United States v. Dovolis, Civ. A. No. 3948.

• Decision Date: 25 April 1952
• Docket Number: Civ. A. No. 3948.
• Parties: UNITED STATES v. DOVOLIS et al.
• Court: U.S. District Court — District of Minnesota

105 F. Supp. 914

UNITED STATES v. DOVOLIS et al.

Civ. A. No. 3948.

United States District Court D. Minnesota, Fourth Division.

April 25, 1952.

Randel J. Elmer and Lyman C. Bybee, of the Office of Rent Stabilization, Chicago, Ill., for plaintiff.

Gordon E. Larkin, of Minneapolis, Minn., for defendants.

NORDBYE, Chief Judge.

This is an action brought by the United States under the Housing and Rent Act of 1947, as amended, 50 U.S.C.A.Appendix, § 1881, et seq. It seeks to obtain a temporary restraining order, preliminary and final injunction enjoining the defendants from any violations of the said Act in the particulars set forth in the prayer of the complaint. As a part of this equitable relief, plaintiff requests that defendants be ordered to return to the Treasurer of the United States, for and on behalf of the parties entitled thereto, a refund of all amounts in excess of maximum rents which may have been received by the defendants from any tenant as rent for the use and occupancy of the premises described therein. The only tenant involved is one L. D. Sargent, a resident of this city and subject to the jurisdiction of this Court. In addition, plaintiff seeks damages against the defendants in three times the amount of excess rent accepted or received by the defendants for the rental of the premises referred to. The prayer for relief further states that, in the event restitution to the tenant is ordered, the amount of the judgment for damages may be reduced "by the amount of such restitution as may be ordered for the period for which such damages may be awarded."

The question presented, therefore, is: Should the tenant, L. D. Sargent, as to whom restitution is to be made to the extent of any excessive rent collected, be included as a party plaintiff so that defendants' proposed counterclaim may be litigated as an offset against such restitution? The amount of the overcharge for restitution is alleged to be $603.75. The amount of the proposed offset is $125, alleged to have arisen by reason of wilful and wanton destruction of a portion of the leased premises by the tenant, L. D. Sargent.

In analyzing plaintiff's complaint, it will be noted that it seeks to recover damages for three times the amount by which the payments accepted or received by defendants as rental exceeded the maximum rent which could be lawfully accepted for the premises in question. That right has inured to the plaintiff by reason of the fact that the tenant has not instituted an action for the recovery of excess rent or for liquidated damages. Consequently, the cause of action for such liquidated damages, which is the action at law, belongs to the United States, and as to that cause no counterclaim of offset as against the tenant can be prosecuted herein. Woods v. Selber, 5 Cir., 171 F.2d 900. However, in addition to this cause of action for liquidated damages, plaintiff proceeds in equity for injunctive relief and invokes the equitable arm of this Court in furtherance of this equitable proceeding to require the defendants to make restitution to the tenant to the extent of the excess rent collected. The prayer for restitution under these circumstances is an equitable adjunct to the injunction decree and is entirely independent of the Government's right at law under the Act to recover liquidated damages, either single or treble. It would seem, therefore, that as to such restitution, if granted, the teachings of Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332, are controlling. On page 403 of 328 U.S., on page 1091 of 66 S.Ct., the court used the following language,

"* * * Should the court decide to issue

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