeks to protect and preserve the personal and property interests of DC residents, families, and those living, working, and playing in the historic and unique Adams Morgan neighborhood." Pls.' Opp'n to Def. SunTrust's Mot. Summ. J. ("Pls.' Opp'n"), Ex. 33, Governing Principles of AMRD at 1, ECF No. 27-2.

Defendant Truist Bank, a Georgia corporation, is the successor by merger to defendant SunTrust Bank Company ("SunTrust").¹ It owns a bank branch property at 1800 Columbia Road, N.W. in the Adams Morgan neighborhood of Washington, D.C. (the "branch property"), which is part of the Washington Heights Historic District, Pls.' Mot., Ex. 19, Map of the Washington Heights Historic District, ECF No. 24-2. A 4,000 square foot plaza at that location (the "Plaza") has for many years functioned as a community space for the neighborhood. Pls.' Mem. Supp. Mot. Summ. J. ("Pls.' Mem.") at 2, ECF No. 24; Defs.' Am. Answer ("Am.Answer") ¶ 27, Kalorama Citizens Ass'n v. SunTrust Bank Co., No. 2017-CA-4182 (D.C. Sup. Ct. July 31, 2017). The Plaza hosts a weekly farmers' market and other community activities, including cider making, dancing, live music, road races, historical events, and annual events such as Three Kings Day and Adams Morgan Day. See Pls.' Mot., Ex. 7, Dep. of Frank Smith at 62:2-10, ECF No. 24-2; id., Ex. 23, Defs.' Statement of Undisputed Materials Facts Filed in D.C. Superior Court (June 23, 2017) ¶ 42, ECF No. 24-2; id., Ex. 24, Photographic Exhibits of the Plaza, ECF No. 24-2. Members of the community regularly participate in activities held on the Plaza, and benefit from the social, recreational, and cultural opportunities offered in the space. See generally Pls.' Opp'n, Ex. 34, Aff. of Mary Belcher ("Belcher Aff."), ECF No. 27-2; id., Ex. 35, Aff. of John L. Hargrove ("Hargrove Aff."), ECF No. 27-2; id., Ex. 36, Aff. of Val Morgan ("Morgan Aff."), ECF No. 27-2; id., Ex. 37, Aff. of Terry Tyborowski ("Tyborowski Aff."), ECF No. 27-2; id., Ex. 38, Aff. of Katherine Rigby ("Rigby Aff."), ECF No. 27-2.

The Plaza resulted from the initial efforts of Perpetual Federal Savings and Loan Association ("Perpetual") to build a bank branch in the Adams Morgan neighborhood. In 1976, Perpetual acquired the then-undeveloped parcel of real estate at 1800 Columbia Road, N.W. Def.'s Mot., Ex. 7, Devolution of Title at 2, ECF No. 25-10. The vacant branch property was used for a variety of community activities, including a weekly farmers' market. Compl. ¶ 17; Pls.' Mot., Ex. 2, Aff. of Marie Nahikian ("Nahikian Aff.") ¶ 7, ECF No. 24-2; Def.'s Mem. at 4, ECF No. 25-1. Perpetual applied to the Federal Home Loan Bank Branch Board ("FHLBB") for approval to build a bank branch on the branch property. See Def.'s Mem. Opp'n Pls.' Mot. Summ. J. ("Def.'s Opp'n"), Ex. 1, Archived FHLBB Materials ("FHLBB Materials") at 6, ECF No. 28-3. Several community groups formally protested Perpetual's application before the FHLBB, citing their concerns about Perpetual's mortgage lending practices, includingallegations of redlining and failure to lend to low- and middle-income Adams Morgan residents. Id. at 6, 12; Def.'s Mot., Ex. 14, Dep. of Frank Smith ("Smith Dep.") at 10:22-25, 11:1-3, 19:12-15, ECF No. 25-17; Nahikian Aff. ¶¶ 9-10. Outside of the FHLBB challenge, the groups also raised "the very, very specific concern about if the building was built, what it would look like and what would happen to the Plaza at 18th and Columbia Road in that space there." Pls.' Mot., Ex. 6, Dep. of Marie Nahikian at 32:10-16, ECF No. 24-2. Perpetual gained community buy-in for its proposed branch through formal commitments to promote lending and home ownership for residents of the Adams Morgan neighborhood, memorialized in a Loan Policy Agreement. FHLBB Materials at 26-30, 31-32. In exchange, the community groups agreed to "withdraw their opposition" to Perpetual's application. Id. at 32. They did so by letter, dated July 21, 1997, and encouraged the FHLBB to accept Perpetual's application "[g]iven Perpetual's acceptance of the Loan Policy Agreement." Id. at 22. With the protests withdrawn, on August 18, 1977, the FHLBB approved Perpetual's application. Pls.' Mot., Ex. 14, FHLBB's Order Approving Perpetual's Branch Application (Aug. 18, 1977), at 1, ECF No. 24-2. The Loan Policy Agreement itself makes no mention of the Plaza, the farmers' market, or any easement. See FHLBB Materials at 24-36.

