Judge hears arguments in Corners suit
Town, Corners want Marcus suit dismissed

By Brian Huber

Dec. 16, 2018

WAUKESHA — A judge this week heard arguments in the Marcus Corp.’s lawsuit against the Town of Brookfield and The Corners, with a decision expected later this month.

The Milwaukee-based Marcus Corporation filed a lawsuit in Waukesha County Circuit Court against the Town of Brookfield and Brookfield Corners LLC just over a year ago, alleging the addition of a nine-screen movie theater by competitor Silverspot Cinemas breaches the terms of a developer’s agreement. Marcus, owner of the town-based Majestic Cinema a mile away from Silverspot’s proposed site, has a 10 percent ownership stake as a minority partner in the Brookfield Corners LLC.

In briefs arguing their positions, the Town and Brookfield Corners argued for the suit to be dismissed, with Marcus arguing that its suit has merit and should continue.

Marcus is arguing that it has the power to veto any Town Board decision related to the development, and any action to approve the proposed theater is a breach of the developer’s agreement.

“Marcus Corporation entered into the Development Agreement agreeing to the development of The Corners without a theatre,” Marcus attorney John Kirtley wrote in a brief. “The Corners is now being developed with a theatre  — an amendment that requires the Marcus Corporation’s written consent, which it has not given. ... (Brookfield Corners) is adding a new building, not part of the original Development Agreement, not agreed to by the Marcus Corporation, and that structural addition (irrespective of use) violates Marcus’ veto rights.”

In its brief arguing for a judgment on the pleadings already in the case, the Town of Brookfield argued that it enjoys immunity under the law for acts done in legislative or judicial functions synonymous with discretionary acts. But Marcus replied legislative immunity does not apply to contractual obligations.

The Town also argued it cannot delegate its zoning authority to any private entity, therefore, any provision granting it “veto power” over zoning decisions is void and illegal. Also, the Town Board’s decision to add the Silverspot theater was subject to judicial review as a certiorari action, which Marcus did not seek, the town argued.

Brookfield Corners LLC also filed a motion to discharge the legal action, referred to as a “lis pendens,” saying the development of the theater does not affect the interests of the Marcus Corporation.

“The title and possession to the Corners will not and cannot be changed as a result of this lawsuit. Marcus’s affiliate’s membership percentage in the LLC will not change. As Marcus would have it, Marcus will either stop the theater (already nearing completion) or Marcus will win a damages award from one or both of the defendants. In either case, no ‘interest’ in the Corners will have changed,” the brief said.

Brookfield Corners also argued Marcus has no claim that the defendants breached a duty to act in good faith, with attorney John Franke saying that Marcus believes it “had every reason to believe a theater could never be built at The Corners, but points to no reason for such a belief.” He added Marcus never argued for a non-compete clause in The Corners, and one can’t be put together without contradicting the Development Agreement provisions that approve any use authorized by the town’s zoning laws.

“Putting a theater in the Corners is not a breach of good faith any more than if Marcus invested in a department store at Brookfield Square that competes with Von Maur,” Franke wrote.

Judge Michael O. Bohren is expected to render a decision Dec. 26.