# Appendix — Wisconsin Avenue Associates, Inc. v. 2720 Wisconsin Avenue Cooperative Ass'n > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_0070%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1982 - **Citation:** 459 U.S. 827 ## Text APPENDIX 1 — OPINION OF DISTRICT OF COLUMBIA DISTRICT OF COLUMBIA COURT OF APPEALS Nos. 79-631 and 79-1103 WISCONSIN AVENUE ASSOCIATES, INC., et al., APPELLANTS, v. 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., et al., APPELLEES. No. 79-1102 GoLr DEPOSITORY AND LOAN COMPANY, INC., APPELLANT, v. 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., “se et al., APPELLEES. ‘5’ ® ies Appeals from the Superior Court of the /3'5 | District of Columbia Gs / (Hon, William E. Stewart, Jr., Trial wo 7 (Argued June 17, 1981 Decided February 2, 1 E. Leo Backus for appellants in Nos. 79-681 and 79- 1108. John H. MacVey for appellant in No. 79-1102. Richard A. Hibey, with whom Robert B. Wallace was ' on the briefs, for appellees. Before Harris, MACK, and Pryor, Associate Judges. een oe Ht i: ita i ai: th PLT ial Tht FL " Ess re i gages, and the issuance of a third mortgage. On December 1, 1974, 2720 Limite Partnership (an entity controlled by defendant Laurins) agreed aise Cinaiate tite te io eum tee Ge ae opty Cescaitie sarge ep ogg Segpaine Inc. (Cooperative), in favor of the yet-to-be-formed Wisconsin Avenue Associates, Inc. (Associates) .* rip 3 ide vance all cash required to acquire title to the property. BE rw car ins te sgl Hmong ype Fay cag iki ne : vt , tes 2b o Geenaben co ae On December 16, 1974, Cooperative executed another note in favor of Associates in the amount of $100,000. An HH i Sees sociates the power to transfer the individual apartments Ht Hf HHT ul Saetirien cecbeage ave Ay we > fii! ST pan ty were broken additional note was executed in favor of Associates on —— 1975, in the amount of $5,700. The amounts oe provided agreement interest from 23 be made at oh i a. | Appendix | Velaees es. fis ie Ate a abet, p 5 lll ileal H Util al UAH Te fe oe i Ua a cial Hy : HAUT ie TBAHTHLE! 3 +3 4°" t ip we 43331 ridises Hae 8 ieee 5 HH ui hil if BUG il £uzit fea iia Hider et Ht HLH 4 Hi HEH Ue es He a3] Hi: ‘HHA neu stig line lta seal atin 1. lil i kal! fet 335 ft as GE HIE fill: ‘ il Ve ii aytiies suenttial Hare PTH tet THE Ber ii Hii fines % ti 43° jail a3 “ft ar i tice tne ts ee all rents collected on those units plus the reasonable Tees cae ea ao gare Hearn ali ip and ordered the : tt Appendix | ; ie Halil att i : in Ht re 1 iit ni ie ie ft : tH chill slicgued, Tate iii i 43 it Teal iad Tet oi it séeeg8 istals HH ‘ pe dba ill i Hitt +7 : i i it Hi i 3 ie Hits], H : cl Hl ie i RS : Wt ) if He HiTH it i : nl uf i HE wae igz8f ea Z P le Hi 33¥ He See: WA NG Tere ln a tll é H tet : age ‘je ta tania? a Vice ele ih PPA UHe HL cel B““seebss Fes adit: iF Hi qeiziel it ont 23a Appendix | tionship, and does so in bad faith, vexatiously, wantonly, or for oppressive reasons.” 1901 Wyoming Avenue Coop- erative Association v. Lee, D.C.App., 845 A.2d 456, 464- 65 (1975) ; accord, AFSCME v. Ball, D.C.App.,——— A.2d —— (No. 80-1309, Dec. 30, 1981) ; Biggs v. Stewart, D.C. App., 418 A.2d 1069, 1071 n.7 (1980); Bay General In- dustries, Inc. v. Johnson, D.C.App., 418 A.2d 1050, 1057 n.20 (1980); Trilon Plaza Co. v. Allstate Leasing Corp., D.C.App., 399 A.2d 34, 37 (1979); Wisconsin Avenue Associates, Inc. v. 2720 Wisconsin Avenue Cooperative Association, Inc., D.C.App., 885 A.2d 20, 24 (1978); ¥. W. Berens Sales Co. v. McKinney, D.C.App., 310 A.2d S°BS ELE SSE E gan3 $ i ee lise Aas at Hee gale c, sakfSais a. a ak Te 3 inpiel bath i? Wee tt i : aah ats i "33 i Hee 3 pS agua dalle l : Haan H lel wir af we of defendant Laurins’ civil contempt citation APPENDIX 2 — EXCERPTS FROM D.C. SUPERIOR COURT DECISION (LIABILITY) DATED JUNE 27, 1978 SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Action No. 2583-76 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., a corporation organized under the Cooperative Associations Law of the District of Columbia DAVID C. SPRIGGS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and President of 2720 Wisconsin Avenue Cooperative Association, Inc. H. JAMES ZELLERS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Vice President of 2720 Wisconsin Avenue Cooperative Association, Inc. JOHN BRIAN DALY, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Secretary of 2720 Wisconsin Avenue Cooperative Association, Inc. PETER C. WOODFORD, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Assistant Secretary of 2720 Wisconsin Avenue Cooperative Association, Inc. STEPHEN L. WILKINS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Treasurer of 2720 Wisconsin Avenue Cooperative Association, Inc. 27a Appendix 2 ABBAS ABUTAA, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. MICHAEL P. ARRA, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. ANGELO L. BARDINE, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. PAULA B. BELL, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. C.M. BROUTSAS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. THOMAS E. COLER, JR., Member of 2720 Wisconsin Avenue Cooperative Association, Inc. G. DAVID CRANE, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. CECILE de ROCHEFORT, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. GERALDINE GARRITY, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. JAMES C. HASSAN, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. RONALD L. HAYES, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. 28a Appendix 2 SACHIKO KAWAGUCHI, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. MARGARET MCMANUS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. CATHERINE G. MORAN, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. CHRISTIE S. ROGERS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. VIVIANE RUSSELL, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. VERDELIA F. SCOTT, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. JOYCE K. TURNER, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. L.J. WELLS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. WILLIAM L. WOLF, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. 29a Appendix 2 VAL MANAGEMENT COMPANY, INC., a Maryland corporation METROPOLITAN MORTGAGE BANKERS, INC., a Maryland corporation ALEKSANDRS V. LAURINS JAMES G. NORMAN CHARLENE BADEN CAROL A. TOMPKINS, a/k/a Carol Jenkins WAYNE A. CHASEN REAL ESTATE EQUITY MANAGEMENT, INC., a Maryland corporation, general partner of Co-vup Mortgage Investors L/P, a Maryland limited partnership SCENIC TRAVEL, INC., a Nevada corporation, a general partner of 2720 Limited Partnership, a limited partnership REAL DEVELOPMENT MANAGEMENT, INC., a Nevada corporation CONFERENCE MANAGEMENT GROUP, INC., a Nevada corporation, a general partner of 2720 Limited Partnership, a limited partnership SECURITY NATIONAL BANK, a District of Columbia corporation Defendants Appendix 2 MEMORANDUM OPINION Findings of Fact and Conclusions of Law This is an action by a District of Columbia cooperative housing association and by individual plaintiffs who are members of the cooperative against certain individuals who were formerly officers and/or directors of plaintiff-cooperative and various entities controlled by these defendants, each of whom had dealings with the cooperative and its members. Such dealings cover the period of time in which the real property involved was acquired and sold to the cooperative, the promotion of the cooperative and the sale of certain of its units and also the management and control of the cooperative from its inception to the present date. The Complaint (amended) is a multiple count pleading setting forth alleged causes of action for declaratory judgments, accounting, breach of contract, breach of fiduciary duty and unjust enrichment, injunctive relief and fraud and deceit. The defendants have denied the existence of any valid causes of action and filed multiple counterclaims seeking to recover for damages to reputation, for tortious interference with business contracts, for ,debts due under two notes and for loss of profits and lastly for *attorney’s fees under terms of certain of the documents executed ’ by the parties. The defendants also seek to recover damages against ‘one of the individual plaintiffs for her alleged breach of employment contract and/or her negligent performance of her employment duties. This litigation was commenced on the 18th day of March, 1976 and shc-tly thereafter the parties appeared before the court for a hearing on a preliminary injunction. Thereafter, the case was placed on a Civil-I calendar and assigned to the Honorable James Belson, who handled all matters thereafter arising until i tue 3la Appendix 2 the 11th day of April, 1978, when the case was certified for trial to this court (order of Chief Judge Greene). The matters, pretrial, were numerous. The complexity of the litigation was such that Judge Belson, in an effort to assist the parties and counsel, made certain rulings, in limine. On the morning of the date of trial, April 17, 1978, the parties announced their withdrawal of a jury demand and the case then proceeded to trial as a non-jury trial. The trial consumed twelve days, in which the court heard testimony of thirty-five witnesses (three by deposition) and received in evidence over 1200 exhibits. Obviously the withdrawal of the jury demand was in part an effort to cut down on the time required for trial (estimated at 5-6 weeks) and the same subject afforded the basis for the court ordering, pretrial that the issues of liability and damages would be bifurcated. Consequently, with the first phase of the trial concluded and counsel now having had the opportunity to submit proposed Findings of Fact and Conclusions of Law, the court addresses the determination of issues of liability on the Complaint and Counterclaims. The substantial majority of plaintiff-purchasers were well educated persons of means who were gainfully employed at the time of purchase. Of the 25 individual plaintiffs, 3 are lawyers, 2 hold PhD degrees, 6 hold Masters degrees. Of the individual plaintiffs, only 3 have not had some college education or some formal education beyond high school and of those, Mrs. Bell and Mrs. Scott have had significaut experience in real estate and/or financial matters. A substantial number of the plaintiff-purchasers had other investments in real property at the time of purchase, including 32a Appendix 2 Mr. Coler, Mr. Hassan, Mr. Rogers and Mrs. Scott, who owned interests in other condominiums and/or cooperatives. Some plaintiff-purchasers looked at condominiums in the area prior to purchase. All plaintiff-purchasers visited the subject property at least once before signing their Cooperative Apartment Sales Agreements. Some plaintiffs sought the advice of legal counsel in connection with their purchases. The defendant Laurins is first a lawyer and also a shrewd and experienced businessman quite at home in negotiating and transacting business through multicorporation type transactions. Norman is a lawyer but his experience is no match for that of Laurins and though in certain areas it was obvious that he participated in discussions and even lent advice and was the author of the wrap-around deed of trust, his role was minor to that of Laurins. The remaining individual defendants were employees of Laurins who recognized that to be their status and obviously had no concept of their functions as officers and/or members of the Board of Directors of the corporate entities involved in dealings with or on behalf of a cooperative. Just prior to trial, the parties, through their counsel, agreed upon and executed a “‘Joint Statement of Undisputed Facts”” which is marked as Exhibit-A to this memorandum opinion and attached hereto as a part of same. At several stages prior to trial, the Honorable James Belson entered in limine rulings. Such rulings are marked as Exhibits 33a Appendix 2 B and C and are attached. This court tréats these as if the law of the case and thus proposes to follow the same with a single exception and that being in the instance of the treatment of the elements of and defense to the tort of interference with the contractual rights of the defendants as asserted in one of the counterclaims. As to that claim, this court is of the view that ‘a more recent decision of the District of Columbia Court of Appeals clarified the law and permits plaintiffs, in opposing the counterclaim, to assert that the actions taken were justified and/or privileged. On November 13, 1976, A.V. Laurins & Co., Inc. executed a Corporations Act of the District of Columbia in December of 1974 since its Certificate of Incorporation was not issued until the 6th of January, 1975. Robertson v. Levy, 197 A.2d 443 (DCCA, 1964). Plaintiffs have urged that since Associates did not exist as a corporation at the time of executing the Deed of Trust, the Assignment Agreement and the $100,000.00 promissory note, each is void. Defendants have countered that following its formal incorporation, Associates adopted and approved all prior acts of the organizers and agents of the corporation. They point out that a contract entered into by a promoter in the name of or on behalf of a corporation prior to issuance of its Certificate of Incorporation can be adopted by the corporation after it comes into existence. Real Estate Central, Inc. v. Kramer, 254 M. 290, 255 A.2d 81 (1969); Rosenberg v. Roiling Inn, Inc., 212 Md. $52, 129 A.2d 924 (1957); 1 Fletcher, Cyclopedia of Corporatiors, 207, 208, 214. Moreover, the corporation’s adoption of such a contract may be express or it may be implied from the corporation’s acceptance of the benefits and its fulfillment of the burdens of the contract. Rosenberg v. Rolling Inn, Inc., supra. The court finds from the facts that Associates has impliedly adopted the acts prior to its incorporation; it has accepted the benefits ake Ada Appendix 2 therefrom and substantially complied with its burdens. The case of Accurate Construction Co. v. Washington, 378 A.2d 681 D.C. App., 1977), cited by the plaintiffs is inapplicable and distinguishable on its facts. Hence, the obligations of Cooperative, entered into prior to Associates’ incorporation, are binding to the extent they have not been modified by the court herein. The cou:t also finds that Cooperative itself has impliedly adopted the acts of December 6, 1974, having accepted the benefits and fulfilled the burdens of its contracts and its Board of Directors now being properly constituted under Title 29, D.C. Code, §813, et seq. With respect to the adoption of Associates, however, the court finds that Associates has failed to fully perform two of its contractual obligations. The language of one of the agreements dated December 6, 1974 (D’s 11) is: “Cooperative agrees to assign to Associates all right, title and ownership to the said Mutual Ownership Contracts representing 100% ownership for the sole purpose of Associates selling these contracts to others who may wish to buy them.’’ (Emphasis added). In the individual mutual ownership contracts, it is provided: ‘“‘The Association acknowledges that the membership of Wisconsin Avenue Associates, Inc. is only for the convenience of the transfer of this mutual ownership contract to an owner for occupancy by way of sale or lease option . . .”” (Emphasis added). The court finds that Associates has failed to fully perform its duties under the agreement to convey all of the units at 2720 Wisconsin Avenue for the benefit of Cooperative. Rather, since the instigation of this litigation, Associates has maintained the unsold units ‘or every purpose but that which is specified by the agreement. The primary objective undoubtedly has been to wield leverage over the plaintiffs, which in and of itself is not untenable. But, by a series of acts which have demonstrated a blatant disregard for the Rules and Regulations, as well as the maintenance of the property, 35a Appendix 2 Associates has caused turmoil in the building. The court therefore enjoins Associates and thereby orders it to cease and desist any and all efforts to sell or lease the remaining unsold units. The court further finds from the uncontradicted evidence that Associates failed to fully perform its obligations as warranted by an “‘apartment preparation”’ sheet (D’s 33). The court accepts plaintiffs’ Attachment B to their Proposed Findings of Fact, which is a list of the work not performed, as the extent of liability on this issue, subject to proof of damages. The court is not persuaded that the plaintiffs’ evidence has risen to the level of proving fraud in this case. Fraud requires proof of misrepresentation of a material fact made with knowledge of its falsity and with intent to deceive. Quoting from Post v. U.S., a case heavily relied upon by plaintiffs: ‘‘Mere breach of fiduciary obligation does not itself constitute active fraud; there must be a specific intent to defraud.’’ 132 U.S. App. 189 at 199 (1968). While the court has found a breach of fiduciary duty, it cannot conclude that there was a specific intent to defraud on the part of the defendants. Plaintiffs also seek an award of attorneys’ fees for prevailing in this action. Such an award, while an exception to the general American rule that each party to an action must bear his own costs, can be awarded where the action involves: a) a breach of fiduciary duty, b) mismanagement by a trustee, c) the taking of secret profits, d) overriding considerations of justice that compel it, or e) activity that justifies an award of attorneys’ fees by way of punitive damages. See Wolff v. Calla, 288 F. Supp. 891 (E.D. Pa. 1960); Wilmington Trust Co. v. Coulter, Del., Ch., 208 A.2d 677 (1965); In Re Bausch’s Estate, 208 App. Div. 482, 115 N.Y.S. 2d 278 (1952); Fleischman Distilling Corp. v. Maier Brewing Co., 386 U.S. 714 (1967); Alyeska Pipeline Service Co. v. Wilderness 36a Appendix 2 Society, 421 U.S. 240 (1975). The courts of the District of Colu mbia recently recognized the appropriateness of an award of attorneys’ fees to prevailing litigants in Belmar Realty Co. v. Bownan, 106 Wash. L. Rptr., p. 673 (D.C. Sup. Ct., Feb. 24, 1978). There the court acknowledged the numerous cases of this jurisdiction allowing fees as an exception to the general rule, ¢.g., 1901 Wyoming Avenue Cooperative Ass'n. v. Lee, 345 A.2d 456 (D.C.C.A. 1975); F.W. Berens Sales Co., Inc. v. McKinney, 310 A.2d 601 (D.C.C.A. 1973); and Continental Insurance Co. v. Lynham, 293 A.2d 481 (D.C.A. 1972). In 1901 Wyoming Avenue Cooperative Ass’n., supra, the court stated, at 464-465: “There are, of course, exceptions. The relevant ones in this action are that where a party brings or maintains an unfounded suit or withholds action to which the opposing party is patently entitled, as by virtue of a judgment or because of a fiduciary relationship, and does so in bad faith, vexatiously, wantonly, or for oppressive reasons, reasonable attorneys’ fees may be allowed. F.W. Berens Sales Co. v. McKinney, 310 A.21 at 603.” (Emphasis added). $100,000.00 and $5,700.00 notes. The court has dealt with and modified these obligations of Cooperative above and thus, as to these counterclaims the court finds in favor of the defendants, subject to proof of specific amounts of entitlement and recovery pursuant to this decision. Thus, as to Counterclaim I, tortious interference with contract, Counterclaim III, damage to reputation and Pers 37a Appendix 2 Counterclaims X and XI, for breach of contract and negligent performance, the court finds that defendants have failed to establish by a fair preponderance of the evidence their entitlement to recover and thus the court’s verdict is in favor of the plaintiffs. As a measure of equitable relief as to which plaintiffs have established their entitlement, the court hereby enjoins the defendants, each and all of them, from performing any act designed to accomplish the sale or further leasing of the eleven (11) unsold units pending final adjudication of this case. June 27, 1978 William E. Stewart, Jr. Judge ce: Richard A. Hibey, Esq. Robert B. Wallace, Esq. Attorneys for Plaintiffs Glenn D. Simpson, Esq. Attorney for Defendants * Bate be)’ age f , 38a APPENDIX 3 — EXCERPTS FROM D.C. SUPERIOR COURT OPINION (DAMAGES) DATED DECEMBER 18, 1978 SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Action No. 2583-76 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., a corporation organized under the Cooperative Associations Law of the District of Columbia DAVID C. SPRIGGS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and President of 2720 Wisconsin Avenue Cooperative Association, Inc. H. JAMES ZELLERS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Vice President of 2720 Wisconsin Avenue Cooperative Association, Inc. JOHN BRIAN DALY, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Secretary of 2720 Wisconsin Avenue Cooperative Association, Inc. PETER C. WOODFORD, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Assistant Secretary of 2720 Wisconsin Avenue Cooperative Association, Inc. STEPHEN L. WILKINS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Treasurer of 2720 Wisconsin Avenue Cooperative Association, Inc. dae Fh 39a Appemiix 3 ABBAS ABUTAA, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. MICHAEL P. ARRA, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. ANGELO L. BARDINE, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. PAULA B. BELL, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. C.M. BROUTSAS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. THOMAS E. COLER, JR., Member of 2720 Wisconsin Avenue Cooperative Association, Inc. G. DAVID CRANE, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. CECILE de ROCHEFORT, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. GERALDINE GARRITY, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. JAMES C. HASSAN, Member of 2720 Wisconsin Avenue Cooperative Association, inc. RONALD L. HAYES, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. ak : 2a ey da Appendix 3 SACHIKO KAWAGUCHI, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. MARGARET MCMANUS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. CATHERINE G. MORAN, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. CHRISTIE S. ROGERS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. VIVIANE RUSSELL, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. VERDELIA F. SCOTT, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. JOYCE K. TURNER, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. L.J. WELLS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. WILLIAM L. WOLF, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. Plaintiffs v. WISCONSIN AVENUE ASSOCIATES, INC., a District of Columbia Corporation -4 4la Appendix 3 VAL MANAGEMENT COMPANY, INC., a Maryland corporation METROPOLITAN MORTGAGE BANKERS, INC., a Maryland corporation ALEKSANDRS V. LAURINS JAMES G. NORMAN CHARLENE BADEN CAROL A. TOMPKINS, a/k/a Carol Jenkins WAYNE A. CHASEN REAL ESTATE EQUITY MANAGEMENT, INC., a Maryland corporation, general partner of Co-op Mortgage Investors L/P, a Maryland limited partnership SCENIC TRAVEL, INC., a Nevada corporation, a general partner of 2720 Limited Partnership, a limited partnership REAL DEVELOPMENT MANAGEMENT, INC., a Nevada corporation CONFERENCE MANAGEMENT GROUP, INC., a Nevada corporation, a general partner of 2720 Limited Partnership, a limited partnership SECURITY NATIONAL BANK, a District of Columbia corporation Defendants a These units are now occupied, however, under lease-options. Thus, facially, defendant Associates has performed fully its contractual obligations to transfer by sale or lease-option all of the units in the building. However, a closer look at the transactions leads the court to conclude that Associates’ conduct, acting through its agents and officers whe were also officers and thus fiduciaries of plaintiff Cooperative, breached not only contractual obligations but fiduciary obligations as well as to the eight unsold units and three units purchased by defendant Laurins.*‘ Article 3, Section 4, of the by-laws of plaintiff Cooperative and paragraph 9 of the Mutual Ownership Contract make it abundantly clear that before any unit can be sold or lease-optioned, _ an application for such action must be approved by the Cooperative. For the eleven units mentioned above, consent was not obtained. In fact, the transactions were explicitly objected to by plaintiff Cooperative. This restriction on the sale or lease of the units is essential to the efficient operation of any cooperative because of its unique financial arrangement. The failure to obtain the consent is thus a clear and material breach of contractual duty.’ 4. One of the units purchased by defendant Laurins was transferred in the name of his daughter, Kimberly Ann Laurins. Because this method was used, at least in part, to avoid the District of Cvlumbia rental regulations, the purchase of this unit will be treated in a similar fashion to that of the two units purchased by defendant Laurins in his own name for purposes of awarding equitabie relief. 5. Although no specific allegations are made in plaintiffs’ Amended Complaint under the contract breach theory, the court will permit the relief to conform to the evidence presented during the trial. SCR - Civil Rule 54(c). 43a Appendix 3 Furthermore, because the officers of defendant Associates were also officers of plaintiff Cooperative, they held the fiduciary obligation to deal fairly with Cooperative. Thus, their failure to obtain consent was a fiduciary breach as well. Although it is uncontested that all of the questioned transactions took place at a point in time which was after defendants were voted out of office of the Cooperative, it cannot be concluded, in this context, that their fiduciary obligations ceased at that point. It is abundantly clear that the interlocking directorate arrangement between Cooperative and Associates was the main reason that the Mutual Ownership Contract was negotiated in the first place. In essence, Associates received an opportunity to make substantial profits as the result of the interlocking directorate situation, thus it is totally inequitable to conclude that Associates can use the advantageous position obtained while its officers were fiduciaries to plaintiffs over the rightful objection of plaintiffs, even though they no longer held office in the Cooperative. In fashioning a remedy, the court will rescind the rights and obligations conferred upon the parties by the Mutual Ownership Contract as to each of the eleven units involved. The court is not of the view, as defendants contend, that it must rescind the sale of all of the units in the building. This is not the situation in which a party seeks to partially rescind an indivisible contract. See Ward v. Deavers, 92 U.S. App.D.C. 167, 170, 203 F.2d 72 (1953). Although the transfer of titles to Associates involved a single agreement between the parties, the sale of each individual unit involved a clearly divisible portion of the total performance required of Associates. Furthermore, defendants’ theory, even if correct in the contract breach context, does not put in question the court’s authority to fashion this type of equitable relief in the fiduciary breach context. daa Appendix 3 To accomplish the rescission, the court will impose the following formula: 1) defendant Associates will not be obligated to pay any outstanding ma‘~tenance fees for the eleven units involved, 2) defendant Associates will receive a credit for all maintenance fees actually paid for the eleven units involved, 3) defendant Associates will pay over to Cooperative all monies received (rent aad option payments) from the eight unsold units, 4) defendant Associates will pay a reasonable rental value to Cooperative for the three units purchased by Laurins* and 5) title to the eleven units will be transferred back to Cooperative. This formula is imposed so as to protect the interest of third parties holding lease-options* and to return the parties to that position they would have held had there never been a Mutual Ownership Contract as to the eleven units. The court will give the parties 30 days to arrive at a monetary figure under the formula above by consent, otherwise, the matter will be referred to the Auditor-Master. : IV. Punitive Damages. Plaintiffs also seek an award of punitive damages on the issues in which the court has found bad faith or oppressive conduct on the part of defendants. First Nat’l. Realty Co. v. Weathers, D.C.App., 154 A.2d 548, 550 (1959), Brown v. Coates, 102 U.S.App.D.C. 300, 303-05, 253 F.2d 36, 39-40 (1958). The court in Brown, (id.), discussed the appropriateness of a punitive award * Defendant Associates and/or Laurins will also receive credit for monies, if any paid for their proportionate share obligations under the $945,000.00 sote for the 11 units involved. 