# Appendix — Wisconsin Avenue Associates, Inc. v. 2720 Wisconsin Avenue Cooperative Ass'n

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1982
- **Citation:** 459 U.S. 827

## Text

INDEX
Page
Opinion of the D.C. Court of Appeals .................. la
eee oni
a AEN Oe ciptia's Uuibins oy Che vb ePOeReGhs oe cwtce cis’
Memorandum Opinion of D.C. Superior Court (trial on dam-
SEER Wok She Cdb en elee asm nwhe uree UE s dambiee Eee. Norman, Baden,
Tompkins and Chasen. who breached their fiduciary duty
to plaintiffs, misrepresented the 1975 maintenance .
the plaintiffs recover of defendants VAL
Company, Inc., Laurins, Norman, Baden, T ins and
Chasen nominal damages in the amount of $26. ($1.00
plaintiff). with interest thereon at the rate provided by
ict of Columbia law; and

(b) The plaintiffs recover of the defendants Laurins. Norman/
Wisconsin Avenue Associates. Inc. and VAL Manage-

Inc. puniive damages in the amount of
$12. $12,500 (£505.00 per plaintiff-purchaser. 25 plaintiff-
=. with interest thereon at the rate provided by

of Columbia law.

' The Corporate defendants, Wisconsin Avenue Associates. Inc... Metro-
cod see g hg ee Inc., Real Estate Equity Management, Inc.,
Scenic Travel, Inc., Real Development Management, Inc. and Conference
Management Group, Inc . are liable in every respect that Laurins himself is
liable. See Liability Opinion of June 27, 1978 at p. 29.

85a

10. Count X, the Court having found in favor of the defen-
dants, judgment is hereby entered in favor of defendants.

11. Count X1, the Court having found in favor of the defen-
dants. judgment is hereby entered in favor of the defendants.

12. Count XII was dismissed and judgment is herein entered in
favor of the defendants.

lt is FURTHER ORDERED. ADJUDGED AND DECREED
THAT

13. Plaintiffs recover of defendant Laurins, Norman. Wiscon-
sin Avenue Associates. Inc.. Metropolitan Mortgage Bankers
Associates. Inc., Metropolitan Mortgage Bankers, Inc., Real Estate
Equity Management, Inc.. Conference Management Group, Inc..
Scenic Travel, Inc., Real Development Management, Inc. and VAL
Management Company, Inc.. $124,245.16 in attorneys’ fees and
$9,974.48 in general costs, with interest thereon at the rate provided
by District of Columbia law.

It is FURTHER ORDERED. ADJUDGED AND DECREED
THAT

14. The rights and obligations conferred upon the parties by
the Mutual Ownership Contracts and by ary other underlying agree-
ments, including and especially the Assignment of Purchase Agree-
ment dated December 6, 1974 (Plaintiffs’ Trial Exhibit 25). as to
Units 103, 104, 106, 107, 204, 501, 703, 805, 302 and 801/802 are
rescinded, with complete right, title and interest in those units vesting
only in 2720 Wisconsin Avenue Cooperative Association, Inc. The
Court accepts the report of the Auditor-Master and incorporates it by
reference into this judgment, * and

* Pursuant to a Stipulation of the parties and the Court's Orders of
December 18, 1978 and January 19, 1979, the Auditor-Master determined
that $131,195.25 was expended by defendant Wisconsin Avenue Associ-
ates, Inc. in mortgage and maintenance payments and that plaintiffs were
entitled to $104,269.00 in actual rents received by defendant and
$20,595.00 as the fair rental value for apartments 302 and 801/802. In
addition, the Court has awarded $3,200.00 to plaintiffs as the amount of
rental owed by Mr. Laurins for the period of time that he occupied Apart-

It is FURTHER ORDERED, ADJUDGED AND DECREED
THAT

15. Defendants, each and all of them, their agents, em-
ployees, relatives, attorneys, and assigns, and all those in active
concert and participation with them be and hereby are enjoined
permanently from performing any act designed to accomplish the sale
or further leasing of Units 103, 104, 106, 107, 204, 501, 703, 805,
302 and 801/802; except that defendants, each and all of them, their
employees, relatives, attorneys and assigns and all those in active
concert and participation with them shall, if requested by plaintiff
Cooperative Association, execute such documents. including, but
not limited to, deeds, certificates of stock , assignment of leases or any
other document required by plaintiff Cooperative Assocition to vest
in it all rights and title in the units described, consistent with this
opinion. ; +

It is FURTHER ORDERED, ADJUDGED AND DECREED
THAT

Plaintiffs’ request for an award of costs in excess of those costs
awarded in Paragraph 13. supra, are denied.

