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February 7, 1989


The opinion of the court was delivered by: WOLIN

 This is a case involving a promissory note and a mortgage on commercial property. Plaintiff, the property owner, claims that defendant, the note holder and mortgagee, improperly refused its consent to plaintiff's sale of the property and that plaintiff suffered adverse tax consequences and other damages as a result thereof. Plaintiff seeks damages and relief under the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202. Jurisdiction is based on diversity of citizenship. *fn1"

 The parties have filed cross-motions for summary judgment. The Court will grant defendant's motion.


 The material facts in the case are not in dispute. Plaintiff Warrington 611 Associates ("Warrington") is a Pennsylvania limited partnership that owns a shopping center located at the corner of Routes 123 and 611 in Warrington, Pennsylvania. The general partners and principals of Warrington are Roger Whyman, a lawyer, and Joseph Flotteron, an architect and engineer. Aetna Life Insurance Co. ("Aetna") is the holder of a promissory note and a mortgage on the shopping center property.

 On approximately March 8, 1976, Warrington applied to Aetna, on a standard Aetna form, for a mortgage loan in the amount of $ 2,400,000 to finance the shopping center project. The first page of the mortgage loan application contained a provision prohibiting prepayment of the loan within the first 11 years (i.e., until 1988) and allowing prepayment thereafter only if Warrington paid a prepayment charge of 5% for prepayment in the twelfth year; this fee would be gradually reduced by 1% per year to a minimum charge of 1% for prepayment in subsequent years. *fn2" Aetna issued a permanent loan commitment on March 19, 1976, as amended on March 26, 1976. Warrington accepted the commitment as amended on April 5, 1976.

 On or about June 18, 1976, Warrington executed a note to the Philadelphia National Bank, the construction lender on the Warrington project, in the principal sum of $ 2,400,000 plus interest at the annual rate of 9.75%. On that same date, Warrington, as mortgagor, executed a mortgage to the Philadelphia National Bank securing the note. Pursuant to a permanent loan buy/sell agreement between the Philadelphia National Bank and Aetna, and by an assignment executed on October 18, 1977, Aetna acquired and now holds the Note and is the current mortgagee on the Mortgage.

 Paragraph 8 of the Note provides for the same prepayment restrictions specified in the mortgage loan application. *fn3" Paragraph 20 of the Mortgage, which the parties agree is a "due-on-sale" clause, prohibits Warrington, under penalty of default, from transferring title to the mortgaged property without the prior written consent of Aetna. *fn4" It is these two provisions of which Warrington complains.

 In September of 1986, Whyman began negotiating with Realco, Inc., a New York corporation, over the sale of the shopping center property to Realco. *fn5" According to Whyman, he and Realco "firmed up [their] negotiations" for the sale of the Warrington property on December 14, 1986. *fn6" On December 17, 1986, Whyman telephoned Aetna to advise it that Warrington had reached an agreement to sell the mortgaged property and that the closing was to take place before December 31, 1986. According to Whyman, he requested that Aetna send him a "pay-off" letter so that he could sell the property. *fn7" Whyman avers that the Aetna representative with whom he spoke *fn8" told him that she would send the pay-off letter out by overnight mail. *fn9" Aetna did not send any such letter.

 Shortly after his conversation with the Aetna employee, Whyman telephoned Lattimer & Buck, Aetna's correspondent agent on the Warrington loan, and spoke with Martin Woodrow, the Lattimer & Buck employee responsible for the loan. In that conversation, Woodrow informed Whyman that it was Aetna's practice to require a fee as a condition of prepayment in cases in which prepayment was prohibited by the loan documents. Woodrow further informed Whyman that Warrington was "locked in" to the loan and would thus have to pay such a prepayment fee in order to be able to sell the mortgaged premises. Whyman responded with his view that such a fee only applied to a refinancing of the loan (when the mortgagor continued to hold the property) but was inapplicable and inappropriate in the case of a sale of the property. *fn10"

 On December 22, 1986, Flotteron telephoned Woodrow to further discuss a prepayment of the loan. *fn11" According to Whyman, Woodrow informed Flotteron that "any requests that were going to be made to Aetna from us had to be in writing hereafter and had to go through [Woodrow]." *fn12" Warrington never submitted a request in writing to Aetna through Woodrow or otherwise. *fn13"

 On December 23, 1986, the day after Flotteron's conversation with Woodrow, Whyman wrote a letter to Aetna memorializing his conversation with Woodrow and setting forth his opinion on the matter. The letter stated in part:

I told Mr. Woodrow of, and asked him as your agent to convey to you, our position that it was illegal and improper for you to demand both a pre-payment penalty and a due-on-sale clause and that your position prevented and restrained our ability to sell our project. I also advised your agent that your prepayment clause was only intended to apply to us as borrower if we wanted to prepay the mortgage but remain as the owner of the project. However, you and your agent are attempting to apply the pre-payment penalty as a condition of your allowing us to sell our project and satisfy the lien of your mortgage on the sale.

 The letter was received by Woodrow at Lattimer & Buck on December 24, 1986, but not by Aetna until January 6, 1987.

 On December 30, 1986, representatives of Warrington and Realco met in New York City for a "pre-closing." The meeting continued into late evening. It is undisputed that a contract of sale was never executed. Warrington contends, however, that an agreement was reached for the sale of the premises. Aetna disputes this.

 The property was not sold to Realco by the end of 1986 and has not been sold by Warrington since then. Because of the change in the federal tax laws as of the beginning of 1987, Warrington alleges that it sustained financial losses by its ...

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