Cowan v. Youssef
| Decision Date | 30 December 1996 |
| Docket Number | No. 93-CV-1637,94-CV-318.,94-CV-2,93-CV-1637 |
| Citation | 687 A.2d 594 |
| Parties | Oliver A. COWAN, et al., Appellants v. Farouk YOUSSEF, et al., Appellees. Farouk YOUSSEF, et al., Appellants v. Oliver A. COWAN, et al., Appellees. |
| Court | D.C. Court of Appeals |
Richard W. Luchs, with whom Roderic L. Woodson was on the brief, Washington, DC, for Oliver A. Cowan, et al. (landlords).
Steven M. Schneebaum, with whom Robert K. Taylor was on the brief, Washington, DC, for Farouk Youssef, et al. (tenants).
Before TERRY, KING, and RUIZ, Associate Judges.
Before us are three consolidated appeals arising out of a protracted landlord-tenant dispute. The Rittenhouse Limited Partnership (RLP) owns the Rittenhouse Apartments on Sixteenth Street, N.W., which is managed by United Management Company. Oliver A. Cowan is the general partner in RLP. Nineteen residents of various apartments within the building (collectively "the tenants") filed this suit against Cowan, RLP, and United Management (collectively "the landlords"),1 stating several claims related to what is known as a "Seventy Percent Voluntary Agreement." The second amended complaint, which eventually went to trial, contained four counts alleging breach of contract, breach of implied warranty of habitability, negligence, and fraud. Only the first two counts went to the jury, which returned a verdict for the tenants on the first count and for the landlords on the second.
On appeal, the landlords challenge the trial court's denial of their motion for directed verdict on the tenants' claim of breach of contract, as well as the court's imposition of a monetary sanction against Mr. Cowan for failure to comply with certain of the tenants' discovery requests. The tenants contend that the court erred in denying their pre-trial motion for class certification, in instructing the jury on the calculation of damages for breach of contract, and in directing a verdict in favor of the landlords on the fraud claim. Additionally, the tenants maintain that the jury's verdict against them on the count alleging breach of the implied warranty of habitability was contrary to the evidence. We reject both the landlords' and the tenants' claims of error and affirm the judgment.
In 1986 the landlords and the tenants entered into a "Seventy Percent Voluntary Agreement"2 which provided that the landlords would replace the Rittenhouse's central heating and cooling system with individual units in each apartment. Up to that time, the landlords had paid all costs associated with climate control and hot water in the building. Once this system was installed, however, the tenants agreed to assume the utility costs for the heating and cooling of their individual apartments. In addition, the landlords promised: (1) that the new individual units would operate quietly, efficiently, and effectively upon installation; (2) that the kitchen and bathroom vents in each apartment would be in proper operating condition; and (3) that the windows surrounding the heating and cooling units would be properly adjusted and caulked to prevent drafts and leaking. As a further enticement to the tenants, the landlords also agreed to renovate the building's elevators, to install a gymnasium and exercise room, and to construct a large water fountain in the front courtyard of the building. After the approval of this agreement by seventy percent of the tenants, the landlords began the conversion of the heating and cooling system in August 1987.
Between 1988 and 1990, several tenants of the Rittenhouse who had initially objected to the agreement unsuccessfully pursued various administrative remedies to prevent it from being carried out. Those remedies were exhausted, however, when this court rejected all the tenants' challenges to the Voluntary Agreement in Davenport v. District of Columbia Rental Housing Commission, 579 A.2d 1155 (D.C.1990). Dissatisfied with the now-completed conversion process, the tenants filed this suit on July 31, 1991. Exactly a year later, on July 31, 1992, the tenants filed a motion for class certification of all persons who lived at the Rittenhouse during the three years immediately preceding the filing of the complaint. The landlords opposed the motion for class certification, and the court denied it without a hearing (none was requested).
In due course the case came to trial before a jury. Four issues were litigated: (1) whether the landlords had installed substandard climate control units in the building, in violation of the Voluntary Agreement; (2) whether the landlords had negligently installed these units; (3) whether the installation of these units violated the warranty of habitability implied in the tenants' leases; and (4) whether the landlords had committed fraud in performing the Voluntary Agreement.