It is FURTHER ORDERED, ADJUDGED AND DECREED
THAT

16. Defendants’ couunterclaim for recovery on the
$100,000.00 note resulted in a verdict for the plaintiffs and judgment
in favor of plaintiffs is hereby entered.

17. On defendants’ quantum meruit counterclaim. the Court
entered its verdict in favor of defendant Associates in the total amount
of $30,700.00, which consist of $21,334.10 in renovation costs and
$9,365.90 in closing costs and rejected all other quantum
claims. The Court, therefore enters judgment in favor of defi
Associates in the amount of $30,700.00 against plaintiff Cooperative

ment 805 and did not pay rent. The net amount of $3,131.21 owed by
plaintiffs to defendant Wisconsin Avenue Associates, Inc. may be set off
against the monies owed by defendant Wisconsin Avenue Associates, Inc.
to plaintiffs as set forth in Paragraph 13, supra.

87a

Association. Said judgment is to operate as an offset against the
award to plaintiff Cooperative Association set forth in Paragraph 6(e)
of this judgment and it is further provided that neither of the judg-
ments are to be otherwise treated or executed upon by the p=rties.

18. Defendants’ counterclaim for recovery on the $5,700.00
note. the Court having found in favor of the plaintiffs. judgment is
hereby entered in favor of plaintiffs.

19. Defendants’ counterclaim for fraudulent misrepresenta-
tion, the Court having found in favor of the plaintiffs. judgment is
hereby entered in favor of plaintiffs.

20. Defendants’ counterclaim for negligent misrepresenta-
tion, the Court having found in favor of the plaintiffs, judgment is
hereby entered in favor of plaintiffs.

21. Defendants’ counterclaim for interierence with con-
tractual relations, the Court having found in favor of the plaintiffs.
judgment is hereby entered in favor of plaintiffs.

22. Defendants’ counterclaim for breach of fiduciary duty, the
Court having found in favor of the plaintiffs, judgment is hereby
entered in favor of plaintiffs.

23. Defendants’ counterclaim for damage to reputation, the
Court having found in favor of the plaintiffs, judgment is hereby
entered in favor of plaintiffs.

24. Defendants’ counterclaim for reformation, the Court hav-
ing found in favor of plaintiffs, judgment is hereby entered in favor of

25. Defendants’ counterclaim for declaratory judgment, the
Court having found in favor of plaintiffs, judgment is hereby entered
in favor of plaintiffs.

26. Defendants; counterclaim for mistake of material fact. the

Court having found in favor of the plaintiffs, judgment is hereby
entered in favor of the plaintiffs.

88a

27. Defendants’ counterclaim for conspiracy, the Court hav-
ing found in favor of the plaintiffs, judgment is hereby entered in
favor of the plaintiffs.

28. Defendants’ counterclaim for breach of employment con-
tract by Cecile L. DeRochefort, the Court having found in favor of the
plaintiff Cecile L. deRochefort, judgment is hereby entered in favor
of the plaintiff Cecile L. deRochefort.

29. Defendants’ counterclaim for negligent performance of
employment contract by Cecile L. deRochefort, the Court having
found in favor of plaintiff Cecile L. deRochefort, judgment is hereby
entered in favor of plaintiff Cecile L. deRochefort.

It is FURTHER ORDERED, ADJUDGED AND DECREED
THAT

30. Plaintiffs’ suit against Security National Bank was dis-
posed of by the granting of summary judgment in favor of defendant
Security National Bank prior to trial.

It is FURTHER ORDERED, ADJUDGED AND DECREED
THAT

31. Since the parties have each addressed the subject of the
amount of a supersedeas bond pending appeal, if any, in this case by
anyone or all of the defendants, the Court treats the subject herein and
rules that in order to effectuate a stay pending appeal the defendant(s)
shall post a bond or undertaking with a surety approved by the Court
in the amount of $400,000.00. In setting this amount of bond or
undertaking the Court has considered the judgments for specific sums
entered herein, the continuing costs to be incurred by further delay,
both as to the property involved and litigation expenses, including

89a

additional attorneys’ fees that might be sought on appeal and lastly the
totality of the judgments as rendered.

