United States District Court, D. New Hampshire
B. McCafferty, United States District Judge.
Norfolk Holding, LLC (“Norfolk”), brings suit
against CBRE, Inc. (“CBRE”) and the United States
Postal Service, alleging several claims arising out of the
Postal Service's solicitation of bids and selection of a
winning bid for the purchase of a Postal facility at 345
Heritage Avenue in Portsmouth, New Hampshire (the
“property”). Norfolk seeks money damages and both
preliminary and permanent injunctive relief to prevent the
Postal Service from selling the property to another bidder.
Norfolk filed its original complaint, the Postal Service
nullified its selection of a winning bid, and terminated the
first bidding process. The Postal Service subsequently issued
a new solicitation for offers on the property, and set a
deadline for the submission of offers for October 18, 2017.
October 5, 2017, Norfolk filed a motion for a temporary
restraining order (doc. no. 8), seeking to enjoin the Postal
Service from receiving offers for or selling the property.
Norfolk subsequently filed an amended motion for a temporary
restraining order (doc. no. 16) and an amended complaint. The
Postal Service and CBRE object to the amended motion for a
temporary restraining order.
October 12, the court held a hearing on Norfolk's amended
motion for a restraining order. At the close of the hearing,
the court orally denied the motion from the bench. This order
sets forth in more detail the basis for that ruling. See,
e.g., United States v. Joubert, 980 F.Supp.2d 53, 55
(D.N.H. 2014) (noting a district court's authority to
later reduce its prior oral findings and rulings to writing).
2011, the Postal Service awarded CBRE a contract to be its
sole provider of real estate management services. As part of
that contract, CBRE acts as the Postal Service's agent
for its “disposal program, ” which is “a
program to sell properties that are no longer required for
postal operations, that may include the entire property, or
part of a property.” At some point prior to December
23, 2016, the Postal Service engaged CBRE to sell, pursuant
to its disposal program, the property located at 345 Heritage
Avenue in Portsmouth, New Hampshire.
First Solicitation of Bids
December 23, 2016, CBRE representative Ken White emailed
Michael Kane, Norfolk's principal, informing him of the
Postal Service's intended sale of the property.
CBRE's marketing materials for the property included the
CBRE, Inc. operates within a global family of companies with
many subsidiaries and/or related entities (each an
"Affiliate") engaging in a broad range of
commercial real estate businesses including, but not limited
to, brokerage services, property and facilities management,
valuation, investment fund management and development. At
times different Affiliates may represent various clients with
competing interests in the same transaction. For example,
this information may be received by our Affiliates, including
CBRE Investors, Inc. or Trammell Crow Company. Those, or
other, Affiliates may express an interest in the Property
described and may submit an offer to purchase the Property
and may be the successful bidder for the Property. You hereby
acknowledge that possibility and agree that neither CBRE,
Inc. nor any involved Affiliate will have any obligation to
disclose to you the involvement of any Affiliate in the sale
or purchase of the Property.
Doc. no. 17 at ¶ 17. CBRE's marketing materials also
included the following:
In all instances, however, CBRE, Inc. will act in the best
interest of the client(s) it represents in the transaction
and will not act in concert with or otherwise conduct its
business in a way that benefits any Affiliate to the
detriment of any other offeror or prospective offeror, but
rather will conduct its business in a manner consistent with
the law and any fiduciary duties owed to the client(s) it
represents in the transaction.
original deadline for offers was set for June 1, 2017 at 4:00
p.m. Norfolk submitted a timely bid for $6.6 million, which
included certain leaseback provisions. White and a Norfolk
representative were in contact regarding Norfolk's bid
over the first week of June, during which White informed the
representative that Norfolk's bid was not the highest but
was competitive. White also asked that Norfolk resubmit its
bid by 4:00 p.m. on June 22.
20, White sent Kane a text message informing him that there
had been a difference of $275, 000 in the top bids previously
submitted. Kane responded with a text message asking if
Norfolk had the highest bid, and White responded that Norfolk
was “definitely in the mix.” White subsequently
extended the deadline for bidding on the property until June
26 at 4:00 p.m. At approximately 1:41 p.m. on June 26, Kane
received a voicemail from another bidder, informing Kane that
he understood that he and Norfolk had been two of the
finalists in the bidding on the property and that he did not
intend to increase his most recent bid of about $6.4 million.
Kane returned the call, and learned that Norfolk was the
highest bidder in the first round, that the next highest
bidder had offered $6.375 million, and that the next highest
bidder had offered approximately $6.325 million. The caller
also informed Kane that he had received the bid information
from White, with whom the caller has a pre-existing business
an hour before the 4:00 p.m. deadline on June 26, Norfolk
submitted to White a bid in the amount of $6.95 million. At
some point over the next two days, White had a conversation
with another of Norfolk's principals. Norfolk alleges
that during that conversation, White “insinuated”
that Norfolk had submitted the winning bid for the property.
28, White spoke to Kane and informed him that Norfolk had not
submitted the highest bid for the property and that he could
not disclose the amount of the winning bid. Later that day,
Kane called the same bidder who had called him with
information about the original round of bids. The bidder
congratulated Kane and called him the “seven million
dollar man, ” believing Norfolk had won the bid for the
property at $7 million. Kane informed the bidder that Norfolk
had not won the bid.
29, White forwarded to Norfolk an email he had received from
Brent Davidson, an employee in CBRE's Washington D.C.
office, explaining that Norfolk was not the winning bidder on
the property. The email read, in relevant part:
Please let RW Norfolk know we appreciate their interest in
purchasing 345 Heritage Ave. USPS utilizes a defined sale and
bid process to ensure that all interested parties are
afforded equal opportunity to purchase USPS assets. The
bidding process for 345 Heritage has concluded and a winning
bidder has been selected. On CBRE's behalf please thank
RW Norfolk for their participation, and we wish them luck
with their future endeavors.
Doc. no. 17 at ¶ 30. White also called Kane to tell him
that Norfolk had been outbid, and that although he could not
disclose the amount of the winning bid, it was less than
$100, 000 more than Norfolk's bid.
Kane spoke to White, Kane sent the following email to White
Upon receiving your email that you were shutting down the
bidding process and that the price difference went from a
spread of $225, 000 and $275, 000 respectively to a spread of
$50, 000 between us and the higher bid and the lower bid
being $550, 000 lower. We were confused and disappointed
because it was never stated that this was the final round.
When we spoke, Brent, you confirmed for me that this last
round of bidding was not necessarily the final round and that