Separately, Perpetual pledged "to develop the property in such a way as to preserve its open quality, attractiveness and accessibility to the vendors that presently use it" by constructing "a modest three-story building placed as far back as possible in order to allow ample room for vendors and other open-air activities." Def.'s Mot., Ex. 18, Letter from Thomas J. Owen (Nov. 2, 1976) at 1, ECF No. 25-21. No written document memorialized an agreement between Perpetual and the community groups with respect to the Plaza. Smith Dep. at 18:1-15, 66:12-25. Rather, the parties had an informal "understanding" that Perpetual would provide a space forthe community activities conducted at 1800 Columbia Road N.W. to continue, id. at 18:9, which understanding "was material to [the community groups'] agreement to accept" Perpetual's bank branch application, id. at 32:16-17.

In 1979, Perpetual completed construction on the branch property at 1800 Columbia Road, N.W., which included the current 4,000 square foot Plaza, and opened the property for use. Compl. ¶ 1; Def.'s Mem. at 3; Am. Answer ¶ 27. Perpetual became insolvent in the late 1980s, and, in 1992, its receiver sold many of its assets to Crestar Bank ("Crestar"), Def.'s Opp'n, Ex. 9, Decl. of Andrew J. Tapscott ¶ 6, ECF No. 28-11, including the branch property, which was transferred to Crestar via quitclaim deed, Def.'s Mot., Ex. 3, Decl. of Daniel Simons ("Simons Decl.") ¶ 5, ECF No. 25-6. SunTrust acquired Crestar by merger in 1998, and therefore became owner of the property. Id. ¶ 4. As of December 7, 2019, defendant Truist Bank is the successor by merger to SunTrust. Def.'s Mem. at 1 & n.1. Perpetual and each of its successors voluntarily granted permission for the community to use the Plaza for the weekly farmers' market and other events upon request. Simons Decl. ¶¶ 7-8; Def.'s Opp'n, Ex. 5, Dep. of Gilbert Earl DeLorme at 23-24, 32-33, 40-43, ECF No. 28-7; Notice of Removal, Ex. G, Part 2, Superior Court Documents at 6-55, 62-63 (Memorandum from Linda Ragan to Steward T. Henderson (May 28, 1996)) (describing "an agreement that was written for Perpetual American Federal Savings and Loan Association," id. at 62, governing the farmers' market), 123-25 (Temporary Farmers' Market Space Agreement), 128-64 (copies of temporary use agreements between owners of the branch property and users of the Plaza), ECF No. 1-8.

In 2015, SunTrust entered into a purchase and sale agreement to sell the branch property to 1800 Columbia Road, LLC, an entity owned by four property development companies (the "developers"). Def.'s Opp'n, Ex. 10, Decl. of Shawn Seaman ("Seaman Decl.") ¶ 3, ECF No.28-12. This executory contract is subject to a preliminary injunction issued in D.C. Superior Court, and therefore has not been finalized. See Notice of Removal, Ex. B, Order at 1, ECF No. 1-2. The developers plan to replace the current branch building and Plaza "with a mixed-use development comprised of retail shops and residential condominiums." Seaman Decl. ¶ 4. Their concept for the property would demolish the Plaza and would provide instead a much smaller gathering space of approximately 380 square feet. See Pls.' Mot., Ex. 28, Conceptual Design for Development Project for 1800 Columbia Road as Submitted by PN Hoffman & Potomac Investment Properties to the Historic Preservation Review Board for its Meeting on Jan. 25, 2017, ECF No. 24-2; id., Ex. 30, Decl. of Hugo A. Roell ¶ 3,...