Borger Management, Inc. v. Sindram

• Decision Date: 14 October 2005
• Docket Number: No. 03-CV-14.,03-CV-14.
• Citation: 886 A.2d 52
• Parties: BORGER MANAGEMENT, INC., Appellant, v. Michael SINDRAM, Appellee.
• Court: D.C. Court of Appeals

886 A.2d 52

BORGER MANAGEMENT, INC., Appellant, v. Michael SINDRAM, Appellee.

No. 03-CV-14.

District of Columbia Court of Appeals.

Argued January 14, 2004.

Decided October 14, 2005.

Phillip L. Felts, Bethesda, MD, for appellant.

Julie H. Becker, with whom Kristin Henrikson, was on the brief, for appellee.

Richard W. Luchs, Washington, DC, was on the brief for amicus curiae The Apartment and Office Building Association of Metropolitan Washington.

Vytas V. Vergeer, Bread for the City Legal Clinic, Debra Gardner, Public Justice Center, Edward Josephson, South Brooklyn Legal Services, Inc., and James R. Grow, were on the brief for amici curiae Wish, Enphront, New York State Tenants & Neighbors Coalition, The National Housing Law Project, and The National Low-Income Housing Coalition.

Rebecca Lindhurst, Bread for the City Legal Clinic, and Patricia Mullahy Fugere, and Antonia K. Fasanelli, Washington Legal Clinic for the Homeless, were on the brief for amici curiae Bread for the City and The Washington Legal Clinic for the Homeless. Before FARRELL and WAGNER,¹ Associate Judges, and BELSON, Senior Judge.

BELSON, Senior Judge:

Borger Management, Inc. (Borger), appeals a trial court decision and order of November 22, 2002, denying its motion for partial summary judgment and granting the cross-motion for summary judgment of appellee, Michael Sindram. Borger contends that the trial judge erred in that she held that the District of Columbia Rental Housing Act (RHA), D.C.Code § 42-3501.01-3509.07 (2001), created an "endless lease," terminable only for statutory good cause, and that the federal Section 8 voucher statute, 42 U.S.C. § 1437f(a), which allows landlords to opt out of the Section 8 program at the end of the initial lease term without a showing of cause, did not preempt the inconsistent provision of the RHA. Additionally, Borger contends that the trial judge erred by failing to give res judicata effect to a final decision and order that an administrative law judge (ALJ) of the District of Columbia Department of Consumer and Regulatory Affairs (DCRA) granted in favor of Borger over Sindram.

We hold that the administrative proceeding before the DCRA was the equivalent of a judicial proceeding and that the issues of fact and law, as they related to the Section 8 preemption issue, were essential to the ALJ's judgment and were the same Section 8 issues upon which the trial court based its grant of summary judgment in favor of Sindram. Accordingly, without ruling on the merits of Borger's contentions regarding Section 8 preemption, we conclude that the trial court erred in failing to rule that appellee Sindram's complaint was procedurally barred on grounds of collateral estoppel, and in failing, accordingly, to grant Borger partial summary judgment. However, as regards Sindram's alternative claim that Borger's actions represented source-of-income discrimination, we hold that that issue was not fully litigated before the ALJ and not addressed in his decision and order, and therefore we conclude that the Superior Court was not precluded from considering Sindram's motion for summary judgment on that ground. The trial court, however, denied Sindram summary judgment on that issue, unable to resolve it on the record before it. We therefore reverse the decision of the trial court denying partial summary judgment to Borger on grounds of Section 8 preemption, but remand for further proceedings on the issue of whether Borger's actions constituted source-of-income discrimination under the DCHRA. D.C.Code §§ 2-1402.21(a), - 1402.31(c) (2003).

I.

In December of 2000, the parties to this case, landlord Borger and tenant Sindram, entered into a rental contract for the residential premises at 6817 Georgia Avenue, Northwest, Washington, D.C. # 204. The rent was $700 per month, and the initial lease term was for one year. At the time the parties entered into the rental contract, Sindram was a participant in the Housing Choice Voucher Program, otherwise known as the Section 8 program. Section 8 is a federally-subsidized program administered locally by the District of Columbia Housing Authority (DCHA). It seeks to assist low-income families to obtain housing by supplementing their rental payments with government vouchers. In order to create a Section 8 tenancy, two separate contracts must be executed. The first is a standard rental contract governing the relationship between the landlord and the tenant. The second is a Housing Assistance Payments Contract (HAP contract), governing the relationship between the landlord and DCHA. The HAP contract provides, among other things, that the tenant will pay a portion of the rent directly to the landlord, while DCHA will pay the remainder of the rent.