The tenants presented extensive testimony that the heating and cooling units installed in their apartments failed to comply with the terms of the Voluntary Agreement. In sum, the tenants' evidence showed that the units lacked sufficient power to heat or cool all the rooms, were noisy, and lacked automatic temperature settings; that their installation left spaces around the units in many apartments where cold air and water leaked in from the outside; that the promised ventilation of the kitchens and bathrooms was virtually non-existent; and that the regulation of the hot water temperature throughout the building was erratic and generally unsatisfactory. The tenants also testified that the additional promises made by the landlords regarding the planned exercise room and the fountain were never fulfilled. The allegations concerning the heating and cooling units were supported by the testimony of two experts, who said that the units in the Rittenhouse were substandard models, that they had been negligently installed, and that they had insufficient power to regulate effectively the temperature inside the apartments.
In response, the landlords offered testimony to the effect that the requirements of the Voluntary Agreement were satisfactorily performed in good faith, that the heating and cooling units were appropriate for the apartments, and that they were properly installed. The landlords also asserted that any problems resulting from the installation of the units which were communicated to the Rittenhouse management and staff were promptly, and consistently, investigated and corrected. An expert witness testified that the units installed in the Rittenhouse were of better quality in design, energy efficiency, and heating capability than other units on the market. This expert also said that the units operated at a low decibel level.
During trial, it became apparent that Mr. Cowan had not fully complied with previous requests for production of documents made by the tenants during pre-trial discovery. Consequently, the court imposed a monetary sanction against Cowan in the amount of $10,000. The next day, however, the court sua sponte reduced this amount to $6,000, stating that the earlier sanction was "excessive."
After the close of all the evidence, the court dismissed two counts of the complaint: Count III, alleging the negligent installation of the heating and cooling units, and Count IV, alleging fraud in the performance of the Voluntary Agreement. The case went to the jury on the two remaining counts. The jury found in favor of the tenants on Count I of the complaint, which alleged breach of the express terms of the Voluntary Agreement, and awarded them a partial rent abatement amounting to approximately $80,000. The jury found in favor of the landlords on Count II, which alleged breach of the implied warranty of habitability.
When the verdict was reduced to judgment a few days later, the court failed to incorporate into the judgment its earlier decision to impose a $6,000 sanction on Mr. Cowan for his discovery violations. The tenants filed a timely motion under Super. Ct. Civ. R. 60(a) to amend the judgment by correcting this omission. The landlords then filed a notice of appeal from the judgment (No. 93-CV-1637), and the tenants noted a cross-appeal (No. 94-CV-2). About ten days later, the court entered an order granting the tenants' motion to amend the judgment. Cowan then filed a motion for reconsideration of that ruling, which the court denied in a two-page order; Cowan filed a notice of appeal (No. 94-CV-318) from that denial. This court later consolidated all three appeals.
In their motion for a directed verdict on the breach of contract claim, the landlords argued that the tenants had failed to produce any evidence of economic loss suffered as a result of the alleged breach of the Voluntary Agreement. Initially, the court granted the landlords' motion, but after reconsideration the court decided to allow this claim to go to the jury. The court ruled that a reasonable jury, given the amount of rent paid by each individual tenant plaintiff (which the tenants had proved in the course of the trial), could use those amounts as a basis for calculating damages if it found the landlords liable.
On appeal, the landlords contend that the trial court erred in denying their motion for a directed verdict on the breach of contract claim. They make two arguments: (1) that the Voluntary Agreement was a contract separate from the tenants' leases, and therefore that an abatement of the rent, the amount of which was stated in those leases, could not properly be awarded as damages for any breach of the agreement; and (2) that, in any event, there was no evidence that the breach resulted in any economic loss to the tenants. We review a ruling on a motion for directed verdict in the light most favorable to the prevailing party. E.g., District of Columbia v. Cassidy, 465 A.2d 395, 397 (D.C. 1983). Applying that standard, we affirm the trial...
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