/s/ Wuiam E. Stwearrt, Jr.
April 27, 1979 William E. Stewart, Jr.
Judge

ce: Richard A. Hibey, Esq.
Robert B. Wallace, Esq.
Attorneys for Plaintiffs

E. Leo Backus, Esq.
Attorney for Defendants

[ATTACHMENTS OMITTED}

90a

DISTRICT OF COLUMBIA
COURT OF APPEALS
Civil Action No. 2583-76
Civil Action No. 2583-76

No. 79-631 and 79-1103

WISCONSIN AVENUE AssociaTes, INC., ef al.,

Appellants,
Vv.
2720 WISCONSIN AVENUE
COOPERATIVE ASSOCIATION, INC., ef al.,
Appellees.
No. 79-1102
Go ip Depostrory AND LOAN Company, INC.,
Appellant,
wv
2720 WisCONSIN AVENUE
COOPERATIVE ASSOCIATION, INC., ef al.,
Appellees.

FILED FEB 2, 1982

JUDGMENT

This cause came on to be heard on the transcript of record from the
Superior Court of the District of Columbia, the briefs and pleadings
filed by the parties, and was argued by counsel. On consideration
whereof, and for the reasons set forth in the opinion filed this date, it
is now hereby.

Yla

ORDERED AND ADJUDGED by this Court that the final judg-
ments and order on appeal herein are affirmed. That portion of the
appeal which is directed to the civil contempt citation is moot.

For the Court:

/s/ ALAN |. HERMAN
Alan |. Herman
Clerk of Court

Dated: February 2, 1982.
Opinion per Associate Judge Stanley S. Harris.

92a

DISTRICT OF COLUMBIA
COURT OF APPEALS

No. 79-631

WISCONSIN AVENUE Associates, INC., ef al.,

No. 79-1102

Gop Drposirory AND LOAN Company, INC.,

No. 79-1103
WISCONSIN AVENUE AssociaATEs, INC., ef al.,
Appellants,
Vv.
No. 2583-76
2720 WISCONSIN AVENUE
COOPERATIVE ASSOCIATION, INC., ef al.,

Appellees.

Before: Newman, Chief Judge; Kelly, Kern, Nebeker, *Mack,
Ferren, *Pryor, And Belson, Associated Judges.

FILED FEB. 23, 1982
ORDER
On consideration of appellants’ petitions for rehearing and rehear-
ing en banc, it is
ORDERED for the merits division* that appellants’ petitions for
rehearing are denied. It appearing that no judge of this Court has
called for a vote thereon, it is

Chief Judge Newman and Associate Judge Belson have recused themselves
from participation in this matter.

93a
FURTHER ORDERED that appellants’ petitions for rehearing en
banc are denied.
PER CURIAM
Copies to:
Honorable William E. Stewart. Jr.
Clerk, Superior Court

E. Leo Backus, Esquire
8401 Connecticut Avenue, #700. 20815

John H. MacVey, Esquire

8401 Connecticut Avenue, #700, 20815
Richard A. Hibey, Esquire

1605 New Hampshire Avenue NW, 20009

Robert B. Wallace, Esquire
1156 15th Street NW, 20004

94a

STATUTES INVOLVED
Title 28 of the United States Code, Section 1257 provides:

“Final judgments or decrees rendered by the highest court of a
State in which a decision could be had, may be reviewed by the
Supreme Court as follows:

“(1) By appeal, where is drawn in question the validity of a
er United States and the decision is against its
v ,

“(2) By appeal, where is drawn in question the validity of a
Statute of any state on the ground of its being repugnant to the
Constitution, Sales @ aus of ti Wiis Sean. and the
decision is in favor of its validity.

“(3) By writ of certiorari, where the validity of a treaty or
stature of the United States is drawn in question or where the
validity of a State statute is drawn in question on the of its
being to the Constitution, treaties or laws of the
United States, or where any title, right, privilege or immunity is
specially set up or claimed under the itution, treaties or
statutes of , or commission held or authority exercised under, the
United Staes.

“For the purpose of this section, the term ‘highest court of a
State’ includes the District of Columbia Court of Appeals.”
The District of Columbia Code (1981 Ed.) provides in pertinent

part:
1-221. Creation; membership; personnel; vacancies
(a) There is established a Council of the District of Columbia;

and the members of the Council shall be elected by the
registered qualified electors of the District.

se ee eee EE

1-227. Powers
(a). . . the legislative power granted to the District vo this Act
is vested in and shall be exercised by the Council. .

se eee eee

95a

1-241
(a) There is established by the Office of Mayor of the District
of Columbia; and the Mayor shall be elected by the registered
qualified electors of the District.

1-242. Powers and Duties
The executive er of the District shall be vested in the
Mayor who shall be the chief executive officer of the District

government.

