1836 S Street Ten. v. Estate of B. Battle

• Decision Date: 05 February 2009
• Docket Number: No. 06-CV-1460.,06-CV-1460.
• Parties: 1836 S STREET TENANTS ASSOCIATION, INC., Appellant, v. ESTATE OF B. BATTLE, Appellee.
• Court: D.C. Court of Appeals

965 A.2d 832

1836 S STREET TENANTS ASSOCIATION, INC., Appellant, v. ESTATE OF B. BATTLE, Appellee.

No. 06-CV-1460.

District of Columbia Court of Appeals.

Argued March 5, 2008.

Decided February 5, 2009.

Eric M. Rome, Washington, for appellant.

Kevin I. Kane, for appellee.

Before RUIZ and GLICKMAN, Associate Judges, and SCHWELB, Senior Judge.

GLICKMAN, Associate Judge:

This case concerns a purported contract for the purchase of a rental housing property by a tenants' association. In the association's view, it entered into a binding sales contract when it accepted the initial offer of sale the owner was required to make under the District of Columbia Tenant Opportunity to Purchase Act, or TOPA.¹ Rejecting that view, the Superior Court granted summary judgment to the owner in the association's suit for specific performance. The tenants' association has appealed. We reverse.

I.

As of 2004, the housing property in dispute, located at 1836 S Street in Northwest Washington, D.C. ("the Property"), was owned by the Estate of B. Battle ("the Estate"). Of the eight units in the Property available for rent, four were occupied and four vacant. In early September 2004, the Estate decided to sell the Property. To comply with TOPA requirements, the Estate delivered to each of the tenants a document dated September 1, 2004, entitled "Offer of Sale & Tenant Opportunity to Purchase Without a Third Party Contract for Housing Accommodations With Five or More Rental Units." This "Offer of Sale" (as we shall refer to it) purported to fulfill the Estate's obligation under TOPA to grant the tenants "an opportunity to purchase" the Property, and to describe the tenants' TOPA rights and responsibilities in connection with that opportunity. The Offer of Sale stated that "[t]he selling price for the accommodation is $1,349,000," and that "[t]he material terms of the sale are as follows: Property to be sold `as is', all cash at settlement."

Interested in pursuing the Estate's offer, the tenants of the Property organized the 1836 S Street NW Tenants Association, Inc. ("the Association"). The Association was registered with the District of Columbia on September 22, 2004. That same day, the Association's President, Patrick Oot ("Oot"), sent a letter on the Association's behalf to the Estate's agent. The letter bore the heading "Letter of Interest in Purchasing and Acceptance of Offer for Sale" and stated that the Association "hereby accepts the offer of sale" of the Property and "further expresses its interest in purchasing" the Property. Pursuant to TOPA, the letter requested the Estate to provide certain information (e.g., an itemized list of monthly operating expenses, utility consumption rates, and capital expenditures for the two preceding calendar years; a copy of the building floor plan; and any contract with a third party) within seven days "to assist the tenants association in exploring the feasibility of purchasing this property." For every day of delay beyond the seven days, the letter warned, "the period for us to negotiate a contract of sale with you shall be extended one (1) day." In a second letter dated September 23, 2004, and titled "Tenants Association Letter of Acceptance of Offer via Regular Mail and Courtesy Electronic Mail," Oot undertook "to memorialize the contents of both the [A]ssociation's September 22, 2004 correspondence and our meeting with" the Estate's agent. "By [its] letter to you dated September 22, 2004," Oot wrote, "the 1836 S Street NW Tenants Association, Inc. accepted [the Estate's] offer of sale for the property ... dated September 1, 2004." The September 23 letter did not refer to the Association's earlier request for information to determine whether a purchase would be feasible; instead, the letter stated that the Association was "ready, willing, and able" to make a 5% refundable earnest money deposit upon request.²

In the meantime, however, on September 17, 2004, the Estate had signed a contract to sell the Property to a third party named Farivar S. Mottaghi ("Mottaghi") for $1.5 million. The "Mottaghi Contract" stated that the sale was "contingent" on the tenants' rights to purchase the Property under District of Columbia law. The Estate furnished the Mottaghi Contract to the Association on September 27-after the Association's letters of September 22 and 23-together with a document entitled "Right of First Refusal Notice for Five or More Rental Unit Housing Accommodations." This notice advised the Association that it would have to match the terms of the Mottaghi Contract, including its $1.5 million purchase price, in order to buy the Property.