The parties entered into both types of contracts. Commencing on December 1, 2000, Sindram paid his portion of the rent; DCHA paid the remainder; and Borger accepted the payments. This arrangement was still in effect on August 10, 2001, at which time Borger notified DCHA and Sindram of its intent to exercise its right under the provisions of the federal legislation creating the Section 8 program to terminate its participation in the Section 8 program, effective November 30, 2001, the last day of the initial lease term. 42 U.S.C. § 1437f. Borger's August 10th notice, filed just four days after an August 6, 2001, DCRA hearing on Sindram's tenant complaint alleging housing code violations by Borger, stated that Sindram could remain in possession of the apartment, paying the full rent, but that it would no longer participate in the Section 8 program or accept partial payment vouchers from DCHA.

On August 15, 2001, in response to Borger's notification, Sindram filed a tenant petition with the DCRA, which was acting upon referral from the Rental Accommodations and Conversion Division (RACD) pursuant to Title II of the Rental Housing Act of 1985.² Sindram asserted that Borger's termination of its Section 8 participation was retaliatory and therefore unlawful. A hearing was held on November 5, 2001, and included the presentation of evidence, testimony of witnesses, and argument by the parties. Before the agency issued a ruling on the complaint, however, the December 2001 rent came due and Sindram and DCHA tendered to Borger rent payments which together totaled the rent owed. Borger refused to accept the payments, returned the portion tendered by DCHA, reiterating its intent to terminate the Section 8 HAP contract, and returned Sindram's payment, stating that it would not accept partial payments from him.

Subsequently, on December 17, 2001, Borger filed an action for possession in the District of Columbia Superior Court on the ground of nonpayment of rent. On February 4, 2002, Sindram filed an answer to the action for possession, setting forth numerous defenses, including the illegality of Borger's termination of the Section 8 HAP contract and of its source-of-income discrimination proscribed by the District of Columbia Human Rights Act (DCHRA). During the pendency of the possessory action, Sindram continued to make his rental payments into the registry of the court pursuant to a protective order entered by the court in January 2002. DCHA also continued to tender its portion of the rental payments directly to Borger, which continued to return the payments.

On March 15, 2002, while the Superior Court case was still pending, the DCRA issued a ruling on Sindram's tenant complaint of retaliation by Borger, ruling that Borger's decision not to renew the Section 8 lease was "permitted by law" and therefore not retaliatory. The decision and order of the DCRA stated: "The failure of the party to file a timely appeal shall result in the waiver of the right to have this Decision reviewed by the District of Columbia Court of Appeals." Appellee Sindram filed a notice of appeal, but subsequently withdrew it for reasons not disclosed by the record, leaving the decision of the ALJ unchallenged.

Notwithstanding the ruling of the DCRA, the parties continued toward resolution of Borger's action for possession, filing cross motions for summary judgment on August 30, 2002 (Sindram) and September 4, 2002 (Borger). Sindram's motion contended that the express language of the HAP contract, the District of Columbia Rental Housing Act, and the DCHRA prohibited Borger's unilateral termination of the Section 8 contract. Borger's cross-motion countered that unilateral termination was permissible under the federal Section 8 statute and that the prior administrative decision by the DCRA procedurally barred Sindram's claim under collateral estoppel and res judicata principles. Borger's cross-motion for partial summary judgment also sought a ruling that Sindram was obliged to pay $700 per month in rent without a DCHRA subsidy.

On November 22, 2002, the trial court granted Sindram's motion for summary judgment, and denied Borger's cross-motion for partial summary judgment as moot. In its order, the trial court ruled that D.C. law created an automatic lease extension, as long as the tenant continues to pay rent, and that therefore the lease remained in effect until terminated upon a showing of good cause. Accordingly, the trial court concluded, the HAP contract, which by its language terminates when the lease terminates, remained in effect and could not be unilaterally terminated by Borger without evidence of statutory good cause. Finally, the trial court concluded that Sindram had failed to present sufficient undisputed evidence to establish as a matter of law that Borger discriminated on the basis of source of income under the DCHRA. The court did not rule on Borger's contention that Sindram's arguments were precluded by reason of the earlier agency decision. This appeal by Borger followed.

II.

On appeal Borger contends that the federal legislation creating the Section 8 subsidy, which allows landlords to opt out of their voluntary participation at the end of the...