Fancher v. Clark, Civ. A. No. 4279.

• Citation: 127 F. Supp. 452
• Decision Date: 31 December 1954
• Docket Number: Civ. A. No. 4279.
• Parties: Clyde FANCHER, Helen Fancher, Paul Brott and Hertha S. Brott, Plaintiffs, v. Hazel E. CLARK, also known as Hazel E. Clark Moore, Defendant.
• Court: U.S. District Court — District of Colorado

127 F. Supp. 452

Clyde FANCHER, Helen Fancher, Paul Brott and Hertha S. Brott, Plaintiffs, v. Hazel E. CLARK, also known as Hazel E. Clark Moore, Defendant.

Civ. A. No. 4279.

United States District Court, D. Colorado.

December 31, 1954.

COPYRIGHT MATERIAL OMITTED

Goral, Reibscheid & Machol, Brian H. Goral, Jacques A. Machol, Jr., Denver, Colo., for plaintiffs.

Harold G. King, Denver, Colo., for defendant.

CHRISTENSON, District Judge.

Plaintiffs have sued to recover statutory damages and attorneys' fees under Section 205 of the Housing and Rent Act of 1947, as amended, 50 U.S.C.A. Appendix, § 1895.

In the complaint it was alleged that on the 27th day of March, 1952, the Office of Rent Stabilization ordered that the maximum rent for certain housing accommodations be decreased to $50 per month, effective July 1, 1947; that during the period May 18, 1950 to October 22, 1951, the defendant landlord collected rental overcharges from plaintiffs Clyde Fancher and Helen Fancher, of $247 and from the Brotts of $200. Judgment for three times these amounts, with attorneys fees, interest and costs, was demanded.

Defendant in her answer denied that she was a "landlord" or that the property in question was a "controlled housing accommodation" within the purview of the Act, and denied that the Office of Rent Stabilization had jurisdiction of either the property or the person of the defendant to order retroactively a reduction of rent during the period she owned the property. As affirmative defenses, she alleged that plaintiffs have been guilty of laches, prejudicial to her, by reason of their paying rent without objection, and their delay in filing the complaint and serving summons, and because defendant as a result of such conduct and without knowledge of any claim, sold the property on October 18, 1951, and in December, 1952 (by amendment changed to 1951) established her residence in California; that the Fanchers are estopped from maintaining this action by reason of a statement made by Helen Fancher to defendant prior to the purchase of the property to the effect that the rent thereon was $70 per month and that having been built since the war, it was not subject to rent control; that the enforcement of the retroactive order reducing rents would deprive plaintiff of her property without due process of law; that it would deny to defendant the equal protection of the law by reason of exclusion from its operation of the period between the time plaintiff sold the property to another and the date of the order; and that plaintiffs failed to bring this action within one year of the date of the alleged violation as required by Section 205(c) of the Act, 50 U.S.C.A.Appendix, § 1895(c). It has been further urged that the defendant did not reside in the district in which this action was brought, nor did any part of any act or transaction constituting a violation occur here, and therefore, that the Court has no jurisdiction to entertain the action.

The basic question which separates the parties is whether the defendant is in a position to question the validity of the maximum rent order involved in view of her claimed failure to exhaust administrative remedies.

At the pre-trial conference it was agreed that the exact amount of what would be an overcharge if the rent reduction order were valid is $330 rather than the $447 claimed in the complaint; and that plaintiffs' exhibit No. 5, "Notice of Proceedings by Rent Director" was received by the defendant at Banning, California on March 14, 1952. It was mailed according to a notation thereon on March 5, 1952.

This exhibit, addressed to Hazel E. Clark at 1564 Franklin, Denver, Colorado, among others, stated:

"A preliminary investigation by the Rent Director indicates that the maximum rent for the described accommodations should be decreased on the grounds stated in Section (s) 157 of the Rent Regulation. Therefore, the Rent Director proposes to decrease the maximum rent from $70 per month to $50 per month. * * * The Rent Director further proposes that the order decreasing the maximum rent shall be effective to reduce the rent from July 1st, 1947 (see below) for the reason(s) stated in Section (s) 83 of the Rent Regulation. * * * In the event you wish to file a reply to this proposed action, such reply must be filed within 10 days from the date of this notice. * * * If no reply and supporting evidence are filed within the above period, the Rent Director may enter an order decreasing the maximum rent without further notice."

