Nelson v. D.C. Rental Hous. Comm'n, No. 16–AA–369

Docket NºNo. 16–AA–369
Citation184 A.3d 864
Case DateMay 24, 2018
CourtCourt of Appeals of Columbia District

184 A.3d 864

Blake J. NELSON, et al., Petitioners,
v.
DISTRICT OF COLUMBIA RENTAL HOUSING COMMISSION, Respondent,
and
The Klingle Corporation, et al., Intervenors.

No. 16–AA–369

District of Columbia Court of Appeals.

Argued April 24, 2018
Decided May 24, 2018


Blake J. Nelson, with whom Carol S. Blumenthal was on the brief, for petitioners.

Jason Lederstein, Assistant Attorney General, with whom Karl A. Racine, Attorney General for the District of Columbia, Todd S. Kim, Solicitor General at the time the brief was filed, and Loren L. AliKhan, Deputy Solicitor General at the time the brief was filed, were on the brief, for respondent.

Richard W. Luchs, with whom Debra F. Leege was on the brief, Washington, for intervenors.

Before Fisher and Thompson, Associate Judges, and Farrell, Senior Judge.

Fisher, Associate Judge:

Blake and Wendy Nelson filed a petition with the Rent Administrator alleging that their housing providers charged rent above the lawful rent ceiling. The petition eventually reached the Rental Housing Commission ("the Commission") and it held that the rent was too high but awarded the Nelsons less relief than they sought. Now, they contend that the Commission shortchanged them and raise four challenges to its ruling. We find none persuasive and affirm.

I. Background

On August 1, 2003, the Nelsons moved into unit 802 in the Kennedy–Warren, a residential apartment complex owned by the Klingle Corporation and managed by B.F. Saul Property Company (collectively, "intervenors"). Their petition, filed on January 26, 2006, alleged that intervenors miscalculated the rent ceiling for their unit and charged rent above the lawful level. Specifically, they averred that intervenors

184 A.3d 866

failed to perfect a 2003 vacancy adjustment and CPI–W (or cost-of-living) adjustments in 2003, 2004, and 2005.1

The hearing examiner generally agreed with these arguments. In a proposed order, he held that the 2003 vacancy adjustment and 2003–2005 CPI–W adjustments were invalid, deducted those increases, and determined that the lawful rent ceiling was $1,766 per month. Noting that intervenors had sought rent above that level—they initially demanded $3,225 per month for the Nelsons' unit and raised that figure to $3,349 and eventually $3,439—the hearing examiner awarded the Nelsons a refund, with interest, for rent charged above the lawful maximum.

Before the hearing examiner converted that order into a final one, the Nelsons and intervenors filed briefs presenting exceptions and objections to the proposed order. The Nelsons argued that the hearing examiner erred in concluding that intervenors did not act in bad faith, a holding that made the Nelsons ineligible for trebled damages. They also contended that he incorrectly calculated their rent refund and, finally, moved to reopen the hearing so that they could submit additional evidence. The hearing examiner rejected all of these arguments, as well as those raised by intervenors, and made only minor changes to the proposed order.

Both parties then sought review by the Commission, which affirmed most of the hearing examiner's holdings. In the one reversal relevant here, the Commission held that, contrary to the hearing examiner's determination, intervenors owed the Nelsons prejudgment interest through the date of the final , rather than proposed , order at a rate of three, rather than four, percent. Rather than remand, the Commission awarded the Nelsons the corrected interest amount. After the Commission rejected their motion for reconsideration of this issue, the Nelsons filed this petition for review.

II. Analysis

This court will accept the Commission's findings of fact if substantial evidence on the record supports them. Loney v. District of Columbia Rental Hous. Comm'n , 11 A.3d 753, 755 (D.C. 2010). As to questions of law, we remain "the final arbiter" but will defer to the Commission's interpretation of "the statutes it administers and the regulations it promulgates" unless its interpretation "is unreasonable or embodies a material misconception of the law." Sawyer Prop. Mgmt. of Md., Inc. v. District of Columbia Rental Hous. Comm'n , 877 A.2d 96, 102–03 (D.C. 2005) (internal quotation marks and citation omitted).

III. The Commission Properly Calculated the Nelsons' Rent Refund

A. The CPI–W Increases from 1987 to 2002

The Nelsons argue that the Commission incorrectly calculated their refund

184 A.3d 867

because it erroneously interpreted the Rental Housing Act's statute of limitations. The Act provides in relevant part that "[n]o petition may be filed with respect to any rent adjustment ... more than 3 years after the effective date of the adjustment." D.C. Code § 42–3502.06 (e) (2012 Repl.). In their primary argument, the Nelsons interpret this provision to give tenants three years from their first rent bill to challenge the entire basis of that initial charge. This approach would allow the Nelsons to contest every rent ceiling adjustment intervenors ever imposed on their unit—including the ones from 1987 to 2002, which the Nelsons allege intervenors filed improperly. The Commission, by contrast, concluded that the Nelsons could not challenge rent or rent ceiling adjustments with effective dates more than three years prior to their petition, regardless of when the adjustment first affected them. This holding precluded the Nelsons from contesting any rent or rent ceiling increase before the 2003 CPI–W adjustment.

