Tsintolas Realty Co. v. Mendez

• Citation: 984 A.2d 181
• Decision Date: 25 November 2009
• Docket Number: No. 08-CV-730.,08-CV-730.
• Parties: TSINTOLAS REALTY COMPANY, Appellant, v. Maria L. MENDEZ, et al., Appellees.
• Court: Court of Appeals of Columbia District

984 A.2d 181

TSINTOLAS REALTY COMPANY, Appellant, v. Maria L. MENDEZ, et al., Appellees.

No. 08-CV-730.

District of Columbia Court of Appeals.

Argued September 24, 2009.

Decided November 25, 2009.

Suzanne M. Tsintolas, with whom Jonathan C. Windle was on the brief, for appellant.

Kenneth J. Nichols, with whom John H. Brown was on the brief, Washington, for appellees.

Before BLACKBURNE-RIGSBY and THOMPSON, Associate Judges, and SCHWELB, Senior Judge.

SCHWELB, Senior Judge:

Tsintolas Realty Company (the landlord) appeals from an order of the Superior Court granting the motion of Maria L. Mendez and Oscar A. Aragon (the tenants) to enforce a settlement agreement which had resolved a suit by the landlord for possession of the apartment occupied by the tenants in northwest Washington, D.C. The landlord asserts that the tenants are not entitled to relief because they committed a material breach of the settlement agreement. The landlord also contends that the agreement left unresolved certain of its claims and that the trial judge erred in holding to the contrary. We reject the first of these contentions, agree with the second, and remand for further proceedings.

I. Procedural and Factual Background

On October 3, 2007, following a building-wide inspection of an apartment building located at 5400 Seventh Street, N.W. in Washington, D.C., the District of Columbia Department of Consumer and Regulatory Affairs (DCRA) issued an order directing the owner of the building to correct numerous housing code violations which had been discovered by DCRA inspectors. There were thirty-three violations in apartment #3, which was occupied by Ms. Mendez and Mr. Aragon. Ms. Mendez had been a tenant of the unit for fourteen years.

On October 31, 2007, the landlord served a Notice to Correct or Vacate on the tenants. In the notice, the landlord alleged numerous violations of the tenants' lease, including, inter alia, the intentional destruction of property inside the unit and damage to the floors and walls. The landlord further alleged that the tenants had failed to inform the landlord in timely fashion of the need for repairs, thus causing further property damage. Finally, the landlord claimed in the notice that the tenants had failed to pay invoices for repairs of conditions which had allegedly been caused by the tenants' negligence. In the notice, the landlord advised the tenants, among other things, that within thirty days, they would have to make or pay for repairs in order to come into compliance with the lease.

The tenants neither corrected the alleged violations nor vacated the apartment, and on December 4, 2007, after the Notice to Correct or Vacate expired, the landlord filed a complaint for possession. At a hearing on January 18, 2008, the court issued a protective order which authorized the tenants to pay their rent into the court registry pending resolution of the case.

On February 15, 2008, before the case could come to trial, the landlord entered into a settlement agreement with the tenants. Under this agreement, the tenants consented to the entry of judgment for possession in favor of the landlord, but the judgment was to be stayed until April 30, 2008. As part of the settlement, the tenants agreed that the February rent, which they had paid into the registry, would be released to the landlord. The landlord agreed to pay the tenants an amount which was set forth in the settlement agreement and which was to be paid when the tenants vacated their unit and otherwise complied with the agreement.

The settlement agreement further provided that the tenants had until April 30, 2008 to vacate their unit and that they would be responsible for paying the rent until that date. However, the agreement also provided an incentive for the tenants to move out of their apartment sooner: if they vacated no later than March 31, and if they gave notice to the landlord of their intention to do so no later than March 5, then the tenants would not be required to pay rent for the month of March (as well as for April). If the tenants did not vacate their unit before April 1, however, the rent for March and April was to be subtracted from the agreed upon amount that the landlord was required to pay the tenants under the terms of the settlement. The agreement also provided that after the tenants surrendered possession, the landlord would cause the complaint to be dismissed.