6. Plaintiffs’ counsel conceded in oral argument that they do not seek to dispossess any current tenants or affect their ability to exercise their lease-options. 45a Appendix 3 in a case very similar to the instant action. In Brown, the defendant stood in a fiduciary relationship to plaintiffs and engaged in conduct which breached his fiduciary duty with the intention of reaping secret profits from plaintiffs. The court first noted the **broad public interest’’ in the performance of fiduciary duties and then concluded that, even though common law fraud had not been proven, that defendant’s conduct was sufficiently culpable to sustain a punitive award. The court placed emphasis on the willfulness ofthe * * * conduct and the societal interest in deterring similar conduct. * * * First Nat'l. Realty Co. v. Weathers, supra, 154 A.2d at 550 (tak-.. . allie al dna APPENDIX 4 — ORDER OF D.C. SUPERIOR COURT DATED JANUARY 19, 1979 AMENDING ORDER DATED DECEMBER 18, 1978 SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Action No. 2583-76 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., a corporation, et al v. WISCONSIN AVENUE ASSOCIATES, INC., A District of Columbia Corporation, et al, Defendants ORDER AMENDING MEMORANDUM OPINION AND ORDER OF REFERENCE TO AUDITOR-MASTER The Court, sua sponte, pursuant to SCR-Civil Rule 60(a), hereby amends the following portions of its Memorandum Opinion dated December 18, 1978 to reflect a change in the number of unsold units in the cooperative complex from eight to nine and the number of units sold to Defendant Laurins from three to two: 1) p-9, line 30; 2) p-10, line 8; n-4, line 5; 3) p-12, line 2, 3; 4) p. 15, n. 8, line 2; 5) p-21, line 22, 23. — = 47a Appendix 4 The nine unsoid units involved are units numbered 103, 104, 106, 107, 204, 207, 501, 703, 805. The two units purportedly sold to Defendant Laurins include unit 302 sold to Defendant Laurins in his own name and unit 801/802 sold to Defendant Laurins and placed in his daughter’s name. And it is further ordered, pursuant to SCR-Civil Rule 53, that this matter be and hereby is referred to the Auditor-Master of this Court to conduct proceedings in accordance with the Court’s Memorandum Opinion of December 18, 1978 as amended. (See pages 11, 12 and 21 of Memorandum Opinion in particular) and to furnish to the Court the report of the Auditor-Master within ninety (90) days of the date of this Order. January 19, 1979 William E. Stewart, Jr. Judge 7 48a APPENDIX 5 — EXCERPTS FROM D.C. SUPERIOR COURT MEMORANDUM OPINION, ORDER AND FINAL JUDGMENTS DATED APRIL 27, 1979 SUPERIOR COURT OF DISTRICT OF COLUMBIA Civil Action No. 2583-76 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., a corporation organized under the Cooperative Associations Law of the District of Columbia DAVID C. SPRIGGS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and President of 2720 Wisconsin Avenue Cooperative Association, Inc. H. JAMES ZELLERS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Vice President of 2720 Wisconsin Avenue Cooperative Association, Inc. JOHN BRIAN DALY, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Secretary of 2720 Wisconsin Avenue Cooperative Association, Inc. PETER C. WOODFORD, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Assistant Secretary of 2720 Wisconsin Avenue Cooperative Association, Inc. STEPHEN L. WILKINS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. and as a member of the Board of Directors and Treasurer of 2720 Wisconsin Avenue Cooperative Association, Inc. 49a Appendix $ ABBAS ABUTAA, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. MICHAEL P. ARRA, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. ANGELO L. BARDINE, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. PAULA B. BELL, Member of 2720 Wisconsin Avenue C.M. BROUTSAS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. THOMAS E. COLER, JR., Member of 2720 Wisconsin Avenue Cooperative Association, Inc. G. DAVID CRANE, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. CECILE de ROCHEFORT, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. GERALDINE GARRITY, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. JAMES C. HASSAN, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. RONALD L. HAYES, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. 50a Appendix 5 SACHIKO KAWAGUCHI, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. MARGARET MCMANUS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. CATHERINE G. MORAN, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. CHRISTIE S. ROGERS, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. VIVIANE RUSSELL, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. VERDELIA F. SCOTT, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. JOYCE K. TURNER, Member of 2720 Wisconsin Avenue Cooperative Asso. ation, Inc. L.J. WELLS, Member cf 2720 Wisconsin Avenue Coo verative Association, Inc. WILLIAM L. WOLF, Member of 2720 Wisconsin Avenue Cooperative Association, Inc. Plaintiffs v. WISCONSIN AVENUE ASSUCIATES, INC., a District of Columbia Corporation : ) i ae Sila Appendix 5 VAL MANAGEMENT COMPANY, INC., a Maryland corporation METROPOLITAN MORTGAGE BANKERS, INC., a Maryland corporation ALEKSANDRS V. LAURINS JAMES G. NORMAN CHARLENE BADEN CAROL A. TOMPKINS, a/k/a Carol Jenkins WAYNE A. CHASEN REAL ESTATE EQUITY MANAGEMENT, INC., a Maryland corporation, general partner of Co-op Mortgage Investors L/P, a Maryland limited partnership SCENIC TRAVEL, INC., a Nevada corporation, a general partner of 2720 Limited Partnership, a limited partnership REAL DEVELOPMENT MANAGEMENT, INC., a Nevada corporation CONFERENCE MANAGEMENT GROUP, INC., a Nevada corporation, a general partner of 2720 Limited Partnership, a limited partnership SECURITY NATIONAL BANK, a District of Columbia corporation Defendants » weeks 52a Appendix 5 MEMORANDUM OPINION ORDER AND FINAL JUDGMENTS _ This court has previously filed Memorandum Opinions dated June 27, 1978 and December 18, 1978 following bifurcated trials of the instant case. The former Opinion treated the subject of liability and later the issues of damages, leaving for resolution the final amounts of judgments dependent upon an accounting to be suppled by stipulation of the parties or, failing in that, by reference to the Auditor-Master of the court. When the stipulation was not forthcoming within the allotted 30-day period, this court filed its Order of January 19, 1979 amending Memorandum Opinion of December 18, 1978 and referring this matter to the Auditor-Master of the court to conduct proceedings in accordance with the court’s Memorandum Opinion of December 18, 1978 and to furnish a report to the court within 90 days. Though the Auditor-Master promptly proceeded to schedule hearings the same were delayed by reason of the fact that the defendant, Wisconsin Avenue Associates, Inc., filed, on January 23, 1979, a petition in the United States District Court Bankruptcy No. 79-00012, under Chapter XI of the Bankruptcy Act and also filed in this court a Suggestion of Lack of Jurisdiction to Proceed against defendant, Wisconsin Avenu~ Associates, contending that the filing of the petiton in the Bankruptcy Court effected an automatic stay upon further proceedings in this court. The plaintiffs countered by filing, under date of February 16, 1979, a Motion for Entry of Judgment pursuant to Rule 54(b) of the Civil Rules of the Superior Court. On March 27, 1979 the Honorable Roger M. Whelan, Bankruptcy Judge, United States 53a Appendix 5 District Court for the District of Columbia, found that the petition of Wisconsin Avenue Associates, Inc. under Chapter XI of the Bankruptcy Act was not filed in good faith and dismissed the case. (Copy of said Order and Memorandum of Law is attached as Exhibit-A). Under date of March 29, 1979, this court denied the motion of the plaintiffs for Entry of Judgment (pursuant to Rule 54(b). The report of the Auditor-Master was filed on April 16, 1979 but it was hand delivered to counsel on April 13, 1979 at the time of their execution of a stipulation attached to the report and forming a part thereof. (Attached as Exhibit-B). The report of the Auditor-Master is accepted and approved. In executing the stipulation made a part of the Auditor- Master’s report, the parties agreed to submit the following questions to the court: (a) Q. Whether defendant may claim a credit for advertising expense, repairs, renovation and overhead, among other things, in connection with the actual leasing, care and supervision of the apartment units in question. Defendant claims the amount of such expenses is $57,000 or thereabouts. A. No, see pages 20, 21, Memorandum Opinion of December 18, 1978. (>) Q. Whether defendant is entitled to a credit for principal and interest payments made on a second mortgage to The Gold Depository and Loan Company, Inc. Defendant claims this mortgage was made to secure borrowings upon the respective units in question on October 6, 1976 and the total of principal and interest payments amounts to $28,749.90. r S4a Appendix 5 A. No. This claim was not even litigated. (c) Q. Whether defendant is obligated to pay the *“*reasonable rental value’’ upon apartment unit 801/802 for the period from January 1, 1978 to the present day. A. The defendants, in effect, elaborate upon this question in a pleading filed April 20, 1979 entitled Defendants’ Request for Further Clarification of the Court’s Formula for Recission, where it is stated in part: “Whether, in regard to apartment 801/802, defendant is obligated to make an accounting for the period from January 1, 1978 to present date, where it appears that no monies were reccived by defendant during the said period, and the tenant, one Marjorie Jawish, has refused to pay any rental whatsoever, contending that title to the premises has been transferred from Kimberly A. Laurins to 2720 Wisconsin Avenue Cooperative Association, Inc., and citing in support thereof this Court’s Memorandum Opinion of December 18, 1978. (See copy of complaint filed in D.C. Superior Court against Mrs. Jawish, and her Motion for Summary Judgment, attached hereto).’’ The Memorandum Opinion of this court, dated December 18, 1978 (Pgs. 11, 12) as amended by the Memorandum Opinion of January 19, 1979, clearly reflects the obligation of defendants to pay the reasonable rental value of 801/802 to the Cooperative. The lease to Jawish, its aftermath and status during the period in question is irrelevant to the obligation as found by the court of the defendants to the Cooperative. 55a Appendix 5 (dq) Q. Whether defendants Wisconsin Avenue Associates, Inc. and/or A.V. Laurins are obligated to pay the “‘reasonable rental value’”’ of apartment unit 805 during the period of the latter’s occupancy as aforesaid. The Court’s formula for rescission (P. 12 of Damage Opinion) does not include unit 805 among those designated for payment of reasonable rental value. A. Yes; see stipulation as to occupancy and as this is implied under the formula for rescission. THEREFORE, in accordance with the several Memorandum Opinions of the court dated June 27, 1978, December 18, 1978 and January 19, 1979 and this Memorandum Opinion, it is by the court this 27th day of April, 1979 hereby adjudged, ordered and decreed as follows: JUDGMENTS ‘tis HEREBY ADJUDGED, ORDERED AND DECREED THAT pursuant to SCR Civil Rule 54(a) as to: (bo) The plaintiffs recover of the defendants Laurins, Norman, Wisconsin Avenue Associates, Inc. and VAL Management Company, Inc. punitive damages in the amount of $12,500 ($500.00 per pilaintiff-purchaser, 25 plaintiff-purchasers), with interest thereon at the rate provided by District of Columbia law. 10. Count X, the Court having found in favor of the defendants, judgment is hereby entered in favor of defendants. S6a Appendix 5 11. Count XI, the Court having found in favor of the defendants, judgment is hereby entered in favor of the defendants. 12. Count XII was dismissed and judgment is herein entered in favor of the defendants. It is FURTHER ORDERED, ADJUDGED AND DECREED THAT 13. Plaintiffs recover of defendants Laurins, Norman, Wisconsin Avenue . 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 any other underlying agreement, including and especially the Assignment of Purchase Agreement dated December 6, 1974 (Plaintiffs’ Trial Exhibit 25), as to Units 103, 104, 106, 107, 204, 207, 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 57a Appendix 5 Auditor-Master and incorporates it by reference into this judgment;’ and It is FURTHER ORDERED, ADJUDGED AND DECREED THAT 15. Defendants, each and all of them, their agents, employees, 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 Association to vest in it all rights and title in the units described, consistent with this opinion. 