The Commission's interpretation is consistent with its precedent and ours. In Kennedy v. District of Columbia Rental Hous. Comm'n , we affirmed the Commission's view that the statute of limitations bars challenges to "adjustments in either the rent levels or rent ceilings ... in place more than three years prior to the date of the filing of a tenant petition." 709 A.2d 94, 97 (D.C. 1998). While the Commission applied this rule, the Nelsons offered an incompatible interpretation—one that would start the limitations period on the date a rent adjustment first affects a particular tenant, rather than the effective date of the increase.

Attempting to distinguish Kennedy , the Nelsons note that, unlike the tenants in that case, who challenged inaccurate calculations of rent ceiling adjustments, they contest improperly filed rent ceiling adjustments. As the Commission recognized, this distinction is immaterial: both arguments constitute merits challenges to the adjustments and the statute of limitations exists to preclude merits arguments, no matter their basis.2 See Majerle Mgmt., Inc. v. District of Columbia Rental Hous. Comm'n , 866 A.2d 41, 43, 46–48 (D.C. 2004) (observing that, absent unique circumstances, Kennedy rule would apply to petition challenging improperly filed and implemented rent ceiling adjustment).

B. The 2002 CPI–W Increase

The Nelsons' alternative interpretation of the statute of limitations focuses on a $5 portion of the 2002 CPI–W increase. The 2002 adjustment, which occurred on a date beyond the statutory period, raised the rent ceiling on the unit from $1,710 to $1,766 but the intervenors only raised the rent to $1,761. Then, on a date within the limitations period, intervenors again raised the rent and the Nelsons assert that the $5 left over from the 2002 CPI–W adjustment was included in that increase.3 They contend

184 A.3d 868

that D.C. Code § 42–3502.06 (e) allows them to contest this $5 portion of the 2002 CPI–W adjustment.

To reach this conclusion, the Nelsons cite United Dominion Mgmt. v. District of Columbia Rental Hous. Comm'n , 101 A.3d 426 (D.C. 2014). There we held that when a housing provider has not properly perfected a rent ceiling adjustment, the statutory period for contesting it begins when the housing provider "implement[s]" the adjustment by using it as a basis to raise a unit's rent. Id. at 427. Based on this holding, the Nelsons essentially argue as follows: when intervenors raised the rent to $1,761, they "implemented" that portion of the 2002 CPI–W adjustment. Tenants had three years from the date of implementation to contest it. However, the other $5 portion of the 2002 CPI–W rent ceiling adjustment remained "unimplemented," and the statutory period for challenging it did not begin, until intervenors (supposedly) incorporated it in the large 2003 rent increase. In other words, the Nelsons claim they were entitled to five extra dollars a month.

We reject this interpretation of United Dominion , which seems to ignore the well-established distinction between the rent ceiling and the amount of rent charged. That case in no way suggested that a rent ceiling adjustment is implemented in stages, as the rent increases, and can be challenged multiple times.4 Rather, we stated that a rent ceiling adjustment "is implemented through a corresponding increase in the rent charged." Id. Here, the "corresponding increase" occurred when intervenors relied on the 2002 CPI–W adjustment to raise the rent above the old ceiling of $1,710. At that point, intervenors gave effect to the new rent ceiling of $1,766 even if they did not raise...

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2 practice notes
  • Pearson v. Dist. of Columbia Rental Hous. Comm'n, 20-AA-351
    • United States
    • District of Columbia Court of Appeals of Columbia District
    • March 3, 2022
    ...the landlord had failed to file a proper claim of exemption from rent control. See Nelson v. District of Columbia Rental Hous. Comm'n , 184 A.3d 864, 866-67 (D.C. 2018) (RHA's statute of limitations also applies to claims resting on improper filing of rent-ceiling adjustments; "the statute ......
  • Pearson v. Dist. of Columbia Rental Hous. Comm'n, 20-AA-351
    • United States
    • March 3, 2022
    ...the landlord had failed to file a proper claim of exemption from rent control. See Nelson v. District of Columbia Rental Hous. Comm'n, 184 A.3d 864, 866-67 (D.C. 2018) (RHA's statute of limitations also applies to claims resting on improper filing of rent-ceiling adjustments; "the statute o......
2 cases
  • Pearson v. Dist. of Columbia Rental Hous. Comm'n, 20-AA-351
    • United States
    • District of Columbia Court of Appeals of Columbia District
    • March 3, 2022
    ...the landlord had failed to file a proper claim of exemption from rent control. See Nelson v. District of Columbia Rental Hous. Comm'n , 184 A.3d 864, 866-67 (D.C. 2018) (RHA's statute of limitations also applies to claims resting on improper filing of rent-ceiling adjustments; "the statute ......
  • Pearson v. Dist. of Columbia Rental Hous. Comm'n, 20-AA-351
    • United States
    • March 3, 2022
    ...the landlord had failed to file a proper claim of exemption from rent control. See Nelson v. District of Columbia Rental Hous. Comm'n, 184 A.3d 864, 866-67 (D.C. 2018) (RHA's statute of limitations also applies to claims resting on improper filing of rent-ceiling adjustments; "the statute o......

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