Drayton v. Poretsky Management, Inc.

• Decision Date: 31 May 1983
• Docket Number: No. 81-270.,No. 81-24.,81-24.,81-270.
• Citation: 462 A.2d 1115
• Parties: Barbara DRAYTON, et al., Appellants, v. PORETSKY MANAGEMENT, INC., Appellee. PORETSKY MANAGEMENT, INC., Appellant, v. Barbara DRAYTON, et al., Appellees.
• Court: D.C. Court of Appeals

462 A.2d 1115

Barbara DRAYTON, et al., Appellants, v. PORETSKY MANAGEMENT, INC., Appellee.

PORETSKY MANAGEMENT, INC., Appellant, v. Barbara DRAYTON, et al., Appellees.

No. 81-24.

No. 81-270.

District of Columbia Court of Appeals.

Argued February 9, 1982.

Decided May 31, 1983.

Bernard A. Gray, Sr., Washington, D.C., for appellants in No. 81-24 and appellees in No. 81-270.

Susan S. Magazine, Washington, D.C., with whom Jeffrey M. Hamberger, Washington, D.C., was on the briefs, for appellee in No. 81-24 and appellant in No. 81-270.

Before NEWMAN, Chief Judge, and KERN and BELSON, Associate Judges.

BELSON, Associate Judge:

Before us are cross-appeals from a judgment entered by the trial court in a suit for possession in the Landlord and Tenant (L & T) Branch of the Superior Court. For convenience we refer to Barbara Drayton, et al., as appellants or tenants and to Poretsky Management, Inc., as appellee or landlord. Landlord challenges the trial court's assumption of jurisdiction to rule on the validity of two rent increases, arguing that the District of Columbia Rental Accommodations Commission (RAC) rather than the Superior Court had jurisdiction to make such a determination.¹ As to the second rent increase, landlord contends also that the trial court erred substantively in invalidating a 7% rent increase taken by the landlord pursuant to the Emergency Heating Oil Rent Adjustment Act of 1979, D.C.Act 3-115. Tenants assert that the trial court erred in denying their oral motion for summary judgment based on landlord's failure to file a statement of certification of costs with the trial court in accordance with our decision in Apartment & Office Building Association of Washington v. Moore, 359 A.2d 140 (D.C. 1976) (Moore 11).² Tenants also contend that the trial court erred in ruling that the June 1, 1979 rent increase was valid.³ Although we hold that primary jurisdiction to pass upon the validity of the rent increases was in the Rent Administrator and the RAC, we conclude that the trial court did not err in ruling that the June 1, 1979, rent increase was to be considered a part of tenants' monthly rent for the purpose of calculating the amount required of tenants in order to exercise their equitable right of redemption pursuant to Trans-Lux Radio City Corp. v. Service Parking Corp., 54 A.2d 144 (D.C. Mun.App. 1947). We reverse the trial court's decision not to include the 7% emergency fuel adjustment for Trans-Lux purposes.

I

On June 17, 1968, landlord and tenants entered into a lease agreement for an apartment at 7 Elmira Street, S.E. The apartment is one of 20 rental units in one of the six buildings in Halley Gardens, an apartment complex managed by landlord. Rent increases were put into effect on June 1, 1979 and January 1, 1980.

On June 10, 1980, landlord filed a suit for possession of the tenants' apartment alleging nonpayment of rent. Tenants filed an answer, contending that rent was not due in the amount claimed because the premises were unsafe and unsanitary and also because the rent increases were illegal. Tenants also counterclaimed for the alleged overpayments of rent. They had not, however, sought review of the increases by the Rent Administrator.

At the outset of the nonjury trial that followed, the court denied tenants' oral motion for summary judgment, ruling that the requirement of filing a statement of certification of costs with the trial court was not a substantive requirement that would preclude a rent increase where the statement had not been filed. At the conclusion of the trial, the court held that tenants were entitled to a rent abatement for the months of August and September, 1980, because of the existence of housing code violations. By subsequent written order the court ruled that by reason of its duty to determine the amount of arrearages tenants would be required to pay in order to exercise their Trans-Lux right of redemption it had jurisdiction to determine the validity of the rent increases, and held that the June 1, 1979, rent increase was valid, but that the January 1, 1980, increase was invalid.

Since there was more than enough money deposited in the registry of the court to cover the amount of rent tenants were found to owe, the court entered judgment for tenants in landlord's action for possession, and ordered disbursement of the monies in the registry. The trial court did not enter judgment on the counterclaim.⁴ These appeals followed.

