Double H Housing Corp. v. David

• Decision Date: 13 March 2008
• Docket Number: No. 05-CV-1268.,05-CV-1268.
• Citation: 947 A.2d 38
• Parties: DOUBLE H HOUSING CORPORATION, Appellant, v. Brian DAVID, Appellee.
• Court: D.C. Court of Appeals

947 A.2d 38

DOUBLE H HOUSING CORPORATION, Appellant, v. Brian DAVID, Appellee.

No. 05-CV-1268.

District of Columbia Court of Appeals.

Submitted January 7, 2008.

Decided March 13, 2008.

Timothy Cole was on the brief for appellant.

Bernard A. Gray, Sr., Washington, DC, was on the brief for appellee.

Before FARRELL, FISHER and THOMPSON, Associate Judges.

THOMPSON, Associate Judge:

Double H Housing Corporation ("Double H") filed a Complaint for Possession in the Superior Court Landlord Tenant Branch, charging that its tenant, Brian David, had failed to pay rents due for October through December 2004. Double H now appeals the court's judgment in favor of David. We reverse in part, affirm in part, and remand.

Factual Background and Procedural History

In 1995, David entered into a lease agreement with Double H for an apartment located at 4601 Connecticut Avenue, N.W., for a lease term commencing July 29, 1995, and ending July 31, 1996.¹ After the lease expired, David continued to occupy the apartment as a month-to-month tenant.² By letter dated May 27, 2003, Double H notified David that his rent, which was then $1,473 per month, would increase effective August 1, 2003. The letter stated that the increased rate would be $1,488 per month if David signed a new lease. Otherwise, the new rent for continuation of David's month-to-month tenancy would be $1,561 per month.

David commenced paying $1,488 per month as of August, 2003, but never signed a new lease. During a bench trial before the Honorable Mary Gooden Terrell, David testified that he had negotiated with Double H rental manager Tony Towler to pay that amount instead of the $1,561 quoted in the May 27, 2003 notice.³ The court admitted into evidence a past-due-rent notice that Double H sent to David on August 14, 2003 for failing to pay the $1,561, and Double H property manager Maria Wilsey testified that Double H had sent David other past-due notices as well. But no other past-due notices were introduced into evidence,⁴ and David testified that Double H sent him no "other notices that my rent was deficient or not paid correctly." It was undisputed that Double H continued to negotiate David's payments of $1,488 per month for each month up to and including October 2004.⁵

This was notwithstanding the fact that on May 24, 2004, Double H sent David a letter notifying him that his rent would increase again effective July 1, 2004. In pertinent part, the May 24, 2004 letter advised David that he could "renew [his] current lease for another 12-month term starting July 1, 2004, at the same Lease rate of $1,561.... Should you decide not to sign for another one-year lease, your rental rate will be $1,611 per month." David wrote a response letter to Double H explaining that his current rent was $1,488, not $1,561; asserting that the "12-month cycle for adjustments to the rent terms for my apartment commences August 1, not July 1"; and stating that he was agreeable to maintaining the rent at $1,488, but that a new lease "should not be necessary." In a follow-up letter to David dated July 8, 2004, Wilsey stated that because David was on a month-to-month tenancy, "your rent may be increased at any time, given a 30-day notice," that David had the option to "renew for another 12-month term for a monthly rate of $1,561, or to continue on a month to month term at a rate of $1,611 per month," and that "[t]here is no offer to renew for a rate of $1,488 per month."

David continued to pay $1,488 per month and Double H cashed his checks for July, August, September and October, 2004. In November 2004, however, Double H began returning David's checks. Double H returned his checks for November and December 2004, and then, on December 20, 2004, filed its complaint for possession for non-payment of rent, which the complaint stated was $1,611 per month.⁶ The Superior Court docket sheet indicates that service of the complaint on David was accomplished by posting on January 14, 2005.

One of Double H's trial exhibits indicates that Double H returned David's January 2005 check for $1,488, but cashed his February 2005 check for $1,488. The Superior Court docket sheet shows that beginning in March 2005, David made rent payments of $1,561 into the court registry, pursuant to what the docket sheet states was a "protective order by consent."