2. Pur-..=* to a Stipulation of the parties and the Court’s Orders of December 18, 1978 and January 19, 1979, the Auditor-Master deiermined that $131,195.25 was expended by defendant Wisconsin Avenue Associates, 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 Apartment 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. ‘ee eae ee a4 yl rer 58a Appendix 5 | 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. Defer.dants’ counterclaim 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 consists of $21,334.10 in renovation costs and $9,365.90 in closing costs and rejected all other quantum meruit claims. The Court, therefore enters judgment in favor of defendant Associates in the amount of $30,700.00 against plaintiff Cooperative Association. Said judgment is to operate as an offset against the award to plaintiff Cooperative Association set forth in Paragraph 6(c). . . . APPENDIX 6 — ASSIGNMENT AGREEMENTS DATED DECEMBER 6, 1974, FROM COOPERATIVE ASSOCIATES; AND FROM ASSOCIATES TO COOPERATIVE AGREEMENT 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 ownershi,; 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 subject, 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. Appendix 6 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. $. Cooperative agrees to maintain al] common areas and facilities 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 the premises and to post whatever signs deemed desirable by Associates to promote sales. This Agreement made this 6th day of December, 1974. ATTEST: 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC. s/ Charlene Baden s/ A. ¥.Laurins Secretary President ATTEST: WISCONSIN AVENUE ASSOCIATES, INC. s/ Carol Tompkins s/ James G. Norman Secretary President Appendix 6 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 known as 2720 Wisconsin Avenue, N.W., Washington, D.C. (the Property); 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 conditions: 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, Cooperative shall execute the wrap-around mortgage referred to herein on a form to be supplied by Associates. Appendix 6 3. Associates shall retain equitable title to the Property until Cooperative has assigned all mutual ownership contracts representing 100 percent ownership in Cooperative to Assc -iates. It is understood that this Assignment is for the purpose of seiling these mutual ownership contracts in Cooperative to persons interested in the cooperative form of home ownership. | ~~ | _. ) = ae a ae “~ rake i” } " ei © ; Fa Pr? This AGREEMENT made this 6th day of December 1974. ATTEST: 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC. s/ Charlene Baden s/ A. V. Laurins Secretary President ATTEST: WISCONSIN AVENUE ASSOCIATES, INC. s/ Carol Tomkins 8s/ James G. Norman Secretary President 63a APPENDIX 7 — LETTERS DATED JULY 10, 1979 ON BEHALF OF GOLD DEPOSITORY AND LOAN COMPANY, INC. GIVING NOTICE OF DEFAULT AND THREATENING FORECLOSURE July 10, 1979 Wisconsin Avenue Associates, Inc. 8401 Connecticut Avenue Suite 700 Chevy Chase, Maryland 20015 Gentlemen: Demand is hereby made for payment of principal and interest on the cooperative apartment collateral note secured by the Mutual Ownership Contract on Units numbered 103, 104, 106, 107, 204, 207, 501, 703, 805, 302, 801, and 802. The principal payment of $150,000.00 plus interest in the amount of $4,580.34 for a total payment of $154,580.34 is due in our office at 8401 Connecticut Avenue, Suite 700, Chevy Chase, Maryland on or before July 16, 1979. If such payment is not made by the specified date of July 16, 1979, the Mutual Ownership Contract which is held as security on this note will be sold at public auction at a time and place to be fixed in the event you do not comply with this demand. Very truly yours, THE GOLD DEPOSITORY AND LOAN COMPANY, INCORPORATED The Cooperative apartment collateral note held by The Gold Depository and Loan Company Incorporated on apartment #103 is in default for May, June and July. Your total deficiency for these three months is $300.00. Demand is hereby made for payment of such total deficiency by way of cash or bank check at our office at 8401 Connecticut Avenue, Suite 700, Washington, D.C. 20015 by July 20, 1979. If such payment is not made by the specified date of July 20, 1979, you will be in serious default of your collateral note and we will, at that time, elect to accelerate payment of the entire principal due on said note in the amount of $5,115.38, plus 8% interest from May 1, 1979 to date paid. In addition to this amount, you will be responsible for all costs including reasonable attorney’s fees. If we are forced to accelerate payment of the entire principal and interest due on said note, the mutual ownership contract which is held as security for this debt will be sold at public auction at a “Oe 21 ye eT ae dee a le a Rss TO ee gl PORN ; ; Bs a 1p rf > Attorney for cv, 2a © 67a Appendix 7 July 10, 1979 Wisconsin Avenue Associates, Inc. 8401 Connecticut Avenue Suite 700 Chevy Chase, Maryland 20015 RE: Apartment #104 Gentlemen: The Cooperative apartment collateral note held by The Gold Depository and Loan Company Incorporated on apartment #104 is in default for May, June and July. Your total deficiency for these three months is $300.00. Demand is hereby made for pay nent of such total deficiency by way of cash or bank check at ou office at 8401 Connecticut Avenue, Suite 700, Washington, D.C. 20015 by July 20, 1979. If such payment is not made by the specified date of July 20, 1979, you will be in serious default of your collateral note and we will, at that time, elect to accelerate payment of the entire principal due on said note in the amount of $7,258.19, plus 8% interest from May 1, 1979 to date paid. In addition to this amount, you will be responsible for all costs including reasonable attorney’s fees. If we are forced to accelerate payment of the entire principal and interest due on said note, the mutual ownership contract which is held as security for this debt will be sold at public auction at 3 a iets thet SB OU bbb cate kl el in the event you do not comply with a time and place to be fixed ae Appendix 7 July 10, 1979 Wisconsin Avenue Associates, Inc. 8401 Connecticut Avenue Suite 700 Chevy Chase, Maryland 20015 RE: Apartment #106 Gentlemen: The Cooperative apartment collateral note held by The Gold Depository and Loan Company Incorporated on apartment #106 is in default for May, June and July. Your total deficiency for these three months is $300.00. Demand is hereby made for payment of such total deficiency by way of cash or bank check at our office at 8401 Connecticut Avenue, Suite 700, Washington, D.C. 20015 by July 20, 1979. If such payment is not made by the specified date of July 20, 1979, you will be in serious default of your collateral note and we will, at that time, elect to accelerate payment of the entire principal due on said note in the amount of $4,412.96, plus 8% interest from May 1, 1979 to date paid. In addition to this amount, you will be responsible for all costs including reasonable attorney’s fees. If we are forced to accelerate payment of the entire principal and interest due on said note, the mutual ownership contract which is held as security for this debt will be sold at public auction at 7 jhe runt you do bet comply with a time and place to be fixed in be re. —_ or Appendix 7 July 10, 1979 Wisconsin Avenue Associates, Inc. 8401 Connecticut Avenue Suite 700 Chevy Chase, Maryland 20015 RE: Apartment #107 Gentlemen: The Cooperative apartment collateral note held by The Gold Depository and Loan Company Incorporated on apartment #107 is in default for May, June and July. Your total deficiency for these three months is $300.00. Demand is hereby made for payment of such total deficiency by way of cash or bank check at our office at 8401 Connecticut Avenue, Suite 700, Washington, D.C. 20015 by July 20, 1979. If such payment is not made by the specified date of July 20, 1979, you will be in serious default of your collateral note and we will, at that time, elect to accelerate payment of the entire principal due on said note in the amount of $4,781.37, plus 8% interest from May 1, 1979 to date paid. In addition to this amount, you will be responsible for all costs including reasonable attorney’s fees. If we are forced to accelerate payment of the entire principal and interest due on said note, the mutual ownership contract which is held as security for this debt will be sold at public auction at ak Pee elite | af 4 The Cooperative apartment collateral note held by The Gold Depository and Loan Company Incorporated on apartment #204 is in default for May, June and July. Your total deficiency for these three months is $300.00. Demand is hereby made for payment of such total deficiency by way of cash or bank check at our office at 8401 Connecticut Avenue, Suite 700, Washington, D.C. 20015 by July 20, 1979. If such payment is not made by the specified date of July 20, 1979, you will be in serious default of your collateral note and we will, at that time, elect to accelerate payment of the entire principal due on said note in the amount of $7,258.19, plus 8% interest from May |, 1979 to date paid. In addition to this amount, you will be responsible for all costs including reasonable attorney’s fees. If we are forced to accelerate payment of the entire principal and interest due on said note, the mutual ownership contract which is held as security for this debt will be sold at public auction at "faa ; si a time and place ae. Appendix 7 to be fixed in the event you do not comply with Sawer ss , eee en + SL SA eee The Cooperative apartment collateral note heid by The Gold Depository and Loan Company Incorporated on apartment #207 is in default for May, June and July. Your total deficiency for these three months is $300.00. Demand is hereby made for payment of such total deficiency by way of cash or bank check at our office at 8401 Connecticut Avenue, Suite 700, Washington, D.C. 20015 by July 20, 1979. If such payment is not made by the gpecified date of July 20, 1979, you will be in serious default of your collateral note and we will, at that time, elect to accelerate payment of the entire principal due on said note in the amount of $4,781.36, plus 8% interest from May 1, 1979 to date paid. In addition to this amount, you will be responsible for all costs including reasonable attorney’s fees. If we are forced to accelerate payment of the entire principal and interest due on said note, the mutual ownership contract which is held as security for this debt will be suid at public auction at you do not comply H. MacVey MacVey for Depository Company =: a SH | a time and piace to be fixed in the event }! ies Ma ~ 2 eee > ] Appendix 7 a time and place to be fixed in the event you do not comply with this demand. Very truly, s/ John H. MacVey John H. MacVey Attorney for The Gold Depository and Loan Company Incorporated JHM:bw Ubi wa Appendix 7 July 10, 1979 Wisconsin Avenue Associates, Inc. 8401 Connecticut Avenue Suite 700 Cisevy Chase, Maryland 20015 RE: Apartment #805 Gentlemen: The Cooperative apartment collateral note held by The Gold Depository and Loan Company Incorporated on apartment #805 is in default for May, June and July. Your total deficiency for these three months is $300.00. Demand is hereby made for payment of such total deficiency by way of cash or bank check at our office at 8401 Connecticut Avenue, Suite 700, Washingtun, D.C. 20015 by July 20, 1979. If such payment is not made by the specified date of July 20, 1979, you will be in serious default of your collateral note and we will, at that time, elect to accelerate payment of the entire principal due on said note in the amount of $8,759.18, plus 8% interest from May 1, 1979 to date paid. In addition io this amount, you will be responsible for all costs including reasonable attorney’s fees. If we are forced to accelerate payment of the entire principal and interest due on said note, the mutual ownership contract which is held as security for this debt will be sold at public auction at ao Appendix 7 a time and place to be fixed in the event you do not comply with this demand. Very truly, s/ John H. MacVey JHM:bw lea sy Appendix 7 July 10, 1979 Wisconsin Avenue Associates, Inc. 8401 Connecticut Avenue Suite 700 Chevy Chase, Maryland 20015 RE: Apartment #302 Gentiemen: The Cooperative apartment collateral note held by The Gold Depository and Loan Company Incorporated on apartment #302 is in default for May, June and July. Your total deficiency for these three months is $300.00. Demand is hereby made for payment of such total deficiency by way of cash or bank check at our office at 8401 Connecticut Avenue, Suite 700, Washington, D.C. 20015 by July 20, 1979. If such payment is not made by the specified date of July 20, 1979, you will be in serious default of your collateral note and we will, at that time, elect to accelerate payment of the entire principal due on said note in the amount of $8,158.57, plus 8% interest from May 1, 1979 to date paid. In addition to this amount, you will be responsible for all costs including reasonable attorney’s fees. If we are forced to accelerate payment of the entire principal and interest due on said note, the mutual ownership contract which is held as security for this debt will be sold at public auction at = * 84a Appendix 7 a time and place to be fixed in the event you do not comply with this demand. JHM:bw ‘Reel Appendix 7 July 10, 1979 Wisconsin Avenue Associates, Inc. 8401 Connecticut Avenue Suite 700 Chevy Chase, Maryland 20015 RE: Apartment #801 Gentlemen: The Cooperative apartment collateral note held by The Gold Depository and Loan Company Incorporated on apartment #801 is in default for May, June and July. Your total deficiency for these three months is $300.00. Demand is hereby made for payment of such total