II

We turn first to landlord's challenge to the trial court's jurisdiction to determine the validity of the rent increases. Landlord contends that tenants could not challenge the rent increases in Superior Court since the RAC had jurisdiction to determine legal rental rates, and tenants failed to exhaust their administrative remedies there.⁵ As we have seen, the trial court ruled that it had jurisdiction under Trans-Lux to make a specific finding of the amount of rent in arrears.

Our resolution of this issue is reached upon consideration of two important policies. One is embraced in the doctrine of primary jurisdiction; the second is the longestablished policy of preserving the summary nature of actions for possession in the Landlord and Tenant Branch of the Superior Court.⁶

Under the doctrine of primary jurisdiction, when a claim is originally cognizable in the courts but requires resolution of an issue within the special competence of an administrative agency, the party must first resort to the agency before he or she may sue for an adjudication. 2 Am.Jur.2d Administrative Law § 788 (1962). Although the doctrines often overlap, the doctrine of primary jurisdiction should not be confused, as it was by appellee here, with the doctrine of exhaustion of administrative remedies. In United States v. Western Pacific Railroad Co. Inc., 352 U.S. 59, 62-3, 77 S.Ct. 161, 164-65, 1 L.Ed.2d 126 (1956), the Supreme Court differentiated between the two doctrines as follows:

The doctrine of primary jurisdiction, like the rule requiring exhaustion of administrative remedies, is concerned with promoting proper relationships between he courts and administrative agencies charged with particular regulatory duties. "Exhaustion" applies where a claim is cognizable in the first instance by an administrative agency alone; judicial interference is withheld until the administrative process has run its course. "Primary jurisdiction," on the other hand, applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending referral of such issues to the administrative body for its views. (citation omitted.)

Earlier, in Far East Conference v. United States, 342 U.S. 570, 72 S.Ct. 492, 96 L.Ed. 576 (1952), the Supreme Court had discussed two factors, uniformity of result and application of specialized and expert knowledge, which warrant invocation of the doctrine of primary jurisdiction. The Court indicated that the two factors were part of the same principle "now firmly established, that in cases raising issues of fact not within the conventional experience of judges or cases requiring the exercise of administrative discretion, agencies created by Congress for regulating the subject matter should not be passed over. This is so even though the facts after they have been appraised by specialized competence serve as a premise for legal consequences to be judicially defined. Uniformity and consistency in the regulation of business entrusted to a particular agency are secured, and the limited functions of review by the judiciary are more rationally exercised, by preliminary resort for ascertaining and interpreting the circumstances underlying legal issues to agencies that are better equipped than courts by specialization, by insight gained through experience, and by more flexible procedure."

Far East Conference, supra, 342 U.S. at 574-75, 72 S.Ct. at 494.

The appropriateness of applying the doctrine in connection with challenges to the legality of rent increases becomes apparent when one considers the relative complexity of the issues raised by such challenges in the light of the workload of the L & T Branch where in recent years more than 100,000 summary actions for possession have been processed annually through what is essentially a one-judge branch of the trial court.⁷

A brief review of the manner in which tenants can challenge rent increases under District of Columbia rent control laws and regulations will help place in perspective the relationship between court proceedings and proceedings before the Administrator and the RAC.

Under the Rental Housing Act of 1977, D.C.Law 2-54 (codified at D.C.Code §§ 45-1981 (1980 Supp.) et seq.), which was in effect at times pertinent to this case, the RAC was authorized to make an adjustment of general applicability to the rent ceilings established by the Act. D.C.Code § 45-1687(b) (1980 Supp.). Sections 260-267 of the Rules of the Rental Accommodations Commission provided for such an adjustment. Before the effective date of such an increase, the landlord was required to give the tenant 30 days advance notice. D.C. Rental Accommodations Commission Rules, § 263.1. In addition, it was required that the rental units be in compliance with the housing regulations. Id., § 263.3(d). Under § 265, the landlord was required to file a certificate of calculation of the increase with the Rent Administrator. Section 266 provided that the tenant could request a review of the certificate by the Rent Administrator. That request had to be filed within 12 months of the effective date of the rent increase. Id., § 266.2. Furthermore, the tenant could challenge the rent increase before it took effect on the basis that the landlord had not met all the prerequisites to an increase, e.g.,...