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Former owner continues win streak against ex-tenant

The former owner of a Rockville office building has been awarded more than $2.2 million in punitive damages and attorneys’ fees from a former tenant that twice forced it into foreclosure because of unpaid rent.

The judgment in favor of Tower Oaks Boulevard LLC last week is on top of the more than $4.5 million in compensatory damages it has been awarded from Ronald Cohen Investments Inc. and Ronald Cohen Management Co.

Montgomery County Circuit Judge Ronald B. Rubin, following a three-day hearing, awarded Tower Oaks $1.5 million in punitive damages, more than $690,000 in attorneys’ fees and more than $36,000 in prejudgment interest, according to court records.

Rubin also granted Tower Oaks’ motions for writs of attachment on four Cohen-owned properties located on or near Rockville Pike. One property is a strip shopping center that includes outdoor retailer REI, a second is for a post office on Rollins Avenue and the other two are office buildings, according to court records.

The bench trial was Tower Oaks’ third court win against the Cohen companies in six months. In January, a Montgomery County jury awarded Tower Oaks $3.9 million from the Cohen companies for tortious interference with its lender and breach of contract while also finding Tower Oaks was entitled to punitive damages. Tower Oaks also obtained a summary judgment ruling for almost $600,000 in unpaid rent prior to the start of the jury trial.

Christopher C. Fogleman, a lawyer for Tower Oaks, said Tuesday he was not authorized by his client to comment on the bench trial. Fogleman is with Gleason, Flynn, Emig & Fogleman Chtd. in Rockville.

Steven M. Weisbaum, a Rockville solo practitioner representing the Cohen companies for the bench trial, did not respond to a request for comment.

Tower Oaks, a holding company of the late John D. Buckingham Sr., purchased the office building at 2701 Tower Oaks Blvd. in 2001. The Cohen companies are owned by Ronald J. Cohen, president of The Cohen Cos. Inc., a trade name owned by Cohen Management. Cohen Cos. owns more than two dozen office, retail and residential buildings in suburban Washington.

The Cohen companies signed a 10-year lease in 2002 for the second floor of the Tower Oaks building. They were one of two tenants in the building, and the landlord needed the rent to pay the mortgage.

In early 2009, the Cohen companies began to demand rent concessions from Tower Oaks and did not pay their monthly rent, according to an amended complaint. When Tower Oaks refused to make the concessions, Ronald Cohen notified Tower Oaks his companies were preparing to leave the office building and that Tower Oaks’ position was “an economic decision that they will have to face with their lender,” according to the complaint.

Tower Oaks took legal action, and the Cohen companies in September 2009 paid nearly $460,000 in unpaid rent and attorneys’ fees, according to the lawsuit. But the companies continued to “falsely claim problems, deficiencies and damages to the property as justification for their failures to pay rent due under the lease,” the lawsuit states.

The Cohen companies stopped paying rent again in February 2011, forcing Tower Oaks to file for Chapter 11 bankruptcy, according to the lawsuit. Since then, Tower Oaks staved off one foreclosure auction and is appealing a second in the Court of Special Appeals. The building was sold back to the lender for $6 million last February, according to the lawsuit.

Jurors deliberated for five-and-a-half hours over two days in late January before coming back with their verdict, which included $2.3 million for the tortious interference count and $950,000 for unpaid rent from December 2011 through November 2012.

 

TOWER OAKS BOULEVARD LLC, ET AL. V. CWCAPITAL LLC, ET AL.

Court:

Montgomery County Circuit Court

Case No.:

368256V

Judge:

Ronald B. Rubin

Outcome:

Plaintiffs’ verdict of $2,226,813 — $1.5 million in punitive damages, $690,572.49 in attorneys’ fees, $36,240.51 in prejudgment interest

Dates:

Incident: February 2009 through November 2012

Suit filed: Sept. 10, 2012

Verdict: May 23, 2014

Plaintiffs’ Attorneys:

Christopher C. Fogelman and William J. Chen III of Gleason, Flynn, Emig & Fogelman Chtd. in Rockville

Defendants’ Attorneys:

Steven M. Weisbaum, Rockville solo practitioner

Counts:

Bench trial to determine punitive damages and attorneys’ fees