deficiency by way of cash or bank check at our office at 8401 Connecticut Avenue, Suite 700, Washington, D.C. 20015 by July 20, 1979. If such payment is not made by the specified date of July 20, 1979, you will be in serious default of your collateral note and we will, at that time, elect to accelerate payment of the entire principal due on said note in the amount of $9,060.14, plus 8% interest from May 1, 1979 to date paid. In addition to this amount, you will be responsible for all costs including reasonable attorney’s fees. If we are forced to accelerate payment of the entire principal and interest due on said note, the mutual ownership contract which is held as security for this debt will be sold at public auction at ; eae ee ee ee ee ae 7 ~~ = 1 ® ‘ t 1 ¥ do not comply with place to be fixed in the event you + 7 i © > an hi “ Lt Maret . ~ a ‘ ys ' ai f if on r e.3 Pay ' j ; - j oe » a os ea ae Se a Ree ee ee ‘bat ¢ I n Pape Ay ’ Appendix 7 July 10, 1979 Wisconsin Avenue Associates, Inc. 8401 Connecticut Avenue Suite 700 Chevy Chase, Maryland 20015 RE: Apartment #802 Gentlemen: The Cooperative apartment collateral note held by The Gold Depository and Loan Company Incorporated on apartment #802 is in default for May, June and July. Your total deficiency for these three months is $300.00. Demand is hereby made for payment of such total deficiency by way of cash or bank check at our office at 8401 Connecticut Avenue, Suite 700, Washington, D.C. 20015 by July 20, 1979. If such payment is not made by the specified date of July 20, 1979, you will be in serious default of your collateral note and we will, at that time, elect to accelerate payment of the entire principal due on said note in the amount of $9,060.14, plus 8% interest from May 1, 1979 to date paid. In addition to this amount, you will be responsible for all costs including reasonable attorney’s fees. If we are forced to acceierate payment of the entire principal and interest due on said note, the mutual ownership contract which is held as security for this debt will be sold at public auction at ste you do nes comply with s/ John H. MacVey The Gold Depository and Loan Company Incorporated John H. MacVey Attorney for Very truly, : : APPENDIX 8 — TEMPORARY RESTRAINING ORDER DATED JULY 13, 1979 SUPERIOR COURT OF ‘THE DISTRICT OF COLUMBIA Civil Division Civil Action No. 2583-76 Civil I — Judge Stewart 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., et al, Plaintiffs, WISCONSIN AVENUE ASSOCIATES, INC., et al, Defendants. TEMPORARY RESTRAINING ORDER Upon consideration of plaintiff 2720 Wisconsin Avenue Cooperative Association, Inc.’s (““Cooperative’’) Motion for a Temporary Restraining Order and/or Motion to Show Cause and of Defendants’ opposition thereto, and it appearing to the Court that on April 27, 1979, The Honorable William E. Stewart, Jr. entered a Memorandum Opinion, Order and Final Judgments in the above-captioned action (‘‘the Judgment’’) which stated, inter alia, that: The rights and obligations conferred upon the parties by the Mutual Ownership Contracts and by any other underlying agreements, including and » Appendix 8 especially the Assignment of Purchase Agreement dated December 6, 1974 (Plaintiffs’ Trial Exhibit 25, as to Units 103, 104, 106, 107, 204, 207, 501, 703, 805, 302 and 801/802 are rescinded, with complete right, title and interest in those units vesting only in 2720 Wisconsin Avenue and it further appearing to the Court that said Judgment further provided that: Defendants, each and all of them, their agents. employees, 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 shail, 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 Association to vest in it all rights and title in the units described, consistent with this opinion. and it further appearing to the Court that Gold Depository and Loan Company, Incorporated (“Gold Depository’’), by letters dated July 10, 1979, copies of which are attached as Exhibits D and E to plaintiff Cooperative’s Memorandum of Points and Authorities in support of its Motion, has threatened to scll the ye 9la Appendix 8 mutual ownership contracts respecting Apartments 103, 104, 106, 107, 204, $01, 703, 805, 302 and 801/802 (collectively, ‘the Units’”) in the building located at 2720 Wisconsin Avenue, N.W., in the District of Columbia, at public auction on July 16, 1979 and July 20, 1979, respectively, and it further appearing to the Court from the Memorandum of Law in Bankruptcy No. 79-00012 (United States District Court for the District of Columbia) attached as Exhibit A to the Judgment that Gold Depository is ‘‘controllied and operated by the same individuals, i.e., Laurins, Norman, Baden, et al."’, and it further appearing to the Court that plaintiff Cooperative will suffer irreparable injury if the Defendants and Gold Depository are not enjoined, pending a hearing before Judge Stewart of this Court as to whether the Defendants and Gold Depository should be held in contempt, from taking any action affecting Cooperative’s rights in the Units, except as set forth in Paragraph 15 of the Judgment; and if the documents and things demanded in Exhibit F to plaintiff Cooperative’s Memorandum of Points and Authorities, which Exhibit is incorporated herein by reference, are not forthwith turned over to the Court pending said hearing: It is, this 13th day of July, 1979, at 5:45 o'clock P.M., hereby ORDERED, that Defendants aud Gold Depository, and each and all of them, and their agents, employees, relatives, attorneys, and assigns, and all those in active concert and participation with them (hereinafter collectively referred to as ‘‘Enjoined Defendants’’), be, and they hereby are restrained and enjoined from taking or purporting to take or causing to be taken any action affecting, directly or indirectly, in whole or in part, Cooperative’s rights in the Units, except as set forth in Paragraph 15 of the Judgment; and it is e, AE. * 92a Appendix 8 FURTHER ORDERED, that the Enjoined Defendants shall cause copies of this Order to be delivered forthwith to every officer, agent, servant, employee, relative, attorney and/or assign, and all those in active concert and participation with them: in connection with the Units; and it is FURTHER ORDERED, that no bond shail be required of plaintiff Cooperative to secure the Enjoined Defendants from loss or damage arising from this Order; and it is FURTHER ORDERED, that this Order be effective immediately and remain in effect through July 23,1979. s/ James A. Belson JUDGE 93a APPENDIX 9 — ORDER TO SHOW CAUSE DATED JULY 13, 1979 SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Division Civil Action No. 2583-76 Civil I — Judge Stewart 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., et al., ; Plaintiffs, v. WISCONSIN AVENUE ASSOCIATES, INC., et al, Defendants. ORDER TO SHOW CAUSE Upon consideration of plaintiff 2720 Wisconsin Avenue Cooperative Association, Inc.’s (*‘Cooperative’’) Motion for a Temporary Restraining Order and/or Motion to Show Cause and of Defendants’ opposition thereto, and it appearing to the Court that on April 27, 1979, The Honorable William E. Stewart, Jr. entered a Memorandum Opinion, Order and Final Judgments in the above-captioned action (‘‘the Judgment’’) which stated, inter alia, that: The rights and obligations conferred upon the parties by the Mutual Ownership Contracts and by any other underlying agreements, including and 94a Appendix 9 especially the Assignment of Purchase Agreement dated December 6, 1974 (Plaintiffs’ Trial Exhibit 25, as to Units 103, 104, 106, 107, 204, 207, 501, 703, 805, 302 and 801/802 are rescinded, with complete right, title and interest in those units vesting only in 2720 Wisconsin Avenue and it further appearing to the Court that said Judgment further provided that: Defendants, each and all of them, their agents, employees, 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 Association to vest in it al! rights and title in the units described, consistent with this opinion. and it further appearing to the Court that Gold Depository and Loan Company, Incorporated (‘‘Gold Depository’’), by letters dated July 10, 1979, copies of which are attached as Exhibits D and E to plaintiff Cooperative’s Memorandum of Points and Authorities in support of its Motion, has threatened to sell the 95a Appendix 9 mutual ownership contracts respecting Apartments 103, 104, 106, 107, 204, 501, 703, 805, 302 and 801/802 (collectively, ‘‘the Units’’) in the building located at 2720 Wisconsin Avenue, N.W.., in the District of Columbia, at public auction on July 16, 1979 and July 20, 1979, respectively, and it further appearing to the Court from the Memorandum of Law in Bankruptcy No.79-00012 (United States District Court for the District of Columbia) attached as Exhibit A to the Judgment that Gold Depository is ‘‘controlled and operated by the same individuals, i.e., Laurins, Norman, Baden, et al.’’, it is, this 13th day of July, 1979, hereby ORDERED, that the Defendants and Gold Depository be, and they hereby are directed to come forth on July 23, 1979 at 3 P.M. and show cause why they should not be held in contempt of the Judgment entered herein on April 27, 1979. s/ James A. Belson JUDGE APPENDIX 10 — MOTION BY THE GOLD DEPOSITORY AND LOAN COMPANY, INC. TO DISSOLVE ORDER TO SHOW CAUSE FOR LACK OF JURISDICTION AND OTHER REASONS FILED AUGUST 1, 1979 SUPERIOR COURT OF THE DISTRICT OF eee cin CIVIL DIVISION Civil Action No. 2583-76 Civil I - Judge Stewart 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., et al., Plaintiffs, Vv. WISCONSIN AVENUE ASSOCIATES, INC., et al., Defendants. MOTION BY THE GOLD DEPOSITORY AND LOAN COMPANY, INCORPORATED TO DISSOLVE ORDER TO SHOW CAUSE FOR LACK OF JURISDICTION AND OTHER REASONS The Gold Depository and Loan Company, Inc. by its attorney, John H. MacVey, appearing specially, moves the court, pursuant TO Supr. Ct. Civ. Rule 12(b) and 12(g), for an order dissolving the Order to Show Cause entered in the above entitled proceeding by Judge James A. Belson on July 13, 1979. In support of this motion The Gold Depository and Loan Company, Inc., respectfully shows the following: | ile "ig *. 97a Appendix 10 I The Gold Depository and Loan Company, Inc., (hereinafter called “‘Gold’’) is not subject to the jurisdiction of this court for the following reasons: (a) Gold is a corporation in good standing incorporated in the State of Nevada on March 17, 1978. fb) Gold does not do business and does not maintain any office in the District of Columbia. Gold is not authorized to do business in the District of Columbia. Gold does not own or operate any assets located in the District of Columbia. Gold does not have any agent or any other person, in the District of Columbia authorized to accept service of process. John H. MacVey is not authorized in any way to accept service of process on The Gold Depository and Loan Company, Incorporated. (c) The aforesaid Order to Show Cause was not served in the District of Columbia upon Gold as required by Supr. Ct. Civ. Rule 4(d\(3) and Rule 4(f), so that Gold has not been legally served with said Order to Show Cause. 2 Gold, without waiving its claim of lack of jurisdiction of this court over Gold, further shows: (a) The Judgment entered on April 27, 1979, and specifically paragraphs 14 and 15 thereof, is not retroactive. (b) Paragraph 15 of said Judgment refers only to “‘sale or further leasing’ of certain real property, namely, certain ms , ee Se ee. Appendix 10 condominium units located at 2720 Wisconsin Avenue, N.W., Washington, D.C. (c) Gold is seeking to foreclose its legal and valid lien on certain personal property, namely, the Mutual Ownership Contracts referred to in Paragraph 14 of said Judgment, which liens were binding and effective long before the said Judgment was entered on April 27, 1979. Gold cannot constitutionally be deprived of its said property rights without due process of law. (d) Said Paragraph 14 of said Judgment only recinds the “rights, title and interest’’ in the listed condominium units of the “‘parties’’ to the above-entitled proceeding. Gold was and is not in any way a “‘party’’ to said proceeding. (e) Gold’s proposed foreclosure of its valid pre-existing lien © on said Mutual Ownership Contracts is not an “‘. . .act designed to accomplish the sale or further leasing. . .”’ of real estate, i.e., the condominium units listed in paragraph 15 of said Judgment entered on April 27, 1979. WHEREFORE, Gold asks that said Order to Show Cause be dissolved as to Gold (1) because the court lacks Jurisdiction over Gold; and (2) because Gold is not in contempt of said judgment entered on April 27, 1979. Respectfully submitted s/ John H. MacVey John H. MacVey, No. 78097 Suite T-2 1718 P Street, N.W. Washington, D.C. 20036 652-2996 eect. SS 2 aa on Appendix 10 CERTIFICATE OF SERVICE I certify that a copy of the foregoing Motion with supporting Points and Authorities and Affidavit by the Gold Depository and Loan Company, Incorporated, was mailed postage prepaid this ist day of August, 1979 to Richard A. Hibey, Esquire, Surrey, Karasik and Morse, 1156 Fifteenth Street, N.W., Washington, D.C. 20005. s/ John H. MacVey John H. MacVey 7 | Appendix 10 SUPEPIOR COURT OF THE DISTRICT OF COLUMBIA CIVIL DIVISION Civil Action No. 2583-76 Civil I - Judge Stewart 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., et al., Plaintiffs, Vv. WISCONSIN AVENUE ASSOCIATES, INC., et al., Defendants. POINTS AND AUTHORITIES 1. The Temporary Restraining Order and the Order to Show Cause were left at 8401 Connecticut Avenue, Suite 700, Chevy Chase, Maryland 20015 by an unidentified person on July 16, 1979, sometime on Monday morning. (See attached affidavit of Betsy Waldron). 2. John H. MacVey is an attorney who maintains an address at Suite T-2, 1718 P Street, N.W., Washington, D.C. for purposes of comp'ying with ules of the Superior Court. John H. MacVey uses the office at 8401 Connecticut Avenue, Suite 700, Chevy Chase, when he is working on cases for clients having a business address at that location. 