Bethesda Low-Rise Site Generates Towering Pile of Litigation

After several legal actions against a neighboring project in Bethesda, Greenhill Capital has proposed plans redevelop Woodmont Triangle. In a public meeting, the property-owner announced its intention to build a low-rise, retail-only “retrofit” on the site. But the project is contingent on the outcome of ongoing lawsuits.

The site was once home to the Fresh Grill restaurant and the Red Tomato Cafe, but both left after construction of an apartment building next door damaged the premises. In 2012, the Montgomery County Department of Permitting Services briefly suspended construction until Bainbridge, the developer of the 17-story, 200-unit structure, took steps to prevent more damage.

In 2013, White Flint, the owner of the building that housed Fresh Grill, sued Bainbridge for causing large cracks in the walls of the restaurantcracks so serious the building had to be evacuated. The ensuing litigation over faulty sheeting and shoring work resulted in an exchange of more than 430,000 documents.

Four days before the December, 2013 trial date, Bainbridge settled the case, agreeing to pay $3.2 million in damages. The judge ordered Bainbridge to pay an additional $3.5 million in legal fees and $411,000 in costs and expenses. The judge noted that the dispute over legal fees was as heated as the litigation over the underlying case.

That settlement did not resolve other litigation. The Fresh Grill restaurant owners sued White Flint, Bainbridge and the Turner Construction Company for its losses when the restaurant failed after moving out of the damaged site. BCC Automotive, another business on the site, brought suit against Bainbridge and Turner, as did Green Tomato LLC, owner of The Red Tomato Cafe.

Now Greenhill, which owns Green Tomato LLC, would like to reconstruct the buildings as a low-density, two-story retail development. Greenhill’s founder says, however, that beginning work on the project is contingent on the outcome of its litigation against Bainbridge, Turner, and the Schnabel Foundation Company over damage to the defunct Red Tomato Cafe.

Real estate development is a costly, high-stakes undertaking even without acrimonious lawsuits over mistakes by contractors. Whether you are constructing a new building or trying to run a business next to an active construction site, you need effective counsel to help you handle the catastrophic problems that can arise.

Longman & Van Gracks expert real estate litigation attorneys have represented plaintiffs and defendants in all types of real estate actions. Contact us today at (301) 291-5027 to schedule a consultation.