Hart v. Vermont Inv. Ltd. Partnership, 94-CV-426

• Court: Court of Appeals of Columbia District
• Citation: 667 A.2d 578
• Docket Number: 94-CV-457.,No. 94-CV-426,94-CV-426
• Parties: Christopher A. HART, et al., Appellants/Cross-Appellees, v. VERMONT INVESTMENT LIMITED PARTNERSHIP, Appellee/Cross-Appellant. VERMONT INVESTMENT LIMITED PARTNERSHIP, Appellant/Cross-Appellee, v. Christopher A. HART, et al., Appellees/Cross-Appellants.
• Decision Date: 09 November 1995

667 A.2d 578

Christopher A. HART, et al., Appellants/Cross-Appellees,
v.
VERMONT INVESTMENT LIMITED PARTNERSHIP, Appellee/Cross-Appellant.
VERMONT INVESTMENT LIMITED PARTNERSHIP, Appellant/Cross-Appellee,
v.
Christopher A. HART, et al., Appellees/Cross-Appellants.

Nos. 94-CV-426, 94-CV-457.

District of Columbia Court of Appeals.

Argued September 11, 1995.

Decided November 9, 1995.

667 A.2d 580

Christopher A. Hart, pro se, with whom Raoul L. Carroll and Clayborne E. Chavers, Washington, DC, were on the brief, for appellants/cross-appellees Christopher A. Hart, et al.

Jeffrey M. Hamberger, Washington, DC, for appellee/cross-appellant Vermont Investment Limited Partnership.

Before SCHWELB and RUIZ, Associate Judges, and GALLAGHER, Senior Judge.

SCHWELB, Associate Judge:

These appeals arise from a dispute between Vermont Investment Limited Partnership ("New Landlord") and Christopher A. Hart, Esquire, Raoul L. Carroll, Esquire, and Clayborne E. Chavers, Esquire (collectively "Tenant") over the validity and construction of a commercial lease. Following a bench trial, the Superior Court held that there had been no meeting of the minds when the lease was negotiated, and that the lease was therefore unenforceable. The judge concluded that, in the absence of a valid lease, the tenancy was at sufferance, and he limited accordingly the relief available to New Landlord for Tenant's breach.

We conclude that the lease was valid, unambiguous, and enforceable in conformity with its terms. Accordingly, we reverse the judgment and remand the case for further proceedings.

I.

THE EVIDENCE

On November 1, 1985, the law firm of Hart, Carroll and Chavers entered into a five-year lease agreement with 1025 Vermont Avenue Limited Partnership ("Prior Landlord") for commercial space which was to be used as a law office for the partnership. Section 1.01 of the Lease provided in pertinent part that "the Leased Premises consist of 4,060 square feet." Section 2.01 of the lease stated, however, that "in the event that the square footage of the Leased Premises determined pursuant to Section 1.01 hereof is different from the square footage provided for in said Section 1.01, the Minimum Rent shall be adjusted accordingly." The base rent agreed upon was $18.25 per square foot, but the lease stated that "provided Tenant is not in default hereof, Tenant shall be relieved of its obligation to pay one half ... of each monthly installment of Minimum

667 A.2d 581

Rent during the first fourteen ... months of the term hereof."

On August 18, 1986, Prior Landlord notified Tenant that the leased premises consisted of 4625 square feet, an increase of approximately 14% over the 4060 square feet described in the lease. A few days later, Prior Landlord submitted a proposed amendment to the lease which would have required Tenant to pay for the additional 565 square feet. Tenant, however, declined to agree to the proposed new terms. On October 16, 1986, Prior Landlord submitted a document entitled "Lessee Estoppel" which indicated that Tenant occupied 4625 square feet and that the annual rent was $84,406. Tenant executed the Lessee Estoppel, but amended the amounts to reflect that it occupied only 4060 square feet and that the annual rent was only $74,095.

On December 2, 1986, with the impasse between the original parties to the lease remaining unresolved, Prior Landlord sold the building to New Landlord. On January 12, 1987, through its General Counsel, New Landlord notified Tenant by letter that "we have examined your lease file and floor plan and have discovered that you are actually occupying 4883 square feet, rather than the 4060 square feet as set forth in your lease." New Landlord demanded that Tenant immediately transmit the rent for December 1986 and January 1987 in an amount based on the new measurements.

In the meantime, the Hart law firm had lost several of its law partners. As a result, Tenant became unable to comply with its rental obligations even at the rate originally agreed upon. At a meeting with New Landlord in January 1987, Tenant explained its financial condition and requested a reduction of the rental space and an opportunity to locate a subtenant. In a follow-up letter dated January 23, 1987, Tenant indicated that if its proposals were rejected, Tenant would vacate the premises on February 28, 1987. Tenant explained that it could no longer pay rent in excess of approximately $2000 per month. New Landlord responded that it would accept nothing less than the full rent, based upon 4883 square feet of office space.