7G ‘Y os , 2 x 5! a \ 7 Appendix 10 3. John H. MacVey is not authorized by any of his clients to accept service of process. 4. John H. MacVey has never filed any appearance in the above-entitled proceeding. 5. No statute or court rule authorizes the service of said Orders outside the territorial limits of the District of Columbia in the circumstances of this Show Cause proceeding. 6. Leaving a copy of said two Orders at 8401 Connecticut Avenue, Suite 700, Chevy Chase, Maryland 20015 therefore is not valid service upon The Gold Depository and Loan Company, Incorporated. Supr. Ct. Civ. Rules 4(d)(3) and Rule 4(f). 7. The Gold Depository and Loan Company, Inc., cannot be deprived of its valid, pre-existing property rights by the indirect method of a contempt citation and issuance of such a contempt citation would deprive The Gold Depository and Loan Company, Inc. of its property rights in violation of the Constitution of the United States. 8. The ruling by Referee in Bankruptcy Whelan, in Bankruptcy No. 79-00012 (U.S. Dist. Ct. for District of Columbia) is not controlling or applicable in this proceeding because (a) The Gold Depository and Loan Company, Inc., is not @ party to that bankruptcy proceeding and has not participated in any way in said bankruptcy proceeding prior to the said ruling by Referee Whelan. SS .. . 2? : _ Appendix 10 (b) The said ruling by said Referee in Bankruptcy is not a final order of a court and said ruling is now being appealed to the United States District Court for the District of Columbia. s/ John H. MacVey, John H. MacVey, No. 78097 Suite T-2 1718 P Street, N.W. Washington, D.C. 20036 652-2996 0% x 4 . = 7 Par , . ab a * —— le eS 2 wa = 2." = SE, | te ed DR wate F ‘ ' N ai! my 4 Appendix 10 SUPERIOR COURT OF THE DISTRICT OF COLUMBIA CIVIL DIVISION Civil Action No. 2583-76 Civil I - Judge Stewart 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., et al., * Plaintiffs, v. WISCONSIN AVENUE ASSOCIATES, INC., et al., Defendants. AFFIDAVIT IN SUPPORT OF MOTION TO QUASH AND TO DISSOLVE ORDER TO SHOW CAUSE State of Maryland ) . Betsy Waldron, being first duly sworn, deposes and says: 1. She is a secretary and receptionist, employed by Metropolitan Group, with offices located at 8401 Connecticut Avenue, Suite 700, Chevy Chase, Maryland 20015. 2. On the morning of July 16, 1979, a messenger visited the aforementioned offices and handed affiant tv.o large brown 4 SS Boe f > -- .—- — FF es sae. Be, eee ele a) e Ses. + Batik sa. 104a Appendix 10 envelopes. One of the envelopes was addressed to ‘“E. Leo Backus, Esq.”’, and the other to “John H. MacVey, Esquire’. 3. Each of the envelopes contained a copy of the “‘Order to Show Cause”’, and “‘Temporary Restraining Order’’ , together with the accompanying papers, purportedly filed by the plaintiff, 2720 Wisconsin Avenue Cooperative Association, Inc. in the above-entitled matter on July 13, 1979. 4. The two envelopes, and their contents, were turned over, respectively to Messrs Backus and MacVey at 8401 Connecticut Avenue, Chevy Chase, Maryland. s/ Betsy Waldron Betsy Waldron Sworn to before me this Ist day of August, 1979. s/ Patricia B. Graham Notary Public My commission expires 7-1-82. APPENDIX 11 — AGREEMENT DATED AUGUST 23, 1978, BETWEEN CO-OP INVESTMENT BANKERS AND THE GOLD DEPOSITORY AND LOAN COMPANY, INC. TRANFERRING PROMISSORY NOTES IN EXCHANGE FOR STOCK SUBSCRIPTION OF STOCK AND TRANSFER OF PROMISSORY NOTES AGREEMENT August 1, 1978 FOR AND IN consideration of One Dollar ($1.00) and other good and valuable services each to the other paid, Co-Op Investment Bankers hereby transfers the promissory notes as set forth in Schedule A attached hereto and ‘made a part hereof, in exchange for 219.415 number of shares of The Gold Depository and Loan Company Incorporated. It is recognized that the shares issued require value backing in the equivalent of one troy ounce of gold per share and that the notes given are given in exchange for said shares and, further that said notes are discounted to reflect a fair market value equivalent to gold at a price of Two Hundred Dollars ($200.00) per ounce, which was the price of gold on August 1, 1978 the date that this exchange was agreed. The parties to this transaction hereby acknowledge the above and the reasonableness of the considerations exchanged hereby. THE GOLD DEPOSITORY AND LOAN COMPANY INCORPORATED s/ Charlene Baden CO-OP INVESTMENT BANKERS s/ A.V. Laurins, Pres. of G/D ’ “wise as 107a Appendix 11 CO-OP INVESTMENT BANKERS NOTES RECEIVABLE July 31, 1978 WISCONSIN AVENUE ASSOCIATES Principal Apt.# 50% Discount Balance 103 Wisconsin Avenue Associates $ 5,689.16 104 Wisconsin Avenue Associates 7,707.59 106 Wisconsin Avenue Associates 5,027.51 107 Wisconsin Avenue Associates 5,374.54 204 Wisconsin Avenue Associates 7,707.59 207 Wisconsin Avenue Associates 5,374.53 501 Wisconsin Avenue Associates 8,713.06 703 Wisconsin Avenue Associates 5,689.17 805 Wisconsin Avenue Associates 9,121.44 801 Kimberly Laurins 9,404.94 802 Kimberly Laurins 9,404.94 302—Ss A. V.. Laurins 8,555.71 87,770.18 ae 43,883.09 + 200 per share - 219.415 Shares APPENDIX 12 — SAMPLE OF PROMISSORY NOTE DATED OCTOBER 6, 1976 AND FINANCING STATEMENT (ONE OF ELEVEN NOTES) CO-OPERATIVE APARTMENT COLLATERAL NOTE $8,929.78 Chevy Chase, Maryland October 6, 1976 For value received we promise to pay to the order of 2720 Limited Partnership the sum of Eight Thousand nine hundred twenty nine and 78/100 Dollars with interest until paid at the rate of eight per centum per annum, at the place of business of the holder hereof. Interest only payment will be due on October 6, 1977, thereafter, principal and interest shall be amortized over a period of five years in monthly installments of One hundred Dollars ($100,00) (with priviledge of making larger payments in any amount) on the first day of each month of each year hereafter, each installment when so paid to be applied first to the payment of the interest on the amount of principal remaining unpaid, and the balance thereof credit to principal. The undersigned further agrees that the entire amount remaining to be paid on said principal shall be paid with interest on October 6, 1982. In the event the undersigned shall sell the collateral security described below, this note shall immediately become due and payable in full. The undersigned shall have no right to assign this note and a subsequent purchaser from the undersigned shall have no right to assume payments hereunder. 109a Appendix 12 The undersigned further agrees that in case of default in the payment of any installment, this note shali mature and the whole amount hereof shall be and become immediately due and payable, at the option of the holder hereof, without notice, presentment or demand. To further secure this note and all of the liabilities of the pledges to the legal holder hereof the following desc ‘ibed collateral security: Mutual Ownership Contract issued by 27.0 Wisconsin Avenue Cooperative Association Inc., as evidence of ownership of Co-Operative Apartment Numbered 302 in 2720 Wisconsin Avenue, N.W., Washington, D.C. The undersigned hereby gives the legal holder hereof full power and authority to sell, transfer, and delivery said collateral security, as hereinbefore described, or any substitute therefor, on the maturity of this note by default, as provided herein, or at any time thereafter, at public or private sale, or in any manner deemed advisable by the holder hereof, without previous demand or advertisement, after mailing a notice of said proposed sale to the undersigned at this last know address, at least twenty (20) days before said sale, with the right of the legal holder thereof to become the purchaser at said sale, and the absolute owner of said collateral security, and after the payment of all costs, expenses and reasonable attorney’s fees, growing out of or connected with the sale, to apply the residue of the proceeds to the payment of this note and interest thereon, paying the surplus, if any, to the undersigned. In case the proceeds of such sale are not sufficient to pay such costs; expenses, and attorneys fees, the principal hereof and interest hereon, the undersigned hereby promises to pay such deficiency forthwith with interest at the rate of 8 per centum per annum. ona on 110a Appendix 12 In case the holder hereof shall elect to pay and satisfy any sum or sums, charges or assessments owing to the said 2720 Wisconsin Avenue Cooperative Association, Inc., and as to which the undersigned is in default, the amount or amounts of such payment or payments shall be added to the indebtedness secured hereby, and at the option of the holder hereof, the entire amount of this note shall immediately mature and become due and payable, said payment not to be deemed voluntary. WISCONSIN AVENUE ASSOCIATES, INC. s/ A. V. Laurins By: A. V. Laurins, President 8401 Connecticut Avenue, Suite 700 Chevy Chase, Maryland 20015 2720 Limited Partnership By Conference Management Group, Inc. G.P. s/ A. V. Laurins By: A. V. Laurins, President Pay to the Order of Co-Op Mortgage Investors, L/P CO-OP MORTGAGE INVESTORS L/P By: Real Estate Equity Management, Inc. G/P By: s/ A. V. Laurins A. V. Laurins, President Pay to the Order of CO-OP INVESTMENT BANKERS cu == ae Appendix 12 CO-OP INVESTMENT BANKERS By: Co-Op Investment Bankers G/P Inc. By: s/ A. V. Laurins A. ¥. Laurins, President Pay to the Order of THE GOLD DEPOSITORY AND LOAN COMPANY INCORPORATED THE GOLD DEPOSITORY AND LOAN COMPANY INCORPORATED By: s/ A. V. Laurins A. V. Laurins, President Appendix 12 sg UCC One Geners— STATEMENT is O Seer dae Se tee ae Sew a October 6, 1962 ? 1. Debtor(s) Name (Last Name First) 2 Debtor(s) Address(es) For Officer % Wisconsin Avenue Associates, (| 8401 cut Avenue (Date, and Suite 700 P . 3. &4. Secured and 5. & 6. Amignee(s) of Secured 2720 Limited Partnershi hadmentes) Connecti The Gold Depository & Loan enor out .-— COs» 8401 Conn. Ave. #700 7. This Gnancing statement covers the following ty pl TAT MAT Ut pltaiirty: (Describe) Mutual OQmership Contract issued by 2720 Wisconsin Avenue Cooperative Association, Inc. as evidence of omership of Co-operative apartment wnitenumbered 307 in 2720 Wisconsin Avenue, ".W., Washi » 0.C. ~ Fe ae security for note, dated October 6, 1976, in the amoung er rs eee fee ery ee ee ree ena ae emer Real are also covered. No. of additional sheets presented. LERNGA LAW BOOK CO. 53 E St. N.W., Wesniengeon, O.C. 20001 2 ve on . vi. . Wasted linees 3 3 & ; 23 sa I ll4a APPENDIX 13 — PROMISSORY NOTE DATED JANUARY 5, 1978, FOR $150,000.00 AND FINANCING STATEMENT CO-OPERATIVE APARTMENT COLLATERAL NOTE $150,000.00 January 5, 1978 For value received We promise to pay to the order of Management Services Group, Inc. the sum of One Hundred Fifty Thousand and no/100 Dollars with interest until paid at the rate of 8% per centum per annum, at the place of business of the holder hereof. Said principal and interest payable in monthly installments of n/a is n/a Dollars (with privilege of making larger payments in any amount) on the n/a day of each and every month after date, until paid, each installment when so paid to be applied, first, to the payment of the interest on the amount of principal remaining unpaid, and the balance thereof credited to principal. Balance to be due upon five days notice at any time. Interest to be compounded monthly. The undersigned further agrees that in case of default in the payment of any installment, this note shall mature and the whole amount hereof shall be and become immediately due and payable, at the option of the holder hereof, without notice, presentment or demand. To further secure this note and all of the liabilities of the undersigned hereon, the undersigned hereby deposits with and pledges to the legal holder hereof the following described collateral security: Mutual Ownership Contracts for units #103, 104, 106, 107, 204, 207, 501, 703, and 805 issued by 2720 Wisconsin Avenue Cooperative Association, as evidence of ownership of Co-operative Apartment Numbered listed above in 2720 Wisconsin Avenue, N.W. Washington, D. C. 20007. * z=. aa CU ee er. 5 aaa 15a Appendix 13 The undersigned hereby gives the legal holder hereof full power and authority to sell, transfer, and deliver said collateral security as hereinbefore described, or any substitute therefor, on the maturity of this note by defauli, as provided herein, or at any time thereafter, at public or private sale, or in any manner deemed advisable by the holder hereof, without previous demand or advertisement, after mailing a notice of said proposed sale to the undersigned at his last known address, at least twenty (20) days before said sale, with the right of the legal holder hereof to become the purchaser at said sale, and the absolute owner of said collateral security, and after the payment of all costs, expenses and reasonable attorney’s fees, growing out of or connected with the said sale, to apply the residue of the proceeds to the payment of this note and interest thereon, paying the surplus, if any, to the undersigned. In case the proceeds of such sale are not sufficient to pay such costs, expenses and attorney’s fees, the principal hereof and interest hereon, the undersigned hereby promises to pay such deficiency forthwith with interest at the rate of eight percent (8%) per centum per annum. In case the holder hereof shall elect to pay and satisfy any sum or sums, charges or assessments owing t the said 2720 Wisconsin A venue Cooperative Association Inc. and as to which the undersigned is in default, the amount or amounts of such payment or payments shall be added to the indebtedness secured hereby, and at the option of the holder hereof, the entire amount of this note shall immediately mature and become due and payable, said payment not to be deemed voluntary. WISCONSIN AVENUE ASSOCIATES, INC. s/ A. V. Laurins By: A. V. Laurins, President Address 840] Conn. Ave. #700, Chevy Chase, Md. 20015 a 501 ny ferry cohatera 3 ‘The above described wn of are to be on. oe ef er Crops ase grocing gows 106, 108 eS St. OH, Avenue listed - hag 1n 2720 Wisconsin Avenue, H.W. Washington, of $150,000.00 whte® ary or ary to become fixtures) Ths above described goods are affixed or to Reai Estate) Ge. (1 ) Procseds axe chee covernd. @ ( ) Products of collaters! as sho covernd. {) No. oC additional sheets presented. Depository & ©. This statement to be returned after recordation to Secured Party, shows above or to The Gol4__. Loan Company, Inc. 8401 Connecticut Avenue #700 ——___—— LERNER Aw BOOK CO. 63 € St. A.W Wamungeen, 0.C 20001 il bikes APPENDIX 14 — AFFIDAVIT OF CHARLENE BADEN SHOWING CHAIN OF TITLE OF PROMISSORY NOTES SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Division Civil Action No. 2583-76 Civil . — Judge Stewart 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION INC., et al., AFFIDAVIT OF CHARLENE BADEN IN SUPPORT OF MOTION TO ALTER OR AMEND JUDGMENT Charlene Baden, being first duly sworn, deposes and says as follows: 1. Affiant is an accountant with more than twenty years of experience. 