Capital Dev. Grp., LLC v. Jackson

CAPITAL DEVELOPMENT GROUP, LLC, Plaintiff v. MARCUS JACKSON, et al., Defendants

Case No. 2014 LTB 9998

SUPERIOR COURT OF THE DISTRICT OF COLUMBIA CIVIL DIVISION - LANDLORD AND TENANT BRANCH

October 1, 2014

MEMORANDUM OPINION AND ORDER AWARDING REASONABLE ATTORNEY'S FEES AND COSTS FOR BAD FAITH LITIGATION

The plaintiff, Capital Development Group, LLC, is the owner of a residential apartment building located at 1271 Meigs Place, N.E. in the District of Columbia. The defendants, Marcus and Indira Jackson, are tenants who reside in Unit 6 of the building. The plaintiff initiated this case on April 21, 2014 by filing a verified complaint for possession in the Landlord and Tenant Branch alleging that the defendants failed to pay a total of $8,100.00 in rent owed between July 2013 and April 2014. The complaint, executed under oath by Sheila Albright, the plaintiff's counsel, alleged further that a "[n]otice to quit has been served as required by law." The plaintiff requested a judgment for possession of the rental unit and a money judgment for unpaid rent and late fees.

The defendants responded to the complaint on June 2, 2014 by filing a motion to dismiss or, in the alternative, for summary judgment. Represented by counsel from the Neighborhood Legal Services Program, the defendants contended that the plaintiff did not serve them with a thirty-day notice to quit for nonpayment of rent in advance of the filing of the suit and that the plaintiff's subsequent service of the summons and complaint, by posting and mailing, was improper in the circumstances. The plaintiff, through Ms. Albright, filed an opposition to the defendants' motion in which it reiterated its assertion that it served a pre-suit notice to quit on the defendants and argued that its later service of the summons and complaint was proper.

The parties appeared for a hearing on the defendants' motion on June 18, 2014. The court began by asking Ms. Albright whether the plaintiff in fact served a thirty-day notice to quit on the defendants, as alleged in the complaint and in the plaintiff's opposition to the defendants' motion. Ms. Albright stated that a notice to quit was served on the defendants on June 2, 2014. The court explained that a suit for possession could not be based on a notice to quit served after the filing of the suit, and Ms. Albright stated in response that a different notice was served on the defendants sometime in 2013. The court asked to see the 2013 notice, and Ms. Albright produced a "30 day notice to correct or vacate" dated July 26, 2013. That notice, however, was a notice to correct or vacate based on an alleged threat by one of the defendants to do bodily harm to the owner of the building (the principal of the plaintiff LLC); the notice made no mention of the defendants' alleged nonpayment of rent. The court ruled that the 2013 notice alleging a threat to do bodily harm to the owner of the building was insufficient as a matter of law to support a suit for possession based on nonpayment of rent, and it stated it was prepared to grant summary judgment in favor of the defendants unless the plaintiff came forward with evidence that the defendants made a written waiver of their right to receive a thirty-day notice to quit for nonpayment of rent. Ms. Albright conceded that the defendants made no such waiver, and the court accordingly granted the defendants' motion and entered judgment in their favor, finding that evidence in the record established without genuine factual dispute that the plaintiff did not serve a thirty-day notice to quit for nonpayment of rent on the defendants as required by law. Given this ruling, the court did not reach the alternative ground advanced in the defendants' motion - that service of the summons and complaint by posting and mailing was improper in the circumstances.

The case is now before the court on the defendants' motion for an award of reasonable attorney's fees and costs. The defendants argue that the plaintiff's failure to serve a thirty-daynotice to quit for nonpayment of rent rendered the case fatally defective from the outset and that the plaintiff and Ms. Albright should be punished for making demonstrably false statements to the court (some under oath) to advance what they knew or should have known was a frivolous complaint. The defendants seek an award of $6,100.00 in reasonable attorney's fees and $285.10 in costs under the bad faith exception to the American Rule.

Ms. Albright has filed two briefs on behalf of the plaintiff and herself in opposition to the defendants' motion. Ms. Albright states first that she believed the thirty-day notice to correct or vacate alleging a threat to the owner of the building was a proper basis on which to sue the defendants for nonpayment of rent. She argues further that it would be inappropriate to award attorney's fees to parties who received free legal representation from a nonprofit organization or, alternatively, that any award should be limited to the amount actually paid by the Neighborhood Legal Services Program in salary for the time spent by the defendants' lawyer on this case.