No further correspondence was exchanged between the Estate and the Association until January 14, 2005. On that date, the Estate sent a letter to Oot reasserting the validity of the Mottaghi Contract and noting an impending statutory deadline for the consummation of negotiations with the tenants. The Association's counsel responded on February 4 by tendering a contract with a sale price of $1.349 million, reflecting the Association's position that the Estate was bound by the terms set forth in its September 1 Offer of Sale, which the Association had accepted.

The Estate rejected the Association's response as both inadequate and untimely, but allowed it an additional seven days to match the deal with Mottaghi. The Association declined to match and instead sued the Estate on February 22, 2005, in Superior Court. The complaint alleged breach of contract, violation of TOPA, and other causes of action, and sought specific performance of the $1.349 million contract.

In due time, the parties filed cross motions for summary judgment. The Estate denied that it was bound by the Association's acceptance of the terms in its September 1 Offer of Sale. It argued that its only pertinent obligation under TOPA was to negotiate with the tenants' association in good faith for a period of 120 days, beginning from the date the Association was created, and then to give the Association a further 15 days to match the third-party contract. Because the 120-day period expired on January 20, 2005 (120 days after the Association was registered) without an agreement, and the contract tendered by the Association on February 4 did not match the purchase price in the Mottaghi Contract, the Estate argued that the Association had failed to exercise its TOPA rights in a timely manner and thereby had lost its opportunity to buy the Property. The Association argued, among other things, that a contract of sale was formed as of September 22 or 23, 2004, when it manifested its acceptance of the Estate's September 1 Offer of Sale. The Superior Court rejected the Association's position and agreed with the Estate, to which it awarded summary judgment on January 9, 2006, without opinion.

II.

Summary judgment is appropriate only if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law."³ A genuine issue of material fact exists if the record contains "some significant probative evidence ... so that a reasonable fact-finder could return a verdict for the non-moving party."⁴ The propriety of summary judgment in this case turns on whether an enforceable contract was formed by the Estate's September 1 Offer of Sale and the Association's September 22 and 23 letters of acceptance. The parties have disagreed over whether the Offer of Sale was a firm offer that could be accepted to create a binding contract or merely an invitation to the tenants to negotiate over a possible sale of the Property, and also over whether the letters of September 22 and 23 constituted an unequivocal acceptance by the Association of the terms of the September 1 Offer of Sale.⁵ In granting summary judgment to the Estate, the trial court necessarily determined that the documents unambiguously did not form a contract, either because there was no genuine offer or no valid acceptance. Thus, this appeal requires us to decide whether the documents are (at the very least) sufficiently ambiguous that a reasonable trier of fact could find they gave rise to a valid, binding contract.⁶ This is a question of law, as to which our review is de novo.⁷

Documents forming a putative contract are ambiguous if, and only if, they are "reasonably or fairly susceptible of different constructions or interpretations, or of two or more different meanings."⁸ They are not ambiguous if we "can determine [their] meaning without any other guide than a knowledge of the simple facts on which, from the nature of language in general, [their] meaning depends."⁹ In this case, though, the Estate's Offer of Sale purports, on its face, to comply with or implement TOPA. We therefore must construe the document in light of TOPA's requirements,¹⁰ for regardless of the parties' actual, subjective intentions, the ultimate issue is whether, by their choice of language including their invocations of TOPA, they objectively manifested a mutual intent to be bound contractually.¹¹ Accordingly it is germane to ask whether TOPA required the Estate to make a firm offer of sale to its tenants (prior to its acceptance of the Mottaghi Contract). We start our analysis with that threshold question.

III.

Explicating TOPA's requirements is an exercise in statutory interpretation. As always, we begin with the statute's "plain language."¹² If the statutory language is unambiguous, we may end there as well.¹³ "[A] court should look beyond the ordinary meaning of the words of a statute only where there are persuasive reasons for doing so."¹⁴ We must, of course, read TOPA as a whole and resist any construction of its words that would render part of the statute a nullity.¹⁵ If we do find ambiguity in TOPA's language, the statute itself directs us to resolve it "toward the end of strengthening the legal rights of tenants or tenant organizations to the maximum extent permissible under law."¹⁶

TOPA extends a panoply...