*se eee He Ee

11-101. Judicial Power
The judicial power of the District of Columbia is vested in the
following courts:

ese aeaegekeHe He EH

(2) The following District of Columbia courts established
pursuant to Article | of the Constitution:

(A) The District of Columbia Court of Appeals
(B) The Superior Court of the District of Columbia

96a

EXCERPTS FROM COURT PAPERS

In accordance with Supreme Court Rule 21.1(h), the following are

excerpts from court papers filed by petitioners in the proceedings
below:

1. On The Issue Of Fiduciary Duty

(a) In “Answer of Defendants Wisconsin Avenue Associates,
Inc. . . . to the Amended Complaint,” it was stated:

2.-3. The allegations [of breach eames | duty and unjust
enrichment] in paragraph 2 and 3, Count VI of the Amended
Complaint are conclusions of law to which no answer is
required; to the extent an answer is required such allegations
are denied and strict proof is demanded at trial.

(b) In “Defendants’ Proposed Findings of Fact and Con-
clusions of Law” (following liability trial):

48. Until the first purchaser signed a contract to purchase a

mutual ownership contract, there was no third party existing

to whom a fiduciary duty could be served because prior to that
time the Cooperative was 100% subsidiary of Associates.

(c) In “Brief for Appellants,” filed with the D.C. Court of
Appeals:
We make no effort to address ourselves to the question of the

metes and bounds of the duty of a seller — fiduciary, since we
are persuaded that no such duty existed in this case.

ese eee enH EH
In the case at bar, the developer was strictly a seller of

apartment units, and was not inviting the public to join. . . in
a common enterprise for their mutual benefit.

see ee

If that be an accurate depiction of the role of the developer,
then his status was not that of a fiduciary, but only one of an
ordinary seller (at pp. 64-66).

97a

2. On The Issue Of The Court's Authority, Constitutionally, To
Impose Punitive Damages For Violation Of A Fiduciary Duty
Previously Unknown

In “Petition for Rehearing and Rehearing En Banc.” filed with the
D.C. Court of Appeals, it was stated in reference to the ex post facto
imposition of punitive damages:

Assuredly, serious questions are raised of due process violation

under the federal constitution (at p. 5)

3. On The Court's Authority To Set Public Policy In Reference To
Clauses Permissible In Deeds Of Trust

In “Brief for Appellants,” filed with the D.C. Court of Appeals, it
was stated:

Ordinarily , the question of what the citizenry may or may not do
neg cm telleedengggabaginlecaenghan ae meg Under our
system of government . ourselves through our
duly-elected sapesneataives, representatives — the
legislature — are empowered to determine what rules are needed
to govern society, and having so determined, pass laws to that
effect. Such action on its part would be the defining , formulation
and establishment of “public policy.”
pt teem died dh oer selene Cee per palma
such course of conduct, perforce, would be legal and proper. No
other body of government, either the executive or the j
may take it upon itself, whether it be on the theory that it is filling
a vacuum in the law or that the legislature has been derelict in its
to it such action. the purport odo so. . they would
be legi — passing laws ine which they are not
authorized to do.
Inasmuch as there is no law in the District of Columbia forbidd-
ing the insertion of |such| clauses . . . [the] usage here on its
+ erate = Tin cresthubanautedurteduclninteteretes
or to decree that such clauses are to be prohibited (at pp. 49-50).

4. On The Issue Regarding The Court's Failure Following Con-
tract Rescission To Restore The Status Quo

In “Brief for Appellants,” submitted to the Appeals Court, the
petitioners, in urging that in order to restore the status quo it was
necessary to return the units to the developer, stated:

Conpuntve cxhuined ty ths cout wun asta eomation to Ss

see ee ee eH

The court in this case. . . . in carrying out its rescission formula,

“restored” the units to the which had never held,
owned or for them. The ph $44 -
was a transitory one only i
Se ee ae eee developer as an

inextricable portion of the original sales price of the
ray wantatnhae p ame ry The reality of the situation was that
the had retained the units as a substitute for a cash
payment for the x over and above the purchase-money
mortgage (at pp. 32-34).

5. On The Issues As To Whether, Following Contract Rescission,
The Failure To Restore The Apartment Units To The Seller
Constituted A Divestiture Violative Of Due Process

In “Petition for Rehearing and Rehearing En Banc.” filed with the
Appeals Court, it was stated:
The Court's Divestiture Of Eleven Apartment Units Belonging To

The Developer
If there single ruling by the court that be
aheeh onan en oe ae 4

known and understood, it was the stripping of the developer of
eleven apartment units . . . and handing them over to Coopera-

99a

AGENCY AGREEMENT

WHEREAS, Wisconsin Avenue Associates, Inc. is desirous of
obtaining title to the real property and improvements located thereon
known as 2720 Wisconsin Avenue, N.W., Washington, D.C.; and

WHEREAS, A. V. Laurins and Co., Inc., through its President
A. V. Laurins, is desirous of providing its services in negotiating
with and acquiring title from the current owners of the property on
behalf of Associates;
following agreement:

1. Laurins shall negotiate with and obtain the best price it can
on the property and execute a purchase agreement therefore in its own
name.

