A judge has dismissed a breach of contract claim brought by the
Marcus Corporation against the Town of Brookfield and The Corners,
but a claim that the defendants acted in bad faith when they
embarked on plans to build a movie theater at the development could
continue to trial.
The Milwaukee-based Marcus 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
breached the terms of a developer’s agreement. Marcus, owner of the
Majestic Cinema that sits a mile away from Silverspot’s proposed
site, has a 10 percent ownership stake as a minority partner in the
In an oral ruling delivered Wednesday afternoon, Waukesha County
Circuit Judge Michael O. Bohren granted requests brought by the
defendants to dismiss the breach of contract claim. He also
dismissed a request by Marcus that the court rule the theater
addition required its written approval.
But Bohren let stand, at least for now, Marcus’s claim that The
Corners’ proposal to add the now partially completed theater, and
the town’s approval of that proposal, constituted a breach of the
defendants’ "contractual duty of good faith and fair dealing."
In a Sept. 28 court filing, attorneys for Marcus wrote that the
company had every reason to believe a theater could never be built
at The Corners, mainly because the development agreement never
mentioned it. But attorneys for The Corners have argued that Marcus
had no reason to believe a theater could never be built on the site.
They have also pointed out that Marcus never argued for a
non-compete clause in the agreement.
Bohren didn’t find that the theater addition constituted a de
facto modification to the developer’s agreement, mainly because the
agreement itself doesn’t define retail space or exactly how much of
it the project can have. He did find, however, that Marcus has a
viable argument with regard to the "duty of good faith and fair
dealing" it expected as a partner in the project.
"Marcus asserts it would not have entered into the contract
knowing a theater was going to be built. The question they ask
rhetorically is ‘why would Marcus (help to) assure the construction
of a competing enterprise?’" Bohren said Wednesday.
"The allegation in the complaint is of a quid pro quo, meaning
that in Marcus’ assertive guarantee of construction it had the
authority to block construction and expansion of the project. Those
are allegations, but I am satisfied that they are sufficient to meet
the state of the law with regard to the duty of good faith and fair
In a written statement issued Wednesday evening, Corners attorney
John Franke wrote that the developer had "hoped that (the) matter
could be fully resolved on the pleadings," but that it looks forward
to prevailing on the remaining claim on a motion for summary
judgment or, if necessary, at trial."
In the meantime, construction of the theater, which is slated to
open in the spring, will continue, he wrote.
"While it is The Marcus Corporation’s policy not to comment on
pending litigation, we are pleased the judge agreed that our claims
that our partners and the Town of Brookfield have not dealt with us
in good faith and have not dealt with us fairly have merit," said
Maggie Cook, an attorney for the Marcus Corporation, in a written
statement. "We look forward to litigating this matter further."
In other items related to the case, Bohren rejected the town’s
claim that it enjoys immunity under the law for acts done in
legislative or judicial functions synonymous with discretionary
He also denied The Corners’ request to discharge a "lis pendens"
in the case, saying the development of the theater does affect the
interests of the Marcus Corporation.
The court is slated to meet again in the case on Feb. 6, for a