American Multi-cinema, Inc., Plaintiff-appellee, v. Sidney Brown, T/a Beltway Plaza Developers; Beltwayregional Center, Inc.; Beltway Plaza Developers,inc., Defendants-appellants.sidney Brown, Plaintiff-appellant, v. American Multi-cinema, Inc., Defendant-appellee, 865 F.2d 1256 (4th Cir. 1988)

We review the district court's decision interpreting an agreement for the building and for the lease of a movie theater complex adjacent to a shopping mall. Sidney Brown and the two Maryland corporations he controls, Beltway Regional Center, Inc., and Beltway Plaza Developers, Inc., (hereinafter "Brown") appeal the district court's orders granting summary judgments in favor of American Multi-Cinema, Inc., (hereinafter "AMC") in its declaratory judgment action and in Brown's eviction action. Brown owns and operates the Beltway Plaza Shopping Center in Greenbelt, Maryland. AMC is a Missouri corporation that operates movie theaters nationwide.

In November 1983, Brown and AMC entered into a construction-lease agreement. AMC agreed to build at its expense a movie theater complex at Beltway Plaza to be owned by Brown, and it agreed to lease the theater from Brown for twenty years. Brown agreed to reimburse AMC for $1,755,000 in construction costs, regardless of the actual costs. Brown also agreed to build at his expense a connector building between his shopping mall and the theater complex and to relocate utility lines to accommodate the theater complex. The parties agreed to split the costs of relocating the utility lines; however, they agreed that Brown would pay any excess over $160,000.

The agreement also provided that the rent should begin upon completion of both AMC's and Brown's construction, "but in no event ... later than eighteen (18) months from [November 1983], provided the Entrance Area construction has been completed by [Brown]." In addition to fixed rent, the agreement provided for rent based on a percentage of the gross receipts of the theater complex.

In 1984, Brown was forced to redesign his connector building because the fire marshall required more exits to accommodate theater patrons. In June 1985, he completed the relocation of the utilities at a cost of $234,290. AMC then began to build the theater complex. Upon completion in May 1986, AMC demanded its construction contribution of $1,755,000 from Brown for its costs in erecting the theater complex. Brown, in turn, demanded adjustments for lost rent, his costs to redesign the connector building, and other setoffs.

In December 1986, AMC brought this diversity action in district court, seeking declaratory relief under its construction-lease agreement with Brown. AMC claimed that the agreement required Brown to pay $1,755,000, less rent and utility costs, to it for its costs in erecting an eight-theater complex adjacent to Brown's shopping mall. Brown counterclaimed for setoffs including lost rent, added building costs, and added utility costs. Several months later, Brown filed an action in a Maryland state court to evict AMC from the theater complex. AMC removed that action to the district court, which stayed it pending the outcome of the declaratory judgment action.

In the course of the pretrial proceedings, AMC served a request for admissions on Brown pursuant to rule 36 of the Federal Rules of Civil Procedure. In this request, AMC asked Brown to admit, among other things, that the parties did not modify the rent payment term in the agreement, that the connector building could have been completed before the theater complex, and that excavating the theater complex site before Brown completed utility relocation work would be hazardous because of underground electrical wires. When Brown sought to file a response to AMC's request for admissions three months later, the district court refused to grant Brown's motion for an extension of time to make this filing.

The district court, in granting AMC's motion for summary judgment, considered the agreement, the admissions, and other documents in the record. Finding that Brown's admissions were independently supported by other facts in the record, the court held that this record did not support Brown's counterclaims for setoffs. The court, therefore, ordered Brown to pay AMC the construction costs plus interest, less certain rent and utility costs. The district court then addressed the eviction action that had been removed from state court and awarded summary judgment in favor of AMC.

On appeal, Brown contends that the district court erred in denying its request to withdraw its admissions. He also argues that genuine issues of material fact existed, both in the declaratory judgment and eviction actions. Finally, Brown argues that the district court erred in awarding AMC prejudgment interest and in refusing to grant Brown interest for past-due rent payments.

Finding no merit to any of these contentions, we affirm.

AFFIRMED.