2. Laurins shall at all times act as agent for Associates and
shall direct title to the property to be taken in the name designated by
Associates at time of settlement.

3. This agency shall terminate after settlement has been made
on the property and an accounting has been made to Associates by
Laurins.

4. Laurins shall be entitled to a fee of $500 plus reimbursement
of all expenses for its services payable by Associates after title has
been transferred and an accounting has been made pursuant to para-
graph 3 hereof.

‘>

This Agreement entered into this _____ day of —_>_E>—
1974.

ATTEST:

By: Caro. A. TOMPKINS

Carol A. Tompkins
Secretary

ATTEST:
By: James NoRMAN
James Norman
Secretary ;
WISCONSIN AVENUE ASSOCIATES, INC.

/s/ James NORMAN
James Norman

10la

WHEREAS, 2720 Wisconsin Avenue Cooperative Association,
Inc. (Cooperative) desires to acquire the property and improvements
located at 2720 Wisconsin Avenue, N.W., Washington, D.C. (the
Property) for the purpose of converting said Property to a cooperative
form of ownership. and

WHEREAS, Wisconsin Avenue Associates, Inc. (Associates) has
obtained the right to acquire fee simple title to the Property; and

WHEREAS, Cooperative desires to convert the said Property to a
cooperative form of ownership by arranging for the sale of Mutual
Ownership Contracts issued by Cooperative to purchasers interested
in a cooperative form of living:

NOW THEREFORE, Cooperative agrees to assign to Associates
all right, titles and ownership to the said Mutual Ownership Contracts
representing 100% ownership of Cooperative for the sole purpose of
Associates selling these contracts to others who may wish to buy then,
subyect, however, to the following terms and conditions:

1. Associates shall arrange for Cooperative to obtain title to
the Property pursuant to an Assignment of a Purchase Agreement on
the subject Property, said Assignment Agreement to be entered into
Concurrently herewith.

2. Associates shall be entitled to no fee from Cooperative for
its services other than the assignment of the Mutual Ownership
Contracts previously described.

3. Associates shall be totally and completely responsible for
all costs involved in promoting. selling, advertising, transferring
title, repair and/or renovation of the interior of any dwelling unit or
any other cost it may incur in the sale of the Mutual Ownership
Contracts.

4. Associates shall not be required to repair or renovate any
dwelling unit except to the extent it, in its absolute discretion, may
deem advisable to facilitate sale of the Mutual Ownership Contracts.

102a

5. Cooperative agrees to maintain all common areas and facili-
ties in good condition and working order at all times and give
Associates access to the Property at all times for any reasonable
purpose and to allow Associates to maintain a sales office , if desired,
on ‘he premises and to post whatever signs deemed desirable by
Associates to promote sales.

This Agreement made this 6th day of December, 1974.
ATTEST:

By: CHARLENE BADEN
Charlene Paden

Secretary
ATTEST:
By: Carot A. TOMPKINS
Carol A. Tompkins
Secretary
2720 WISCONSIN AVENUE COOPERATIVE
ASSOCIATION, INC.

By: A. V. Laurins
A. V. Laurins
President

WISCONSIN AVENUE ASSOCIATES, INC.

By: James NORMAN
James Norman
President

103a

ASSIGNMENT OF PURCHASE AGREEMENT
to
2720 Wisconsin Avenue, N.W., Washington, D.C.

WHEREAS, Wisconsin Avenue Associates Inc. ( Associates) has
acquired the right to obtain title to the property knowns -2720
Wisconsin Avenue, N.W., Washington D.C. (the Properiy); and

WHEREAS. 2720 Wisconsin Avenue Cooperative Association,
Inc. (Cooperative) desires to purchase the Property and convert it to a
cooperative form of ownership;

NOW THEREFORE, in exchange for Cooperative executing a
wrap-around mortgage in the amount of $945,000, secured by the
Property. in favor of Associates and Cooperative further agreeing to
give Associates an exclusive agency to develop the Property as a
cooperative on terms to be mutually agreed upon between the parties,
Associates hereby agrees to assign its right to obtain fee simple title in
the Property to Cooperative under the following terms and con-
ditions:

1. Associates shall advance all cash required by Cooperative
to enable it to acquire title to the Property. Cooperative shall repay all
monies advanced by Associates over a period of twenty-three (23)
years from date of settlement with no interest or principal payable the
first year, interest only for the second and third years at the rate of
8.5% per annum, and principal and interest payments thereafter at
8.5% per annum until the principal amount has been repaid in full.

