A Montgomery County Circuit Court judge has denied efforts by Johns Hopkins University to dismiss a lawsuit challenging its plans to build a research park at Belward Farm, saying that documents outlining the terms of the sale contained “ambiguities” about whether there were limits placed on future development.

The outcome of the dispute over the Gaithersburg farm could have significant implications for the county’s efforts to cement its reputation as a hub for medical research.

In a 24-page decision filed late Friday, Judge Katherine D. Savage wrote that in reading both the deed and contract governing the sale, “the Court finds that a reasonable person standing in the parties’ shoes at the time of the Contract’s formation could find the agreement ambiguous.”

On Monday, university officials said in a statement: “Friday’s ruling was on a preliminary motion and is not dispositive of the case at all. We are disappointed that the judge could not rule at this time that the contract and deed are unambiguous and do not restrict height, scale or density and do not prevent the university from leasing to outside tenants.

“We are confident, however, that the court will come to that conclusion as the case continues.”

The university purchased the property from Elizabeth Beall Banks in 1989, and the 108 acres that remain undeveloped are a key component of the county’s ambitious $10 billion, 17.5 million-square-foot “science city” development.

Banks’s heirs, who filed suit in November to block Hopkins’s efforts to move forward, said they were thrilled with the ruling.

“We are grateful the Judge feels our case has merit and deserves to be heard,” Banks’s nephew Tim Newell said in a statement.

The project is part of an effort to expand Montgomery’s reputation as a hub for bioscience research by creating a development where people can work, live and shop — linked together by a new rapid transit system.

The dispute centers around the sale of Belward Farm, a 138-acre parcel in Gaithersburg. Family members said Banks, a retired Montgomery County Public Schools teacher, believed the deal would shield Belward from dense commercial development when she sold it for $5 million — far less than its appraised value of $54 million.

Banks’s heirs say that at the time of the sale — and for many years after — their aunt believed that a satellite campus would be developed on the land. In the late 1990s, Hopkins officials had the property rezoned to allow for construction of such a development.
But Hopkins officials changed their plans for the property. Instead of a 1.4 million-square-foot development of low-slung buildings, university officials received permission from the county in 2010 to develop a 4.7 million-square-foot research park on the property. University officials maintained their updated plans are in keeping with the terms of the 1989 deal. But family members disagreed.

At a hearing in early February, lawyers for the university argued that while language in the original deed placed restrictions on uses for the land, it placed no limits on the size or the number of buildings that could be constructed. Nor did language in the deed prohibit the university from leasing the property to other parties.

But in her ruling, Savage noted several instances where language in the deed is unclear. She cites as an example a provision that development on the larger parcel be known as the “Belward Campus of The Johns Hopkins University.”

“The naming requirement gives an indication that the use provisions may be in place to reflect the parties’ agreement that Belward Farm be developed as a traditional campus,” she wrote.

Savage added: “The contract language lacks the precision necessary to make the determination JHU requests at this stage in the litigation, when these elements of the Deed and Contract are read in their entirety and inferences made in the light most favorable to the non-moving party.”

In court filings, the family’s lawyer, David Brown, noted that the property was split into two parts, a 30-acre section, known as Parcel A, on which no development restrictions were placed and Parcel B, a 108-acre section where the use was to be limited to “. . . agricultural, academic, research and development, delivery of health and medical care and services or related purposes only.”

In her decision, Savage wrote that “. . . the lack of restrictions on Parcel A, compared to use restrictions on Parcel B suggest that the parties may have intended restrictions on Parcel B that went to overall scope of development and not just the uses spelled out in the Contract.”

The university has 15 days to respond to the original suit.