United Dominion Mgmt. Co. v. D.C. Rental Hous. Comm'n

• Citation: 101 A.3d 426
• Decision Date: 16 October 2014
• Docket Number: Nos. 13–AA–613,13–AA–960.,13–AA–959,s. 13–AA–613
• Parties: UNITED DOMINION MANAGEMENT COMPANY, Petitioner, v. DISTRICT OF COLUMBIA RENTAL HOUSING COMMISSION, Respondent, and Brian Hinman, Intervenor.
• Court: D.C. Court of Appeals

101 A.3d 426

UNITED DOMINION MANAGEMENT COMPANY, Petitioner

v. DISTRICT OF COLUMBIA RENTAL HOUSING COMMISSION, RespondentandBrian Hinman, Intervenor.

Nos. 13–AA–613

13–AA–959

13–AA–960.

District of Columbia Court of Appeals.

Argued June 10, 2014.

Decided Oct. 16, 2014.

Vincent Mark J. Policy, with whom Richard W. Luchs, Washington, DC, was on the brief, for petitioner and for amicus curiae Apartment and Office Building Association of Metropolitan Washington.

James C. McKay, Jr., Senior Assistant Attorney General, with whom Irvin B. Nathan, Attorney General for the District of Columbia, Todd S. Kim, Solicitor General, and Loren L. AliKhan, Deputy Solicitor General, were on the brief, for respondent.

John E. Logan, Washington, DC, for intervenor.

Before GLICKMAN, EASTERLY, and McLEESE, Associate Judges.

Opinion

EASTERLY, Associate Judge:

In this consolidated appeal,¹ we address certain types of rent ceiling increases and when they may be challenged under the relevant statute of limitations. Specifically, we are asked to apply the statute of limitations in the Rental Housing Act (“RHA”), which provides 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.), to the following scenario: (1) a landlord files the necessary amended registration form with the Rent Administrator for a claimed rent ceiling increase, but the form is filed late—that is, the landlord failed to properly “take and perfect” the rent ceiling increase as required by relevant regulations, see 14 DCMR §§ 4204.10(c), 4207.5 (1986), (2) more than three years pass, (3) the landlord raises the rent pursuant to the improperly perfected rent ceiling increase, and (4) the tenants then, within three years, seek to challenge their rent increase pursuant to the improperly perfected rent ceiling increase.

We uphold as a reasonable interpretation and application of D.C.Code § 42–3502.06(e) the RHC's determination that, under these circumstances, an improperly perfected rent ceiling increase is not “effective” until it is implemented through a corresponding increase in rent charged, and thus the statute of limitations in this scenario begins to run from the date of the demanded rent increase. Even though rent ceilings have been abolished in the District, the resolution of this case may elucidate the proper application of the statute of limitations for other similar cases still pending before the RHC.

Of more general application, we clarify the proper standard of review that this court must apply to decisions of the RHC, and that the RHC must apply at the outset when it considers an appeal from the determination of an Office of Administrative Hearings (OAH) Administrative Law Judge (ALJ).

I. Facts

United Dominion manages an apartment building located at 907 Sixth Street, Southwest. In the summer of 2006, United Dominion sent notices to tenants Brian Hinman, Delores Jackson Kelly, and Tresa Rice—all tenants in separate units—alerting them to scheduled increases in their rent. The notices attributed the rent increase to rent ceiling adjustments (otherwise known as vacancy adjustments) filed pursuant to Section 213(a)(2) of the Rental Housing Act of 1985,² see D.C.Code § 42–3502.13 (2001). This provision allows a landlord to raise the rent ceiling for a registered property within a specific window of time, 30 days, after the property becomes vacant. See 14 DCMR §§ 4204.10, 4207.5 (explaining that a rent ceiling adjustment shall be considered “taken and perfected” when filed within 30 days of a vacancy); see also Sawyer Prop. Mgmt. of Maryland, Inc. v. District of Columbia Rental Hous. Comm'n, 877 A.2d 96, 109–10 (D.C.2005) (explaining that in order to raise a rent ceiling based on a vacancy, the housing provider must file an amended registration form “within thirty days of the rental unit becoming vacant”). But in each case, the landlord had untimely filed the amended registration form claiming the rent ceiling increase.³

Shortly after receiving notice of the increases in their rent, Mr. Hinman, Ms. Rice, and Ms. Kelly each filed tenant petitions with the OAH in which they argued, inter alia, that their rent increases were ineffective because each was based on an improperly perfected rent ceiling increase. An OAH ALJ heard their petitions in the winter of 2007. At each hearing (and, in the Hinman and Kelly cases, in memoranda subsequently filed with OAH), United Dominion took the position that the tenants' claims were barred by the statute of limitations in D.C.Code § 42–3502.06(e) because the tenants had not sought to challenge the rent ceiling increase within three years of the filing of the (concededly untimely) amended registration form claiming the rent ceiling increase. In October 2007, an OAH ALJ rejected United Dominion's argument and ruled in Mr. Hinman's favor. Other OAH ALJs followed suit in Ms. Rice and Ms. Kelly's cases in the spring of 2008, citing the ALJ's Order in Mr. Hinman's case.