2. Simultaneously with closing title to the Property, Coopera-
tive shall execute the wrap-around mortgage referred to herein on a
form to be supplied by Associates.

3. Associates shall retain equitable title to the Property until
Cooperative has assigned all mutual ownership contracts represent-
ing 100 percent ownership in Cooperative to Associates. It is under-
stood that this Assignment is for the purpose of selling these mutual

104a
ownership contracts in Cooperative to persons interested in the coop-
erative form of home ownership.
This AGREEMENT made this 6th day of December, 1974.
ATTEST:

By: CHARLENE BADEN
Charlene Baden

Secretary

ATTEST:

By: Caro. A. TOMPKINS
Carol A. Tompkins
Secretary

2720 WISCONSIN AVENUE
COOPERATIVE ASSOCIATION, INC.

By: A. V. Laurins
A. V. Laurins
President

WISCONSIN AVENUE ASSOCIATES, INC.

By: JaMes NORMAN
James Norman
President

105a

2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATES, INC.
MUTUAL OWNERSHIP CONTRACT

This contract made in the District of Columbia, this sixth day of
December, 1974. by and between the 2720 Wisconsin Avenue Coop-
erative Association. Inc. (hereinafter sometimes called the Associa-
tion) and Wisconsin Avenue Associates Inc. and shall bind all sub-
sequent assignees of this contract by Wisconsin Avenue Associates,
Inc.

WITNESSETH

THAT, for and in consideration of the sum of one ($1.00) dollar,
each to the other paid, the receipt of which, each from the other is
acknowledged, and of the mutual conditions and covenants herein
contained, the Association and Associates do mutually agree as
follows:

1. Membership Fee: The Association acknowledges that the
membership of Wisconsin Avenue Associates, Inc.. is only for con-
venience of the transfer of this mutual ownership contract to an owner
for occupancy by way of sale or lease option and therefore that all the
rights and privileges of membership are extended to Wisconsin Ave-
nue Associates, Inc. so that it may extend same to owner occupants
(hereinafter referred to as Member). No membership fee is required
© be paid by Wisconsin Avenue Associates, Inc. The restrictions
against transfer or rental shall not apply to Wisconsin Avenue Associ-
ates, Inc. or to any lender. All other subsequent transfers, from
Wisconsin Avenue Associates, Inc., however, are subject to a two
hundred ($200.00) membership fee. Said membership fee shall not
be subject to refund.

2. Management: Association shall employ the property
management firm designated by Wisconsin Avenue Associates, Inc.
for a term of not less than three years from the date of this agreement
to manage the affairs of the Association. The property Management
firm appointed by Wisconsin Avenue Associates, Inc. shall keep
adequate records, collect all moneys on behalf of the Association
from Member which are due and payable under this mutual own-

106a

ership contract, make all appropriate disbursements, and render a
yearly accounting to the Association showing receipts and dis-
bursements and the amount of interest and taxes paid and allocable to
each Member.

3. Voting Rights: Wisconsin Avenue Associates, Inc. shall
have an irrevocable proxy coupled with an interest to cast all votes of
the Membership of the Association for whatever purpose required for
the period of three years from February |, 1975.

4. Sale and Purchase of Perpetual Use: Subject to all the
provisions in this contract and pursuant to the terms of the agreement
between the Association and Wisconsin Avenue Associates, Inc.
dated December 5, 1974, the Association agrees to assign a right of
perpetual use and enjoyment, (hereinafter called the “Perpetual
Use”), of apartment number 203 at 2720 Wisconsin Avenue, Wash-
ington, D.C. This transfer is effective December 6, 1974.

5. Assessed Value: The assessed value of the Perpetual Use of
this apartment is $21,000 which represents |.55268% of the total
assessed value of the property and agreed to represent the ownership
interest of member in the Association. This percentage ownership
interest cannot be changed by the Association without a unanimous
vote of 100% of the members.

6. Monthly Payments and Special Assessments: Member
agrees to pay to the Cooperative Association, by the first day of each
month, 1/12 of the amount resulting from multiplying the annual
budget of the Association times the percentage ownership interest in
the Association. In addition, member agrees to pay any special
assessment promptly when requested by the Board of Directors. Said
special assessment shall be limited to that percentage of the total
assessment which is equal to member's ownership interest.

7. Member as Guarantor: Upon assignment or transfer of
(hs contract, a promissory note shall be executed by the new member
(assignee) and secured by this mutual ownership contract for the
balance due on his/her share of the corporate indebtedness due to the
holder of the deed of trust executed by the Association on December
6, 1974 to enable it to acquire title to the property. This promissory
note shall be assigned by the Association the holder of the Deed of

107a

Trust previously mentioned as additional security. ihe annual budget
of the Association shall include the payments of principal and interest
due on this indebtedness.

