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Tenants Lose Class-Action Status in Long-Time Dallas Mart Dispute

DALLAS -- Tenants in the International Apparel Mart here have lost their certification as a class for a long-pending lawsuit, because the Leaseholders Association of the Dallas Apparel Mart was late in publishing a legal notice about the class action,...

DALLAS — Tenants in the International Apparel Mart here have lost their certification as a class for a long-pending lawsuit, because the Leaseholders Association of the Dallas Apparel Mart was late in publishing a legal notice about the class action, as required by the state district court.

But while the legal controversy with the Mart continues, LADAM members say there now is considerable harmony between tenants and Mart management, and the group, which once threatened to leave the building for showrooms elsewhere, has dropped that proposal.

The class was certified in late 1991 and included all tenants of the Mart from 1982 through 1991. It was the result of a lawsuit filed in 1990 by LADAM and nine individual sales representatives against the Dallas Market Center, which owns the Mart. The suit sought an accounting of how utility and tax charges were calculated and aimed to have tenants of the Mart certified as a class.

An announcement of the impending class action ran May 31 in the Dallas Group III supplement to WWD, missing the March 8 deadline set by Judge Bill Rhea. On June 7, Rhea granted the DMC’s motion to decertify the class and ruled that a retraction of the May 31 announcement had to be published June 9 and 10 in WWD and June 14 in the Dallas Morning News.

Jack Dowd, a principal in Dowd Bros., one of the nine individual plaintiffs and a member of LADAM, asserted that the suit for an accounting of utility and tax charges would continue. Now, however, the plaintiffs would include only the nine individuals plus LADAM, which has about 535 members, he said.

The DMC sees it differently. Marilyn Lahr, attorney for the DMC, maintains that LADAM can’t represent its members in the suit. “It has not been authorized by the court to act on behalf of any of its members,” she pointed out.

Lahr said the judge is expected to set a trial date within the next three weeks for the nine named plaintiffs. In addition to Dowd Bros., they include Flahavin Enterprises, Charles J. Dowd and Hector P. Dowd, Brilliant Sales, Jim Quist and Associates, Jacques de la Marre, Martha Foster Associates, Merle Gorman and Marcia Oliver Sales.

“I’m anxious for this thing to go to trial,” Lahr added. “The damages in this case are going to be nominal, if any. We had an independent accountant do a random audit [of the pass-through charges], and everything checked out, and that was 2 1/2 years ago.”

Chris Weil, attorney for LADAM, wasn’t available for comment.

While LADAM leadership maintained it will continue with the suit, the group has stopped threatening to move out of the Mart.

“In an effort to show a greater degree of unity here, we have downplayed moving out of the Mart,” said Jim Quist, president of LADAM. “We feel that the new management in the building has been so cooperative in issues aside from the lawsuit that there is a new attitude and more upbeat feeling between tenants and management.”

About two years ago, the Mart made some concessions to tenants by lowering tax and utility charges and renegotiating rents on an individual basis. Early last year, the Mart froze rents for 1993 instead of imposing an annual escalation.

Several Mart tenants, including many of the named plaintiffs in the 1990 suit, met Wednesday with Bill Winsor, chairman and chief executive officer of the DMC and two other DMC executives. Both Winsor and two sales representatives who attended said that while the two sides disagreed about the meaning of the judge’s ruling, the meeting still had a positive outlook and focused on promoting the Mart to buyers.

“We said, ‘Look, we need to establish solidarity here; we know we have some momentum,”‘ Winsor explained. “We feel we can link into a common goal, which is to be the destination point for retail America.”

“Aside from the lawsuit, where we have different interpretations, it was one of the most constructive meetings that we’ve had,” Quist affirmed. “There was a tremendous amount of unity of purpose and eagerness on both sides to cooperate to make Dallas the foremost market in the country.”