United Dominion appealed these orders to the RHC and the RHC held a hearing in each case in 2008. More than five years later, the RHC affirmed the ALJ's decision in Mr. Hinman's case. Analyzing the statute of limitations issue in depth, the RHC concluded that (1) an untimely amended registration form claiming a rent ceiling increase is considered improperly “taken and perfected” and does not trigger the statute of limitations; (2) under these circumstances, the increase in the rent ceiling is not “effective” for purposes of § 42–3502.06(e) until it is implemented through a corresponding increase in rent charged. The RHC also rejected United Dominion's secondary argument that allowing these challenges to rent ceiling increases claimed years earlier would constitute an unconstitutional deprivation of United Dominion's property and violate due process.

The RHC decided the Rice and Kelly matters soon thereafter, and in each adopted its reasoning from Mr. Hinman's case. United Dominion then filed petitions for review of all three RHC orders in this court.

II. Standard of Review

The parties disagree about this court's standard of review for the RHC's decisions, and we discern confusion on the part of the RHC regarding its standard of review for the OAH ALJ's decisions in these cases. Accordingly, we elucidate the appropriate standard of review at all levels relevant to this proceeding.

This court will not disturb RHC's factual findings unless they are unsupported by substantial evidence in the record. See Loney v. District of Columbia Rental Hous. Comm'n, 11 A.3d 753, 755–56 (D.C.2010). We also give “considerable deference to the RHC's interpretation of the statutes it administers and the regulations it promulgates”; we will “sustain the RHC's interpretation of those statutes and regulations unless it is unreasonable or embodies a material misconception of the law, even if a different interpretation also may be supportable.” Sawyer, 877 A.2d at 102–03 (internal quotation marks omitted). We are the final arbiter of the meaning of our case law, see Nunnally v. District of Columbia Metro. Police Dep't, 80 A.3d 1004, 1012–13 n. 20 (D.C.2013), but to the extent that the RHC has used our case law to assist it in interpreting ambiguities in the RHA and implementing regulations, we continue to defer to the RHC in its exercise of statutory interpretation. Thus we reject United Dominion's argument that this court should give no deference to the RHC's interpretation of the RHA and its implementing regulations.

We agree with United Dominion, however, that the RHC erred when it stated that its review of the OAH ALJ was similarly deferential, although we ultimately determine that this error was inconsequential. In its decision and order affirming the ALJ's decision in Mr. Hinman's case, the RHC stated that it would “sustain an ALJ's interpretation of the [Rental Housing] Act unless it is unreasonable or embodies a material misconception of the law, even if a different interpretation may also be supportable” and that it would “defer to an ALJ's decision so long as it flows rationally from the facts and is supported by substantial evidence.” As support for this deferential standard of review, the RHC cited to case law from this court and 14 DCMR § 3807.1 (1986). Neither provides support for the RHC's articulation of its standard of review of the OAH ALJ's order.

Looking to the decisions from this court cited by the RHC, none discuss the RHC's standard of review as an agency; rather they reflect this court's standard of judicial review when reviewing agency decisions, which is generally controlled by the District of Columbia Administrative Procedure Act, D.C.Code § 2–510 et seq. (2012 Repl.).

The standard of review set forth in 14 DCMR § 3807.1 does pertain to the RHC—but it hails from a different era of adjudicating rental housing matters, and does not pertain to the RHC review of the decisions of an OAH ALJ. The regulation provides that, with respect to legal determinations, the RHC “shall reverse final decisions of the Rent Administrator [of the Department of Consumer and Regulatory Affairs] which the Commission finds to be based upon arbitrary action, capricious action, or an abuse of discretion, or which contain conclusions of law not in accordance with the provisions of the [Rental Housing] Act....” 14 DCMR § 3807.1 (emphasis added). Prior to the establishment of OAH in 2006, the Rent Administrator was the entity that adjudicated tenant petitions under the RHA. See D.C.Code § 42–3502.04(c) (2001) ; see also D.C.Code § 2–1831.03(b–1)(1) (2012 Repl.). Now, the RHC reviews orders of OAH ALJs adjudicating tenant petitions under the Rental Housing Act.⁴ See D.C.Code § 2–1831.16(b) (2012 Repl.).

Although OAH assumed the adjudicatory duties of the Rent Administrator, it is not appropriate for it to stand in the Rent Administrator's shoes. Unlike the Rent Administrator, the OAH is not a...