8. Application of Payments: The Member agrees to make
payments required under paragrpah 6 herein at one time and in one
lump sum when due. Any balance of Interest and Operating Payments
remaining unpaid shall be added to and become a part of the Purchase
Price and bear interest therewith.

9. Occupancy: The Member shall own and use the dwelling
covered by this contract as a private dwelling and may enjoy the use,
in common with all other members of the Association, of all commu-
nity property and facilities of the Association, so long as he remains a
member of the Association, and abides by all the terms of this
Contract. The Member may sublease his dwelling, provided that his
tenant be first approved by the Association.

10. Operating Services, Utilities and Reserves: The
Association shall (i) provide necessary management and administra-
tion of the property, (ii) pay or provide for the payment of all taxes
and assessments levied against the property, (iii) procure and pay or
provide for the payment for fire insurance on the property (including
insurance on the Member's dwelling. but not his personal property),
(iv) provide and pay for water, gas and electricity in reasonable
amounts, (v) set up reserves to cover vacancy, collection losses,
repurchase and future costs of replacements, and (vi) provide and pay
for all necessary current repairs, maintenance and replacements of
Association property , except that the Member shall be responsible for
all interior painting and decoration and the repair and maintenance of
all kitchen appliances, lighting and bathroom fixtures located in the
Member's dwelling. If the Member does not provide such interior
repair and maintenance and painting and decorating in a manner
satisfactory to the Association, it may have any work performed
which in its judgment is necessary and charge the cost to the Member.
If such charge is not paid when it accrues, it shall be added to and
become part of the unpaid balance of the Promissory Note described
in paragraph 7, and bear interest therewith.

108a

11. Current Value: For the purpose of this Contract, the
Current Value of the Perpetual Use of the Member's dwelling during
any month, shall be the assessed value (as stated in paragraph 5
herein) less 1/12 of 3% of the assessed value for each month (esti-
mated depreciation of the building and equipment), including the
current month, which has elapsed since the first day of the month in
which this Contract was made.

12. Representation by Member: The Member represents
that the dwelling is being purchased for his immediate and personal
use and occupancy as a dwelling.

13. Transfer by Gift or Inheritance: The Member may
transfer his Perpetual Use of any interest under this Contract by gift,
bequest, assignment or otherwise to anyone, provided that if such
Perpetual Use or interest is to be transferred to a person other than a
member of the Member's family, such person shall not be permitted
to occupy the premises without the approval of the Association.

14. Termination of Contract: In the event of default by the
Member of any payments or charges required under this Contract, or
violation of any other provisin hereof, the Association may terminate
this Contract upon ten (19) days written notice to the Member. The
Association may terminate this Contract upon thirty (30) days written
notice if upon adequate proof its Board of Directors by a vo'> of
four-fifths (4/5) of all the directors shall determine that the Member is
undesirable as a resident in the Development. In the event of termina-
tion under this paragraph, the Association may, at its election, pur-
chase the Perpetual Use for its current value as set forth in paragraph
10 herein, or sell such Perpetual Use for an amount determined by the
Association to be its fair market value. Upon disposition of the
Perpetual Use pursuant to this paragraph. the Association shall pay to
the Member the amount of the disposal price less the unpaid balance
of the Purchase Price and less the estimated cost of painting and
decorating (required to be done by the Member pursuant to Paragraph
10 herein), which are necessary to place the dwelling in suitable
condition for another occupant.

109a

15. Observances of Mutual Ownership Principles: The Mem-
ber convenants that he shall preserve and promote the mutual own-
ership principals upon which the Association has been founded, abide
by the By-Laws, and Rules and Regulations of the Association, and
by his active cooperation with its other members bring about for
himself and his co-members a high standard in home and community
conditions.

16. Peaceable Possession: If the Member makes the pay-
ments herein required and performs all of the conditions and agree-
ments of this Contract the Association covenants that at all times
while this Contract remains in full force and effect, the Member may
peaceably have and enjoy the sole use and benefit of the apartment
herein above described, and may enjoy, in common with all other
members of the Association, the use of all community property and
facilities of the Development, provided. however, that the Associa-
tion shall have a right upon reasonable notice to the member to inspect
the premises occupied by such member.

IN WITNESS WHEREOF., the parties hereto have caused this
Contract to be signed and sealed on the date and at the place first
above mentioned.