The settlement agreement also contained a confidentiality provision prohibiting the tenants from divulging the terms of the settlement. Under this provision, the landlord was entitled to recover the entire settlement amount from the tenants if the tenants divulged the terms of the agreement. Judge Joan Zeldon approved the settlement, and she explained to Ms. Mendez and Mr. Aragon in open court that the "the terms of this agreement are confidential" and that "the divulging of these terms is a material breach.... If you talk about this to anybody this whole agreement is in breach." The judge added that "[y]ou must keep this confidential [a]nd if [the landlord] learns that you didn't, he can say I don't agree to any of it." Finally, after both tenants assured the court that they understood their obligations, the judge reiterated that "it's particularly important that you not talk about this."

During the hearing, the judge read the settlement agreement (including the amount which the landlord had agreed to pay the tenants) aloud in open court. Without objection, the judge approved the agreement. The praecipe containing the agreement was filed with the court and became a part of the case jacket. So far as the appellate record reveals, no party moved at that time to seal the settlement agreement or the case file. Indeed, the first indication that the landlord wished to have the record sealed came several months later, when counsel for the landlord requested that the landlord's response to the tenants' motion to enforce the settlement agreement be filed under seal.

Judge Zeldon informed the parties at the conclusion of the February 15 hearing that the complaint had been resolved, and that for administrative purposes, the case was considered closed. She explained, however, that in the event of an alleged breach of the settlement agreement, either party had the right to move to reopen the case.

Ms. Mendez and Mr. Aragon vacated their apartment, as agreed, prior to April 30, 2008. They also provided the landlord with the required timely notice of their intention to do so. The landlord, however, refused to make the payment specified in the agreement. The landlord initially refused to pay on the stated grounds that the tenants had failed to provide the landlord with an IRS Form W-9, which would be required by the Internal Revenue Service, according to the landlord, in the event the payment specified in the settlement agreement was made to the tenants. On April 23, 2008, the tenants filed a motion to reopen the case and to enforce the settlement agreement. A copy of the agreement was attached as an exhibit to the motion.

On April 25, 2008, the landlord sent the tenants a written demand for $6,493.60, representing the March and April rent and other claimed costs associated with unpaid invoices and alleged physical damage to the apartment. A few days later, on May 6, 2008, the landlord filed a separate action for breach of contract in the Civil Division of the Superior Court, once again seeking payment of the March and April rent and the other alleged damages. The landlord voluntarily dismissed the separate action, however, after Judge Gerald Fisher, who had replaced Judge Zeldon in the Landlord & Tenant Branch of the Superior Court's Civil Division, ruled that the landlord was entitled to rent for March and April, but that the landlord's claim for alleged damage to its property had been resolved in the tenant's favor by the settlement agreement.

II. The Trial Court's Decision

Judge Fisher heard the tenants' motion on May 16 and 22, 2008. The tenants testified that they vacated their apartment prior to March 31. Judge Fisher, however, disbelieved this testimony, describing a part of it (a claim that the tenants had only one set of keys) as "almost preposterous." Instead, the judge credited evidence on behalf of the landlord to the effect that Mr. Aragon was in the apartment several times in early April. The judge therefore ruled that the landlord had the right to subtract the March and April rent from the payment required by the settlement agreement.

On the merits, the judge held that under the circumstances of the case, the tenants did not commit a material breach of the confidentiality provision by appending to their motion a copy of the settlement agreement, and that the landlord was not relieved on its obligations under the agreement on the grounds that the tenants had violated it. Judge Fisher also concluded that the landlord was not entitled to reduce the settlement amount by unpaid invoices and by damage to the apartment for which, according to the landlord, the tenants were responsible. The judge held that these claims had been asserted in the Notice to Correct or Vacate, which was attached to the landlord's complaint for possession, and that any issues relating to damage to the property had been resolved, as an integral part of the case, by the parties' settlement agreement. This appeal followed.

III. The Claim of Material Breach by the Tenants

Responding to the tenants' claim that the landlord failed to comply with the settlement agreement, the landlord contends that the tenants themselves committed a material breach of that agreement by attaching a copy of the agreement to their motion to enforce, allegedly in violation of the agreement's confidentiality provision. It is the landlord's position that this alleged material breach by the tenants nulli-fied the landlord's obligations set forth in the settlement agreement. We do not agree.

The facts regarding...