Kelley v. Broadmoor Co-op. Apartments

• Decision Date: 16 May 1996
• Docket Number: No. 95-CV-847.,95-CV-847.
• Citation: 676 A.2d 453
• Parties: Lucile KELLEY, Appellant, v. BROADMOOR COOPERATIVE APARTMENTS, Appellee.
• Court: D.C. Court of Appeals

676 A.2d 453

Lucile KELLEY, Appellant, v. BROADMOOR COOPERATIVE APARTMENTS, Appellee.

No. 95-CV-847.

District of Columbia Court of Appeals.

Argued March 19, 1996.

Decided May 16, 1996.

Douglas V. Rigler, Washington, DC, for appellant.

William John Hickey, with whom Thomas Collier Mugavero, Washington, DC, was on the brief, for appellee.

Before FARRELL, KING, and REID, Associate Judges.

REID, Associate Judge:

Appellant Lucille Kelley filed a complaint for monetary damages and injunctive relief against appellee Broadmoor Apartments, Inc., a cooperative housing association. She challenged the imposition on non-resident owners of a surcharge on the rental of their apartments. She alleged that the surcharge violated her Perpetual Use and Equity Contract with the Broadmoor, and the bylaws of the cooperative. The trial court granted summary judgment to the Broadmoor. We affirm.

FACTUAL SUMMARY

In 1948, the Broadmoor apartments, located at 3601 Connecticut Avenue, N.W., became a non-profit housing cooperative known as Broadmoor Cooperative Apartments, Inc. Broadmoor sold "perpetual use and equity contracts" to residents and potential residents. Appellant Lucille Kelley and her now deceased husband acquired a perpetual use and equity contract for Apartment 613 on November 28, 1958, as tenants by the entirety. For over thirty-five years, Mrs. Kelley was a resident of Broadmoor. In April 1994, at the age of 95, she moved to a retirement home.

Mrs. Kelley wanted to rent her apartment to her niece, and sought the written consent of the Broadmoor Board of Directors, as required by § 6(d) of the contract, and § 62 of Broadmoor's bylaws. Section 6(d) of the contract provided in pertinent part:

6. The Member, so long as he shall comply with the terms and conditions hereof, shall peacefully enjoy the exclusive use of the purchased apartment and, in common with others similarly entitled, shall have the use and enjoyment of all community property of the Co-operative. In the interest of the common welfare of all members of the Co-operative, the Member expressly agrees as follows:

(d) That he will not lease or permit the sub-leasing of the purchased apartment, or transfer the use or possession thereof without the written consent of the Cooperative, and any approved leasing shall be on standard contract form prepared and furnished by the Co-operative.

Section 62 of the bylaws specified in relevant part that:

The control by the Board of Directors of the right of occupancy extends to leasing or subleasing by either resident or equity members. Application for authority to lease or sublease shall be made to the Board of Directors in the form and upon such terms as it may, from time to time, prescribe. . . . Leases and subleases shall not extend beyond a six-month period without specific approval of the Board of Directors....

As of May 6, 1991, the fee imposed for the leasing of an apartment was "$100.00 charged to the owner; $100.00 placed in escrow by leasee renting the apartment." The owner was subjected to a lease renewal charge of $100.00 every six months.

Approximately three months after Mrs. Kelley sought to lease her apartment to her niece, the Board voted to eliminate the lease renewal fee. In its place the Board decided to impose a surcharge of 5% on the monthly operating assessment of owners for each rented apartment, and an escalating additional 5% surcharge on the assessment each rental year until the maximum of a 25% surcharge was reached in the fifth year. The Board's intent, as later articulated by its President, was "to promote owner occupancy, maintain the value of each owner's investment in his or her home, and ensure a consistently high quality of life for Broadmoor residents." On July 22, 1994, the Board informed resident members of the Broadmoor that the surcharge would become effective on September 1, 1994.

Mrs. Kelley filed a complaint in the trial court on August 30, 1994. Her complaint alleged that the surcharge (1) breached the terms of the contract; (2) breached the bylaws; (3) constituted age discrimination, in violation of D.C.Code §§ 1-2501 et seq.; (4) constituted tortious interference with her contract; and (5) "breached the Board's fiduciary duty to operate and manage the Broadmoor in a fair, reasonable and nondiscriminatory manner." Mrs. Kelley sought injunctive relief and monetary damages.