This notice further provides that the landlord shall be relieved from the duty to refund any rent collected in excess of $50 per month between November 22, 1951 and the next rent payment date after issuance of said order.

There was received in evidence at the pre-trial conference, subject only to objection on the grounds of materiality and competency, copy of an order issued by the Area Rent Director on March 27, 1952, the terms of which are in accordance with the above mentioned notice. Endorsed on this order is a certificate that "Exact copy mailed to landlord and tenant on Mar. 27, 1952."

Defendant's counsel concedes in his brief that "no registration statement was ever filed by the defendant or by any previous owner of the property." While not expressly appearing, it was implicit in the arguments and conceded during the pre-trial conference that defendant made no attempt to object to the proposed order of which she received notice on March 14, 1952, or to inquire about, or appeal from, the subsequent order, although she denies having received a copy of such subsequent order.

Following the pre-trial conference, plaintiffs moved for summary judgment against the defendant and defendant moved for summary judgment against plaintiffs. The broad question is whether the pleadings and admissions on file show that there is no genuine issue as to material facts and that one or more of the parties is entitled to judgment as a matter of law. Fed.Rules Civ.Proc. rule 56, 28 U.S.C.A.

Defendant's motion for summary judgment of "no cause of action" against plaintiffs is denied. From any viewpoint she could not be entitled to judgment as a matter of law on the present record.

In considering the real problem of whether summary judgment must be granted against the defendant, I take cognizance of the rule stated in Schreffler v. Bowles, 10 Cir., 1946, 153 F.2d 1, certiorari denied 328 U.S. 870, 66 S.Ct. 1366, 90 L.Ed. 1640. The purpose of a summary judgment is to permit speedy and expeditious disposal of cases where the pleadings do not as a matter of fact present any substantial question for determination or where formal allegations of fact in pleadings may be pierced, and it appears from uncontroverted facts set forth in affidavits, depositions or admissions on file that there are no genuine issues for trial. Flimsy or transparent charges or allegations are insufficient to sustain a justiciable controversy requiring submission thereof for trial.

It is conceded by plaintiffs that if they were insisting upon liquidated damages of three times the amount of the claimed overcharge there would be a substantial issue of fact as to whether such overcharge was wilful or the result of failure to take practical precautions. 50 U.S.C.A.Appendix, § 1895(a). However, for the purposes of their motion for summary judgment, plaintiffs have waived any claim for refund except in the amount of actual overcharges.

It is admitted by the plaintiffs that summary judgment cannot be granted as to the amount of attorneys' fees since there is an issue on what would be a reasonable sum. However, in cases such as this the Court could grant summary judgment on specific primary issues if circumstances justified, leaving for future hearing a determination of such matters as amount of attorneys' fees or damages. Bates v. McClees, D.C.E. D.Pa., 1948, 76 F.Supp. 939; Fed.Rules Civ.Proc. rule 56(c), 28 U.S.C.A.

Consideration of the basic question of whether defendant is in a position to question the validity of the maximum rent order in this Court will be deferred until after determining whether defenses touching other points preclude summary judgment. These other defenses will be examined in the order inverse to that in which they are above noted.

This Court has jurisdiction to entertain the action, despite the fact that it is claimed that defendant does not reside within the district and did not reside here when the order of the Rent Administrator reducing maximum rents was made. Apart from the question of venue, it is clear that the Court has jurisdiction over the person of the defendant. It is conceded that she has been duly served with process and she has entered her appearance. This proceeding could be brought in any district in which any part of the act or transaction constituting the violation occurred, or in any district where the defendant resides or transacts business and process could be served in any district where the defendant could be found. 50 U.S.C.A. Appendix, § 1896(c). It cannot be controverted that the part of the transaction which involved the collection of rent and which in connection with the subsequent order gave rise to the claim for refund, occurred in Colorado. The property is situated here. It would be a strained interpretation of the statute to hold that a landlord without registering a rental accommodation, could collect in one district unauthorized rent and then could deprive the courts of that district from entertaining a suit based on such collection by moving before the Rent Administrator was able to discover defendant's omission and to enter an order. Under such circumstances, to require a plaintiff to bring suit in a distant district, and to produce witnesses there, far removed from the situs of the property involved and from the place where at least the major part of the transaction on which the violation is based occurred, would seem unreasonable. The...