Tauber v. District of Columbia

• Decision Date: 16 June 1986
• Docket Number: No. 83-1042.,83-1042.
• Citation: 511 A.2d 23
• Parties: Laszlo N. TAUBER, Appellant, v. DISTRICT OF COLUMBIA, Appellee.
• Court: D.C. Court of Appeals

511 A.2d 23

Laszlo N. TAUBER, Appellant, v. DISTRICT OF COLUMBIA, Appellee.

No. 83-1042.

District of Columbia Court of Appeals.

Argued June 4, 1985.

Decided June 16, 1986.

Louis Ginberg, Washington, D.C., for appellant.

William J. Earl, Asst. Corp. Counsel, with whom Inez Smith Reid, Corp. Counsel, John H. Suda, Principal Deputy Corp. Counsel, and Charles L. Reischel, Deputy Corp. Counsel, Washington, D.C., were on brief, for appellee.

Before NEBEKER and FERREN, Associate Judges, and GALLAGHER, Senior Judge.

GALLAGHER, Senior Judge:

This is an appeal from a decision of the Civil Division, Superior Court, which held that appellee, the District of Columbia, is entitled to continued occupancy of a building leased by appellant, Laszlo N. Tauber, under a twenty-year lease. Two issues are raised on appeal: whether the lease is unenforceable because of noncompliance with the statute of frauds, and whether the lease became terminated on December 31, 1981, by mutual agreement of the parties. Finding error in the trial court's failure to provide adequate findings, we reverse and remand for further proceedings.

In 1968, the District of Columbia leased the Presidential Building at 415 12th Street, N.W., for a term of five years. With renegotiated terms, the lease was renewed for three years in 1973. In 1974, however, Dr. Laszlo N. Tauber, as trustee for the Pennsylvania Avenue Joint Venture, acquired the Presidential Building and urged the District to cancel the lease and negotiate a longer term lease. The Tauber lease was executed following lengthy negotiations between Tauber and officials of the District of Columbia Department of General Services (DGS). Tauber was interested in a twenty-year lease. The District, on the other hand, planning to build its own municipal office building, was interested in a short-term lease. One focus of the negotiations, therefore, was an escape clause. As a result, the parties agreed to the following:

Should the District, at any time, after the first five years of this lease, construct an office building of its own to house the tenants in the demised premises, the District may, upon two years' written notice, vacate the demised premises without damage and all rents shall cease upon such vacation, provided however, that should a new District owned building not be completed at the expiration of the two year notice period as aforesaid, then the District may remain in the demised premises until completion of its building and may vacate the demised premises upon ninety (90) days' written notice so to do.

The provision in the twenty-year lease incorporated several of the parties' desires. To satisfy the District's contingency regarding a new building, the provision allowed an escape after a term shorter than twenty years.¹ The clause incorporated two provisions to benefit the appellant. First, the District was to give two years' notice to the appellant. This condition afforded him the time to make the necessary arrangements to secure a new tenant. Second, there was a requirement that appellee vacate before the lease termination only upon construction of its own building to house occupants of the Presidential Building. This provision safeguarded the landlord's interest by precluding the District from negotiating a lease with another landlord. After appellant signed the lease, the Mayor, with the approval of Corporation Counsel, signed the lease. The lease, dated July 29, 1975, commenced October 1, 1975, and was to expire September 30, 1995. Although signed by both parties, the lease was not executed under seal as required by law.² Nevertheless, both parties performed in accordance with its terms for several years.

After entering negotiations to acquire a building site with the General Services Administration (GSA) and obtaining a budget appropriation, the District gave appellant notice of intent to vacate on October 30, 1978.³ The notice set forth Addendum H in full and explained that because the District had appropriated funds and anticipated completion of its building by the end of 1981, it intended to vacate at that time. The termination would have been six years and three months into the lease and with more than three years' notice.⁴ Appellant acknowledged receipt of the notice of intent to vacate on November 1, 1978.⁵ Difficulties in obtaining the site for the municipal office building and in therefore determining when the building would be finished, however, prompted the District to send Dr. Tauber's agent a letter rescinding its notice on November 3, 1979, and stating that, when a completion date could be determined, it would give ninety-days' notice under the provisions of Addendum H. Appellant, on November 8, 1979, "rejected" the District's rescission and offered to negotiate the lease to begin after December 31, 1981.