On December 7, 1994, the trial court ordered the Board to approve Mrs. Kelley's niece's lease and allow her to occupy Apartment 613. In addition, Mrs. Kelley was ordered to pay the rental surcharge, without prejudice to her continuing challenge to its validity. Mrs. Kelley moved for summary judgment on February 16, 1995. On March 1, 1995, the Broadmoor opposed Mrs. Kelley's motion, and filed a cross-motion for partial summary judgment. The trial court issued an order dated March 9, 1995, denying Mrs. Kelley's motion for summary judgment and granting the Broadmoor's motion as to the breach of contract count of Mrs. Kelley's complaint. The order stated in part:

Under paragraph 6 of the Perpetual Use and Equity Contract, plaintiff's apartment was to be used only as a private residence for the use of the plaintiff, her family, guests, and servants. Plaintiff may not lease the apartment without the written consent of defendant. The contract places no restrictions on the defendant's exercise of that consent power. Nothing in the contract precludes defendant from conditioning such consent upon payment of a fee, calculated as a stated percentage of the monthly assessment. Accord, Vernon Manor Co-op. Apartments v. Salatino, 15 Misc.2d 491, 178 N.Y.S.2d 895, 900-902 (1958).

Subsequently, the parties stipulated to the dismissal of count three of Mrs. Kelley's complaint, without prejudice.

On May 5, 1995, the Broadmoor moved for summary judgment on the counts concerning the alleged breach of the bylaws, the alleged invalid exercise of power by the Board, and the alleged breach of fiduciary duty. On May 25, 1995, Mrs. Kelley filed an opposition and cross-motion. In addition, she filed a "renewed motion for summary judgment." The "renewed motion" was opposed on the ground of untimeliness. In an order dated June 1, 1995, the trial judge granted Broadmoor's motion, stating:

For the reasons set forth in the instant motion, and by the Court in granting defendant's earlier motion for summary judgment, it is clear that there is no genuine dispute as to any material issue and that defendant is entitled to judgment as a matter of law.

The trial court denied Mrs. Kelley's renewed motion for summary judgment in an order dated June 30, 1995. The order specified that "for reasons stated in defendant's opposition, the motion is both untimely and without merit." On June 30, 1995, Mrs. Kelley appealed the trial court's orders dated March 9, 1995, June 1, 1995, and June 30, 1995.

ANALYSIS

Mrs. Kelley argues that: (1) the surcharge violates her "`valuable equity right' of rental" under the contract; (2) section 45 of the bylaws<sup>1</sup> "protects her against any adverse change—such as a surcharge—in her `valuable equity right' of rental", and section 68 of the bylaws precludes the Board from amending the bylaws in a manner that would diminish her alleged equity right; and (3) the Board's action in imposing the surcharge was ultra vires because "it is subjective, discriminatory, and unreasonably calculated to further the interests of some owners at the expense of others." The Broadmoor asserts that Mrs. Kelley has (1) no "`valuable equity right' of rental" under the contract; and (2) no valid "claim for breach of fiduciary duty or `breach of the bylaws and the powers of the corporation'."

Standard of Review

"In reviewing a motion for summary judgment, `we must assess the record independently . . . and view it in the light most favorable to the party opposing the motion'." Walton v. District of Columbia, 670 A.2d 1346, 1353 (D.C.1996) (referencing Colbert v. Georgetown Univ., 641 A.2d 469, 472 (D.C.1994) (en banc)). See also Young v. Delaney, 647 A.2d 784, 788 (D.C.1994). "We will affirm the entry of summary judgment if `there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law'." Holland v. Hannan, 456 A.2d 807, 814 (D.C.1983) (quoting Super. Ct. Civ. R. 56(c)). Moreover, "summary judgment is appropriate where a contract is unambiguous since, absent such ambiguity, a written contract duly signed and executed speaks for itself and binds the parties without the necessity of extrinsic evidence." Id. at 815 (referencing Glekas v. Boss & Phelps, Inc., 437 A.2d 584, 587-88 (1981)). Whether a contract is ambiguous is a question of law. Id. (referencing Clayman v. Goodman Properties, Inc., 171 U.S.App. D.C. 88, 96, 518 F.2d 1026, 1034 (1973)). We have previously determined that "a contract is ambiguous when, and only when, it is, or the provisions in controversy are, reasonably or fairly susceptible of different constructions or interpretations, or of two or more different meanings...." Burbridge v. Howard Univ., 305 A.2d 245, 247 (D.C.1973) (citation omitted).

The Question Of A Valuable Equity Right Of Rental

Mrs. Kelley claims she has a "valuable equity right"—a "full proprietary right "—of rental under the contract which the surcharge violates. We disagree. Neither the perpetual use contract nor the bylaws grant an equity right of rental to Mrs. Kelley in the sense she means: an essentially unrestricted right to rent subject only to a qualified right of the Board to approve the tenant. The words of each document are clear and unambiguous in giving owner's only a highly restricted right to rent. Section 6(d) of the perpetual use contract conditions the owner's lease or the sub-lease of an apartment on "the written consent of the Co-operative." Section 62 of the bylaws states that "the control by the Board of Directors of the right of occupancy extends to leasing or...