ATTEST:

/s/ Carow A. TOMPKINS
Carol A. Tompkins

Secretary
ATTEST:

By: CHARLENE BADEN
Charlene Baden
Secretary

110a

WISCONSIN AVENUE ASSOCIATES, INC.
(A District of Columbia Corporation)

By: James NORMAN
James Norman
President

2720 WISCONSIN AVENUE
COOPERATIVE ASSOCIATION, INC.
(A District of Columbia Corporation)

By: A. V. Laurins
A. V. Laurins
President

NULLIFIED CLAUSES IN DEED OF TRUST

The four clauses in the Deed of Trust nullified by the trial court
provided, as follows:

“11. Grantor shall save Beneficiary and Trustees harmless
from all costs and expenses, including reasonable attorneys’
fees. and costs of a title search, continuation of abstract and
preparation of survey. incurred by reason of any action. suit,
proceeding, hearing, motion or application before any Court or
administrative body in and to which Beneficiary or Trustees may
be or become a party by reason of this Deed of Trust, including
but not limited to condemnation, bankruptcy, and administra-
tion proceedings, as well as any other of the foregoing wherein
eae edb nndndee Aer om be 4 Amery de

necessary to defend or uphold the terms of this Deed of
Trust, and all money paid or expended by Beneficiary or Trus-
tees in that regard, together with interest thereon from day of
such payment at the rate provided in the note, shall be secured
hereby and, shall be payable by Grantor to Beneficiary or
Trustees, as the case may be, within five (5) days after demand.”
(PI. Ex. 5, p. 8).

“17. In the event of the sale, conveyance, or transfer of all
or any part of the Premises by the Grantor, Beneficiary may
accelerate the entire princi on the Note. In the event of a
sale, conveyance, or er of an interest in the Grantor which
includes the right of possession to a part of the Premises,
Beneficiary may accelerate that portion of the total indebtedness
secured hereby which said owner of an interest in Grantor has
secured by executing his promissory note to Grantor pursuant to
the provisions of 27 herein. Beneficiary may at his
sole option elect to refinance said portion of this indebtedness
for the Grantor if the sale of said interest is made to a person
whom the Beneficiary, in its sole j . believes to be
financially capable of supporting the portion of the indebtedness
he will be responsible for. Said refinancing may be made at the
ge pe met ar legal rate of interest. The primary responsibil-
ity of repaying the refinanced portion or portions of the total
indebtedness secured by this Deed of Trust shall remain with

“34. Grantor covenants and agrees not to exercise any right
or privilege or repayment of the Participating Financing and
further covenants and agrees not to enter into any agreement

112a

with the holder of the Participating Financing modifying or
amending any of the provisions dealing with payment of princip-
al or interest thereunder without the prior written consent of the
Beneficiary. In consideration of the financing provided by Ben-
eficiary under the provisions of this Deed of Trust. Beneficiary
is irrevocably constituted sole and exclusive agent and attorney
in fact for Grantor to arrange. at Beneficiary’s sole discretion to
refinance any or all of the Participating Financing or debt due
under the terms of this Deed of Trust if such action is desired by
Beneficiary. Such agency shall include the authorization of the
Grantor for Beneficiary to execute on Grantor's behalf all docu-
ments required by any lender to accomplish said refinancing. In
the event the Grantor shall not have the power to delegate to
Beneficiary the performance of any act required to effect said
refinancing. Grantor agrees to execute any documents and pro-
vide any such affidavits or representations required of a lender to
effect said refinancing. Failure of Grantor to cooperate in all
respects with the refinancing of the Participating Interest or debt
due hereunder shall be deemed a detault under the terms and
provisions of this Deed of Trust.” (App. Pl. Ex. 5. p. 20).

“46. Nothing herein contained nor any transaction related
hereto shall be construed or shall so operate either presently or
prospectively, (a) to require Grantor to pay interest at a rate
greater than is now lawful in such case to contract for, but shall
require payment of interest only to the extent of such lawful rate,
or (b) to require Grantor to make any payment or do any act
contrary to law; but if any clause and pi ovision herein contained
shall otherwise so operate to invalidate this Deed of Trust in
whole or in part, then such clauses and provisions only shall be
held for naught as though not herein contained and the remainder
of this Deed of Trust shall remain operative and in full force and
effect. If at any time any law or court decree prohibits the
performance of any obligation undertaken herein by the Gran-
tor. or provides that any amount to be paid by the Grantor must
be credited against the Grantor's obligations under the Note . the
Beneficiary will have the right. on ten (10) days’ prior notice to
the Grantor to require payment in full of the entire indebtedness
secured hereby.” (PI. Ex. 5. p. 46).

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_0023%3A2. Public record. Not legal advice.