At the close of the bench trial held on October 5, 2005, the trial judge ruled that Double H was not entitled to the arrearages that it sought. The court reasoned that Double H was "entitled to rent increases, but it should not be conditioned upon whether someone negotiates a new lease," because that approach "puts the tenant at a tremendous disadvantage." The court ruled that the rental rate would be considered $1,488, the amount "that had been accepted for a whole year." The court also held that the offer of a lower monthly rent in exchange for signing a new lease was "void." The trial judge stated that "if the landlord wants to increase the rent, then they need to ... do a rental increase, and not condition it upon any leases being signed...."

This appeal followed.

Analysis

I.

Double H's brief focuses on the following issue: whether a landlord, entitled to increase the rent charged to its month-to-month tenant, may require the tenant to execute a new lease agreement as a condition of receiving a discount from the otherwise applicable rent increase. We agree with Double H that a landlord may do so, absent circumstances that would support a finding that the tenant was effectively coerced into abandoning the month-to-month tenancy that he was entitled to maintain under District of Columbia law (specifically, D.C.Code § 42-3505.01).

By providing that "no tenant shall be evicted from a rental unit, notwithstanding the expiration of the tenant's lease or rental agreement, so long as the tenant continues to pay the rent to which the housing provider is entitled for the rental unit," section 42-3505.01 guarantees a holdover tenant the opportunity to continue his tenancy on a month-to-month basis as long as he pays the rent. It does not, however, mandate that any continued tenancy must be month-to-month or preclude the landlord and tenant from agreeing to a new or renewed lease. We can imagine a disparity between (i) the monthly rent charged to a tenant who continues residence as a month-to-month tenant and (ii) the monthly rent charged upon execution of a new lease, that is so large that the tenant is effectively forced to sign a new lease. In such a case, we might well hold that the "choice" presented by the landlord conflicts with section 42-3505.01, because it denies the tenant a meaningful opportunity to remain as a month-to-month tenant.⁷ But the trial court did not find (and the record provides no basis for a finding) that there was such a huge disparity here or that David was denied a meaningful choice.⁸ We therefore cannot agree that Double H was precluded from offering to charge David a discounted rent amount if he signed a new lease but charging him a higher monthly rent if he continued his month-to-month tenancy.⁹ To hold otherwise would, we think, encroach on the landlord's — and tenant's — "`basic freedom to contract as he will,'" which we have said remains one of the "rather basic rights incident to the ownership of property [that] ought not to be summarily dismissed as obsolete" even under our modern statutory rental housing law. Goodman v. District of Columbia Rental Hous. Comm'n, 573 A.2d 1293, 1297 (D.C.1990) (quoting White v. Allan, 70 A.2d 252, 255 (D.C. 1949)).

Because we conclude that the trial court's judgment was not required in order to give effect to section 42-3505.01, we cannot uphold the judgment for the reasons that the trial court stated. However, our holding that Double H could condition a rent discount on David's signing a new lease does not lead us to declare that Double H is entitled to recover the rent it demanded for the period in issue. Rather, for reasons that we explain infra, for the months through October 2004, we affirm the court's judgment that David did not owe the rent that Double H demanded.¹⁰ For the period from November 2004 through February 2005, we remand the case to the trial court to determine the monthly payment amounts for which David was liable.

II.

Paragraph 32 of the 1995 lease agreement between Double H and David states as follows:

HOLDING OVER: Should Tenant continue in possession after the end if the term, herein created with permission of the Landlord, it is agreed that the tenancy thus created can be terminated by either party giving to the other party no less than thirty (30) days' written notice from the first day of the month, to expire on the last day of the month. In so continuing the Landlord reserves the right to renegotiate new terms and conditions pertaining to the rent at that time, and the Tenant covenants and agrees to keep and fulfill all other conditions and agreements herein and in case of default in payment of rent, hereby waives the right of any notice to quit.

Thus, the parties' agreement called for "renegotiat[ing] new terms and conditions pertaining to the rent" should David holdover after his lease expired.

When Double H informed David unilaterally in May 2003 and May 2004 that the rent for continuing his month-to-month tenancy would increase to $1,561 as of August 1, 2003, and then to $1,611 as of July 1, 2004, David remained in his apartment and continued to pay only $1,488. The record makes clear that David did not simply agree to pay the higher rent that Double H demanded.¹¹ He sought to negotiate a lower month-to-month rent, and in the meantime, simply held out, resisting Double H's demands and (it appears) hoping that Double H would relent and accept the lower amount ($1,488) that he tendered each month.

The trial court found that Double H had accepted David's payments of $1,488 "for a whole year" after Double H announced the rent increase that would take...