Over the next year, the District acquired additional funds but was still unable to meet the price sought by GSA. On October 14, 1980, it reiterated in a letter its intention to remain in the premises until the proposed new office building was completed, and to give ninety-days' notice in compliance with Addendum H once completed. Appellant, in response, restated its position that the October 30, 1978, notice governed defendant's terms so that December 31, 1981 remained the vacancy date. In July 1981, exclusive negotiations between the District and GSA ended and the District subsequently was outbid on the site. Nevertheless, it acquired a new site for a municipal office building in 1982, with expected completion of construction by March 1985.

In the fall of 1981, the parties exchanged letters reasserting their contrary positions. With the District still occupying the premises on December 31, 1981—the date of vacation indicated in the October 30, 1978 notice—Tauber filed a complaint on January 2, 1982 in Superior Court, Landlord and Tenant Branch, for possession of the office space and three days later, a complaint for a declaratory judgment designating the District a "holdover occupant and trespasser" liable for fair market rental.⁶ In August 1982, the cases were consolidated and in November, the parties' cross-motions for summary judgment were denied.⁷

On March 16, 1983, a thirteen-day nonjury trial commenced. At trial, Dr. Tauber testified that he was unaware that leases required seals and, had he known, he would have signed under seal. He also testified that he interpreted Addendum H as requiring two years' notice to vacate as long as the District remained in the building a minimum of seven years. He therefore considered the District's notice of intent to vacate as contrary to the terms of Addendum H and therefore an unconditional notice of termination of the lease. According to him, his acknowledgment of the notice effectively nullified Addendum H.

Colonel Starobin, on the other hand, testified that he interpreted Addendum H to mean that the District could give notice to vacate under any circumstances which would reasonably lead to completion of a new municipal building as long as the District remained in the building for five years. Starobin claimed that in notifying Tauber he intended to invoke the provisions of Addendum H, rather than discard them. Nor did he view Dr. Tauber's letter of November 1, 1978, to be an acceptance of an unqualified offer to terminate the lease. Finally, he testified that he believed when he sent the notice that the new building would be built within the time-frame mentioned.

Following the introduction of evidence of the 14th and U Streets site near the close of testimony, the trial court attempted to ascertain from the attorneys the government's plans for the site and its relevance to Addendum H. Emphasizing the importance of this information to a considered decision in the case, the trial court requested the government to present witnesses to clarify the issue.⁸ Nevertheless, the government, arguing that the lease was valid until 1995 so that contingent plans were immaterial, later declined to present additional witnesses on the issue. For some reason, not apparent to us, the trial court abandoned its previously announced viewpoint and did not pursue the important question.

The trial court concluded that, although the lease did not formally comply with the statute of frauds, a number of factors rendered the lease enforceable: the parties admitted the existence of an agreement—a twenty year lease in writing, executed by both parties, and the District had made several substantial alterations in the building in reliance on the lease. Furthermore, the court reasoned, the District would face serious financial problems and disruption to its school system if the lease were found unenforceable. Relying on equitable principles of waiver and part performance, the court found that the lease was removed from the statute's ambit and enforceable by the appellee.

With regard to the termination of the lease, the court rejected appellant's interpretation of the facts. Rather than deeming appellee's notice of intent to vacate as unconditional because it came before the seven-year minimum,⁹ it held that the notice was tendered in good faith, that it conformed with Addendum H, and that there was no "meeting of the minds" to terminate the lease unconditionally. Furthermore, the court noted that an alternative and more sensible reading of Addendum H in light of the circumstances of its drafting meant the lease could be terminated at any time after five years. Regardless of the correct interpretation of the lease, said the court, the District acted in a way that it believed conformed with the provisions of the Addendum and was exercising its conditional power of termination pursuant to it. The court deemed the termination notice legally ineffective when the District, in good faith, abandoned the 3rd and D Streets site. The court reasoned that once notice was tendered, three representations arose: (1) notice was given in good faith; (2) it...