Court rules for Claremont Colleges in CST contract dispute

The California Court of Appeal ruled in favor of The Claremont Colleges (TCC) in their long dispute with Claremont School of Theology over the sale of the property. The ruling basically directs CST the sell the campus property to TCC for $4 million. Here is a statement from TCC about the decision.

On Fri., Jan. 22, 2021, the Court of Appeal of the State of California, Second Appellate District, Division One ruled in favor of The Claremont Colleges regarding the validity and enforceability of a 1957 agreement between TCC and the Claremont School of Theology (CST). The Court ruled that CST’sagreement to sell its former campus property fronting Foothill Boulevard in Claremont to TCC is validand enforceable and directed. It said CST must sell the campus property to TCC for approximately $4 million.

CST originally bought the land from TCC at a below market price and was granted an affiliate status with TCC all in an effort to assist CST’s transition into the Claremont community. CST approached TCC in 2015 to discuss TCC’s interest in buying all or part of the CST property. Since then, TCC has worked in earnest for more than five years to resolve its dispute with CST outside the courts, including by offering CST market value ($14 million based upon an independent evaluation) for a portion of CST’s former campus property and proposing to renovate the housing on thatcampus and providing CST the first right to use the renovated housing.

CST rebuffed all reasonable solutions provided by TCC. “We were disappointed that CST chose to not work with us in finding an amenable solution. The Claremont Colleges had no other option but to respond to this egregious lawsuit to enforce a legally binding agreement. We look forward to acquiring the land per the agreement and using the land for the benefit of the colleges and the Claremont community” said Stig Lanesskog, Chief Executive Officer of The Claremont Colleges Services.

The litigation initially brought by CST in 2016 attempted to void TCC’s right to repurchase CST’s campus property in accordance with the terms of the parties’ 1957 agreement, as well as subsequent agreements made through the years. In Jan. 2019, the trial court determined that the property mustbe used only for educational purposes. It held that TCC had a first right of refusal in the event CST receives a bona fide offer for a sale or other transfer of the property. However, the ruling did not enforce the terms of the parties’ long-standing agreement, which gave TCC a right to repurchaseusing the parties’ agreed formula.

In February 2019, CST surreptitiously signed a sale and long-term lease agreement with Yalong Investment Group, based in Shanghai, China, without informing the colleges and in conflict with the CST/TCC 1957 agreement and subsequent agreements. CST’s agreement with Yalong remains the subject of pending litigation. Following the execution of the lease and purchase agreement, CST relocated to Willamette University in Salem, OR.


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