Lord & Taylor wins $31M award in White Flint Mall dispute

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A federal jury on Friday awarded Lord & Taylor $31 million in its breach-of-contract action against the owners of White Flint Mall, who in an agreement 40 years ago said they would keep the mall open but have since effectively closed it down amid plans to build a town center.

Lord & Taylor continues to operate at the enclosed mall’s location on Rockville Pike, even as demolition of White Flint is expected to be completed early next year.

The jury announced its verdict following more than two days of deliberations after a 10-day trial in U.S. District Court in Greenbelt.

The mall’s owner, Lerner Enterprises LLC, argued at trial that it had no choice but to close the high-end mall amid competition from the nearby Westfield Montgomery mall, Bloomingdale’s departure from White Flint in 2012 and the growing consumer preference for open-air, pedestrian friendly shopping centers, such as Rockville Town Square about five miles from White Flint. Lerner Enterprises also argued that Lord & Taylor raised no objections to the planned conversion in its early stages.

In February 2012, Lerner Enterprises submitted its redevelopment plan to Montgomery County, which granted its approval later that year. Lord & Taylor LLC filed its lawsuit alleging breach of contract action in July 2013.

In its move away from an enclosed mall, Lerner Enterprises, doing business as White Flint L.P., has demolished the former Bloomingdale’s store and did not renew leases for other tenants, including Gap, Nine West, Godiva Chocolate, Esterman Estate Jewelers and Bruno Cipriani, according to court filings.

Dave & Buster’s, another former tenant, also sued to stop the redevelopment, saying it violated its lease. But a federal judge last year ordered the restaurant and arcade to close.

Lord & Taylor, in its complaint, said Lerner’s “actions, combined with the intentionally created high vacancy rates within the enclosed mall and its promotion of the new redevelopment in the press and at the county, have caused most customers to simply stop patronizing the shopping center site and Lord & Taylor’s store altogether.”

The retailer added that it “has not consented to [the] redevelopment… because the redevelopment will cause irreparable harm to Lord & Taylor’s store, its customer base, its reputation and the goodwill it has created and fostered in the community for over 30 years.”

The case is Lord & Taylor, LLC et al v. White Flint, L.P., 8:13-cv-01912-RWT.