By letter dated March 3, 1987, Tenant notified New Landlord that it had vacated the premises as of February 28, 1987. Tenant retained the keys, however, apparently in order to show the premises to prospective new tenants. On March 17, 1987, New Landlord's attorney advised Tenant that it had violated the lease by failing to pay rent and by abandoning the premises. New Landlord notified Tenant that it had five days to cure the violations, and warned that "upon your failure to do so, the landlord will, without further notice, terminate the lease and institute an action for possession." On March 23, 1987, Tenant delivered the keys by hand to New Landlord, but Tenant did not pay rent for the month of March 1987 or for any month thereafter. In July 1987, the premises were rented to a new tenant.

II.

THE TRIAL COURT PROCEEDINGS

On February 27, 1990, New Landlord filed a complaint in the Superior Court, alleging that Hart, Carroll and Chavers had failed to pay rent and other charges due and had vacated the premises in violation of the lease. New Landlord prayed for damages in the amount of $328,119.98 (that sum apparently representing rent due and late charges alleged to be due). Each defendant filed a separate answer denying liability and counterclaimed for return of the security deposit.

The case was tried to the court, sitting without a jury, on October 28, 1992. On March 10, 1994, the trial judge issued his written Findings of Fact, Conclusions of Law, and Order. After setting out the facts in some detail, the judge concluded that there had been no meeting of the minds on material terms in the lease, and that the lease was therefore unenforceable. He reached this conclusion because, in his view, "the square footage provision regarding office space is materially at variance with the understanding of the parties." Recognizing that Section 2.01 of the lease "provides for adjustments to the lease agreement in the event of a discrepancy," the judge was of the opinion that this provision "contemplates

667 A.2d 582

only de minimis adjustments." The judge stated that

the 20.3% increase in minimum rental fails to be that intended by the parties and expresses a different agreement altogether. Therefore, the Defendants are not liable for the 20.3% increase in rent due to the failure of a meeting of the minds between the parties on that issue.

Because, in his view, the lease was not enforceable, the judge concluded that the defendants were "tenants at sufferance." The judge held that the defendants had given the requisite thirty-day notice to quit on March 3, 1987, and were thus liable for rent only through April 3, 1987. The judge awarded New Landlord $6,000 in "unpaid rent" and, curiously, $6,000 in late fees.¹ The judge did not address the defendants' counterclaims. Tenant's appeal and New Landlord's cross-appeal followed.

III.

LEGAL DISCUSSION

A. Validity of the Lease.

The lease negotiated by Prior Landlord and Tenant was a contract. See, e.g., Management Partnership, Inc. v. Crumlin, 423 A.2d 939, 941 (D.C.1980). Accordingly, the issues before us are governed by the substantive rules of contract law. Id. Here, the judgment of the trial court rests primarily on the judge's determination that there was no enforceable contract because there had not been a meeting of the minds. In reviewing that determination, we must sustain the judge's evidentiary findings unless they are clearly erroneous, see Super.Ct.Civ.R. 52(a), but we review his legal conclusions de novo. American Bldg. Maintenance. Co. v. L'Enfant Plaza Properties, Inc., 655 A.2d 858, 861 (D.C.1995). In this case, the question whether the lease is enforceable turns largely on the legal conclusions to be drawn from undisputed facts.

The trial judge apparently believed that the lease was invalid because the parties to it, or at least Tenant, subjectively intended Section 2.01 of the lease to apply only to de minimis adjustments of the square footage on which the rent was to be based.² The judge cited no authority in support of this position, and we know of none.

"It is, of course, the general rule that one who signs a contract has a duty to read it and that he is obligated according to its terms." Hollywood Credit Clothing Co. v. Gibson, 188 A.2d 348, 349 & n. 1 (D.C.1963) (citing 17 C.J.S. Contracts § 137 (1963)). In the absence of fraud or its equivalent, "one is obligated by his contract, though signed without knowledge of its terms." Saylor v. Handley Motor Co., 169 A.2d 683, 685 (D.C. 1961). "It is not enough to avoid a contract that one party signed it believing it did not contain what was plainly expressed therein." Spain v. Fuston, 242 S.W.2d 892, 894 (Tex. Civ.App.1951). In Howard Univ. v. Best, 484 A.2d 958 (D.C.1984), we stated that

this court adheres to the "objective law" of contracts, whereby the written language embodying the terms of an agreement will govern the rights and liabilities of the parties, irrespective of the intent of the parties at the time they entered the contract, unless the written language is not susceptible of a clear and definite undertaking, or unless there is fraud, duress or mutual mistake.

(Citations and internal quotation marks omitted).

"The only intent of the parties to a contract which is essential, is an intent to say the words and do the acts which constitute

667 A.2d 583

their manifestation of assent." Ray...