Lord & Taylor isn’t content to defend the $31 million jury verdict it received in August in the White Flint Mall case. It’s looking for more.
In an appeal brief filed Dec. 23 in the U.S. Court of Appeals for the Fourth Circuit, the retailer claimed that a lower court incorrectly precluded it from receiving damages for its property rights.
The appeal brief was filed in response to the claims filed in November by attorneys for White Flint that the retailer received a massive windfall because the court failed to allow the jury to consider the potential future profits of the store at a redeveloped mall site.
The owners of the mall—Lerner Enterprises and The Tower Cos.—have been entangled in the ongoing legal battle with the retailer over a 1975 easement agreement to maintain the mall as a “first-class” enclosed shopping center. In August, a jury found that the mall’s owners violated the agreement and awarded the retailer $31 million, the amount a Lord & Taylor expert witness testified would be what the store would lose in profits with the loss of the adjoining mall and surrounding redevelopment construction.
The mall itself is now torn down at the Rockville Pike site. All that remains is piles of rubble, part of a wall, parking lots and the Lord & Taylor store.
The brief from Lord & Taylor represents the second step in the appeal process. Now the appeals court will either rule on the briefs or call for oral arguments. A ruling by the court could once-and-for-all settle the case, which has dragged on since the mall’s owners in 2012 proposed redeveloping the struggling mall into a mixed-use town center project.
In the brief, attorneys from the law firm Greenberg Traurig LLP argued that accurately forecasting profits for a massive redevelopment project that hasn’t been constructed and for which detailed plans don’t exist is not possible. “Courts have routinely excluded or limited testimony seeking to estimate lost profits that are either too far off into the future and/or based on too many uncertainties,” Lord & Taylor’s attorneys contended.
During the District Court trial over the summer, Judge Roger Titus agreed with this argument and instructed the jury not to consider potential future profits for the store at a redeveloped site. That move is primarily what the mall’s owners are appealing.
Lord & Taylor’s attorneys also went on the offensive in their brief, asserting that Titus erred by not allowing the jury to consider the value of its property rights under the easement agreement. While Lord & Taylor does not technically own the property, the 1975 easement agreement grants the retailer use of the land on which the store is constructed, until at least 2042. The lawyers claim the easement could be worth from $6.5 million to $15.1 million. The retailer asked for a new trial to debate the merits of this claim.
While the winding legal case has not stopped demolition of the mall, it has delayed the mall’s owners from starting the process of developing a new town center. The owners have not submitted any plans to the county since having a sketch plan approved in 2012 that calls for 5.22 million square feet of residential, retail, office and hotel development at the site.
It has also limited the mall’s owners’ ability to sign up tenants and line up financing for the project. Lord & Taylor’s brief notes that the owners were in negotiations to bring a Wegmans in as an anchor tenant, but they never signed a lease and “negotiations had fallen through years” before the District Court trial took place over the summer.
The attorney representing the mall’s owners, Scott Morrison, has previously said the redevelopment will not move forward until the appeal is settled and may not happen at all unless the jury’s verdict is reversed. However, attorneys for Lord & Taylor have said this is legal posturing and that the $31 million ruling likely won’t affect the estimated $800 million redevelopment.