2. The statements made by affiant in this affidavit are based on affiant’s personal knowledge. 3. Affiant was first employed as an accountant and office manager by A.V. Laurins & Co., Inc. on January 23, 1973 and has been so employed by affiliated companies continuously to date. Lee 1198 Appendix 14 Affiant’s duties have been, and are to manage the office and accounting departments and the collections of all rental and note payments for all companies managed by or associated with A.V. Laurins and for other companies and partnerships located at 8401 Connecticut Avenue, Chevy Chase, Maryland. Affiant’s primary fiduciary obligations are to the investors who provided the monies to fund the projects from which the notes receivables and the rent receivables are deprived. 4. James G. Norman was president of Wisconsin Avenue Associates, Inc. from December, 1974 to July 1976. 5. Aleksandrs V. Laurins was president of Wisconsin Avenue Associates, Inc. from July, 1976 to December 31, 1978 when affiant became president of Wisconsin Avenue Associates, Inc., after the resignation of said Laurins. Exhibit A attached hereto and made part hereof is a true and correct copy of the original minutes of the Special Meeting of the Board of Directors of Wisconsin Avenue Associates, Inc., held on January 3, 1979. 6. Affiant has been a director of Wisconsin Avenue Associates, Inc., from December, 1974 to date. 7. Aleksandrs V. Laurins now resides at 2247 Clay Street, San Francisco, California. He has had his legal domicile in California since January 1, 1976 and he has resided in California continuously since January 1, 1979. He maintains his office in California and does not manage the office at 8401 Connecticut Avenue, Chevy Chase, Maryland. 8. On December 6, 1974, 2720 Wisconsin Avenie Cooperative Association, Inc. gave a promissory note in the amount of $945,000 secured by a deed of trust for the real estate _ ea Ww Appendix 14 located at 2720 Wisconsin Avenue, N.W., Washington, D.C. for the benefit of Wisconsin Avenues Associates, Inc. Copies of said note and deed of trust are attached hereto and made part hereof as Exhibit B. 9. At the same time, i.e. December 6, 1974, Wisconsin Avenue Cooperative Association, Inc. physically delivered to Wisconsin Avenue Associates, Inc., fifty Mutual Ownership Contracts, including the twelve said contracts which are defendants’ Exhibit 4 introduced at the hearing before Judge Stewart on August 2, 1979. Such Mutual Ownership Contracts were so delivered as additional security for the aforesaid promissory note anc deed of trust. (See, parag.aph 7, Defendant’s Exhibit 4, hearing on August 2, 1979. Compare, Agreement dated December 6, 1974 attached hereto and made part hereof as Exhibit C; and Assignment of Purchase Agreement attached hereto and made part hereof as Exhibit D). 10. On December 16, 1974, Wisconsin Avenue Associates, Inc. sold the said secured promissory note of $945,000.00 to 2720 Limited Partnership. 11. At that time, i.e. December 16, 1974, Wisconsin Avenue Associaic:, Inc., physically transferred possession of the fifty Mutual Ownership Contracts to 2720 Limited Partnership because said contracts are additional security for the said $945,000.00 promissory note secured by the said deed of trust. (See, paragraph 7 of ach Mutual Ownership Contract; Defendants; Exhibit 4, hearing on August 2, 1979). Subsequently the $945,000.00 note and all fifty Mutual Ownership Contracts were transferred to Co-Op Mortgage Investors L/P and then to Co-Op Investment Bankers. 12la Appendix 14 12. On August 8, 1978, Aleksandrs V. Laurins, affiliated individually, and affiliated corporations and partnerships reorganized by forming a new limited Maryland partnership, Co-Op Investment Bankers. The certificate of limited partnership for Co-Op Investment Bankers is attached hereto and made part hereof as Exhibit E. A copy of the limited partnership agreement is attached hereto and made part hereof as Exhibit F which shows the complete text of the limited partnership agreement. The text of all limited partnership agreements is identical. The financial relationship of Co-Op Investment Bankers and The Gold Depository and Loan Company Incorporated is set forth by the report of Touche Ross & Co. for years 1977 and 1978 attached hereto and made part hereof as Exhibit G. Article V, Section F, of the attached. limited partnership agreement shows that independent Trustees (who are not related to or in participation in any way with Aleksandrs V. Laurins or any of the defendants) have control over any investment of partnership assets in excess of five percent (5%) of the partnership assets, including the said Mutual Ownership Contracts. Therefore, the said independent Trustees have a substantial interest in the disposition of said contracts. 13. As a consequence of the transfer of the said secured promissory note for $945,000.00 described in paragraph 11, above, Co-Op Investment Bankers has physical possession of all fifty Mutual Ownership Contracts, including the twelve contracts in dispute in this proceeding; and Co-Op Investment Bankers claims a first lien on said contracts. 14. Co-Op Investment Bankers became the holder in due course of notes evidencing twelve other loans, i.c., twelve notes in the original amount of $93,108.21 which were secured by a 122a Appendix 14 second lien on the twelve Mutual Ownership Contracts in dispute in this proceeding. On August 22, 1978, Co-Op Investment Bankers transferred the said twelve notes to its wholly-owned subsidiary, The Gold Depository and Loan Company, Incorporated, for 219.415 shares of The Gold Depository and Loan Company Incorporated. (See, Defendant’s Exhibit #2, hearing on August 2, 1979). 15. The Gold Depository and Loan Company Incorporated became holder in due course of a note in the amount of $150,000.00 dated January 5, 1978, secured by a third lien on the said twelve Mutual Ownership Contract. (ee, Defendant’s Exhibit 3, hearing on August 2, 1979). 16. Because Co-Op Investment Bankers holds a first lien on the said Mutual Ownership Contracts, such contracts were not physically transferred to The Gold Depository and Loar Company Incorporated; and said contracts are now in the physical and actual possession of Co-Op Investment Bankers. s/ Charlene Baden Charlene Baden Subscribed and sworn before me this 22nd day of August, 1979. s/ Betsy Waldron NOTARY PUBLIC My commission expires 7/1/82 Kd APPENDIX 15 — EXCERPTS OF FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER FOR CIVIL CONTEMPT AND PRELIMINARY INJUNCTION DATED AUGUST 10, 1979 Superior Court of the District of Columbia Washington, D.C. 20001 William E. Stewart, Jr. Judge August 10, 1979 Richard A. Hibey, Esq. Robert B. Wallace, Esq. 1156 - 15th Street, N.W. Washington, D.C. 20005 E. Leo Backus, Esq. 8401 Connecticut Avenue - #700 Chevy Chase, Maryland 20015 John H. MacVey, Esq. 1718 P Street, N.W. #T-2 Washington, D.C. 20036 Re: 2720 Wisconsin Avenue Cooperative Association, Inc., et al v. Wisconsin Avenue Associates, Inc., et al - C.A. No. 2583-76 Gentlemen: Enclosed herewith is a copy of Findings of Fact, Conclusions of Law and Order for Civil Contempt and Preliminary Injunction. | 124a Appendix 15 Some changes have been made in this Order as originally proposed by counsel for the plaintiffs, which will be apparent to each of you. The court has also concluded that inasmuch as the incontroverted evidence at the hearing was that Mrs. Charlene Baden, one of the defendants herein, had resigned as an officer of the Gold Depository corporation at a time prior to the events referred to in the Order, this court has determined not to issue a Rule to Show Cause as to that defendant. Very truly yours, William E. Stewart, Jr. 12Sa Appendix 15 SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Division Civil Action No. 2583-76 Civil I — Judge Stewart 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., et al., FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER FOR CIVIL CONTEMPT AND PRELIMINARY INJUNCTION INTRODUCTION This matter came before the Court on Plaintiffs’ Request for an Order to Show Cause why the Defendants and the Gold Depository and Loan Company Incorporated (hereinafter ““GDLC’’) should not be held in contempt of this Court’s Final Judgment and Order of April 27, 1979, and Plaintiffs’ request for a Preliminary Injunction, requiring that the GDLC comply with Paragraphs 14 and 15 of this Court’s Final Judgment and Order. 126a Appendix 15 On July 13, 1979, Plaintiffs sought and received from this Court' a Temporary Restraining Order against GDLC and an Order to Show Cause why Defendants and GDLC should not be held in contempt of this Court’s Final Judgment. By mutual agreement of the parties and with the approval of this Court, the Temporary Restraining Order and the Order to Show Cause were extended through August 2, 1979. On August 2, 1979, the Court conducted a hearing upon the Plaintiffs’ Order to Show Cause and request for a Preliminary Injunction. The Defendants and GDLC appeared by counsel and presented evidence. At the conclusion of the hearing, the Court stated on the record the following findings of fact, conclusions of law, and orders, to be effective immediately. FINDINGS OF FACT 1. Plaintiffs have contended that Defendants and GDLC are in violation of Paragraph 15 of this Court’s Final Judgment. Paragraph 15 of this Court’s Final Judgment and Order, provides that: Defendants, each and all of them, their agents, employees, 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, 207, 501, 703, 805, 302 and 801/802; except that defendants, each and all of them, their 1. The Honorable James Belson sitting as Judge-in-Chambers. 127a Appendix 15 employees, relatives, attorneys and assigns and all those in active concert and participation with them shall, if requested by plaintiff Cooperative assignment of leases or any other document required by plaintiff Cooperative Association to vest in it all rights and title in the units described, consistent with this opinion. 2. The Final Judgment and Order further provides at Paragraph 31: ... that in order to effectuate a stay pending appeal the defendant(s) shall post a bond or enn Smarereray sc in the amount of 7400,000.00. that GDLC is a Nevada corporation that does not do business or maintain offices in the District of Columbia, and further contending that it was not properly served with the Order to Show 6. Based upon the pleadings, exhibits, and the candid admissions of counsel for GDLC, the Court finds that: (a) GDLC is a Nevada corporation; (b) GDLC holds itself out as doing business in the District of Columbia; and > 78 ee Appendix 15 (c) GDLC maintains that it has an interest in land located in the District of Columbia, i.e., Apartment Units 103, 104, 106, 107, 204, 207, 501, 703, 805, 302, and 801/802 located at 2720 Wisconsin Avenue, N.W., Washington, D.C., as set forth in a letter dated July 10, 1979, referred to in Finding of Fact No. 3, supra. 7. With respect to notice, the Court finds that: (a) the letterhead of GDLC indicates that its offices are located at Suite 700, 8401 Connecticut Avenue, N.W., Washington, D.C. 20015, the same office address as Wisconsin Avenue Associates; (b) the letterhead also reflects that the telephone number for GDLC is the same as that of E. Leo Backus, counsel for Wisconsin Avenue Associates; and (c) counsel for Defendants admitted at the August 2, 1979 hearing that the Order to Show Cause was served upon them on July 16, 1979, at Suite 700, 8401 Connecticut Avenue, Chevy Chase, Md. 20015, the address of GDLC, Wisconsin Avenue Associates, Inc., and the location of Mr. Laurins’ law offices, as it appears on the papers filed in this case. The Court finds, therefore, that Mr. Laurins, as counsel of record in this action and as President of GDLC, had adequate notice of this Court’s Order to Show Cause. 8. Based upon the pleadings, exhibits, and the candid admissions of counsel for Defendants and GDLC, and the previous findings of Bankruptcy Judge Roger M. Whelan of the United States District Court for the District of Columbia, filed on Mar. et a lah Thiet «i vie) 2 b ‘ rl: OH , 129a Appendix 15 27, 1979, in the case of In Re Wisconsin Avenue Associates, Inc., No. 79-00012, this Court finds that: (a) GDLC is controlled, operated, and is in active concert and participation with Aleksandrs V. Laurins; (b) Aleksandrs V. Laurins is President of GDLC; (c) the Court has specifically enjoined Mr. Laurins and the other Defendants, as well as those in active concert with them, from performing any act designed to accomplish the sale or further leasing of Units 103, 104, 106, 107, 204, 207, 501, 703, 805, 302 and 801/802; (d) Mr. Laurins, through GDLC, has attempted to violate this Court’s Final Judgment and Order by threatening to sell at auction the Mutual Ownership Contracts for the apartment units designated above; (e) Mr. Laurins is a named-defendant in this case, and appears in the Court files as counsel of record for the Defendants; (f) Mr. Laurins has not withdrawn his appearance as counsel; and (g) Mr. Laurias, as an attorney and member of the Bar of this Court, should be amply aware of the consequences of violating the Final Judgment of this Court. 