Discussion

Generally, the parties to a civil dispute are responsible for their own attorney's fees and costs. 6921 Georgia Ave., N.W., Ltd. P'ship v. Universal Cmty. Dev., LLC, 954 A.2d 967, 971 (D.C. 2008). Exceptions to this so-called "American Rule" exist only as created and defined by statute, contract, and the common law. Id. One exception recognized at common law enables a party to recover its reasonable attorney's fees and costs by demonstrating that the opposing party "acted in bad faith either by filing a frivolous action, or by litigating a properly filed action in a frivolous manner." Hundley v. Johnston, 18 A.3d 802, 806 (D.C. 2011). The principal purpose of the bad faith exception is "to punish those who have abused the judicial process and to deter those who would do so in the future." Synanon Found., Inc. v. Bernstein, 517 A.2d 28, 37 (D.C. 1986).

The bad faith exception is properly invoked "only in the presence of extraordinary circumstances or when dominating reasons of fairness so demand," Synanon Found., Inc., 517 A.2d at 37 (citing Launay v. Launay, Inc., 497 A.2d 443, 450 (D.C. 1985)), and proof of bad faith litigation must be by clear and convincing evidence, Fischer v. Estate of Flax, 816 A.2d 1, 12 (D.C. 2003). To determine whether a litigant has initiated an action in bad faith, the court must examine whether "the claim is entirely without color and has been asserted wantonly, for purposes of harassment or delay, or for other improper reasons." Synanon Found., Inc., 517 A.2d at 40. A claim is colorable if it "has some legal and factual support, considered in light of the reasonable beliefs of the individual making the claim." Jung v. Jung, 844 A.2d 1099, 1108 (D.C. 2004). A claim entirely lacking in color, however, gives rise to an inference that it was filed with an improper purpose. See Gen. Fed'n of Women's Clubs v. Iron Gate Inn, Inc., 537 A.2d 1123, 1129 (D.C. 1988) ("It is difficult to imagine a case in which a claim wholly without color could be asserted without an improper motive."); see also Ginsberg v. Granados, 963 A.2d 1134, 1138 (D.C. 2009) ("A court nonetheless may infer bad faith in circumstances where 'an attorney . . . brings an action that a competent attorney could not under any conceivable justification reasonably believe not frivolous.'") (ellipsis in original) (quoting Braley v. Campbell, 832 F.2d 1504, 1512 (10th Cir. 1987)).

The court finds by clear and convincing evidence that the plaintiff and Ms. Albright engaged in bad faith litigation in this case. The law in the District of Columbia has been settled for at least four decades that service of a thirty-day notice to quit is "a condition precedent to the landlord's suit for possession." See Moody v. Winchester Mgmt. Corp., 321 A.2d 562, 563 (D.C. 1974); see also D.C. Code § 42-3202 ("A tenancy from month to month, or from quarter to quarter, may be terminated by a 30 days notice in writing from the landlord to the tenant to quit."). A tenant can make a written waiver of his or her right to receive a notice to quit fornonpayment of rent, D.C. Code § 42-3208; Jamison v. S&H Assocs., 487 A.2d 619, 621 (D.C. 1985), but in the absence of a waiver, service of a thirty-day notice to quit is a prerequisite to the commencement of an action for possession in the Landlord and Tenant Branch - i.e., "unless waived," service of the notice must be effected on the tenant at least thirty days before a suit may be filed in court, Grimes v. Newsome, 780 A.2d 1119, 1121 & n.3 (D.C. 2001). The law is equally well established, moreover, that a complaint for possession cannot allege lease violations beyond those specifically articulated in the pre-suit notice. See Luskey v. Borger Mgmt., 917 A.2d 631, 632 (D.C. 2007) ("When one is sued for lease violation A, and that matter is settled before trial, one cannot be tried for lease violation B - without a complaint filed and notice served spelling it out - simply because lease violation B may exist.").

The plaintiff's claim for possession, therefore, was utterly meritless from the outset, given the absence of any waiver by the defendants of their right to receive a pre-suit notice to quit for nonpayment of rent and the plaintiff's failure to serve the defendants with a proper notice alleging nonpayment of rent at least thirty days before the filing of the complaint. No landlord or attorney with even a cursory knowledge of landlord-tenant law in the District of Columbia could plausibly believe that a notice to quit served more than a month after the filing of the complaint could support a suit for possession, and no such landlord or attorney could reasonably take the position that a notice alleging a threat to do physical harm to the owner of the building could serve as the foundation for a suit for possession based on nonpayment of rent. The claim...