9. Also before this Court is Defendants’ refusal to appear on July 26, 1979 and July 31, 1979, pursuant to requests by a) ue Appendix 15 Plaintiffs that Defendants turn over to Plaintiffs all documents necessary to effectuate the rescission of Defendants’ claimed interest in the apartment units designated above. On July 11, 1979, the Plaintiffs sought production by the Defendants and those acting in concert with them of all documents and things in their possession necessary to effectuate rescission of Defendants’ claimed interest in the above designated apartment units. This request was made pursuant to Paragraphs 14 and 15 of this Court’s Final Judgment and Order. The scheduled date for compliance with this request was originally scheduled to take place at 11:00 A.M. on July 26, 1979. The Defendants failed to appear. The Plaintiffs then requested that the Defendants appear on July 31, 1979 at 11:00 A.M. The Defendants, once again, failed to appear. 10. Throughout the litigation of this case, the parties have come to this Court on an emergency basis and sought relief. Defendants had ample notice of Plaintiffs’ attempt to implement Paragraphs 14 and 15 of this Court’s Final Judgment of April 27, 1979, and Defendants did not come before this Court to seek relief from Plaintiffs’ letter of demand. CONCLUSIONS OF LAW 1. Based upon Paragraphs 6 - 8 of the Findings of Fact, it is clear that GDLC has substantial contact with the District of Columbia, and that this Court has jurisdiction over GDLC pursuant to D.C. Code Ann. §13-423 (1973 & Supp. V 1978). 2. The refusal of Defendant Aleksandrs V. Laurins to comply with this Court’s Final Judgment of April 27, 1979, will not be tolerated. Judge Holtzoff of the United States District Court has held in Blackwelder v. Crooks, 151 F. Supp. 26, 28 (D.D.C. 1957): er i13la Appendix 15 In Land v. Dollar, 88 U.S. App. D.C. 311, 324, 190 F. 2d 366, 379, the Court emphatically observed that: ‘“‘An order issued by a court having jurisdiction of the persons and subject matter must be obeyed, even though the defendants may sincerely believe that the order is ineffective and will finally be vacated, even though the Act upon which the order is based is void, even though the order is actually set aside on appeal, even though the basic action becomes moot.”’ The Court went on to say that this must be the rule because of the necessity of ordérly process under our constitutional system of government. It is therefore clear that this judgment must be obeyed. 3. The Court also has before it the question of Plaintiffs’ Request for a Preliminary Injunction enjoining GDLC from taking any action with respect to the above designated apartment units. The Court finds that the judgment of April 27, 1979, embodied within it an injunction that adequately enjoined GDLC from taking any action with respect to the apartment units designated above. However, in order to eliminate any possible doubt about the intent of the April 27, 1979 Final Judgment, the Court will issue a preliminary injunction requiring GDLC to comply with the judgment and restraining GDLC from taking any action with respect to Apartment Units 103, 104, 106, 107, 204, 207, 501, 703, 805, 302, and 801/802. In issuing this injunction, the Court finds that Plaintiffs have satisfied the criteria set forth in the controlling case of Virginia Petroleum Jobbers Ass'n. v. Federal 132a Appendix 15 Power Commission, 104 U.S. App. D.C. 106, 110; 259 F.2d 921, 925 (1958). Specifically, Plaintiffs have shown and the Court finds that: (1) Plaintiffs have made a strong showing that they are likely to prevail on the merits; (2) without such relief Plaintiffs will be irreparably injured; and (3) the public interest in maintaining the integrity of this Court’s judgment will be served by granting this injunction. ORDER The Court finds Defendant Aleksandrs V. Laurins in civil contempt of this Court and orders that an attachment be issued to have Mr. Laurins taken into custody by the Marshall of this Court. The Court further orders that Mr. Laurins may purge himseif of this contempt by executing the documents as set forth in Paragraph 15 of this Court’s Final Judgment and Order of April 27, 1979, and releasing any and all claims that he or any of the persons or entities acting in concert with him may claim in the unsold apartment units. The Court further orders that GDLC is enjoined from taking any action with respect to Apartment Units 103, 104, 106, 107, 204, 207, 501, 703, 805, 302, and 801/802, except as set forth below. The Court further orders that Defendants and GDLC tender to the Plaintiffs the originals of the Mutual Ownership Contracts for the apartments, as well as a current, accurate copy of the Deed of Trust Note indicating any and all endorsements, and purge from any and all records or filings with the Recorder of Deeds for the District of Columbia any claim to ownership in Apartment 133a Appendix 15 Units 103, 104, 106, 107, 204, 207, 501, 703, 805, 302, and 801/802. The Court further orders that Mr. Laurins execute an instrument drafted by Plaintiffs that releases any and all ownership claims that Mr. Laurins, the Defendants, GDLC, Kimberly Laurins or any of the entities owned, controlled or in active concert and participation with any of the Defendants, may claim in any of the following Apartment Units: 103, 104, 106, 107, 204, 207, 501, 703, 805, 302, and 801/802, and purge from any and all records or filings with the Recorder of Deeds for the District of Columbia any claim to ownership in those apartment units. SO ORDERED this /0th day of August, 1979. s/ William E. Stewart, Jr. William E. Stewart, Jr. Judge Richard A. Hibey, Esq. ce: Robert B. Wallace, Esq. E. Leo Backus, Esq. John H. MacVey, Esq. “ 134a APPENDIX 16 — PROFFER DATED SEPTEMBER 19, 1979 OF ELEVEN MUTUAL OWNERSHIP CONTRACTS BY GOLD DEPOSITORY AND LOAN COMPANY, INC. PURSUANT TO COURT ORDER SUPERIOR COURT OF THE DISTRICT OF COLUMBIA CIVIL DIVISION Civil Action No. 2583-76 Civil I — Judge Stewart 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION, INC., et al., Plaintiffs, v. WISCONSIN AVENUE ASSOCIATES, INC.., et al., Defendants. The Gold Depository and Loan Company, Incorporated (hereinafter called ‘‘GDLC’’) by its attorney, hereby proffers to the court for tender to the plaintiffs in the above-entitled proceeding in compliance with the order of this court dated August 10, 1979, (entered on August 13, 1979) and the court’s order dated September 14, 1979, denying GDLC’s Motion to Amend Judgment and Order entered on August 13, 1979, the Mutual Ownership Contracts for Apartment Units 103, 104, 106, 107, 204, 207, 501, 703, 805, 302, and 801/802 located at 2720 Wisconsin Avenue, N.W., Washington, D.C. and the leases for Apartment Units 106, : 204, 302, 501, 703, and 805. a 135a Appendix 16 The originals of said Mutual Ownership Contracts and leases are physically attached to this Proffer. GDLC has no other documents relating to ownership of said units. In support of this motion, counsel for GDLC respectfully shows the following: 1. This Proffer is made without waiving the legal rights of SE ern Sy epee. ae OO Rye any aeiar Ta claims on behalf of defendants. 2. This Proffer is made on behalf of all defendants and all parties who may be held to be in active concert or participation with said defendants, including Aleksandrs V. Laurins, without waiving the legal contentions previously made by GDLC in this proceeding. 3. Counsel for GDLC is advised that a motion is being filed with this court to purge Aleksandrs V. Laurins of contempt of court. This Proffer is made in aid of said motion to purge and in an effort by GDLC to comply with the orders of this court dated August 10, 1979, and September 14, 1979. Respectfully submitted, s/ John H. MacVey John H. MacVey 8401 Connecticut Avenue Suite 700 Chevy Chase, Maryland 20015 (301) 652-2996 Attorney for The Gold Depository and Loan Company Incorporated Pas 136a Appendix 16 CERTIFICATE OF SERVICE I certify that a copy of the foregoing Proffer of Mutual Ownership Contracts and Leases was sect by mail postage prepaid this 19th day of September 1979 to Richard A. Hibey, Esquire, Surrey and Morse, 1156 15th Street, N.W., Washington, D.C. 20005, attorney for plaintiffs. s/ John H. MacVey John H. MacVey | eee 137a APPENDIX 17 — STIPULATION DATED OCTOBER 24, 1979 WITH CERTAIN EXCF?TIONS CONCERNING CERTAIN QUITCLAIMS, ETC. PURSUANT TO COURT ORDER SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Action No. 2583-76 2720 WISCONSIN AVENUE COOPERATIVE ASSOCIATION INC., et al Plaintiffs v. WISCONSIN AVENUE ASSOCIATES, INC., et al . Defendanis. Pursuant to the Judgment dated April 27, 1979, and to this Court’s Orders of August 10, 1979 and September 17, 1979, and with reference to certain Conveyances, Assignments, Releases and Quitclaims of even date herewith annexed hereto as Exhibits A, B, C, D and E, Aleksandrs V. Laurins, on the basis of his personal knowledge, information and belief, represents to the Plaintiffs herein, their heirs, successors and assigns as follows: 1. No person, corporation or other equity has or claims any interest in or to the apartment units identified as numbers 103, 104, 106, 107, 204, 207, 501, 703, 805, 302 and 801/802, located in the building owned by 2720 Wisconsin Avenue Cooperative Association, Inc., a District of Columbia corporation, except as ait ae 138a Appendix 17 follows:* a. Wisconsin Avenue Associates, Inc., a District of Columbia corporation, which asserts ownership thereof. b. Co-Op Investment Bankers, a Maryland limited partnership and, as the general partner thereof and not otherwise, Co-Op Investment Bankers G/P, Inc., a Maryland corporation, which claims (1) A security interest founded upon a master or wrap-around mortgage (deed of trust), dated December 6, 1974, in the principal amount of $945,000, and (2) A supplementary lien upon each of the individual Mutual Ownership Contracts relating to the aforesaid units by way of additional security for the said master or wrap-around mortgage. c. The Gold Depository and Loan Company, Incorporated, a Nevada corporation, which claims subordinate liens held in security of loans made against the units on October 6, 1976 (loans aggregating $93,123.84), and January 5, 1978 (loan of $150,000 on units 103, 104, 106, 107, 204, 207, 501, 703 and 805). * This Stipulation excludes references to the claims of Mrs. Marjorie Jawish and Mr. Henry Jawish, holders of the Third Deed of Trust Note, Ms. Carol Jawish, holder of the Second Deed of Trust Note in the amount of $95,000, and The National Bank of Washington, holder of the First Deed of Trust Note in the amount of $148,815.49. oe ae 139a Appendix 17 d. Kimberly Laurins, a minor, asserts ownership of apartment 801/802. ¢e. Aleksandrs V. Laurins asserts ownership of apartment 302. s/ Aleksandrs V. Laurins Aleksandrs V. Laurins s/ Aleksandrs VY. Laurins Aleksandrs V. Laurins For Kimberly Laurins Dated: Oct. 24, 1979 STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO On October 24 th, 1979, before me, the undersigned, a Notary Public in and for said State, personally appeared Aleksandrs V. Laurins, known to me, to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. s/ Anne Nobilione Notary Public in and for said . 7, = lene ten * a . io Sep heee ee BAe, Bi ae ee nel et a ke a i. « “S,. '-— 140a Appendix 17 EXHIBIT A ASSIGNMENT I, Aleksandrs V. Laurins, acting pursuant to the direction of the court as set forth in its Judgment dated April 27, 1979, and with reference to the Stipulation of even date herewith, annexed hereto and made part hereof, do hereby convey, assign, release and quitclaim any right, title and interest that I may have in or to the apartment units, identified as numbers 103, 104, 106, 107, 204, 207, 501, 703, 805, 302 and 801/802, located in the building owned by 2720 Wisconsin Avenue Cooperative . Association, Inc., a District of Columbia Corporation (the *““Cooperative’’) to the Cooperative, its successors and assigns. s/ Aleksandrs V. Laurins Aleksandrs V. Laurins Sworn to and subscribed before me this 24th day of October, 1979. s/ Annie Nobilione Notary Public My Commission Expires: 6/29/82 l4la Appendix 17 EXHIBIT B ASSIGNMENT I, Aleksandrs V. Laurins, acting pursuant to the direction of the court as set forth in its Judgment dated April 27, 1979, and with reference to the Stipulation of even date herewith, annexed hereto and made part hereof, as parent and next friend of Kimberly Laurins, do hereby convey, assign, release and quitclaim, on behalf of Kimberly Laurins, any right, title and interest that she may have in apartment units 801/802 located -in a building owned by 2720 Wisconsin Avenue Cooperative Association, Inc., a District of Columbia corporation (the **Cooperative’’) to the Cooperative, its successors and assigns. s/ Aleksandrs V. Laurins Aleksandrs V. Laurins Sworn to and subscribed before me this 24th day of October, 1979. s/ Annie Nobilione Notary Public My Commission Expires: 6/29/82 ual 142a Appendix 17 EXHIBIT C ASSIGNMENT I am an officer of Wisconsin Avenue Associates, Inc. and on its behalf take the following action: Now, therefore, act [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_0070%3A2. Public record. Not legal advice.